Blue Chip 95

BLUE
Issue 95 • May/Jun/Jul 2025
www.bluechipdigital.co.za
CHIP
0.5 CONTINUOUS
PROFESSIONAL DEVELOPMENT
THE OFFICIAL PUBLICATION OF THE FPI
0.5 CONTINUOUS
PROFESSIONAL DEVELOPMENT
01 CONTINUOUS
PROFESSIONAL DEVELOPMENT
01 CONTINUOUS
PROFESSIONAL DEVELOPMENT
1.5 CONTINUOUS
PROFESSIONAL DEVELOPMENT
1.5 CONTINUOUS
PROFESSIONAL DEVELOPMENT
02 CONTINUOUS
FUTURE OPTIMISM
Innovating AI
PROFESSIONAL DEVELOPMENT
02 CONTINUOUS
PROFESSIONAL DEVELOPMENT
AMETF TRANSPARENCY
What you need to know
DO THIS NOW
Map your advice process
TRUST BENEFICIARIES
The complexities of compliance
A COACHING WAY OF BEING
Rob Macdonald on what it is and why it is key

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The evolution of a
future-fit profession
Lelané Bezuidenhout, CEO of the FPI, attests that the financial planning profession
operates at an intersection of trust and transformation. Consumers seek answers,
stability and guidance. Regulators prioritise compliance and responsible conduct.
Professionals strive for meaning, relevance and growth. Bezuidenhout adds that at
the core of financial planning is a duty of care – a responsibility that cannot be outsourced,
delegated or diluted. While discussions about innovation often focus on technology, true
innovation in financial planning encompasses leadership. It involves reimagining client
engagement, success measurement and the evolution of a future-fit profession (page 8).
Research shows the greatest value that a financial planner adds is through behavioural
coaching. On page 22, Rob Macdonald suggests that this approach doesn’t change the
fundamental nature of the work of a financial planner, which is to help clients implement
money decisions. However, he doesn’t believe that financial planners can help clients make
sound money decisions without helping them make decisions about their life as well.
Regardless of what the biases are or why they exist, a financial planner’s challenge is to help
people avoid behavioural biases by putting together optimal portfolios, says Florbela Yates,
MD, Equilibrium, in her column on page 16. This requires a deep understanding of financial
drivers, different asset classes, various investment styles, what risk means for different investors
and what triggers certain behaviours.
Investing is a complex and unpredictable game, where emotions and biases can often
cloud judgement. By establishing a consistent process, investors can navigate the markets with
greater confidence and clarity (page 54). If your advice process has evolved over time without
a structured review, chances are it’s inconsistent and holding back your business growth. Turn
to page 42 to find out how to map your advice process.
AI has been in existence since the 1950s. The most recent iteration of AI relates to the
rationalisation and reasoning capabilities of the large language models (LLMs) that underpin
ChatGPT and Gemini (page 26). LLMs and Retrieval Augmented Generation (RAG) have been
taking the world by storm. This storm is not going to leave the world of financial advice
unscathed. In fact, it is going to fundamentally change the way advice is given. RAG opens
the door for the use of LLMs in both financial reporting and advice (page 55).
Francois du Toit, founder of PROpulsion, says that by using ChatGPT’s processing capabilities,
financial advisory practices can build comprehensive procedure libraries that enhance service
quality, boost operational efficiency and strengthen compliance frameworks – without the
time investment that documentation typically requires (page 62). On page 50, Zeldeen Müller,
founder and CEO, inSite Connect, shares three AI tricks to make your clients love you more.
Reimagining client engagement, understanding and coaching behavioural biases and
triggers, sound financial knowledge, leveraging technology and commitment to ethics and
compliance are the makings of a future-fit financial planner.
Read all about it in this edition of Blue Chip.
Alexis Knipe, Editor
Blue Chip Journal – The official publication of FPI
blue-chip-journal
Blue Chip is a quarterly journal for the financial planning industry and is the official publication of the
Financial Planning Institute of Southern Africa NPC (FPI), effective from the January 2020 edition. Blue Chip
publishes contributions from FPI and other leading industry figures, covering all aspects of the financial
planning industry.
A total of 7 500 copies of the publication are distributed directly to every CERTIFIED FINANCIAL PLANNER®
(CFP®) in the country, while the monthly Blue Chip Digital e-newsletter reaches the full FPI membership base.
FPI members are able to earn three verifiable Continuous Professional Development (CPD) points per edition
of the print journal (four per year) under the category of Professional Reading.
Special advertising packages in Blue Chip are available to FPI Corporate Partners,
FPI Recognised Education Providers and FPI Approved Professional Practices.
ISSUE 95 |
MAY/JUNE/JULY 2025
BLUE
CHIP
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CONTENTS
ISSUE
95 MAY/JUN/JUL 2025
EDITOR’S NOTE
02 By Alexis Knipe
08
FPI FOREWORD
Message from the CEO of the FPI
ON THE MONEY
10 Milestones, news and snippets
16
HOW HAVING A BIAS CAN
AFFECT YOUR POTENTIAL
RETURNS AS AN INVESTOR
Column by Florbela Yates, Managing
Director, Equilibrium
17
TRUMP 2.0
Column by Rob Macdonald,
Independent Consultant
18
ESG: THE HEARTBEAT OF
RESPONSIBLE ADVICE
Column by Kobus Kleyn, CFP®, Tax and
Fiduciary Practitioner, Kainos Wealth
22
A COACHING WAY OF BEING
Rob Macdonald unpacks what it
is and why it is important to the work of
a financial planner
26
SURVIVAL OF THE FASTEST
With the arrival of AI into the
mainstream world, we find ourselves at a
point of optimism over the future, by Doug
Nicol, Investment Analyst, Fundhouse
30
IMPACT AND RETURNS:
WHY FINANCIAL PLANNERS
SHOULD CONSIDER ACOF
The narrative that impact comes at the
cost of returns simply is not true, by Warren
Wheatley, CEO, Altvest Capital
32
THE FUTURE OF GROUP RISK
Why a consultative approach is key
to financial security in SA, by Corinne, da
Silva, CFP®, Business Development Manager,
Jigsaw Financial Services
34
CLIENT CONFIDENCE BEYOND
THE WRAPPER
Financial planners face growing pressure
to demystify an increasingly complex
array of products in today’s investment
landscape, by Vuyo Nogantshi, Head
of Distribution: Index and Structured
Solutions, Absa Group
LEADING THE WAY TO
35 PAN-AFRICANISM
Blue Chip caught up with Fundi Pikashe,
CFP®, Head of Distribution: Structured
Solutions, Absa Index and Structured
Solutions, CIB, Absa
36
KNOWING ISN’T DOING
Why smart financial advisors
should have their own trusted financial
advisor, by Henda Kleingeld, CFP®, FPSA®,
TEP, Programme Director PGDIP in Financial
Planning, School of Financial Planning Law,
University of the Free State
37
A SHIFT UP AND TO THE LEFT
By Francois Olivier CA(SA), CFA, and
Stephan Engelbrecht, portfolio managers at
Mazi Asset Management
38
WHAT YOU NEED TO KNOW
ABOUT AMETF TRANSPARENCY
Actively managed ETFs are gaining traction,
by Niki Giles, Head of Strategy, Prescient
Fund Services
40
ETF EVOLUTION: GLOBAL
AND SOUTH AFRICAN
TRENDS DRIVING INDEX INVESTING
By Fikile Mbhokota, CEO, Satrix
42
MAPPING YOUR
ADVICE PROCESS
The most important thing you can do
in 2025, by Theoniel McDonald, CFP®,
Wealth Associates
44
IF YOU REALLY WANT TO
INFLUENCE A CLIENT’S
BEHAVIOUR, APPEAL TO INTEREST
NOT TO REASON
By Rob Macdonald, Independent Consultant
46
SECURING A LEGACY THROUGH
ROBUST AND TIMEOUS
ESTATE PLANNING
By Gareth Lange, Wealth Manager,
Private Client Holdings
26
4 www.bluechipdigital.co.za

CONTENTS
ISSUE
95 MAY/JUN/JUL 2025
THE POWER OF PLAY
48 IN THE WORKPLACE
How fun fuels success
THREE AI TRICKS TO
50 MAKE YOUR CLIENTS
LOVE YOU MORE
By Zeldeen Müller, CEO of inSite
Connect and Creator, AgendaWorx
52
BUILDING A FINANCIALLY
STABLE PRACTICE
By Guy Howill, Chief Executive,
Fairbairn Consult
54
UNLOCKING SUCCESS:
THE POWER OF PROCESS
IN SPORTS AND INVESTING
You’re only as good as your process,
says Andrew Padoa, Portfolio Manager,
Sasfin Wealth
LOOKING FORWARD TO
55 A RAG-BASED FUTURE
AI is part of the future of financial advice,
by Paul Nixon, Head of Behavioural Finance,
Momentum Investments and Prof Evan
Gilbert, Research Strategist, Momentum
Investments and Research Professor,
Stellenbosch University
56
FORGED BY FIRE
Blue Chip speaks to Gareth Collier,
Founder, Firecrest Modern Capital, about
starting a new practice
58
SOCIALLY RESPONSIBLE
INVESTMENT: A LIFELINE,
NOT A PASSING TREND
By David Le Page, Director, Fossil Free SA
60
A HOME FOR INDEPENDENT
FINANCIAL PLANNERS
By Warren Ingram, CFP®, Co-founder,
Galileo Capital
THE HIDDEN COMPLEXITIES
61 OF COMPLIANCE
By Sandile Khumalo, LLM (Unisa), FPSA®,
GTP(SA) Fiduciary Practitioner, Lex24
62
CREATING PROCEDURES
WITH CHATGPT
By Francois du Toit, Founder, PROpulsion
IF YOU DON’T PAY, YOU
63 DON’T STAY
Why authentic communication could be
a hidden key to client retention, by Tim
Slatter, Creator, Contatti, Director, Slatter
Communications
66
RECORD OF ADVICE:
VARIOUS DEFINITIONS
OFTEN LEAD TO MISINTERPRETATION
Anton Swanepoel, Founder, Trusted
Advisors, says that that maintaining a
record of advice is a requirement that is
here to stay
Recognised
Scan Me
Recognised
Recognised

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Warwick Wealth is an owner of Authorised Financial services and credit provider (FSP no. 44731)

BLUE
CHIP
FPI UPDATES | CEO message
Lelané Bezuidenhout, CFP®, CEO,
Financial Planning Institute of Southern Africa
Our shared
leadership legacy:
dedicated to
development
The CEO of the Financial Planning Institute of
Southern Africa share the FPI’s latest news.
As financial planning professionals, we are at a pivotal
juncture where our guiding principles are more
crucial than ever, and our role in shaping the financial
futures of South Africans is under greater scrutiny.
This year has underscored that professionalism transcends
titles or designations – it manifests through our actions.
It embodies our commitment to ethical conduct in an
increasingly complex environment, our discipline to remain
informed and proactive, and our shared responsibility to
serve our clients with competence and care, irrespective of
economic or political climates.
As the CEO of the Financial Planning Institute of Southern
Africa (FPI), I am continually reminded that our profession
operates at the intersection of trust and transformation.
Consumers seek answers, stability and guidance. Regulators
prioritise compliance and responsible conduct. Professionals
strive for meaning, relevance and growth.
Balancing these expectations is not a burden but a privilege.
Raising the standard in uncertain times
South Africa’s economic environment continues to challenge
us – from tax policy shifts and rising living costs to constrained
national budgets and evolving retirement regulations.
Financial planners often serve as the first line of defence for
individuals and families navigating this complexity. We must
go beyond being reactive; we must be knowledgeable leaders
who convert uncertainty into opportunity for our clients. This
necessitates acquiring the latest tools, insights and strategies
to offer advice that is both reliable and sustainable.
Ethics are not optional
At the core of financial planning is a duty of care – a responsibility
we cannot outsource, delegate or dilute. In an era of instant
content and fast advice, it is tempting to prioritise trends over
truth. However, our clients deserve more. They deserve planners
who are transparent about their credentials, dedicated to their
development and unwavering in their integrity.
There is growing concern in the industry regarding
individuals misrepresenting their professional status –
claiming designations they have not earned or continuing to
use titles without remaining in good standing. To be clear:
a designation like CFP® is not merely symbolic. It signifies
a full commitment to education, ethics, experience and
ongoing compliance. Terminated FPI members cannot use
the CFP® designation or refer to themselves as CERTIFIED
FINANCIAL PLANNERS®.
When someone falsely claims to be a certified professional,
they violate public trust. As a professional body, we owe it to
the public and our ethical members to uphold the value and
exclusivity of these credentials, and we will continue to do so
diligently and resolutely.
Innovation is not just technology – it’s leadership
While discussions about innovation often focus on artificial
intelligence, automation or digital tools, true innovation
in financial planning encompasses leadership. It involves
reimagining client engagement, success measurement and the
evolution of a future-fit profession.
This year, we have witnessed inspiring examples of how
8 www.bluechipdigital.co.za

FPI UPDATES | CEO message
BLUE
CHIP
This year has underscored that
professionalism transcends titles or designations
– it manifests through our actions.
our profession can progress. From AI-enhanced compliance
monitoring to modernised engagement through digital
credentials and talent pipeline growth via school and
university outreach – theseinitiatives signify a profession
embracing its potential.
Innovation also necessitates rethinking our impact
standards. What if continuing professional development was
measured by client outcomes rather than hours? What if young
people viewed financial planning as a primary career choice?
These are questions we must address to remain relevant.
Building the next generation
South Africa requires more qualified, ethical and competent
financial planners. Growing the profession involves more than
recruitment – it demands aspiration. We must demonstrate
that financial planning is a meaningful, dynamic profession
which positively impacts lives.
We continue to invest in creating pathways for new entrants
through partnerships, career awareness programmes and
competency-based qualifications. Our vision extends beyond
filling seats; we aim to cultivate leaders who view their roles as
both advisors and advocates for financial wellbeing.
As professionals, we must mentor, share and uplift. Our
legacy encompasses not only the portfolios we manage but
the individuals we inspire.
The power of collective identity
One of the most powerful reminders this year has been
the value of community. In a world that often prioritises
individual success, the financial planning profession thrives on
collaboration – knowledge sharing, peer accountability and a
shared commitment to public service.
“We are Family” is more than a catchphrase; it embodies the
solidarity that binds us. It is why, even in challenging times, we
support each other, our clients and the standards we uphold.
As we enter a new season, I invite every professional,
whether newly-certified or experienced, to recommit to our
shared purpose. Let us lead with courage, advise with care
and grow with intention. We are more than professionals; we
are custodians of hope, educators of the next generation and
champions of ethical financial behaviour.
Together, there is no limit to the impact we can achieve.
In closing
This profession transcends numbers; it concerns people –
their dreams, security and legacies. Every plan we craft is a
blueprint for a better future. Every conversation builds trust.
Every act of professionalism affirms our societal role. Let us
continually strive for improvement, representing the best of
our profession. Let us hold ourselves, and each other, to the
highest standards.
The future of financial planning is not something we await.
It is something we actively build.
Until next time,
Lelané Bezuidenhout, CFP®, CEO, Financial Planning
Institute of Southern Africa
The 2025 FPI Awards are still open for entry! This is your golden
opportunity to showcase your expertise, celebrate your achievements
and gain recognition in the financial planning profession.
www.bluechipdigital.co.za 9

BLUE
CHIP
On the money
Making waves this quarter
Planning for tomorrow
INVESTING IN THE FUTURE
One of the most powerful tools for driving gender equality is financial
freedom, eg women taking control of their financial futures through
investing, trading and wealth-building strategies. Women remain
under-represented in investing and trading. A recent study shows
that women are more likely to save but less likely to invest, often
due to risk aversion and the perception that financial markets are
male dominated. Fortunately, more accessible financial platforms and
tailored education programmes are breaking down these barriers,
making financial markets more accessible than ever. Women who
understand financial markets, cash-flow management and investment
strategies are better positioned to take on leadership roles. Strong
financial acumen allows them to make informed decisions, negotiate
better deals and drive business growth with greater certainty.
A long-term plan
Financial confidence is not just about immediate business success.
Think about it as providing long-term stability. Women statistically
live longer than men, making financial planning and wealth creation
even more critical. A strong investment portfolio ensures financial
security well into retirement, reducing dependence on external
financial support.
Building financial confidence starts with education. Women
must have access to financial literacy programmes that simplify
investing, risk management and market
trends, enabling them to make informed
decisions. Financial institutions and
brokers have a responsibility to create
inclusive, user-friendly platforms that
provide transparency, security and ease of
use. Mentorship and community support
also play a vital role in encouraging women
to participate in financial markets.
By Zihaad Israfil, CEO, CFI Financials
South Africa
SECOND SURGE OF SAVINGS POT WITHDRAWALS
Since the start of the new tax year on 1 March 2025, Alexforbes has seen a
second wave of interest from retirement fund members in checking their
balances and submitting savings pot claims. Fund members may access
their savings pots once every tax year with over 400 000 having done so
via Alexforbes between September 2024 and February 2025 during the
first wave of withdrawals.
With the start of the tax year, an initial four-day surge saw 33 000
withdrawal claims sparking concerns that South Africans were dipping
back into their savings pots at the same rate as before. However, the daily
volume of claims has since tapered off. To date, Alexforbes has successfully
paid 55 000 claims, while the remaining claims continue to progress
through the claims cycle.
While many members are making withdrawals, it is encouraging
to see that a large proportion of those eligible have chosen not to do
so. Instead, they are keeping their savings pots invested for retirement
or emergencies – the original purpose of the savings pot component.
This suggests that the significant efforts by employers, trustees
and the industry to educate and support members is having
a positive impact. While the savings pot offers members
flexibility to manage financial emergencies, Alexforbes urges
retirement fund members to carefully assess the long-term consequences
of such withdrawals. Members should consider:
Preserving retirement savings. Withdrawals reduce the amount available
for retirement. Funds should only be accessed in cases of genuine
financial emergencies.
Understanding tax implications. All withdrawals are subject to taxation,
which could impact a member’s overall tax liability.
Cybersecurity awareness. With heightened withdrawal activity,
cybercriminals may increasingly target retirement fund members. To
stay protected:
• Only use official channels for transactions.
• Never share banking details, OTPs or login credentials.
• Authenticate any withdrawal-related communication.
Currently, retrenched members can access their vested
and savings components provided they have not already
done so within the same tax year, but not the
retirement component as this remains preserved
until retirement.
By Vickie Lange, Head: Best Practice, Alexforbes
10 www.bluechipdigital.co.za

BLUE
CHIP
On the money
Making waves this quarter
Fortifying the future of finance
SHAPING TOMORROW’S FINANCIAL LEADERS
Driven by technological advancements and constant regulatory change, the financial
services landscape is constantly evolving, and the need for sound financial advice is
greater than ever.
At Milpark Education, we pride ourselves on offering innovative financial planning
qualifications tailored to equip graduates with the essential knowledge and skills to
navigate this volatile industry. We ensure that our teaching is relevant by integrating
Artificial Intelligence (AI) across undergraduate modules and introducing industry
software at the postgraduate level.
As most of our lecturers are CFP® professionals, students can access the latest
industry-specific expertise and learn from practical application.
Choose Milpark Education to make your mark in the financial services industry.
Leanne Ferreira, CFP®, Head of Department,
School of Financial Services, Milpark Education
NEW HEAD FOR SCHRODERS CAPITAL SOLUTIONS
Schroders Capital, the $97.3-billion private markets business of
Schroders, has appointed Vikram Bhandari to the newly created
role of head and chief investment officer (CIO) of Schroders Capital
Solutions. Bhandari will help drive business growth and lead
Schroders Capital’s private markets solutions strategy and execution.
The senior appointment reflects the firm’s client-centric approach
and will further leverage its private markets solutions capabilities
on a global scale.
Schroders is already a market leader in offering structures
which provide greater access to private markets through its range
of listed vehicles, as well as semi-liquid and illiquid structures.
The firm introduced the UK’s first Long-Term Asset Fund (LTAF),
Climate+, followed by the UK’s first LTAF exclusively dedicated to
renewable energy and energy transition infrastructure, in response
to increasing demand from defined contribution clients to access
the benefits that private markets investment can offer.
BALANCING LIABILITY RISK IN AN UNCERTAIN ECONOMIC CLIMATE
In Aon’s latest Global Risk Management Survey, legislative changes
made it into the top 10 risks that the financial sector is faced with.
“Complying with a wide variety of complex laws and regulations
is ongoing, challenging and administratively burdensome,” says
Sam Varela, senior legal risk advisor at Aon South Africa.
“Anything from employee fraud, incorrect advice and the
subsequent financial loss can have dire financial repercussions if a
claim is lodged. This is where Professional Indemnity (PI) insurance
is essential in providing financial institutions and independent
financial advisors with indemnity in respect of legal liability arising
out of the practice of their profession,” says Varela. “Professional
liability doesn’t just arise from compiling a proposal for a client,
but exists in the advice given, which can lead to a liability claim for
damages arising out of errors, omissions or negligent acts while
rendering – or failing to render – a professional service. Any client
who suffers harm as a result may claim against you.”
PI cover may include the professional’s own legal costs, as well
as any damages and legal costs that are due to the claimant, up
to a defined limit.
“If a PI claim is lodged against
you or your business, an appropriate
policy will mitigate both the financial
and business impact. Claims are
typically long-tailed by nature,
taking years and huge legal costs
before being finalised, highlighting
the critical role that PI insurance
plays in protecting your reputation
and ability to work as a professional,”
concludes Varela.
www.bluechipdigital.co.za
11

The highs and lows of finance
GOLD TO HIT ALL-TIME HIGHS
Gold’s seemingly unstoppable surge is likely to push prices to fresh
all-time highs, with global financial advisory and asset management
giant deVere Group now forecasting the metal to hit $3 300 per
troy ounce before the end of the second quarter of 2025. Nigel Green,
CEO of deVere Group, comments, “With tariffs being expanded, trade
policies zigzagging and concerns over inflation and an economic slowdown
intensifying, capital is flooding into gold as a trusted store of value.
“Geopolitical flashpoints also continue to reinforce gold’s appeal.
The ongoing conflict in Ukraine, renewed instability in the Middle
East and mounting tensions in the South China Sea are contributing
to a risk-laden global landscape. Central banks across the globe are
accelerating their gold purchases, signalling a profound shift in
international reserve strategies.”
The People’s Bank of China has now increased its holdings for the
fourth consecutive month, a trend mirrored by other monetary authorities
looking to mitigate currency risks and geopolitical exposure. With the US
dollar’s dominance being increasingly questioned, gold is emerging as the
primary asset of choice for sovereign reserves.
Adding to the momentum, China’s latest financial reforms are expected
to unleash a tidal wave of fresh demand. In a landmark shift, Beijing has
approved a pilot programme permitting insurers to allocate assets into
gold, a move that aligns with the country’s broader strategy of diversifying
away from US dollar-denominated assets.
With China’s central bank already aggressively increasing its gold
reserves, this new policy opens the floodgates to further institutional
investment, injecting fresh capital into the market and reinforcing the
metal’s long-term upward trajectory.
The safe-haven metal’s rally is no longer just a reflection of short-term
uncertainty; it’s underpinned by a fundamental reordering of financial
priorities at the highest levels.
IMPLEMENTATION OF THE RMCP
There have been material amendments to the new Chapter 4 of
GN 7A, which guides the board of directors (the accountable institution
is a legal person with a board of directors), senior management
(an institution without directors) and persons holding the highest
authority in accountable institutions regarding their obligations in
relation to the Risk Management and Compliance Programme (RMCP)
of an accountable institution as set out in the Financial Intelligence
Centre Act, 2001 (FICA).
GN 7A reflects amendments relating to an accountable institution’s
RMCP, including:
Responsibilities. The board of directors, senior management
or other person(s) exercising the highest level of authority must: (i)
approve the RMCP after consideration of the overall risks and risk
appetite of their business, which responsibility cannot be delegated
to any other entities within the institution; and (ii) ensure compliance
by the accountable institution and its employees with the provisions
of FICA and its RMCP.
Culture of compliance. The entities who are solely responsible
for the effectiveness of the RMCP will be held accountable if it is
inadequate. An example provided in GN 7A is when a supervisory
body conducts an inspection and identifies a version control issue.
This occurs when, say, a financial service provider (FSP) updates its
approved RMCP but doesn’t obtain board approval for the revision.
The board’s omission constitutes non-compliance with its obligations
under FICA.
Risk identification. The RMCP must be drafted accordingly for
each business. Practically, the RMCP should inform the reader of
how the business will comply with FICA. A risk-based approach
is fundamental for accountable institutions to ensure that they
adequately manage the risks associated with money crimes. This
approach involves assessing inherent risks (the risk exists before
controls are applied) and residual risks (the level of risk after
mitigation measures were implemented).
Group-wide RMCPs. GN 7A notes that accountable institutions
may implement a group-wide RMCP. However, if accountable
institutions elect to implement a group-wide RMCP, it must specify
what does and what does not apply to the different entities within
the group.
GN 7A underscores South Africa’s efforts to strengthen its antimoney
laundering and to address the Financial Action Task Force’s
criterion of South Africa’s outstanding deficiencies. For example,
GN 7A now prescribes that the development of new products, services,
delivery mechanisms, practices and technologies must be covered
under the accountable institutions’ risk assessment.
By Webber Wentzel
12 www.bluechipdigital.co.za

Medical aid and financial advice
WHY MEDICAL AID ALONE IS NOT ENOUGH
Many consumers struggle to navigate the complexities of the
medical aid landscape, which can lead to unexpected expenses and
gaps in cover. This is where financial literacy becomes critical and
where brokers play a key role in helping individuals understand the
products available and how they can choose the right combination
of medical aid and gap cover to meet their individual needs.
Financial literacy is a crucial yet often overlooked aspect of
healthcare decision-making. Financial literacy refers to an individual’s
ability to understand and manage their financial resources
effectively. When it comes to healthcare, this means being able to
navigate complex medical aid policies, understand benefits and
exclusions and make informed choices about cover.
The medical scheme tariff or medical aid rate is rarely what
procedures and treatments cost. It is simply the rate at which a medical
aid scheme reimburses healthcare providers for services rendered to
its members. This tariff is set by the medical scheme itself and varies
depending on the plan and provider agreements. The reality is that
medical specialists often charge well beyond these tariffs, sometimes
as much as 500% of the medical aid rate, leaving patients with
substantial shortfalls.
This is where gap cover becomes essential. Gap cover bridges the
financial gap between what medical schemes pay and the actual
costs of private in-hospital healthcare services. Even comprehensive
medical aid plans come with limitations, such as co-payments for
specialist consultations or caps on certain treatments.
Brokers provide invaluable financial advice tailored to each client’s
unique circumstances. It is essential to consider budget constraints.
The best plan is only effective if it remains affordable. Brokers help
clients strike a balance between comprehensive cover and financial
sustainability. Understanding limitations related to a client’s existing
cover allows brokers to recommend suitable gap cover products that
address specific shortfalls.
Financial literacy in healthcare is about empowering individuals
to make informed decisions that protect them from financial strain.
Brokers serve as indispensable guides, helping clients navigate
complex medical aid structures, identify potential shortfalls
and secure the right combination of medical aid and gap cover.
By enhancing financial literacy, brokers contribute to a more
knowledgeable and financially secure consumer base.
By James White, director of sales and marketing, Turnberry
Management Risk Solutions
ANCHORED IN ADVICE
For those of us who have flung ourselves into the rewarding but
rapidly shifting ocean of financial advice, it’s generally because we’re
drawn to helping people chart their course across vast and often
unpredictable waters. We act as captain, offering the tools, support
and advice to keep the ship steady, helping them navigate life’s
storms while journeying towards their destination. Before deciding
to join our stable, the financial advisors we chat with cite common
challenges as the key drivers behind their desire to move. These
generally are:
Navigating the career currents
Financial advisors (FAs) often face challenges in aligning their career
goals and personal needs, particularly when they feel a lack of
support from their Financial Services Provider (FSP). Many FAs
struggle with limited opportunities for professional development,
mentorship or recognition, leaving them feeling undervalued
despite their contributions. FAs are often restricted to selling a
narrow range of products or tied to commission structures that
don’t account for changing client needs or market conditions, which
limits their ability to grow or diversify their income.
As FAs are generally only qualified to sell certain categories of
products, clients need to seek advice from other specialists should
they require something that is not part of that FA’s wheelhouse.
In-practice problems
FAs often grapple with complex systems and time-consuming
processes tied to compliance. Demystifying these intricate systems is
overwhelming, slowing productivity and limiting their capacity to grow
their practices. A lack of adequate technology to manage their practices
further exacerbates these challenges. Without access to modern,
integrated systems, FAs face difficulties in streamlining administrative
tasks, client communication and performance tracking, ultimately
impacting their ability to deliver the best possible service to clients.
Value perception
FAs face significant challenges in meeting client needs due to limited
offerings from their chosen FSP. This affects their ability to provide
tailored, impartial financial advice, leading to gaps in solving clientspecific
problems. This limitation can undermine client trust in the
FA’s recommendations.
It is critical that FSPs look at what FAs both want and need and then
innovate like crazy. It is important that FAs work with providers who
offer the necessary support so they can focus on doing what they do
best – advise.
By Danie van den Bergh, head of acquisitions, Momentum
Financial Planning
www.bluechipdigital.co.za
13

To enter or to nominate a fellow colleague,
go to www.fpi.co.za/annual-awards/

2025 Professional Practice of the Year Award
The FPI Professional Practice of the Year competition was first launched in 2020 where the winner was
announced at the prestigious FPI Annual Convention Gala Dinner.
The competition has been developed to include an initial desktop audit and a site visit where a range of
criteria is evaluated such as the practice’s practice management abilities, skills and overall knowledge and
practice of holistic financial planning. The desktop audit and site audit results are then evaluated by
executives and CFP ® -professionals from the FPI in order to determine the winner.
Entries close: 30 th of June 2025
2025 Diversity and Inclusion Award
The Diversity and Inclusion Award recognises an individual whose commitment to diversity and inclusive
excellence has impacted South Africa’s varied ethnic groups, races, and cultures in a positive way. Our
primary aim as the Financial Planning Institute of Southern Africa (FPI) is to engender a community that
fosters the value of financial planning and advances in the financial planning profession. The FPI’s
strategy includes actively encouraging those who advance the financial planning process.
Entries close: 10 th of October 2025
2025 Harry Brews’ Award
The Chairman’s Award was introduced in 2010 and in 2013 was renamed the Harry Brews’ Award in
honour of Harry Brews – who transformed South Africa’s life assurance industry. The Award recognises an
individual who has made an outstanding TH lifelong contribution to the FPI by promoting the Institute and its
marks and/or the financial planning profession in society, academia, training, government, media, or any
other professional sphere. The winner must also exemplify the FPI ethics principles of client first, integrity,
objectivity, fairness, professionalism, competence, confidentiality, and diligence.
Entries close: 10 th of October 2025
2025 It Starts with Me Award
The It Starts with Me Award, launched in 2015 in conjunction
with the FPI It Starts with Me programme, recognises the
CFP ® professional who contributes tirelessly to promoting the
CFP ® certification. This person entrenches the CFP ® mark in
their work and life, invests in their personal brand
by letting others know they are a CFP ® professional and
also volunteers where required.
Entries close: 10 th of October 2025

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COLUMN
How having a bias affects your
potential returns as an investor
As investment managers, we analyse the impact of investor behaviour on plausible outcomes.
Florbela Yates, Managing
Director, Equilibrium
Florbela Yates is the head of
Equilibrium in the Momentum
Metropolitan group. Equilibrium
is an independent discretionary
fund manager that partners
with financial advisors to help
them enable their advice
outcomes. Equilibrium brings
balance to an advice practice
by delivering services and
investment solutions to help
clients achieve their defined
investment goals.
A
behaviour we see from investors is
having a home-country bias, where
they over-invest in local stocks
relative to the optimal portfolio.
We see this for a couple of reasons, including
barriers to foreign investments, risk-aversion and
behavioural factors.
These behavioural factors include familiarity
bias and availability bias.
People who express familiarity bias tend
to invest in the companies that they know.
For example, they believe that because they
use a specific brand, it must be popular, so they
are more likely to invest in the companies whose
brands they use.
The second is availability bias: buying more
South African equities because they believe
that due to living here, they have more influence
over how local companies perform.
Then there are cultural biases and factors
that often affect how they invest their money.
Of course, the vehicle through which you
invest may also limit your ability to invest in
other countries.
Regardless of what the biases are or why
they exist, our challenge is to help people avoid
behavioural biases by putting together optimal
portfolios with allocations to other countries
besides their home country. When we construct
portfolios, we look not only at the return
expectations but also spend time understanding
the risks associated with certain countries as
well as how asset classes behave in various
market conditions. We then build robust
and diversified portfolios that make
it easier for investors to stay invested.
This requires a deep understanding
of financial drivers, different asset classes,
various investment styles, what risk means for
different investors and, yes, an understanding
of what triggers certain behaviours.
We recently analysed model portfolios
managed on behalf of South African investors.
Of the 67 balanced model portfolios we
examined, just over 43% had no exposure outside
South Africa and only 10% had 45% or more
invested outside South Africa. The difference in
performance between these portfolios ranged
enormously, and without detailed information
about all the underlying holdings, we can
assume volatility will be vastly different without
the full benefits of geographical diversification.
We have a team based in the UK that manages
hard currency portfolios for South African and UK
investors, and so I investigated whether there is
any difference between the two ranges in terms
of home-country bias. Those managed on behalf
of largely South African investors have a more
neutral allocation to the MSCI World Index, while
those managed on behalf of UK investors tend to
have a bias towards the UK. The models with a UK
bias significantly underperformed those with a
more neutral weighting over one year, three years
and five years.
When we look deeper, it’s not actually
only the allocation to US equities that drove
this, although this was a contributor over
the more recent period (our managers were
underweight on the mega US tech stocks
in both ranges). The biggest impact on
portfolios was the diversification across
countries and the sectors available in different
economies that contributed significantly to
the differences.
Lack of diversification and irrational
biases affect returns and investors’ long-term
investment amounts. We can’t prevent investors
from having biases. But we can spend more
time analysing their impact and making
investors aware of the dangers of biases. This
allows our clients to make more informed
decisions. They will be better able to manage
the risk/return trade-off, are more likely to stay
invested and ultimately more likely to reach
their investment goals.
To find out more about Equilibrium and
how we bring improved balance into your
financial advice practice, visit eqinvest.co.za.
Equilibrium Investment Management (Pty) Ltd (Reg. No. 2007/018275/07) is an authorised financial services provider (FSP32726) and part of Momentum Group Limited, rated B-BBEE level 1.
16 www.bluechipdigital.co.za

COLUMN
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Trump 2.0
A time to focus on what you can control.
Rob Macdonald,
Independent Consultant
Rob Macdonald has held several senior
positions in the investment industry.
He is an independent consultant and
coach who also develops and facilitates
training programmes in behavioural
coaching and practice management.
Before joining the financial services
industry, Macdonald was MBA director
at the UCT Graduate School of
Business. He is the author of the book
The 7 Pillars of Financial Health and is
co-author of Rethinking Leadership.
Macdonald has a Master’s degree in
Management Studies from Oxford
University and is a CFP® Professional.
In recent conversations financial planners
have expressed bemusement with global
events thanks to Trump 2.0. One planner
expressed frustration that Trump 2.0 is
causing lots of unnecessary work for clients.
Another planner said that clients have asked
for communication about what was going
on, but he didn’t quite know what to say.
Neither of these comments is a surprise, given
the drama that seems to unfold daily on the
back of Trump 2.0, and the unpredictable
nature of this drama. One day tariffs are on,
the next they’re off. Or are they? I doubt the
man in question knows the answer. It’s not
worth speculating about. But the first quarter
of 2025 highlights that global events impact
client portfolios and client psyches. I guess
few people are not unsettled by the unhinged
proclamations and actions emanating from
the largest economy in the world. So how can
we prevent events like these from being an
unnecessary distraction for both clients and
financial planners alike?
Perhaps the best way is to remind ourselves
(and clients) of Stephen Covey’s Circle of
Influence model. It has three concentric
circles with the outside circle labelled Circle
of Concern. Herein lies conversations about
Trump 2.0. We may enjoy having these
conversations, but nobody not even Trump
2.0 has any idea what’s coming next, how
the global economy will be impacted or
how markets will react. You may still want to
have these conversations to give a client the
opportunity to “offload”. But even this has
limited value because as a fan of reality TV,
Trump 2.0 will ensure that for the next four
years there will be no shortage of footage
about which your clients will want to “offload”.
Who will forget the infamous Oval Office
bullying episode with Ukrainian President
Zelensky, during which Trump opined, “This
will make for great TV”? So, if there is little point
having a conversation about the leader of the
free world’s latest antic, what does one talk to
clients about?
Covey’s model suggests the only
conversation that would be meaningful at
this time, is one that deals with what you and
your client have in your Circles of Control and
Influence. Neither of you have any control
or influence over global political events,
economic policy decisions, investment market
movements or unpredictable events that may
happen in your client’s life. Any attempts at
predicting any of these events are a waste of
energy. Again, you can have a conversation
about what you can’t control or influence,
but what is the point? Rather, it would be
more meaningful to focus on what is in your
and your client’s control. Clients can adjust
their spending habits, their savings rates and
their plans about what they want from their
money and life. Financial planners don’t have
any control over any of those aspects of a
client’s world, but they can play a crucial role
in influencing the decisions clients make. This
is the essence of financial planning, helping
clients make and implement decisions about
their life and money.
As a financial planner, one thing you do
have control over is how you communicate
with clients, as well as the frequency and
content. Research suggests that your
approach to communication will have the
greatest influence on your client’s experience
of your advice, greater than your investment
or product choice recommendations. It is
worth spending time on the activity you
have the greatest control over. The more
you have planned your communication and
implemented it consistently, the more likely
you will influence client behaviour. Focusing
on your Circle of Control trumps getting
caught up in your client’s Circle of Concern, no
matter what’s going on in the world or even if
your clients do want to have a conversation
about Trump 2.0.
www.bluechipdigital.co.za
17

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COLUMN
ESG: the heartbeat of responsible advice
Now more than ever, ESG considerations are not optional extras – they are central to responsible financial planning.
Kobus Kleyn, CFP®,
Tax and Fiduciary
Practitioner, Kainos Wealth
Kobus Kleyn, CFP®, is a leading
financial planner and tax and
fiduciary practitioner in South
Africa. He has published over
200 articles, authored six
books and co-authored three
more. He is a multiple awardwinning
professional and holds
memberships with eight local
and international professional
associations. His awards include
four from the FPI (one of them a
Lifetime Achievement Award)
and two from the Million Dollar
Round Table; a Lifetime Award
and the President’s Award. He
also received the Liberty Group
Lifetime and INN8 Diamond
Award for Best Overall Impact
and Contributions to the Advice
Profession in South Africa.
As fiduciaries, our role extends beyond
product advice or portfolio performance.
We are, in essence, stewards of our clients’
legacies – charged with navigating them
through uncertainty while honouring their values,
families and future.
Environmental, Social and Governance (ESG) is not
a tick-box exercise or a flavour-of-the-month theme.
For me, ESG is about meaningful alignment between
our clients’ investments and their broader life story.
It’s about legacy. It’s about sustainability in the
deepest sense – not just market sustainability, but
personal sustainability.
The world has changed. Climate events have
become more frequent. Inequality remains deeply
entrenched, particularly here in South Africa.
Governance failures – from state capture to corporate
scandals – have eroded trust across institutions.
Clients are no longer asking if their money is making
a difference. They’re asking how.
A growing number of my clients – particularly
the next generation of professionals and business
owners – want to invest in a way that reflects their
beliefs. They want their financial plans to “do no
harm” and, ideally, “do some good”. They ask whether
their portfolios support clean energy, their retirement
savings avoid extractive industries and if their
corporate structures align with ethical tax planning.
We cannot ignore these questions. ESG is a
fiduciary imperative.
South African ESG context
In our market, ESG brings its own unique challenges
and opportunities. South Africa’s just energy transition
is not only an environmental concern, but also a social
and economic one. Unemployment, energy insecurity
and structural inequality create complex trade-offs.
This is where local expertise becomes vital. It’s
not just about applying a global ESG filter. It’s about
contextualising impact. For instance, a mining
company with strong local empowerment credentials
and carbon transition plans may offer more ESG
integrity than a foreign-listed green fund with little
social footprint here.
ESG requires due diligence, not default settings.
It means understanding what each client values and
matching that with real-world, measurable outcomes.
ESG and fiduciary duty
Some advisors fear that ESG compromises returns.
The data says otherwise. Multiple studies – including
work by Morningstar and MSCI – show that wellconstructed
ESG portfolios deliver comparable or
even superior risk-adjusted returns over the long term.
Beyond performance, ESG speaks to the core
of fiduciary duty: to act in the best interests of the
client. And best interests today include ethical
alignment, intergenerational fairness and long-term
risk mitigation.
In fiduciary planning, we talk about protecting
legacies – trusts, wills and business succession. ESG
simply extends that thinking. What kind of world
will our clients’ grandchildren inherit? Will their
investments reflect the values they shared around the
dinner table? Will their wealth preserve ecosystems,
uplift communities and reward transparency?
Practical steps for planners
So how do we integrate ESG meaningfully into our
advice process?
Start with values-based conversations. Don’t
jump straight into selling products. Ask what matters.
Many clients have never had the space to connect
money with meaning.
Use independent ESG research. Filter beyond
marketing material. Tools like Sustainalytics or local
ESG rating providers guide product selection.
Evaluate fund mandates. Look for fund managers
with clear stewardship records.
Incorporate ESG into compliance checklists.
Include ESG as part of your record-keeping and client
review process.
Collaborate across professions. ESG touches
tax, estate, legal and insurance planning. A multidisciplinary
view strengthens outcomes.
Financial freedom is not just a goal – financial
freedom is a journey. ESG ensures that this journey is
not only profitable, but purposeful. Let’s ensure that
when our clients build wealth, they also build a world
worth living in.
18 www.bluechipdigital.co.za

MEET THE
MANAGERS
10th June Johannesburg
12th June Cape Town
NEW
INDUSTRY
SURVEY

BLUE
CHIP
Strapline
FPi DPS
Young Financial Planners Organisation
Advancing Professional
Financial Planning and
Advice for All
20 www.bluechipdigital.co.za

Strapline
BLUE
CHIP
AD???????
Young Financial
Planners Organisation
Learn more, visit www.fpi.co.za
www.bluechipdigital.co.za
21

BLUE
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CLIENT ENGAGEMENT | Behavioural finance
A Coaching Way of Being
Blue Chip explores the role of coaching in unlocking financial potential. Behavioural
coaching expert, Rob Macdonald, unpacks what it is and why it is important to the
work of a financial planner.
22
www.bluechipdigital.co.za

CLIENT ENGAGEMENT | Behavioural finance
BLUE
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What is coaching?
Most people are probably familiar with the idea of a coach. Our
experience is usually from the sports field, where we may have
had a coach at school or observed coaching in the professional
sports era. Yet more recently interpersonal coaching has grown
globally as a way of supporting individuals in their life or work.
Various labels are given to this, the most common probably
being “Life” or “Executive” coaching. The essence of this form
of interpersonal coaching, I believe, is for a coach to help an
individual find answers for themselves to questions that they
themselves have, about any aspect of their life or work. It may
help someone who is dealing with a challenge, wanting to make
a change or trying to achieve a goal.
How is that distinct from mentoring?
Mentoring usually involves someone with greater experience
or expertise, passing on guidance and knowledge to someone
less experienced. Coaching is about helping someone find their
own answers to questions, rather than providing the answers.
An example would be, in response to the question, “How should
I do this?” a mentor may say, “I suggest you do it this way… in
my experience that worked best.” Whereas a coach is likely to
respond with a question like: “What ways have you thought of
doing this?” So, a mentor plays a role in offering solutions or
advice; in coaching the responsibility for finding solutions and
a way forward falls onto the client, rather than the coach.
Coaching is about helping
someone find their own
answers to questions.
How then does coaching apply to financial planning,
given that clients go to a financial planner to get advice?
Yes, on the face of it, financial planners play more the role of
mentor rather than coach. They have the financial technical
expertise and experience which a client usually lacks. But
there are two key challenges that financial planners face when
giving advice to clients. The first is that sometimes they will
give the wrong advice because the client hasn’t given them all
the information needed to give the right advice. Second, the
financial planner gives the right advice, but the client doesn’t
take it.
Isn’t that a problem that just comes with the territory of
being in a professional advisory occupation?
Yes. Doctors, laywers and other advisory professions face the
same challenge. Unfortunately, there is another problem with
giving advice! Ironically, giving advice can be disempowering.
If you tell me what to do, then I can blame (or praise) you for the
outcome of the advice.
A financial planner I worked with had a client who had a
spending problem. The financial planner advised the client that
they needed a budget and offered to draw up the budget for
the client. Six months later, the financial planner was fired by
the client because they still had a spending problem. The client
had taken no responsibility for sticking to the budget because it
was all the financial planner’s idea. In a way, it was the financial
planner’s budget not the client’s budget!
So how do financial planners address these problems?
The key is to find a way for clients to take greater responsibility
for their own financial outcomes. Research by Morningstar
shows that clients are more likely to achieve financial health if
they feel in control of their financial future.
In other words, getting clients to feel more empowered with
the decisions they make is key to effective financial planning.
Helping clients take responsibility for their own decisions is what
a coaching approach enables.
Does this mean that financial planners should be coaches?
No. You might be surprised by my answer. Clients are still coming
to financial planners for financial advice, so I don’t believe
financial planners can be just a coach. They still must draw on
their expertise and experience to help clients, just like mentors.
In some ways I think we are doing the financial planning
profession a disservice with the many new services we see
emerging, and financial planners taking on labels such as
a financial counsellor, therapist or coach to differentiate
themselves. Often there are people who operate with these
labels who are not even licensed to give financial advice. But
in the same way that I want to see a doctor about my physical
health, I want to see a financial planner about my financial health.
Yet, you are advocating for a coaching approach to
financial advice.
I definitely am. Much research shows that the greatest value that
a financial planner adds is through behavioural coaching. But
I’m suggesting that this approach doesn’t change
the fundamental nature of the work of a
financial planner, which I believe is to help
clients make and implement life and money
A financial
planner’s work
is not just about
the money.
Rob Macdonald,
Independent Consultant

BLUE
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CLIENT ENGAGEMENT | Behavioural finance
decisions. And this is the crux: a financial planner’s work is not just
about the money. After all, money is simply a means to an end. I
don’t believe you can help clients make sound money decisions
without helping them make decisions about their life as well. And
I believe that you can do that best by adopting a Coaching Way
of Being.
After all, money
is simply a
means to an end.
What do you mean by a Coaching Way of Being?
A “Way of Being” describes how you turn up with your clients.
If you turn up as the technical expert who sees your technical
advice as your real value-add, you can provide great advice, but
as I mentioned earlier, it could be wrong, or it just doesn’t land
with the client.
By adopting a “Coaching” Way of Being, you turn up in a way
that recognises that the client is the expert in their life and that
taking responsibility for their own decisions is key to their financial
health. Most importantly, the financial planner turns up mindful
of the fact that the person in front of them is their client, not the
client’s money.
How do you develop a Coaching Way of Being?
Just like when you learn to ride a bicycle, you can only learn it by
doing. So, it’s a way of being that I believe can only be learned by
doing. You can’t learn it by reading a book or watching a video.
The key is in the doing and the practicing.
I have run several behavioural coaching programmes designed
to help financial planners develop a Coaching Way of Being. In
these programmes, we develop key interpersonal skills such as
being present, curious, showing empathy, asking good questions
and listening deeply.
I don’t believe you can help clients
make sound money decisions
without helping them make
decisions about their life as well.
Adopting a Coaching Way of Being also demands high levels of
self-awareness, self-insight and self-management skills, which in
fact are the foundation of this way of being. An encouraging aspect
of learning to work in this way is that it not only impacts how you
relate to clients, but feedback from the programme participants
suggests that they have found it useful in their personal lives and
in how they relate to colleagues, family and friends.
If you are interested in learning more about how to
develop a Coaching Way of Being, you can contact Rob at:
rob@coachingwayofbeing.com

BLUE
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INVESTMENT | Technology
Survival of the fastest
With the arrival of Artificial Intelligence into the mainstream world, we find ourselves at a
point of optimism over the future in this cycle of technology innovation.
Remember Netscape Navigator? The company was the
dominant web browser and search engine in the 1990s,
later displaced by Google, Microsoft, Apple and Amazon
as the kingpins of the Internet age. At the height of
Netscape’s success, Google was a one-year-old startup, Microsoft
was just releasing Windows 2000 – its latest operating system
that you could buy in a box set, while Apple was making goodlooking
desktops and Amazon was an emerging online bookstore.
Netscape was seen by investors as the access point to the
boundless opportunities that the Internet held for the future
of business, causing the share price to soar after its IPO in 1995,
even though it barely made a profit on meagre sales. What the
company did to generate those sales did not matter to investors as
they bought into the hope of future earnings. As the San Francisco
Chronicle reported at the time:
“It’s more likely that investors believe the myriad alliances
Netscape has struck with other technology companies will
enable it to set the tone for developing business, banking and
entertainment on the World Wide Web. The bottom line is that it
doesn’t matter that Netscape is still a puny company on paper.
The future is what counts, and optimism over the future has juiced
the stocks of most Internet-related companies, not just Netscape.” 1
The public launch of ChatGPT in 2022 created a wave of
excitement as the world tried to digest this new wave technology
that showed the potential to answer complex questions like a
human would. This also caused an increased level of anxiety as
the concept of machines taking our jobs was suddenly more
realistic than a Hollywood film plot. Elon Musk was at pains
to point out at the time that there was a myriad of unintended
consequences that followed the launch of this technology and
that serious controls were needed. The AI machine, however, had
been built and unleashed on the world.
The emergence of AI
AI has been in existence as a field of research since the 1950s.
Much of this body of work has already been integrated into many
aspects of our daily lives as well as the economy. For example,
autonomous robots building cars are controlled by AI systems,
while the predictive text when typing a phone message has
been around for almost a decade. The step change with the
most recent iteration of AI relates to the rationalisation and
reasoning capabilities of the large language models (LLMs) that
underpin the now common ChatGPT and Gemini applications
that you can access on your phone.
These models are like a super-smart colleague that you can talk
to, just like you would a person. You can ask anything – questions,
help with writing, explanations or even just to chat – and it
responds in a way that sounds natural. It doesn’t have feelings, but
it’s been trained to understand language by reading a huge volume
of Internet-sourced books, articles and conversations. It doesn’t
“think” like a human; it gives you helpful or interesting answers
based on what it’s learned. (This comment was in fact written by
ChatGPT.)
The range of future uses for AI are impossible to predict
26 www.bluechipdigital.co.za

INVESTMENT | Technology
BLUE
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but are likely to include services that complete mundane daily
tasks like restocking your fridge to more complex tasks such as
negotiating legal agreements for the sale of a property. In business,
AI management teams could form the nucleus of a company
directing and organising resource allocation. These tools could
solve hugely complex logistical or optimisation challenges in our
electrical grid or traffic management systems to boost efficiency
and productivity. These ideas may sound far-fetched, but this
is exactly where LLMs are being actively applied today, and we
are likely to see the introduction of these services in the not-sodistant
future.
The drivers of AI development
The key parties driving the development of AI technology and its
progression into real world commercial applications are broadly
grouped as follows:
Infrastructure. Manufacturers of graphics processing units
(GPUs) train and run the most advanced models, eg Nvidia. These
chips are highly specialised and hard to replicate, with only a
handful of companies providing them at this stage.
Hyperscalers. These are large technology companies like
Meta, Microsoft and Alphabet that have leveraged the scale of
their platform businesses and balance sheets to develop various
services and applications related to AI technology. The likes of
Alphabet have chosen to internally develop this capability (eg
Gemini), whereas Microsoft has formed strategic partnerships
with AI leaders like OpenAI to secure its spot as the frontier of
the market.
Other downstream providers. These are businesses that have
established teams of experts developing inhouse AI capabilities
to avoid being behind the technology curve (banks and insurers)
or venture capitalists funding early startups to set up the “new
new thing”. 2
The stakes of participation are high, requiring cutting-edge
computing power, significant electricity consumption, access
to vast datasets and the technical expertise needed to train the
models. This has narrowed the field of companies pursuing
AI technology to a select group, who have deployed large
amounts of capital to invest in AI-related initiatives.
Yet, AI is increasingly viewed as essential for survival across
business and government, seen as a critical investment to maintain
a competitive edge or to avoid obsolescence. This has fuelled an
almost “sky-is-the-limit” expectation of what companies are willing
to pay to stay at the forefront of AI, unlocking vast potential for
future revenue streams tied to AI-related services owned by the
companies that hold the key to technology.
Share prices have reflected this enthusiasm as the market
increases its revenue expectations for this small cohort of stocks,
in other words, rewarding AI leaders for the high level of capital
expenditure on AI.
The winners today may not be the winners of tomorrow
The AI infrastructure stocks like Nvidia have been early winners,
enjoying extraordinary profits as demand for their chips has risen
with the need for additional computing speed and stock-piling
efforts by Big Tech, while competition has been almost nonexistent
and supply is constrained.
However, the winning business model for service providers
like Microsoft, Meta and Alphabet has yet to emerge. Despite this,
their stock prices reflect a scenario in which they win the AI race
and successfully translate this position into higher earnings – an
outcome that is far from certain. For example, it remains unclear
how Microsoft will integrate AI into its existing services, a process
that could take years of trial and error. This uncertainty raises
questions about Microsoft’s future business model, with a wide
range of possible outcomes – ranging from immense success
(Microsoft Azure cloud service) to obsolescence or something in
between with slower- than-expected earnings growth.
Another threat is the emergence of innovative technologies
like DeepSeek that can disrupt the status quo. DeepSeek is a
one-year-old Chinese startup that recently showed the world
there are faster, cheaper ways to compete. This not only reduces
the amount of computing power needed to build and run AI
models (less chips and data centres) but also weakens the
control that Big Tech has over cutting-edge AI models. There
are questions about DeepSeek’s merit, sustainability and
security, but that misses the point:
• Its emergence shows the value that AI potentially holds, with
a billionaire hedge fund manager from China betting his
fortune on AI. Other tech billionaires like Eric Schmidt (Google)
are doing the same with startups like Anthropic.
• It reminds us that we are still in the exploratory disruptive
stage of the AI lifecycle, with potentially no clear winners
identified yet. Recall the earlier example of Netscape, who
along with a myriad of other early innovators of the Internet
disappeared, later to be replaced by Google, Amazon and
Facebook, who emerged much later in the cycle as winners.
They then developed platform business models that no-one,
not even their founders, imagined in early infancy.
Hence, history demonstrates that the current AI winners today may
not be the AI winners of tomorrow. For example, does Alphabet
get replaced by a superior alternative to Google Search or does
www.bluechipdigital.co.za 27

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INVESTMENT | Technology
Nvidia’s dominance get eroded by emerging Chinese production of
chips? There are 1 800 AI models available on the Microsoft Azure
platform. Who will win? And if they do, will it use the Microsoft
platform to host its services or another emerging company who
disrupts the status quo? Ultimately, the range of outcomes is wide,
even if we agree at a base-level that AI will change the world, and
there are strong arguments to suggest it will.
Stock market expectations
Earnings for Big Tech have surprised on the upside since the AI
hype began in 2023 and there has been strong momentum in its
share prices, which is driven in part by speculation around the
outlook for AI and in part by investors fearing missing out on the
AI theme. The risks that the hyperscalers turn these AI investments
into earnings growth and profits are high. Recently a few of the
companies have provided more muted outlooks, citing supply
constraints and challenges with electricity demand among several
other emerging headwinds.
AI is increasingly viewed as
essential for survival across
business and government.
We have seen the market show excitement towards new
technology innovations over the past years as investors looked
to identify the next “new new thing”, including thematic ideas like
the metaverse 3 and NFTs, 4 and even Bitcoin and the blockchain.
These ideas have largely perked interest and then subsided as
the embedded risks or commercial viability remain a challenge.
There have been other emerging themes like autonomous driving
or energy transitions, where AI is destined to be the technology
that binds this all together. There is also the potential that today’s
AI winners are derailed by advances in computing power – led
by the quantum computing industry which has yet to make its
presence felt.
AI as a concept has immediate, tangible real-world applications
with the potential for future evolutions. This provides a level of
comfort that the benefits could deliver productivity and innovation
gains for a while to come. This also means it is important not to
focus solely on AI leaders as the primary beneficiaries.
As with past technological advancements, the benefits extend
across the broader economy, driving productivity gains and
reducing inflation. It is also likely that there will be a long list
of potential losers that are either startups that fail to develop
a sustainable service proposition or an incumbent that fails to
adapt to the AI transition. Companies like Samsung, who have
committed to developing cutting-edge chip-manufacturing
technology to rival the incumbent TSMC, have failed to meet
the required quality and efficiency standards and the company
risks another large derating of its stock.
How to access the AI investment opportunity
AI technology has the potential to deliver meaningful investment
opportunities, but the major warning for investors is that an AI
leader purchased at the wrong price could prove to be a poor
investment if the resulting growth in earnings doesn’t justify the
investment made to achieve its dominance. Likewise, missing out
on emerging opportunities could mean an investor missing the
investment of the next decade and beyond.
Our investment approach to access the AI investment case is
multi-pronged:
1. Start with the index. Buy passive, because we don’t know who
the winner will be. We have done this – conservatively – but it
has added material returns from holding winners which hardly
anyone saw.
2. Invest in specialist growth funds, who set out to look for these
opportunities and others like them every day.
3. From a valuation perspective, we need to weigh up high
prices versus the size of the opportunity, as you can get drawn
into overpaying. Like the trajectory of technology out of the
Internet boom in the 1990s, it is likely that you will need to
adjust positions in portfolios as the market finds its path to the
ultimate winners as Google and Amazon showed. Balancing
likely reality and optimism is important in this phase.
New disruptive technologies like AI will become pervasive,
benefiting many companies, creating new ones and rendering
others obsolete. However, accessing these opportunities
while avoiding pitfalls is less straightforward. As AI becomes
embedded, we expect the path to be one with volatility, along
with disruptions and surprises, as we navigate this exciting
technological revolution.
Doug Nicol, Investment Analyst, Fundhouse
[1] www.elon.edu
[2] “The New New Thing – A Silicon Valley Story” written by Michael Lewis about the rise and fall of Netscape.
[3] An online world which integrates real life activities.
[4] Non-Fungible Tokens – essentially turning data into asset form.
28 www.bluechipdigital.co.za

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Tickets available at:
humansundermanagement.com/southafrica2025

BLUE
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INVESTMENT | Responsible investment
Impact and returns: why financial
planners should consider ACOF
The narrative that impact comes at the cost of returns simply is not true.
Financial planners are often faced with a key challenge
when advising clients: balancing the desire for strong
financial returns with the growing demand for investments
that drive positive social and economic impact. The
perception that impact comes at the cost of returns, or vice
versa, has historically kept investors from seizing opportunities
that could achieve both. The Altvest Credit Opportunities
Fund (ACOF) is one such example. ACOF delivers private credit
returns that are competitive andcontribute to economic
development by funding South African SMEs. With equity
investors earning an internal rate of return (IRR) of almost
26% per annum for a seven-year period, and debt providers
earning Prime +2%, ACOF offers a compelling investment case
that aligns financial growth with meaningful impact.
South Africa faces a staggering SME funding shortfall,
estimated at over R500-billion. Traditional banks often view
SMEs as risky, and businesses are pushed towards expensive
non-bank financial institutions (NBFIs) that charge predatory
rates – sometimes exceeding 100% annually. This leaves many
SMEs in a financing trap.
Private credit
ACOF provides structured, secured loans to high-potential
SMEs. These businesses represent the backbone of South
Africa’s economy, yet they struggle to access funding. The
fund bridges this gap while ensuring investors benefit from
a well-managed portfolio of diversified loans, supported by
strong risk management protocols and collateralised lending
structures. Private credit, historically an asset class reserved
for institutional investors, has become an attractive option for
those seeking high yields with controlled risk. ACOF offers
financial planners exposure to this lucrative asset class, with
flexible entry points:
Equity. No minimum investment, allowing broad participation.
Debt. Minimum of R1-million, built for income generation.
Economic and social impact
Beyond returns, ACOF is structured to generate meaningful
economic impact. Since its inception, the fund has:
• Deployed over R240-million in funding to SMEs.
• Maintained a strong pipeline of R640-million, showing demand
for its financing solutions.
• Funded businesses across 19 different economic sectors.
• Created nearly 1 400 jobs in South Africa.
For clients interested in ESG investing, ACOF is a clear case
of how capital drives real-world change while maintaining
financial discipline.
Real-world success
ACOF’s impact is not theoretical – it’s visible in the businesses
and communities it helps grow. By providing fair, flexible
funding, ACOF unlocks economic potential that would
have remained dormant. Here are some of the businesses
transformed through ACOF’s support:
Dippa Distributors. A fourth-generation fishing family
that had never owned their own vessel secured an ACOF loan
to purchase a boat, allowing them to grow their business
independently for the first time.
Azowel Projects. What began as a modest vegetable farm
in KwaZulu-Natal is now a high-tech hydroponic agricultural
enterprise. The result: greater food security for local
communities and new jobs for women and youth in rural areas.
Mila Restaurant. With ACOF’s support, Mila specialises
in world-class Greek fine-dining. Mila invested in its staff by
sending them to Greece to train with Michelin-star chefs.
The result? Over 100 new jobs, international standards and a
revitalised local hospitality sector.
Why act now
The demand for SME financing in South Africa creates a longterm
opportunity for investors to benefit from sustainable, highyield
returns. With its structured approach, secured lending
and clear impact, ACOF is an investment opportunity that
financial planners can confidently present to their clients.
By integrating ACOF into their advisory portfolios, financial
planners can offer:
Attractive returns. 26% IRR for
equity investors and Prime +2% for
debt providers.
Portfolio diversification. Exposure
to the private credit market.
Tangible impact. Funding that
contributes to SME growth.
Investing for impact and returns is no
longer a trade-off – it’s an opportunity.
ACOF makes it possible for investors
to have both.
Warren Wheatley,
CEO, Altvest Capital
30 www.bluechipdigital.co.za

BLUE
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FINANCIAL PLANNING | Financial literacy
The future of group risk:
why a consultative approach is key to financial security in SA
South Africa faces a significant financial literacy crisis.
According to the Organisation for Economic Co-operation
and Development (OECD), only 42% of the adult
population are financially literate.
Research from National Treasury indicates that over
60% of households struggle with budgeting and managing debt,
leaving many unprepared for financial emergencies or retirement.
Income inequality exacerbates this issue, with the top 10% of
earners taking home more than half of the country’s income,
according to Stats SA.
The shift toward consultative selling
Given the country’s economic challenges, changing family
structures and the growing complexity of financial products, a
consultative approach is more critical than ever in South Africa’s
group risk and employee benefits market. Instead of merely
promoting products, there’s a need for advisors to focus on
understanding each employer’s unique requirements through a
thorough needs analysis.
The rise of AI tools and call centres, coupled with reduced
human interaction, has left many advisors frustrated. Navigating
the growing number of product providers, complex terms
and conditions and stringent regulatory requirements, such
as Know Your Client (KYC) and Policyholder Protection Rules
(PPR), has become overwhelming. Independent advisors face
an added challenge: regulations now require communication of
policy changes to employers and individual members, making
communication and education even more critical, especially
given South Africa’s low financial literacy levels. As a result, many
advisors tend to gravitate towards a limited selection of providers
they trust, which can ultimately restrict client choice and limit
business growth.
The independent advisor’s challenge
Economic disparities among corporate clients and the diverse
socioeconomic workforce mean a one-size-fits-all approach
is inadequate. As a business development manager at Jigsaw
Financial Services and a CFP® with over 30 years’ experience in
the industry, I have seen how financial protection plays a vital role
in employees’ lives.
In lower-income sectors, financial protection often takes
precedence over retirement savings. Many employees covered
under group policies are sole breadwinners, meaning their
families depend entirely on their income. The right benefit structure
ensures families are protected in times of need. Furthermore,
employees who are uninsurable as individuals rely on their employerprovided
group cover, which may be their only form of financial
protection. Conducting a detailed analysis of the employee data
32
www.bluechipdigital.co.za
is essential to ensure the correct cover is in place and that pricing
remains sustainable.
Addressing the complexity of group risk
At Jigsaw Financial Services, we support advisors in navigating
the complexities of group risk, ensuring the benefits offered align
with the needs of both employers and employees. We utilise data
analytics to strengthen advisors’ recommendations. A detailed
analysis of employee demographics provides critical insights
into group composition. For example, an advisor may initially
request standard cover up to normal retirement age. However,
data analysis might reveal that several key employees are already
nearing retirement age, and the company may intend to retain
them beyond retirement.
While insurers may simply quote as requested, we highlight
these insights to advisors, adding value to their recommendations
and ensuring better alignment with employer needs. Risk cover
is often overlooked in favour of investment-focused retirement
planning. However, escalating risk costs can erode investment
allocations, ultimately affecting long-term financial security.
Sustainable risk pricing requires industry-specific accuracy. Are
engineers desk-bound or field-based? Are IT employees remote
or on-site? These distinctions impact pricing and affordability
allocations, ultimately affecting long-term financial security.
A call for a consultative approach
South Africa’s financial literacy crisis presents both a challenge and
an opportunity. Advisors play a crucial role in guiding employers
and employees through their options, ensuring risk benefits
are structured effectively and
members understand their
cover. By adopting a consultative
approach, advisors can have a
meaningful impact on financial
security across the country.
Jigsaw empowers advisors
utilising data-driven insights,
technical expertise and strategic
support needed to navigate this
evolving landscape. We help
advisors craft sustainable, clientcentric
solutions that provide real
financial protection. Together,
we can drive meaningful change
in the group risk space, ensuring
South Africans have the security
they need for the future.
Corinne da Silva, CFP®,
Business Development
Manager, Jigsaw
Financial Services

Financial Services
Partnering with Financial Advisors, Employee Benefit
Consultants and Retirement Fund Administrators to
navigate Group Risk with expertise, insights, and
solutions that matter.
010 447 2234
info@jigsawsa.co.za
www.jigsawsa.co.za
Jigsaw Financial Services (Pty) Ltd (Reg No: 2003/015468/07)
(FSP No.: 21406) is an Authorised Financial Services Provider.

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INVESTMENT | Solutions
Client confidence beyond the wrapper:
engaging investors on investment safety
Financial planners need to demystify an increasingly complex array of products in today’s
investment landscape.
From unit trusts and ETFs to structured products, clients seek
guidance on safety. The challenge lies in helping clients look
beyond labels towards the underlying risk, regulation and
appropriateness of each investment. The evolution of the
South African retail investor has been shaped by regulatory progress,
technology and product innovation. From an era when investment
opportunities were primarily reserved for institutions and high-networth
individuals, retail investors now enjoy direct access to a wide
array of investment vehicles.
Investments are typically made through Linked Investment
Service Providers (LISPs), stockbrokers or bank platforms. Unit trusts
offer diversification, accessibility and a mature regulatory regime.
The prevailing approach to portfolio construction often defaults to
a collection of unit trusts rather than a blend of distinct strategies
across different wrappers. But investing isn’t limited to one format.
Nor should it be.
Safety in investing is an outcome of sound regulation, transparent
design and investor understanding. It’s essential to appreciate that
no investment is risk-free. What matters is whether the risks are
appropriate for your goals and are managed effectively.
Unit trusts, ETFs, structured products: what’s the difference?
Product
Type
Issuer Primary Regulator(s) Investor Protections
Unit Trusts Asset managers Collective Investment
Schemes Control Act
(CISCA), FAIS
ETFs
Structured
Products
Hedge
Funds
Asset
managers/issuers
Banks
Asset managers
JSE listings
requirements, CISCA
Banks Act, FAIS, Basel
IV, prudential
standards
CISCA (as per retail
hedge fund rules)
Table 1. Investment products and their regulation.
Daily pricing,
diversification rules,
trustee oversight
Index tracking, liquidity
(if exchange listed)
Capital or yield
protections (where
applicable), defined
outcomes
Disclosure standards,
leverage limits
All these products are regulated under South African
law, but regulation reduces risk, it does not eliminate it.
Structured products
Structured products are often misunderstood. They
offer predefined outcomes based on market
scenarios – for investors seeking certainty.
Yet, concerns have been raised about their
safety. When structured products fail to
meet expectations, it’s typically due to:
Misunderstanding the product
• Mismatches between investor needs and product design.
• Mis-selling by advisors or platforms.
Structured products issued by reputable institutions and used correctly
perform as expected but require due diligence. Investors must
evaluate both the product features and the issuer’s creditworthiness,
especially as many products are issued by banks whose obligations
are unsecured.
Understanding regulation
In South Africa, investments benefit from multi-layered regulations:
• Statutory laws like CISCA, the Banks Act and the Financial Advisory
and Intermediary Services (FAIS) Act.
• Prudential frameworks like Basel IV.
• Conduct regulations enforced by the FSCA.
• Dispute resolution mechanisms.
Beyond formal laws, there are industry codes of conduct, reporting
obligations, compliance guidelines and enforcement frameworks,
which create a robust safety net.
Investment risks
All investments carry risks that are not unique to any single product
type and should be carefully evaluated regardless of the investment
wrapper. Key risks include:
• Credit. The possibility that the issuer defaults.
• Market. Losing money due to movements in financial markets.
• Liquidity and marketability. The inability to access/sell your
investment without affecting its price.
• Operational and behavioural. Issues like administrative failure or
investor panic during volatility.
Clients are increasingly exposed to traditional and alternative
investment opportunities, so safety is no longer a one-dimensional
concept. It’s shaped by product structure, regulatory strength and
investor awareness.
As financial planners, your role is to engage constructively
with complex products. For instance, you can translate
regulatory frameworks into practical guidance, explain
trade-offs across wrappers and align recommendations
with client goals. This elevates advice beyond transaction
to relationship. When guiding a client on product
safety, the message remains the same: informed
Vuyo Nogantshi, Head
of Distribution: Index
and Structured
Solutions, Absa Group
investing begins with understanding.
Understanding begins with engagement. Your
ability to engage clients on the safety of their
investments is what will ultimately build trust
and enhance their investment experience.
34 www.bluechipdigital.co.za

INVESTMENT | Solutions
Leading the way to pan-Africanism
Absa Index and Structured Solutions sits within Global Markets in the Corporate and Investment Banking division
of Absa and is fundamental in the group’s objective of being a leading pan-African bank. Blue Chip caught up
with Fundi Pikashe, CFP®, Head of Distribution: Structured Solutions, Corporate and Investment Banking, Absa.
BLUE
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Please provide an overview of the team’s mission and how it
fits within Absa’s broader Corporate and Investment Banking
(CIB) strategy.
Absa Index and Structured Solutions (AISS) offers clients solutions
which fit into three capabilities:
• Index Solutions. Exchange traded products (ETFs, ETPs and AMCs)
offering low-cost, seamless and efficient trading.
• Structured Solutions. Pre-packaged solutions that allow retail
investors to achieve customised risk-return objectives and enhance
their investment opportunities by offering tailored exposure to
various asset classes and market conditions.
• Fund Solutions. A range of investment strategies that optimally
manage risk and return objectives on a single fund or portfolio
of funds.
What inspired the decision to take traditional investment
banking products into the retail market? What opportunities
do you see in this space?
By innovating to allow scalable access to retail investors, we create
opportunities for our clients to expand their investment universe,
achieving better outcomes from both a risk and return perspective.
There is currently a very low penetration of these products in retail
client investment strategies. An opportunity exists for retail advisors
to build better solutions for their clients by taking advantage of tool
sets that complement how they have historically worked for clients.
How does Absa CIB support the integration of traditional investment
banking products into the retail market?
Part of CIB’s strategy is to be purposeful in how we compete; by
identifying attractive growth pockets by geography, segment and
product. We identified the retail market as a segment that benefits
from the solutions historically offered to institutional investors.
We offer lower minimum investment amounts to retail investors
in our Structured Products range monthly, making these products far
more accessible. The same is true for our fund-linked solutions where
advisors provide customised solutions on a client-by-client basis.
How does Absa CIB’s global reach and expertise enhance innovation
and meet the needs of retail clients?
Absa Group is a diversified financial services provider headquartered
in Johannesburg with over 41 000 banking professionals and a
customer base of over 12-million. Our presence in Africa includes
regionally coordinated coverage in 12 markets. We provide global
reach through our London and New York offices. The firm leverages
its strength in capabilities across the global markets and investment
banking disciplines together with internal and external partnerships
that ensure retail clients have access to current and relevant solutions.
What role do global markets play in the delivery of retail
banking products?
As a part of the broader CIB, the Global Markets division delivers on the
strategy to be a leading pan-African bank. The depth of capabilities
within Global Markets, the partnerships leveraged both on and
outside the continent, our drive to be a digitally powered business
and a robust control environment ensure the successful development
and delivery of a valuable range of solutions.
How does AISS provide added value to retail clients, and what
differentiates it from other players in the market?
AISS distinguishes itself by offering:
• Customisation and flexibility. Clients can test different approaches
across a diverse solutions range.
• Comprehensive documentation. Transparency and jargon-free
explanations allow a more certain investing experience.
• Advanced trading platforms. Providing relevant data on the
performance of investors’ strategies.
• Dedicated support. A diverse response team that covers all aspects
of investing journeys.
• Ethical practices. Prioritising investors’ best interests and avoiding
conflicts of interest.
Please outline upcoming initiatives or products.
While our structured products have a well-established track record
of delivery, we continuously innovate in this space with product or
transactional improvements. Our fund solutions are new to market, and
will revolutionise how advisors and investors structure their portfolios.
How does this initiative align with Absa’s overall client commitment?
Absa Group aims to be a leading pan-African
bank, grounded in its responsibility to serve
its clients. This dedication involves a deep
understanding of the value provided
throughout the entire client relationship.
AISS extends the availability of traditional
banking products, once exclusive
to institutional clients and hedge funds,
to retail clients. Consequently, our
services allow retail clients
to tailor solutions to their
needs, granting them the
flexibility in defining their
own investment goals.
Fundi Pikashe, CFP®, Head
of Distribution: Structured
Solutions, Corporate and
Investment Banking, Absa
www.bluechipdigital.co.za

BLUE
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CLIENT ENGAGEMENT | Behavioural finance
Knowing isn’t doing
Why smart financial advisors should have their own trusted financial advisor.
Financial advisors excel at guiding clients towards sound
financial decisions. However, when it comes to their
own finances, they often struggle to apply the same
pragmatic advice they offer to clients. I include myself
in this observation. The cognitive biases, behavioural patterns
and challenges that advisors help clients navigate affect their
own decision-making processes. Making objective financial
decisions can be even more challenging for advisors, as
personal preconceptions may cloud their judgement. This reality
underscores the adage, “A lawyer who represents himself has a
fool for a client”. The same principle applies to financial advisors.
Avoiding uncomfortable topics is a common human tendency,
particularly when dealing with subjects that provoke discomfort
or anxiety. Retirement planning, estate planning, drafting a
will, budgeting, health issues and succession planning are all
complex and emotionally charged discussions that are frequently
postponed and avoided by both clients and financial advisors.
As financial experts, advisors routinely encourage clients to
confront these difficult issues directly and guide them through
complex financial situations. They construct comprehensive
financial plans that address every aspect of a client’s financial
portfolio, providing guidance and accountability to ensure
adherence to strategic plans. Advisors educate clients about
the challenges and discipline required to follow through on
these plans, emphasising that regular reviews and objective
assessments are necessary for long-term success.
Avoiding uncomfortable topics
is a common human tendency.
Financial advisors are adept at prompting clients to discuss
sensitive issues, including confronting mortality, recognising
detrimental spending habits, addressing retirement concerns
and engaging in succession planning. These conversations
require empathy, persistence and the ability to guide clients
through emotionally difficult territory. An unbiased viewpoint
significantly enhances the decision-making process.
Tom Stoppard aptly remarked, “We give advice by the bucket
but take it by the grain.” Despite dedicating their careers to advising
others, many financial advisors do not apply the same principles
to manage their own financial affairs. They often overlook the
importance of seeking professional help for their personal financial
plans, either due to overconfidence or reluctance to admit the need
for assistance. Cognitive blind spots impede sound financial decisionmaking,
leading to procrastination and incomplete planning.
A trusted financial advisor provides an objective perspective
on difficult topics such as succession and retirement planning,
educational funding for children and budgeting within a commissionbased
environment. This ensures that advisors receive candid,
unbiased advice that serves their best interests, even if it challenges
their initial perspectives.
John Steinbeck’s observation, “You know how advice is, you only
want it if it agrees with what you wanted to do anyway,” underscores
the importance of having an advisor who provides objective
guidance rather than merely validating preconceived ideas.
It is important to acknowledge that financial professionals, like
all individuals, may encounter challenges in organising their own
finances. Seeking assistance is not a sign of weakness but rather
an acknowledgement of the complexity of personal financial
planning. Just as financial advisors advocate for their clients to
seek expert guidance, they should apply the same principle to
their own financial matters. By appointing a trusted financial
advisor to manage your financial situation, you benefit from the
same clarity, objectivity and strategic insight that your clients
do – why would you deserve anything less?
Henda Kleingeld CFP®, FPSA®, TEP, Programme Director:
PGDIP in Financial Planning, School of Financial Planning
Law, University of the Free State
36 www.bluechipdigital.co.za

A shift up and to the left
A
strategic allocation to hedge funds offers a compelling
solution, with the potential to shift an investment portfolio’s
efficient frontier upwards and to the left, delivering higher
expected returns for a given level of risk.
Monthly Global Economic Policy Uncertainty Index. 1
While hedge funds offer significant potential, prudent portfolio
construction emphasises diversification. Regulations, such as South
Africa’s Regulation 28 of the Pension Funds Act, often limit exposure
to alternative investments to less than 10%. We suggest that investors
make it part of the allocation in a well-balanced portfolio.
The impact of hedge fund inclusion is illustrated in the following
graph, which displays the efficient frontier for a portfolio comprising
South African and global equities as well as South African bonds.
The red line shows the efficient frontier without hedge funds. The
blue line shows the efficient frontier with a hedge fund allocation.
By incorporating hedge funds, the efficient frontier shifts upwards
and to the left, demonstrating the potential for increased returns at
every risk level.
INVESTMENT | Economy
In times of global economic uncertainty, as reflected by the recent surge in the Global Economic Policy
Uncertainty Index, investors seek robust strategies to enhance returns while mitigating risk.
BLUE
CHIP
Contrary to the common perception of hedge funds as purely
speculative vehicles, the South African hedge fund industry has
matured significantly since the launch of the first fund in 1998 [1][2] .
Since 2015, the industry has been regulated under the Collective
Investment Schemes Control Act (CISCA), ensuring greater
transparency and investor protection. With industry assets
exceeding R100-billion and a substantial portion managed by
experienced investment professionals, hedge funds have become
an integral part of institutional asset owners’ portfolios. Pension
funds and funds of funds, not people who are known for taking
excessive risk, and not unquantifiable risks, are the biggest
investors in hedge funds today.
A typical hedge fund aims to produce consistent, correlated
returns, typically at some stated level above inflation or a broad
index of interest (eg SteFi). In pursuit of this goal the manager
deploys the traditional tools of buying shares, bonds and holding
cash, but this is augmented with additional strategies which are
not available to traditional long-only managers. These tools/
strategies employed by hedge fund managers include:
• Short selling. Profit from anticipated declines or stagnation in
asset prices.
• Pair trading. Profit from the relative value difference between
two similar assets.
• Leverage. Amplify returns by borrowing funds, subject to
regulatory limits.
• Derivatives. Financial instruments, such as options and futures,
used for risk management and targeted returns.
A strategic allocation to hedge funds can be a powerful tool for
enhancing portfolio efficiency. As an example, an investor who
allocated 20% (rebalanced annually) to a hedge fund index [3] at
the end of 2017 would have achieved a compound annual
growth rate of more than 1% better than the ASISA South African
Multi-Asset High Equity Group Average, [4] 9.2% versus 8.1% and
this would have been achieved with less volatility.
By understanding their unique strategies and regulated nature,
investors can leverage the true potential of hedge funds to achieve
higher returns while effectively managing risk.
Efficient Frontier: optimal portfolios including and excluding
hedge funds.
[1] www.policyuncertainty.com
[2] Novare SA Hedge Fund Survey 2023.
[3] We use an equally weighted index across the South African Long/Short
Equity category as monitored by HedgeNews Africa as our Hedge Fund Index.
[4] As published by Morningstar.
Francois Olivier CA(SA), CFA,
Portfolio Manager,
Mazi Asset Management
Stephan Engelbrecht,
Portfolio Manager,
Mazi Asset Management

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INVESTMENT | AMETFs
What you need to know about
AMETF transparency
Actively managed exchange-traded funds are gaining traction as South African investors seek more
dynamic and potentially higher-return opportunities.
Unlike traditional passive exchange-traded funds (ETFs)
that track an index, actively managed exchangetraded
funds (AMETFs) involve professional portfolio
management. This entails a team of experts actively
researching securities, analysing market trends and leveraging
proprietary models.
The growing popularity of AMETFs internationally has
sparked a lively discussion about portfolio transparency.
Unlike traditional index-tracking ETFs, which follow clear,
predefined benchmarks, AMETFs are guided by the expertise
of fund managers, who aim to outperform the market.
The question then is: how transparent should AMETFs be
about their portfolio holdings?
Transparency options
There are essentially three different transparency options,
depending on where they are issued and the preference of
the fund manager. These are:
1. Transparent. Disclose all portfolio holdings and their
weights on the manager’s website daily.
2. Semi-transparent. Disclose holdings monthly or
quarterly and may also release “proxy portfolios” that
may not include all holdings.
3. Non-transparent. Only required to disclose their
holdings quarterly or monthly.
Regional approaches
United States. Regulatory requirements dictate that most
ETFs, including actively managed ones, disclose their
holdings daily, giving investors real-time insight into the
assets they own. However, some actively managed funds view
daily transparency as a double-edged sword: while it fosters
investor trust, it also exposes a fund manager’s strategy,
making it more vulnerable to being replicated by competitors
or front-run by traders.
To address this, the US Securities and Exchange Commission
(SEC) approved a new class of “semi-transparent” or “nontransparent”
ETFs in 2019. These funds are required to disclose
their holdings quarterly rather than daily, balancing investor
demand for insight with the need to protect proprietary
strategies. This model has proven popular and has expanded
the AMETF market, attracting investors who value the security
of knowing what they hold without compromising fund
managers’ competitive edge.
Europe. The transparency requirements differ from country
to country. Some regulators, like the French Autorité des
Marchés Financiers, have recently relaxed the transparency
rules, and semi-transparent ETFs are now required to publish
holdings “at least once a month”. Issuers may share the daily
composition of their portfolios with contracted market
makers but must simultaneously distribute this information
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through the same channel to all relevant parties, reducing
the risk of front-running. In December 2024, Luxembourg’s
Commission de Surveillance du Secteur Financier published
an FAQ providing for the possibility to defer the disclosure of
an AMETF portfolio composition. This information is required
to be published at least monthly. The Central Bank of Ireland
is also looking at relaxing its transparency rules for AMETFs.
South Africa. The AMETF market is still in its infancy, with
the Johannesburg Stock Exchange (JSE) only allowing listings
from 2022. As in Europe, South African fund managers are
cautious about sharing too much information, given concerns
about strategy replication and market impact. The JSE has
allowed fund managers the choice of either transparent or
non-transparent AMETFs, where holdings are only required
to be disclosed on a quarterly basis, but intra-day Net Asset
Values (iNAVs) must be published at least three times a day.
The level of transparency
that investors require often
depends on their priorities.
The benefits of semi-transparent or non-transparent
AMETFs
• New market adaptation. Quarterly disclosures provide
enough information for investors while allowing fund
managers to innovate.
• Reduced managerial pressure. Less frequent transparency
gives managers room to focus on their strategies.
• Protection from front-running and replication. Semitransparent
ETFs help protect investors from other traders
jumping ahead of the fund’s trades or copying its strategy.
• Access to equity capabilities. Many fund managers are
hesitant to adopt AMETFs due to transparency concerns
and may be more willing to offer equity capabilities
through semi-transparent options.
regulatory requirements, making them more accessible to
a broad range of investors.
• Simplified monitoring. Investors can more easily track
their portfolio’s performance and risk exposure by
reviewing the disclosed holdings, ensuring alignment with
their investment strategy.
• Market stability. Transparency contributes to overall
market stability by providing consistent and reliable
information to participants.
Balancing transparency and investor needs
While transparency builds trust, allowing investors to
understand risks and track their investments, especially
during market volatility, excessive transparency can expose
fund managers to competitive risks. AMETFs need continuous
innovation to outperform benchmarks, and daily transparency
may lead to strategy replication or short-term decisions that
hinder long-term growth.
The level of transparency that investors require often
depends on their priorities. Retail investors may not always
need real-time insights into an ETF’s holdings, especially when
iNAVs can help them assess whether the ETF is trading close
to its fair value.
Investors need to assess which level of transparency
aligns with their investment goals and risk tolerance. Those
seeking real-time accountability may prefer transparent
AMETFs, while those focused on long-term returns might
find semi-transparent or non-transparent ETFs more suitable.
The landscape of AMETFs reflects the broader trend toward
customisation and choice in investing. By understanding the
trade-offs of each structure, investors can make informed
decisions that best align with their financial objectives.
The benefits of transparent AMETFs
• Efficient pricing. Daily transparency has been tied to
an efficient arbitrage mechanism, resulting in narrower
premiums and discounts, tighter spreads and better
liquidity as market makers precisely know the composition
of the basket of stocks within the ETF.
• Investor confidence. Full transparency allows investors
to see exactly where their money is allocated, enhancing
trust and satisfaction. This is particularly appealing during
periods of market volatility.
• Regulatory compliance. Transparent ETFs meet stringent
Niki Giles, Head of Strategy, Prescient Fund Services

INVESTMENT | ETFs
ETF evolution: global and South African
trends driving the future of index investing
The ETF market is evolving at an unprecedented pace, reshaping global investment landscapes.
By the close of 2024, global exchange-traded fund (ETF)
assets under management (AUM) hit US$14.85-trillion,
marking a 17.1% compound annual growth rate (CAGR)
over the past decade. South Africa is aligning with this
trajectory, witnessing mass inflows into ETFs and index-tracking
investments. Satrix, the dominant player in the local ETF
market, captured 72.5%* of all ETF flows in 2024, while its
combined ETF and indexed unit trust flows accounted for
50.5%* of total indexation flows. According to Fikile Mbhokota,
CEO of Satrix**, the group experienced 127% year-on-year ETF
inflow growth from 2023 to 2024, adding nearly R5-billion in
inflows and pushing Satrix’s AUM beyond R240-billion^ as of
December 2024.
This exponential growth reflects a fundamental shift: investors
are embracing ETFs as core portfolio holdings, attracted by
cost efficiency, transparency and liquidity. The move toward
indexation is accelerating – over the past 12 months, indexed
strategies accounted for 87.8% of total industry net inflows.
The structural shift away from actively managed funds highlights
how local investors are recalibrating their portfolios to align with
global trends.
Global ETF trends shaping 2025 and beyond
1. Explosive growth in ETF savings plans. ETFs are becoming
the default investment vehicle for long-term savings, particularly
in Europe. ETF savings plans are projected to quadruple over
the next five years, according to BlackRock. This retail-driven
trend signals a growing demand for automated, cost-effective
investing, which could spill over into emerging markets like
South Africa.
2. The rise of active ETFs. Active ETFs are outpacing traditional
mutual funds, particularly in the United States, with a staggering
US$3-trillion flow gap in favour of ETFs. This shift suggests
that investors are seeking the flexibility of active management
combined with the efficiency of ETFs – a trend that could
see local asset managers responding with more innovative
product offerings.
3. Institutional acceleration in ETF adoption. ETFs are no
longer just a retail investment tool – institutional investors
are increasing their allocations to ETFs for their cost efficiency,
liquidity and tactical portfolio management benefits. South
African pension funds and asset managers are expected to
follow global institutions in using ETFs for risk management,
sector rotation and exposure to international markets.
4. Thematic and alternative ETFs gaining traction. Global
ETF innovation is at an all-time high, with 1 787 new product
ETFs launched in 2024, a net increase of 1 234 after 553 closures.
Cryptocurrency ETFs are experiencing robust asset accumulation,
led by the iShares Bitcoin Trust.
5. Regulatory tailwinds supporting ETF growth. Europe’s
ETF market is benefiting from regulatory frameworks, boosting
transparency and digitalisation.
Breaking new ground
“ETF adoption in South Africa will continue accelerating, driven
by both retail and institutional investors seeking cost-effective,
globally diversified investment solutions,” says Mbhokota. She
anticipates:
• Stronger inflows into equity and fixed-income ETFs
• A growing shift toward international diversification
• Increased demand for innovative, crypto and
active ETFs
As South Africa’s financial ecosystem evolves,
ETFs are becoming the backbone of modern
portfolio construction, reinforcing their position
as a core component of investor strategies in
2025 and beyond.
*Sources: Satrix and Morningstar, 31 December 2024 | ^Satrix, 31 December 2024, AUM represents all assets managed in CIS vehicles
(Satrix ETFs, unit trusts and UCITS), life pooled portfolios, assets managed via segregated mandates by Satrix as a division of Sanlam
Investment Management and Satrix branded endowment funds managed by Sanlam Structured Solutions. **Satrix is a division of Sanlam
Investment Management. Other sources used:
• ETFGI
• Morningstar
• etfSA.co.za
Fikile Mbhokota, CEO, Satrix
• Introduction to ETFs: by State Street Global Advisers SPDR.
• Goldman Sachs ETF Accelerator: The Growth of ETFs in Europe.
Satrix Managers (RF) (Pty) Ltd (Satrix) is a registered and approved Manager in Collective Investment Schemes in Securities and an authorised financial services provider in terms of the FAIS. Collective investment
schemes are generally medium- to long-term investments. With Unit Trusts and ETFs, the investor essentially owns a “proportionate share” (in proportion to the participatory interest held in the fund) of the underlying
investments held by the fund. With Unit Trusts, the investor holds participatory units issued by the fund while in the case of an ETF, the participatory interest, while issued by the fund, comprises a listed security traded
on the stock exchange. ETFs are index tracking funds, registered as a Collective Investment and can be traded by any stockbroker on the stock exchange or via Investment Plans and online trading platforms. ETFs
may incur additional costs due to being listed on the JSE. Past performance is not necessarily a guide to future performance and the value of investments /units may go up or down. A schedule of fees and charges
and maximum commissions are available on the Minimum Disclosure Document or upon request from the Manager. Collective investments are traded at ruling prices and can engage in borrowing and scrip lending.
Should the respective portfolio engage in scrip lending, the utility percentage and related counter parties can be viewed on the ETF Minimum Disclosure Document. International investments or investments in foreign
securities could be accompanied by additional risks such as potential constraints on liquidity and repatriation of funds, macroeconomic risk, political risk, foreign exchange risk, tax risk, settlement risk as well as potential
limitations on the availability of market information. For more information, visit www.satrix.co.za.
40 www.bluechipdigital.co.za

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PRACTICE MANAGEMENT | Operations
Mapping your advice process:
the most important thing you can do in 2025
If your advice process has evolved over time without a structured review, chances are it’s inconsistent and
holding back your business growth. We recently undertook the task of mapping our advice process, and if
there’s one thing we learned – it should have been done years ago.
Like many financial planning businesses, our process
developed organically, shaped by changing regulations,
technological advancements and advisor preferences.
While it met compliance requirements, it lacked efficiency
and scalability. If you’re considering doing the same, be prepared –
this is not a quick exercise. With competing priorities, it’s unrealistic
to expect to complete it overnight. In our case, it unfolded over six
months, following these structured steps:
1. Establishing a research base
• Literature review. We examined local and international best
practices.
• Industry engagement. We consulted with firms, both locally and
globally, to understand their processes.
• Internal stakeholder input. We gathered insights from senior
advisors, administrators, marketing and operations teams.
• Industry events. We attended presentations on emerging trends
and strategies.
2. Mapping and optimisation process
• Mapping our “best house view” process. We defined our ideal,
repeatable process to establish a baseline.
• Identifying essential tools. We assessed the technology and
resources required.
• Scrutinising each step. We interrogated every stage to optimise
for efficiency and client experience.
• Developing supporting materials. We built guidelines, scripts
and templates.
3. Implementation and continuous improvement
• Presenting and training. We introduced the new process to the
team and provided training.
• Monitoring and refinement. We established an ongoing review
mechanism to ensure continuous improvement.
The surprising gaps we found
Mapping the “best house view” process across a medium-sized
business (28 advisors across three financial service providers)
revealed striking inconsistencies – even within the same firm.
Expectedly, younger advisors were more reliant on technology,
while senior advisors leaned on traditional methods. However, what
was surprising was how effective many senior advisors’ processes
were in comparison. Their success came down to discipline – having
a structured, repeatable process that had become second nature.
What stood out most was the stark divide between client
retention and client acquisition strategies:
• Senior advisors focused primarily on existing clients, driving
retention and deepening relationships.
• Younger advisors, still building their client base, were left to figure
out client acquisition on their own.
While both are critical to business growth, we realised that client
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acquisition was the missing link. Without a structured acquisition
strategy, growth is slow and newer advisors struggle to gain
traction. By mapping our process, we created an opportunity to
design a repeatable, scalable approach for attracting new clients
– one that ensures the sustainability of both individual advisors
and the business.
The real value of advice: it’s not about the product
A major takeaway from this process was that advisors can struggle
to clearly articulate the value they provide. If advisors are unsure
of their value, selling their process becomes significantly harder.
The industry still grapples with an outdated mindset –
equating an advisor’s worth with the products they sell. Yet,
studies from institutions like Vanguard and Russell Investments
consistently show that the real value of financial planning lies
elsewhere, such as in:
• Behavioural coaching. Helping clients to manage emotions
and stay disciplined.
• Active rebalancing. Ensuring portfolios remain aligned with
long-term objectives.
• Customised family planning. Addressing intergenerational
wealth transfer.
• Tax planning. Minimising tax liabilities through strategic planning.
The financial planning industry must shift its focus. Our product
is advice. Investment and insurance products are simply tools
to implement that advice. We packaged these important valueadded
services and trained our advisors to communicate them
more effectively.
Sales and communication: the underrated skillset
As we refined our process, another issue became clear: too little
time is spent training advisors in sales and communication skills.
The word “sales” carries a negative connotation in our industry,
often associated with aggressive product pushing. Yet, ethical
persuasion is a fundamental skill for any financial planner. As
Richard Mulholland puts it in Here Be Dragons, “To sell well is a
noble craft. We should all sell with pride.” Technical expertise is
essential, but it’s not enough. Advisors need to:
• Communicate complex ideas simply and persuasively.
• Build trust through clear and engaging conversations.
• Guide clients toward positive financial decisions.
Newer advisors focus their conversations on themselves or their
firm trying to sell themselves rather than demonstrating an
understanding of client needs. We prioritised training in active
listening and client engagement skills, drawing on techniques from
Chris Voss’ Never Split the Difference, such as mirroring, labelling,
paraphrasing, summarising and using effective pauses.
By treating these soft skills as equally important as technical
knowledge, we strengthened our advisors’ ability to connect with
clients and improve engagement.
The power of first impressions
Once we mapped our advice process, we had the opportunity to
scrutinise every interaction – especially the initial client call and
first meeting. One of the biggest insights? The first conversation
determines everything. If advisors mishandle the initial call, they
risk being perceived as product pushers rather than trusted
professionals. We refined this process by breaking down the first
client meeting into micro-steps designed to:
• Build rapport and establish trust from the outset.
• Deliver a clear and compelling message about the value of
financial advice.
• Gather the necessary information to support effective planning.
By visually mapping each step, we identified specific tools to
professionalise every client interaction. This process allowed us to
standardise email templates, meeting guidelines and presentation
materials. By ensuring consistency across our brand, we offer a
more polished client experience.
The case for mapping your advice process
After much debate, one thing became clear: great processes exist,
but few are well-documented. Many firms rely on informal, advisorspecific
approaches, leading to inefficiencies and inconsistencies.
Going through this exercise gave us the opportunity to identify
training gaps, clarify roles within the advice process and review
and optimise our organisation’s “toolbox” – including technology,
templates and engagement strategies.
The result? A structured, repeatable and scalable
approach that ensures best practices aren’t left
to chance. Most businesses have an advice
process, but few have one that is truly optimised.
If there’s one thing you do in 2025, map your
advice process!
I always enjoy engaging with industry
professionals about their processes –
what’s working, what isn’t and what we can
learn from one another. If you’d like to connect
to discuss this topic, our insights and what
we’ve learned along the way,
feel free to reach out to
Theoniel McDonald,
CFP® at theoniel@
wealthassociates.co.za
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CLIENT ENGAGEMENT | Behavioural Finance
If you really want to influence
a client’s behaviour, appeal
to interest not to reason
Giving technical information and advice to clients is one thing. Getting them to take appropriate
action is another.
During the recent market turmoil, a financial
planner shared with me how they had
a client who insisted on moving all their
investments to cash, despite the financial
planner’s attempts to dissuade the client from doing
this. The financial planner told me they had asked
the client to sign a “disclaimer”. This is not unusual.
I often hear financial planners say that they get a
client to sign a disclaimer when the client doesn’t
take their advice. But this is not good for either party.
The client is likely to be worse off, and the planner’s
position as a professional advisor is compromised.
Benjamin Franklin wrote in Poor Richard’s Almanack
(1735),“If you would persuade, appeal to interest not
to reason.”
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The power of this approach struck me recently in reading
the book Supercommunicators, by Charles Duhigg, in which
he relates the story of a urologist, Dr Behfar Ebdaie, who
specialises in treating prostate cancer at Memorial Sloan
Kettering Cancer Center in New York City. The story is close to
home because my father had prostate cancer, and treating it
is slightly complicated. The most certain way to prevent the
cancer spreading is to have surgery or radiation treatment,
but the risk of this treatment is potential incontinence and
impotence, often long term. Yet prostate cancer is often slowgrowing,
so for most people with prostate tumours, doctors
advise against surgery or any other form of treatment. Lowrisk
patients are counselled to adopt an approach of “active
surveillance”, which usually involves periodic blood tests and
possibly biopsies.
Dr Ebdaie’s patients would frequently face the dilemma
of whether to have surgery or to keep monitoring and only
act if the cancer grows. Dr Ebdaie would use thorough data
and evidence from studies to show that in most cases it
was best to adopt the surveillance approach. Yet when he
advised patients that they would be better off adopting the
surveillance approach and didn’t need surgery, many insisted
they wanted surgery. This was bewildering to Dr Ebdaie as an
expert in this form of cancer. He couldn’t understand why the
patients wouldn’t take his advice, and even worse, would opt
for the riskier treatment. Duhigg reports that this response is
not limited to Dr Ebdaie, and that an estimated 40% of prostate
cancer patients opt for unnecessary surgeries.
To help him see what he may be doing wrong when
engaging with his patients, Dr Ebdaie engaged the services
of Professor Deepak Malhotra from Harvard Business School,
an expert in negotiation. Professor Malhotra told Dr Ebdaie
that he was assuming all his patients wanted was objective
medical advice in which he outlined their options to make an
informed choice.
Prof Malhotra suggested that Dr Ebdaie, before giving
advice, should try to understand what his patients wanted.
He suggested that the best way of doing this was through
asking open-ended questions, such as, “What does this cancer
diagnosis mean to you?” In response to this question, patients
didn’t talk about medical concerns but rather about their
family and how the different treatment options might impact
on them. Invariably, when Dr Ebdaie approached his patients
in this way, they didn’t talk about the disease, but rather about
their marriages, their memories of a parent’s illness or worries
about the future.
Dr Ebdaie also discovered that different people needed
different things, some wanted emotional reassurance, others
wanted to feel in control, and some wanted to know how other
patients had made their decisions. Dr Ebdaie soon realised
that his previous way of engaging in these conversations was
flawed, and that it didn’t help to convey lots of information
which patients didn’t care about or couldn’t process because
of their emotional state. He changed his approach, asking
first what mattered to his patients when they heard they had
cancer, and within six months the number of patients opting
for surgery fell by 30%.
If you would persuade,
appeal to interest
not to reason.
Dr Ebdaie could have continued doing the surgery that
patients asked for and get them to sign “disclaimers” about
potential incontinence and impotence. But he was concerned
about the wellbeing of his patients, and why as the expert,
he was not able to get them to take his
advice. His professional effectiveness
was compromised. As a true
professional he had his clients’ best
interests at heart, and when “reason”
didn’t prevail – giving them
information, he discovered that
finding out what really mattered to
them – their “interest”, was the key to
enabling his advice to land.
As a financial planner, the next
time a client doesn’t want to take your
advice, consider whether the best
route is to get them to sign a
“disclaimer”, or to see if there
may be questions you could
ask the client that appeal
to their “interest” rather
than to “reason”. After all,
asking clients to sign a
“disclaimer” because they
don’t listen to your advice
seems more like throwing
reason to the wind, and
not acting in the client’s
best interest.
Rob Macdonald,
Independent Consultant

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FINANCIAL PLANNING | Estate planning
Securing a legacy
The need for a comprehensive and up-to-date estate plan cannot be overstated. The true architect of
enduring wealth is investing in high-quality companies whose value grows and compounds over time.
A
well-thought-out estate plan helps prevent disputes
and conflicts among family members by clearly
outlining your intentions regarding the distribution
of your assets. “Estate planning documents, such as
wills, codicils, trust deeds and living wills are used to carefully
express your wishes and to map the process to be followed when
you die, ensuring the smooth transfer of wealth. They are also
particularly useful for complex family structures,” says Gareth
Lange, a wealth manager at Private Client Holdings.
Why is estate planning important?
Provides for dependants. Dependants include minor children,
elderly parents or disabled family members.
Minimises taxes. Strategic estate planning can minimise the
tax liabilities associated with transferring assets to your heirs,
potentially saving your beneficiaries significant sums of money.
Protects assets. Estate planning protects your assets from
creditors, lawsuits and other legal claims.
Estate liquidity. Estate liquidity is critical to cover estate costs
and liabilities without affecting the financial inheritance intended
for your beneficiaries. “It’s important to note that SARS and your
creditors are paid first during estate administration. If there is
insufficient liquidity, your beneficiaries may be forced to sell
some of your assets to pay off debts,” cautions Lange.
Beneficiary nomination. Nominations should be regularly
updated as your personal and financial circumstances evolve.
It’s important to understand how beneficiary nomination works
for each type of policy and investment.
Appropriate structuring of growth assets. Long-term growth
assets are placed in the proper investment vehicles.
Efficient estate administration. Avoids unnecessary delays.
Considerations
• Individuals with foreign assets should consider a foreign will
as well. Most countries have their own laws regarding
succession and the drafting of wills.
• In terms of the Estate Duty Act, if the deceased was a South
African resident at the time of death, their worldwide assets
are included for the purpose of calculating estate duty.
• Marital regimes or life partnerships have consequences when
it comes to estate planning.
What estate planning tools are available?
Testamentary trust. These are employed where children under
the age of 18 lack contractual capacity (and) or are not capable
of inheriting directly, for example, someone with special needs.
Inter vivos trust (living trust). This tool reduces your estate
duty liabilities by pegging the value of assets in your personal
estate and allowing the growth of the assets to take place in the
trust. This trust is established during your lifetime to manage and
protect assets for your beneficiaries.
Donations. Donations are used to reduce the value of your
estate (R100 000 annual exemption). Donations between
spouses are exempt from donations tax, while donations to
certain public benefit organisations are also exempt, subject to
certain thresholds.
Section 4q deductions. No estate duty is payable on bequests
to your spouse, including proceeds from a domestic life policy.
Bequests. A cash legacy may be bequeathed to a beneficiary in
your will, but you must ensure that there is sufficient liquidity in
the estate to honour the bequest.
Insurance policies. Proceeds of domestic life policies can be
excluded for estate duty purposes or may be deductible in
examples such as life policies or key-person and buy-and-sell
assurances in favour of a spouse.
Living annuities. These excellent succession planning tools
don’t attract estate duty or executor fees. Beneficiaries have the
option of transferring the living annuity into their own name,
taking it as a lump sum or a combination of the two with almost
immediate access.
Your estate plan should be reviewed at least once every three
to five years or whenever significant life events occur, such as
marriage, divorce, births and deaths of family members as well
as significant changes in your
financial circumstances or
relocation to another country
or jurisdiction with different
estate planning laws.
“Given the complexity of
robust estate planning, and as
estate planning laws evolve,
it’s critical for your estate plan
to remain compliant with
current legal requirements
to maximise benefits for your
beneficiaries. This is where
professional advice plays an
important role in developing
and maintaining a robust
estate plan that secures your
legacy,” says Lange.
Gareth Lange, Wealth Manager,
Private Client Holdings
46
Private Client Holdings is an authorised financial services provider (licence #613). Private Client Holdings has taken care to ensure that all the information provided herein is true and accurate
and will therefore not be held responsible for any inaccuracies in the information herein. The above content does not constitute advice and the reader should contact the author for any related
concerns. Private Client Holdings shall not be responsible and disclaims all loss, liability or expense of any nature whatsoever which may be attributable (directly, indirectly or consequentially) to
the use of the information provided.

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PRACTICE MANAGEMENT | Operations
The power of play in the workplace:
how fun fuels success
With workplace culture evolving rapidly, companies
that prioritise fun and play aren’t just boosting
morale; they’re also enhancing creativity, teamwork
and overall job satisfaction. Studies show that a
playful work culture fosters innovation, improves engagement
and enhances productivity. However, some business leaders may
hesitate to introduce play in the workplace due to concerns about
cost, productivity and return on investment (ROI).
Marieta Kruger, wellness manager at Medihelp, explains, “The
key is finding a balance where play complements work rather than
disrupts it. We believe that a healthy work-life balance includes
moments of play, which is why we incorporate engaging activities
into our workplace culture. Our initiatives are designed to foster
teamwork, promote wellness and create an environment where
employees feel motivated and valued.”
The science behind play at work
Play isn’t just for children; in fact, it can have numerous health
benefits for adults. Neuroscientific research shows that play
activates brain circuits linked to problem-solving, collaboration
and stress relief. According to Kruger, employees engaging in
playful activities “experience a sense of freedom that allows fresh
thinking, stronger connections with colleagues and increased
motivation”. Research also suggests that play enhances focus
and efficiency, making time spent on fun activities a long-term
productivity booster. Several businesses worldwide successfully
integrate play into their corporate culture:
• Google. Known for its creative office spaces, Google has play
areas, nap pods and gaming zones to encourage spontaneous
idea generation.
• LEGO. Employees at LEGO are encouraged to play with its
products, fostering innovation through hands-on creativity.
• South African companies. King Price understands the
importance of having fun at work, incorporating unconventional
office spaces, fun zones and play into its culture.
Injecting fun into the workplace
Fun at work is a prescription for a healthier, more engaged
workforce. Smaller businesses can adopt low-cost strategies
such as gamified challenges, flexible break times or simple teambuilding
activities. Kruger shares four easy-to-implement remedies
to take a workplace from dreary to dynamic:
Dose 1: Gamified challenges. Boost engagement with a little
friendly competition. Think step challenges to get people moving,
trivia quizzes to sharpen minds or problem-solving games to turn
teamwork into a winning strategy. The perks? More motivation,
fun and a workplace that feels like a community.
Dose 2: Interactive break areas. Create dedicated spaces with
fun activities and comfortable lounges. Medihelp’s Wellness Hub
is stocked with puzzles, board games and a blackboard where
employees can doodle, share messages or jot down their favourite
quotes. Our honesty library and free gym classes create spaces
and opportunities to recharge. These small escapes help beat the
afternoon slump and encourage cross-team connections.
Dose 3: Playful meetings. Make meetings matter (and fun!).
Infuse brainstorming sessions and meetings with role-play,
improv exercises or problem-solving games. Medihelp takes
brainstorming to the next level with hackathons, vision boards
and creative techniques to develop fresh solutions. Some teams
kick off monthly engagement sessions with icebreakers, while
our quarterly town hall meetings start with music and themed
dress-ups. Great ideas happen when people are relaxed, engaged
and having fun.
Dose 4: Flexible Fridays. Themed dress-up days, casual networking
or social hangouts are easy ways to boost morale and bring teams
together. At Medihelp, we love celebrating special events like
Youth Day and Heritage Day with themed outfits and Wellness
Hub activities.
Measuring ROI of workplace play
Tracking employee engagement scores, absenteeism rates or
productivity levels before and
after implementing play-based
initiatives are effective ROI
measurements. If employees
are more motivated, creative and
collaborative, the investment
pays for itself. By integrating play
into the workplace – whether
through planned events or
small everyday moments –
companies can foster a culture
of engagement, creativity and
wellbeing. The result? Stronger
teams, happier employees and
a more successful business.
Marieta Kruger,
Wellness Manager,
Medihelp Medical Scheme
48 www.bluechipdigital.co.za

We’ve got a plan
for everybody
Easy-to-understand cover
Innovative self-service platforms
120 years’ experience
Award-winning service
medihelp.co.za
Medihelp is an authorised financial services provider (FSP No 15738)

BLUE
CHIP
PRACTICE MANAGEMENT | Technology
Three AI tricks to make your
clients love you more
Businesses that continue educating clients through blogs, newsletters or guides see conversion rates four to
six times higher than those that don’t. *
But in your busy schedule, finding time for this feels
impossible. Sound familiar? Here’s a practical solution: using
AI cleverly can drastically reduce your workload and extend
your reach.
Drawing on storytelling principles, I’ll share simple prompts
to get AI working for you. These will help your clients grasp key
financial concepts, tailored to South Africa, without overwhelming
them – or you.
You don’t need to be a tech expert. Tools like Grok developed by
xAI or ChatGPT can transform complex financial ideas into plain
English. The key is to give AI precise instructions – specifically,
specify the audience, context and desired simplicity level.
I’ll demonstrate with three common client concerns: identifying
pyramid schemes, calculating pension income and addressing
retirement savings shortfalls. Each prompt ensures answers reflect
the South African context, use UK spelling and feature rands. You
will also see that you need to tell AI at what level to pitch content.
For the average person, we recommend staying at a grade 10
comprehension level; however, for more complex concepts, we
have successfully employed younger age comprehension levels.
Prompt one: Detecting pyramid schemes. Clients often hear
“investment opportunity” and miss the warning signs. Equip them
with this prompt:
Please write a short article – half an A4 page – explaining how
to spot a pyramid scheme in South Africa. This should be written
at a Grade 10 level but still sound professional and clear. Use a
simple, conversational writing style to make the concepts easy
to understand. Use South African examples with rand values.
The tone should be straightforward, practical and educational.
Include a simple checklist at the end to help readers quickly
evaluate whether an investment opportunity might be a pyramid
scheme. Use UK spelling and do not include grammar
corrections or quote marks in your response.
Prompt two: Understanding pension income.
Explaining a life annuity can be tricky, but AI can
simplify it with this prompt:
Please write a short article – half an A4 page –
explaining how much income a person can expect
to receive on average from a standard life annuity
for every R1-million invested in South Africa. The
explanation should be clear, professional and
written at a Grade 10 reading level. Use a simple,
conversational tone to make the concept easy to understand.
Include realistic South African examples using rand values. The
tone should be practical, straightforward and educational. Add a
simple checklist of the key factors that can increase or reduce the
income amount from a life annuity. At the end, clearly explain how
choosing not to include a spouse’s pension can leave their partner
financially vulnerable if they pass away. Also, in very simple terms,
show how R1-million today would be worth less after 10 years if
inflation is 5% per year. Use UK spelling throughout and do not
include grammar corrections or quotation marks in your response.
Prompt three: Tackling retirement shortfalls. When clients
worry their savings won’t suffice, AI can offer calm, actionable advice
with this prompt:
Please write a short article – half an A4 page – explaining what a
person in South Africa can do if they reach age 65 without sufficient
retirement savings. The explanation should be clear, practical
and written at a Grade 10 reading level. Use a simple, conversational
tone to make the content easy to understand and relatable.
Include realistic examples using rand values to help illustrate
possible scenarios. The tone should remain professional,
straightforward and educational throughout. At the end of the
article, include a simple checklist of actionable steps a person
can take to improve their financial situation in retirement. Use UK
spelling consistently and do not include grammar corrections or
quotation marks in your response.
Why this approach succeeds
Next time you’re pressed, try these prompts with your AI tool. Adjust
them as needed, and you’ll deliver value that keeps clients informed
and loyal. It’s a straightforward way to elevate your service – proof
that educating clients needn’t be a chore.
BONUS PROMPTING TIP – TRY THIS!
Instead of asking AI to write an article, swap
it with the words “write a story” and see how
it can create a relatable example that you can
use for your clients.
* According to Hubspot
Zeldeen Müller, CEO of inSite Connect
and Creator, AgendaWorx
50 www.bluechipdigital.co.za

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BLUE
CHIP
PRACTICE MANAGEMENT | Operations
Building a financially
sustainable practice
There is lots of talk about different fee models for financial advisors.
If we look at huge companies like Microsoft and Apple, we can
see that they have moved from once-off to ongoing revenue
(we used to buy Office on a CD but now subscribe to Office
365). They have done this because subscription models create
ongoing or passive income. This means that these companies
now get paid over and over for the same sale, resulting in higher
earnings over the medium to long term.
Ongoing income also improves client loyalty, financial stability,
growth potential and a higher practice valuation. Like Apple and
Microsoft, financial planners with a high proportion of passive
income tend to earn more over the long term, because passive
income accumulates over time, unlike upfront commissions that
are the result of a single year’s effort.
Empirically, when we looked at all the Fairbairn Consult advisors
who earned over R1-million in 2024, we found that 78% of their
income was ongoing, with only 22% once-off. In other words, the
advisors who make the most money do so because they have a high
proportion of ongoing income that builds up over time.
By considering different commission models, you can make
the strategic shift from once-off to ongoing revenue for every line
of business.
You can see that the upfront commission on life products is the
worst because it creates the risk of clawbacks, does not build
ongoing income (other than premium updates) and it does
not contribute to your practice valuation. As a result, it is most
important to shift from upfront to as-and-when commission on life
products. To do this, you need to understand all the options from
the different product providers, so that you can recommend the
most appropriate solution to your clients, and, at the same time,
ensure your own financial sustainability.
The conventional approach to transition from upfront
commission to as-and-when is to take as-and-when commission
on a portion of policies and to switch entirely to as-and-when after
reaching a specific monthly income target. However, you can also
consider a mix of as-and-when and upfront commissions, with a
higher proportion of as-and-when for larger policies so that you
mitigate the risk of clawbacks.
You can even game the system by taking as-and-when
commission on policies that are either likely to lapse early or stay
on books for a long time. Let me explain: while each product has
slightly different as-and-when commission structures, they all result
in higher net income than upfront commission for policies that
lapse early because you do not get hit by a clawback. They also pay
more over the long term because there is a built-in rate of return
of around 15%. And don’t forget that as-and-when commission
increases every year when the premiums increase.
By switching from once-off to ongoing revenue, you can derisk
your business, earn a predictable monthly income that keeps
growing and increase your practice valuation. While many advisors
know this, it takes discipline and conviction to make one of the
most important changes in your business.
One day or day one – you choose.
Source of income
Nature of
income
Does it create risk
for you?
Does it build
passive
income?
Does it
enhance you
valuation?
Nature of
income
Does it create
risk for you?
Does it build
passive
income?
Does it
enhance you
valuation?
Advisors earning ONCE-OFF income
Advisors earning ONGOING income
Life Risk
Upfront
Commission
High risk - can be
clawed back
No
No
As & When
commission
Life Savings
Upfront + As &
When
commission
High risk – upfront
portion can be
clawed back
Partly
Partly
As & When
commission
Investments, Once-off
fees
Pension Funds
Upfront Advice
or Service fees
Annualized
Commission
Low risk - cannot
be clawed back
High risk - can be
clawed back
No
No
Ongoing
Advice or
Service fees
Ongoing /
monthly
commission
Low risk -
cannot be
clawed back
Yes
Yes
Short-term, Life Risk, Life
Savings, Pension Funds
Investments, Medical
schemes, Non-life
savings, Subscription fees
As & When
Commission
Ongoing
Advice or
Service fees
Low risk - cannot
be clawed back
Yes
Yes
As & When
Commission
Ongoing
Advice or
Service fees
Guy Holwill, Chief
Executive and Founder,
Fairbairn Consult
52 www.bluechipdigital.co.za

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BLUE
CHIP
FINANCIAL PLANNING | Investment
Unlocking success: the power
of process in sports and investing
You’re only as good as your process. You’re not as good as your outcome.
the process”.
That’s what Handré Pollard said when he was
interviewed after kicking the match winning
“Trust
penalty to beat England in the Rugby World Cup
semi-final in 2023. He slotted the kick in the 78th minute to
put the Springboks into the lead for the first time in the game.
The pressure was huge. The Springboks were expected to
win by some margin, but the first half was a disaster, and the
Springboks had to fight their way back into the game.
Long-term adherence to one’s
process is vastly underrated.
Pollard didn’t just slot the kick. He absolutely middled it.
The Springboks went on to win the game by one point and beat
the All Blacks by one point to win the World Cup final.
Handré Pollard did not miss a kick at the poles for the entire
World Cup. His record was 13 from 13. This is exceptional –
especially when you consider that most of these kicks were
during the quarter-final, semi-final and final.
It’s clear from his track record that he thrives in high-pressure
situations. Pollard has played in 32 knock-out rugby games in
his career, of which he has been on the winning side on 28
occasions (while playing for eight different teams). That is an
88% winning record in knock-out games.
I would argue that Pollard’s focus on process, rather than
on outcome, is one of the main reasons why he and his team
thrive under pressure. All his process-driven training Monday
to Friday, which includes a rigorous training regimen, precise
kicking mechanics and mental preparation, enable him to have
a high probability of successful outcomes on Saturday.
Jimmy Spithill, a professional sailor and skipper, said
the following about process and outcome:
“You are only as good as your process. And if your
process is solid, then you will be consistent. And if you
are consistent, then you will be good. But if your process is
flawed, then you will be inconsistent, and you will be bad. So,
you’ve got to focus on the process, not the outcome. Because if
you focus on the outcome, you’ll never get there. You will never
get there because you will never have a solid process.”
When the going gets tough and you are in a high-pressure
environment, you will fall to the level of your process. In the
world of sport, a well-defined and repeatable process plays
a significant role in success. But the importance of process
extends far beyond the playing field. In the world of investing,
a well-defined and repeatable process is equally crucial for
achieving superior outcomes.
Investing is a complex and unpredictable game, where
emotions and biases can often cloud judgement. However,
by establishing a clear and consistent process, investors can
navigate the markets with greater confidence and clarity. If you
have a good process, you should have good long-term results.
In the short run there is no correlation between process and
outcome, but over the long term, that’s what really matters.
Investment process is extremely important.
Short-term investment outperformance
is overrated. Long-term adherence to one’s
process is vastly underrated.
A well-defined and repeatable process
is one of the keys to success for achieving
superior outcomes in both sports and
investing. Whether on the rugby field,
sailing in the ocean or investing in the
markets, the power of process is undeniable
– and those who embrace it are likely to be
rewarded with superior results.
Andrew Padoa, Portfolio Manager, Sasfin Wealth
54 www.bluechipdigital.co.za

Looking forward to a RAG-based future
Why AI is going to be part of the future of financial advice.
INVESTMENT | Technology
BLUE
CHIP
Large Language Models (LLMs) and their more recent cousin
– Retrieval Augmented Generation (RAG) – have been taking
the world by storm. This storm is not going to leave the world
of financial advice unscathed. In fact, we believe that it is
going to fundamentally change the way advice is given.
Most people have already encountered LLMs in some way.
They are prompt-based generative models – they generate text
and images in response to prompts by a user. They are incredibly
powerful in this area and give users the ability to generate content
very easily. They are not perfect, however, as they make things
up if there is a need to do so. As they have been developed to
be deployed in as general a context as possible, they are not that
useful in specific contexts such as reporting or financial advice
where accuracy is vital.
A new approach overcomes these problems:
RAG opens the door for the use of LLMs in both
financial reporting and advice. In fact, we believe
that the opportunities this approach offers are too
incredible to ignore.
RAGs differ from traditional LLMs in that
they combine the generative power of these generalist models
with access to a store of specialised, local and time-specific
knowledge such as your client’s current portfolio, commentary
from the managers they are invested in and news about global
investment markets.
If properly constructed, they offer advisors the potential to
accurately generate reports reflecting this information in an
automated way. Imagine the value-add to your clients of having
a unique performance report that reflects their returns and
commentary pertaining to their portfolio only. Imagine the time
savings made of being able to generate these reports automatically,
and even on demand.
While these are amazing developments, they just reflect the
potential for doing what we do now – just better (much, much
better!). But wait, there’s more! RAG offers other benefits for an
advice process that are simply not possible now. We believe that
they can improve the advice process by allowing advisors to do
things differently. More specifically, they incorporate personalitybased
information about the client and use this information to
suggest interventions and generate communications in a way
that resonates with them better and leads to better investment
outcomes for them.
My colleague, Paul Nixon, and I have been investigating our
clients’ (mainly) self-defeating investment switching behaviour
for many years. More recently, we used machine learning-based
tools to do so. We have published several academic papers on
this topic because the use of machine learning to understand
clients is seen to be novel and helpful.
This technology
will be part of
your future.
In this work, we have identified clusters of investor behaviour
that significantly vary from each other. This can be useful to advisors
to segment their client books into groups that require different
interactions as their reasons for switching their investments are
different. Crudely speaking, some may be performance-seeking,
while others may be switching funds to avoid risk. We have also
developed a successful predictive model of these switches – again,
using machine learning models. We are currently exploring the role
of psychological variables in terms of explaining this behaviour.
Intuitively, they should help, but it is very important to demonstrate
that you can measure these reliably and that there is good empirical
evidence that shows they matter.
These findings provide significant insights into the nature of
your clients and their behaviour – but what we
have found is that advisors struggle to interpret
these insights and choose the correct interactions
to use them. This is where RAG offers something
completely new. It tells you which clients are likely
to switch and why – and it offers you advice on
how to leverage this information. It helps generate
communications that are tailored to the client’s psychological
makeup and addresses the underlying reasons for the switch. That’s
something that good advisors may do instinctively – but not all
advisors can do so.
RAG offers the potential for more efficient reporting and betterquality
advice. Finally, by providing the ability to store client
information in a more explicit form, it provides a way to increase
the value of your book when you retire. While there are technical
issues to overcome, this technology will be part of your future. It will
be very exciting to see this happen and be part of it.
Paul Nixon, Head of
Behavioural Finance,
Momentum Investments
Prof Evan Gilbert, Research Strategist,
Momentum Investments and Research
Professor, Stellenbosch University
www.bluechipdigital.co.za
55

BLUE
CHIP
PRACTICE MANAGEMENT | Operations
Forged by fire: where futures
take flight
Gareth Collier, CFP®, one of the 2024 Financial
Planner of the Year Award runners-up, recently
opened his own financial planning practice,
Firecrest Modern Capital. Blue Chip spoke to
Collier about the intricacies of this inception.
Congratulations, Gareth, on founding Firecrest Modern
Capital. Please encapsulate the establishment into
three sentences.
Firecrest was born from a desire to offer deeply personalised
financial planning for entrepreneurs and families navigating the
complexities of substantial wealth. Recognising the need for a
transformative approach, we envisioned a practice where expert
guidance and tailored strategies empower clients to achieve
their unique aspirations. This vision has forged a dedication to
securing long-term prosperity and peace of mind for discerning
individuals and their families.
What was the most challenging aspect of starting your
own practice?
It was initially balancing the demands of building a business
infrastructure while focusing on delivering exceptional client
service. Establishing the necessary operational frameworks,
from technology to compliance, required significant time and
effort, all while ensuring the high standards of personalised
attention our clients expect. It has, and continues to be, a
delicate act of creation on multiple fronts.
What is key in the development of your business?
The development hinges on two key cornerstones: nurturing
strong relationships with all stakeholders and actively engaging
with the broader financial planning profession community.
Building genuine trust and fostering enduring connections with
our clients remains paramount.
Equally vital is cultivating collaborative relationships
with complementary businesses, forming a network where
each party, being the best in their field, brings their specific
expertise to benefit our respective clients. We believe that this
interconnected approach will foster a high standard of service
and contribute significantly to Firecrest’s growth.
How will you develop your financial planning team?
Team development will be deeply rooted in the principle that
every individual within our ecosystem matters. Growth will be
FIRECREST FOUNDER
Gareth Collier, CFP®, has been a practising financial planner
since 2012. He is a director and founder at Firecrest Group
and is driven to provide the highest level of advice and
service to his clients. Collier holds a BComm Financial
Management degree (UNISA, 2009); postgraduate diploma
in Financial Planning (UFS, 2016); CFP® designation (2018)
and a postgraduate diploma in Investment Management
(UFS, 2021) where he excelled as the top overall student. He
was recognised as one of the top three financial planners
of 2024 by the FPI.
intentionally organic, attracting individuals who resonate with
our mission and purpose.
Our aim is to cultivate a partnership-driven environment
where our team feels a profound sense of belonging and
empowerment to contribute their unique talents. Each member
should thrive, knowing their perspectives and wellbeing are
paramount, fostering a shared commitment to excellence in all
aspects of our practice.
56 www.bluechipdigital.co.za

PRACTICE MANAGEMENT | Operations
BLUE
CHIP
What will set Firecrest apart?
We plan to strategically leverage technology to streamline
processes that maximise the time available for meaningful
conversations with our stakeholders. Our exceptional value
will be further amplified by our growing network of best-ofbreed
complementary businesses. This collaborative ecosystem
allows us to offer insightful guidance in both local and offshore
financial planning strategies.
The core of our client engagements is our “head, heart and
hands” philosophy: applying sharp intellect and expertise,
coupled with genuine empathy and a focus on actionable
solutions to empower our clients.
What is Firecrest’s business strategy and philosophy?
Our strategy is built on a long-term vision that extends
beyond our individual involvement, creating a sustainable
entity for all stakeholders. We are committed to fostering
trusting relationships with everyone connected to Firecrest –
our team, clients and network of supporting businesses. We
recognise that mutual respect and shared values are essential
for enduring success. Our philosophy centres on continuous
growth and adaptation, striving to build a practice that creates
a legacy of excellence and integrity that will benefit those
involved with Firecrest long into the future, ensuring its support
for generations to come.
Which services do you offer?
Our services are centred on providing intuitively crafted
financial solutions, encompassing the overarching aspects
of financial planning, investment management, retirement
and estate planning and risk management. This includes
guidance on the complexities of significant wealth, providing
tailored advice on effective tax planning. Recognising the
interconnectedness of personal and business finances, we
assist business owners with implementing comprehensive
employee benefit solutions.
We also offer expertise in global wealth management,
philanthropic advisory and comprehensive family office
services, including wealth structuring and multi-generational
planning. As a meritocratic practice, our advice is always
objective and driven by rigorous analysis, so that clients
can access opportunities based on their inherent value and
suitability. While our planning process is comprehensive, it is by
no means prescriptive; we believe the most impactful planning
arises when solutions and decisions are co-created with our
clients. Our overarching goal is to provide clarity and confidence
in navigating the complexities of their financial lives.
What advice do you have for those setting up a new
financial business?
While the foundational elements of business – compliance,
licensing and operational processes – are essential, don’t let
them overshadow the core purpose: enjoying being of service
to your clients. It’s easy to lose sight of the fulfilling work of
client engagement. Launching a practice, while exciting, is
also isolating. Build a strong network to share the journey
and navigate the inevitable challenges. Self-doubt will likely
surface. Seek out mentors who offer guidance and help you
regain your footing. Don’t hesitate to ask for help; it’s a sign
of strength.
Cultivate a clear vision for the practice you want to create.
Remember that creating something and sharing it with the
world is the most personal form of risk. It’s emotional, tied to
identity and calls for judgement. That risk may be essential to
the process of making something truly meaningful. Stay true
to your authentic self – that unique quality is why clients and
stakeholders will connect with you in the first place. Embrace
your individuality; no-one can be a better “you” than you.
FORTIFYING THE FOUNDATION
Rudolph Geldenhuys, CFP®, winner of the 2024 FPI Financial
Planner of the Year Award, has joined Firecrest Modern Capital as
Collier’s business partner. The partnership of these two once rivals
who competed in the 2024 FPI Awards is a powerful step forward.
“We are dedicated to building authentic and enduring
relationships based on trust and discretion, and I am excited to see
how our combined expertise will help our clients achieve longterm
prosperity and peace of mind,” says Collier.
Here’s to a bright future for Firecrest, Where Wealth Takes Flight.
Rudolph Geldenhuys,
CFP®, 2024 FPI Financial
Planner of the Year.
www.bluechipdigital.co.za
57

BLUE
CHIP
INVESTMENT | Responsible investment
Socially responsible investment:
a lifeline, not a passing trend
If you are a truly conscientious financial advisor, there’s a vital conversation that you should be having
with your clients: climate change.
“On our current path, civilisation as we know it will
disappear.” That’s the blunt, stark warning University
of the Witwatersrand graduate and former UK chief
science advisor, Sir David King, has for us on climate
change. It won’t be tomorrow, it won’t be any time soon – but at
some point, the cumulative damage of ever-mounting natural
disasters caused by climate change will become more than global
society can bear, unless we follow the recipe for safety that King
and many other climate scientists recommend; rapidly eliminating
all emissions, repairing ecosystems and building resilience.
This warning may perhaps sound strange to you in the Trump
era of mass climate change denial, but the unhappy truth is that
climate change is real, and in fact, scientists have, if anything,
underestimated – not exaggerated – the full dangers. Global
warming is accelerating, and we risk triggering “tipping points”,
such as the Arctic Sea and glacial ice loss and the loss of the Amazon
rain forest: where human ecological damage starts cascading
unpleasant feedbacks.
Climate change and investors
Climate change threatens investors in several ways. Firstly, there are
the physical risks of being on a planet facing ever greater numbers
of natural disasters, especially droughts, floods and sea-level rise.
Secondly, the direct financial risk of having your savings invested
in dead-end fossil fuels and missing out on greener growth. Thirdly,
the indirect economic damage of living in economies that are
increasingly dragged down by the fossil fuel industry’s “externalities”
– the full costs of their pollution that they impose on us.
South Africa’s climate vulnerabilities
The likely impacts of climate change on South Africa are
extreme; and these should be considered in the context
of a world also facing varying but compounding knockon
impacts: Gauteng, which contributes around 34%
of South Africa’s GDP, is facing severe water risk from
degraded infrastructure and climate change. The CSIR
says South Africa’s water demand will outstrip water
supply by 17% by 2030. Mining, which uses 5% of South
Africa’s water, can’t function without it.
Continued fossil fuel dependence
The social cost of our continued fossil fuel dependence for South
Africans is immense, over half a trillion rand annually, according to
the International Institute for Sustainable Development, more than
five times the revenue government receives from the industry.
The 2018-2021 Northern Cape drought wiped out R14-billion in
agricultural output, while Cape Town’s “Day Zero” crisis cost the
Western Cape 5% of its GDP in 2018. By 2050, rising seas could drown
R1.3-trillion worth of coastal property.
ESG isn’t charity – it’s at least a survival strategy and at best a
returns engine. In 2023, Kroll found that, “ESG leaders earned an
average annual return of 12.9%, compared to an average 8.6%
annual return earned by laggard companies.” Tech companies with
high ESG ratings doubled returns compared to lower-rated peers.
If you’re driven by data, then the data is clear, as this IEEFA
summary finds: “ESG funds continue to thrive and outperform
traditional funds across equity and fixed-income asset classes.”
And, “ESG portfolios offer better downside risk protection, with
higher upside beta than downside beta in most nations,” observes
the Strategic Finance newsletter.
According to Robeco, “A 2015 meta-study from Friede et al undertook
an exhaustive, quantitative study of the entire universe of
2 250 published academic studies on ESG performance spanning
four decades of data from 1970 to 2014. The analysis concluded
that ESG correlated positively to corporate financial performance
in 62.6% of studies and produced negative results in less than 10%.”
David Le Page, Director,
Fossil Free South Africa
Our green economy opportunity
The global green economy will hit $10.3-trillion
by 2050. For South Africa, renewables already
employ 32 000 people compared to coal’s
82 000. Green jobs are projected to surge to
275 000 by 2030.
The data is unambiguous: fossil fuels are
a dead end. A genuinely green economy is
the only meaningful growth story left. South
Africa’s financial planners can either guide
clients through this transition or explain why
they didn’t.
58 www.bluechipdigital.co.za

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PRACTICE MANAGEMENT | Operations
A home for independent
financial planners
There is a real concern that independent financial planning is dying while product-driven consolidators buy
up small, independent financial planning businesses to bulk up their product factories, where profits are
juicy, and scale is possible.
Regulators are partly responsible for this trend as they
exponentially increase the complexity and cost of doing
business. This disproportionally affects smaller firms,
driving business owners into the arms of the aggregators
who are only too willing to buy them out. My concern is that
regulators seem to prefer a small number of large firms that
they can monitor more easily. While this consolidation trend is
convenient for regulators and rewarding for product factories, I
worry that clients will lose out through higher fees and reduced
service levels.
This is a biased opinion piece meant to voice some frustrations
and transparently inform you that we are entering the struggle
to preserve independent financial planners while regulators,
industry bodies and even the supposedly pro-independent fund
management houses dither or actively work to push independents
out of the industry.
Consolidation is happening
The days of small independent financial planners are ending unless
we collectively work to protect them. As a shareholder of a mediumsized
financial planning business, I am less concerned about
our firm’s survival than I am about the future of sound financial
planning. I wonder how a handful of large, bureaucratic firms will
look after clients when primarily focused on their management
bonuses and shareholder returns.
If you think a few large financial planning firms will result in
better service, I encourage you to consider the level of service you
receive from your bank. The drive by banks to improve profitability
by reducing client service is evident for all to see. Banks want you to
service yourself via your smartphone or a web portal. They certainly
don’t want you to come into a branch and speak to a qualified
person unless you are there to buy something. I suspect that will
happen in financial planning if the industry is reduced to a handful
of behemoths.
What is best for clients?
Clients generally receive better quality and more personalised
service from owner-managed financial planning firms. Many clients
want to form a long-lasting relationship with their financial planner.
This is relatively easy to ensure in a smaller firm, whereas larger
firms employ career-oriented go-getters who are there to build
their careers and climb the corporate ladder.
Client service is not the core function of a large firm; profitdriven
product aggregation is the goal, and clients are seen as
the route to more assets. At the very least, regulators and industry
bodies should find ways to protect the future of small independent
financial planners so that clients have a choice. Some clients are
comfortable dealing with large brands because they value the
brand more than the relationship, but this is not universally true
for all clients.
A home for independent financial planners
We decided to start a new partnership model to partner with
financial planners who want to focus on client service and retain
independence of advice. We are not aiming to consolidate
their client assets into our product factory; we want to enable
financial planners to provide objective and independent advice
to their clients. We want to spread the regulatory, technology and
compliance costs across a larger number of advisors to limit the
impact of these costs while continuing to provide world-class
processes, systems and support.
Independent financial planners can outcompete big product
factories using shared resources such as FICA monitoring tools
and policies, consolidated statements, compliance monitoring and
international CRM systems. We don’t think there is a better recipe
than an independent financial planner who provides great service
and uses shared operational tools and processes
to implement and monitor client outcomes.
Conclusion
Some financial planners will be
attracted by the lucrative prices
offered by product factories for their
clients. In some instances, clients
might be better off, but in most cases,
financial planners who care about
their clients will feel uncomfortable
that they are selling out their clients and
staff. I don’t think we have all the answers,
but I am not keen to sell out my clients
for some extra money.
Warren Ingram, CFP®, Co-founder, Galileo Capital
60 www.bluechipdigital.co.za

FINANCIAL PLANNING | Estate planning
BLUE
CHIP
The hidden complexities of trust
beneficial ownership compliance
Financial advisors frequently recommend the use of trusts as an estate planning tool and in some instances,
they serve as the professional trustee on client trusts.
Commencing from 1 April 2023, the Trust Property
Control Act, 1988 requires trustees to create and
keep up-to-date and lodge a beneficial ownership
register (BoR) of each trust on the International Cost
Management Standard (ICMS) web portal maintained by the
Master of the High Court. Section 1 of the Act defines a trust’s
beneficial owner as the trust’s founder/donor, trustees and any
natural person who directly or indirectly ultimately owns the
relevant trust property or who exercises effective control of
the trust, and each beneficiary referred to by name in the trust
deed. Non-compliance attracts fines of up to R10-million and/or
up to five years’ imprisonment. While this requirement appears
straightforward from a superficial/textual reading of the Act, this
write-up provides a high-level summary of some of the hidden
complexities of complying with the obligation.
Trustees have a fiduciary
duty to exercise due care,
skill and diligence in their
administration of a trust.
Trustees must avoid assuming that merely because an
individual is named/mentioned as a beneficiary in the relevant
clause of the trust deed that such person is in fact a beneficiary
of the trust. The beneficiary clause of some trust deeds merely
sets out a “pool” of potential beneficiaries from which the trustees
may from time to time select individuals on whom they may
confer a benefit. The individuals in the “pool”, although named,
only become beneficiaries from the date on which trustees vest
or distribute a benefit or permit them to use a trust asset. It
would thus be incorrect to include such individuals’ names in the
relevant trust’s BoR before they receive a benefit from the trust.
The wrongful inclusion of the details of such potential beneficiary
in the trust’s BoR could constitute a breach of their constitutional
right to dignity and privacy and as such could expose the trustees
to a claim for damages.
Ordinarily, where an official (such as a trustee) performs a
particular act in compliance with a statutory duty, they would
be indemnified by the relevant legislation from any potential
liability towards third parties. However, the Act does not grant
any indemnity to trustees for any errors they might commit in
complying with their BoR submission obligations. Trustees may
have to look to the asset base of the trust or their professional
indemnity cover for any protection in this regard.
It is interesting to observe that the South African Revenue
Service (SARS) requires that one of the supporting documents
that trustees need to submit together with a trust’s income tax
returns is the BoR for the trust concerned, which must match
the BoR lodged with the Master of the High Court. However,
SARS’s definition of a trust “beneficial owner”, which extends
to so-called “trust protectors”, is broader than that in section 1
of the Act (summarised above). Trustees must, accordingly, be
mindful of this difference in definitions when submitting the
trust’s tax returns and avoid being inadvertently in default of
SARS’s requirements. This is complicated by the fact that there
is no legal basis for SARS’s broader definition, yet SARS expects
trustees to comply with its requirements.
Trustees have a fiduciary duty to exercise due care, skill and
diligence in their administration of a trust. The latter duty entails
compliance with all relevant laws that impact trusts, one of which
is the BoR submission as provided for in the Act. However, it is
arguable that this duty does not extend to laws that are invalid
or unconstitutional.
In my view, the BoR regime is irrational and thus
unconstitutional as there is no rational connection between
the creation and maintenance of a BoR and government’s fight
against money-laundering and the financing of terrorism and
proliferation of weapons of mass destruction.
The BoR compliance obligation presents a minefield
of constitutional and interpretational issues that are not
immediately apparent from a superficial reading of the Act. It is
thus highly advisable that where financial advisors recommend
the use of a trust as part of a financial
planning solution, the client and/or
trustees be advised to seek competent
legal advice on whether and/or to what
extent they need to comply with the BoR
submission obligation.
Sandile Khumalo, LLM (Unisa),
FPSA®, GTP(SA), Fiduciary
Practitioner, Lex24
www.bluechipdigital.co.za
61

BLUE
CHIP
PRACTICE MANAGEMENT | Technology
Creating procedures with ChatGPT
Many advisors know the frustration of repeatedly explaining the same procedures to team members.
Financial advisory practices rely on consistent processes
for smooth operations and regulatory compliance. Yet
documenting these processes as Standard Operating
Procedures (SOPs) often gets pushed aside. Video
recordings provide a quick way to capture processes, but
transforming these recordings into formal SOPs has traditionally
required significant effort. ChatGPT now offers a solution that
simplifies this conversion process. Here’s a guide to creating SOPs
using this approach:
Recording your process effectively
Create a video recording that thoroughly captures your process.
Choose a screen recording tool like Loom, Microsoft Teams or
Zoom. When recording:
• Narrate each action deliberately.
• Highlight decision points for various circumstances.
• Point out common mistakes and how to avoid them.
• Describe shortcuts to work more efficiently.
• Explain how the process connects to broader workflows.
Converting speech to text
You’ll need a transcript of your narration:
• Most recording platforms now generate transcripts.
• Review the transcript for accuracy, especially with financial
terminology and product names.
• Don’t worry about small errors, as modern AI usually interprets
imperfect transcripts.
SOPs deliver value when
they’re regularly used.
Writing an effective ChatGPT prompt
The instructions you give ChatGPT influence the quality of your
SOP. A well-crafted prompt might look like this:
”I have recorded a video showing [specific process, eg ‘how we
conduct client annual reviews’]. Transform the transcript below
into a comprehensive SOP document with these sections: Purpose
and Scope, Required Systems and Access, Detailed Procedure
Steps, Compliance Considerations, Troubleshooting and Quality
Assurance Checkpoints. Format it for readability with numbered
steps and clear headings.”
Generating the initial draft
Creating your SOP is straight-forward:
• Enter your prompt followed by the transcript into ChatGPT.
• Review the generated document carefully.
• Ask for specific improvements where needed.
ChatGPT will organise information logically, eliminate
unnecessary details and create a structured document that
flows well.
Enhancing the generated SOP
While ChatGPT provides an excellent starting point, human
expertise improves the final product:
• Incorporate your firm’s specific terminology and branding.
• Add references to relevant compliance requirements.
• Include links to the original video recording for visual learners.
• Add screenshots at crucial steps for clarity.
• Ensure all steps align with best practices.
Using SOPs regularly deliver value. Consider these strategies:
• Store all SOPs in a searchable knowledge base or your practice
management system.
• Use consistent tagging to make finding procedures simple.
• Schedule regular reviews.
• Create awareness by introducing new SOPs in team meetings.
Financial advisory-specific applications
• Client lifecycle processes from onboarding to review cycles.
• Investment operations such as portfolio construction.
• Back-office procedures.
• Compliance processes.
• Workflows across your various platforms.
Benefits beyond efficiency
• Ensuring consistency in client service.
• Reducing operational risks.
• Simplifying training.
• Helping to identify process inefficiencies.
• Avoiding key person dependencies.
By combining video recording with
ChatGPT’s processing capabilities,
financial advisory practices can
build comprehensive procedure
libraries that enhance service
quality, boost operational
efficiency and strengthen
compliance frameworks.
Francois du Toit,
Founder, PROpulsion
62
www.bluechipdigital.co.za

If you don’t pay, you don’t stay
Why authentic communication could be a hidden key to client retention.
CLIENT ENGAGEMENT | Communication
BLUE
CHIP
There’s a quiet truth in financial planning that few
professionals like to admit out loud: if you don’t pay, you
don’t stay. It sounds transactional – almost crude – but the
underlying behavioural dynamic is anything but. In fact, it
cuts straight to the heart of one of the biggest challenges in client
retention: perceived value.
In a profession where many planners work on commission or
assets under management (AUM) models, it’s easy for clients to
forget that they are, in fact, paying for an ongoing service. There’s
no monthly debit order that they see. No invoice that reminds
them of your worth. And when the cost feels invisible, so too can
the value. This is where regular, human-centric communication
becomes essential.
The perception of value
In behavioural psychology, this is known as effort justification, a
principle within Festinger’s cognitive dissonance theory (Festinger,
1957). It shows that the more effort or investment a person makes,
the more likely they are to value the outcome. In a financial planning
context, when clients feel invested, emotionally or financially,
they’re more likely to stay engaged. But what happens when clients
don’t feel like they’ve invested anything?
Without clear and consistent communication, even your
most valuable clients can begin to disengage.
Not because the work you do isn’t important,
but because it hasn’t been visible, relatable or
relevant in their lives. It’s not a reflection of your
value; it’s a reflection of how they perceive the
relationship when they’re not reminded of the
positive difference it is making in their life.
The human touch
I’ve seen this play out often. Financial planners
pour hours into technical excellence, regulatory
compliance and strategic portfolio construction,
but struggle to consistently show up in their
clients’ lives in ways that feel personal and
meaningful.
A quarterly performance report or a dry
product update just doesn’t cut it any more.
What people crave, especially in times of
uncertainty, is conversation, not just information.
They want stories that reflect their own financial
journeys. They want insight into how others are
navigating similar life transitions. They want to
feel understood, not just advised. They want to
be seen, not just sold to.
This is why I believe that content is not the
endgame; it’s the starting point. A well-crafted
blog, newsletter or social media post should feel like the beginning
of a conversation, not the closing of a sale.
Building trust
Trust isn’t built in a single meeting. It’s forged in the small,
consistent moments between meetings. In the thoughtful email
that lands when a client’s parent falls ill. In the blog that names the
fear they’ve been carrying about retirement. In the LinkedIn post
that reminds them that wealth is measured not just in money, but
in meaning.
Content strategies that work are those that mirror real life.
That speak to the messy, emotional, human side of money and
not just the spreadsheets, benchmarks and awards evenings. And
when your communication regularly addresses what your clients
are going through, you create an experience of care that’s hard to
walk away from.
Conversation over conversion
Too many communication strategies are built around conversions.
Click rates. Call bookings. Product pushes.
But the planners who thrive are the ones who understand that
conversation precedes conversion. These are the planners who use
communication not to transact, but to connect. Not to inform, but
to engage. When a client feels emotionally
What happens
when clients don’t
feel like they’ve
invested anything?
Tim Slatter, Creator, Contatti,
Director, Slatter Communications
invested, they’re far more likely to stay
financially invested too. So, how do you start?
Be strategic. Don’t just create content – create
conversations. Ask questions. Invite replies.
Follow up personally.
Be client focused. Make your communication
about them, not you. Talk about their life, not
your service.
Be authentic. Share stories, not stats. Use
everyday language. Let your personality
through.
Be consistent. Whether it’s daily, weekly,
monthly or bi-monthly (depending on the
medium and platform), create a rhythm your
clients can rely on.
Because at the end of the day, the fee isn’t
just financial. The real fee is trust; yours,
and theirs. And the planners who continue
to earn it, month after month, are the ones
whose clients don’t just stay... they grow.
Let’s stop hoping that loyalty will hold
without consistent connection. Show up. Stay
in touch. Build something worth staying for.
www.bluechipdigital.co.za
63

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BLUE
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PRACTICE MANAGEMENT | Compliance
Record of advice: various definitions
often lead to misinterpretation
In my experience over the last two decades, if you had to ask 100 advisors what their definition of a record of
advice is, you will probably get 100 different answers.
I
will go out on a limb and state that maintaining a record of
advice is a requirement that has come to stay in one form or
another, whether in terms of the provisions of the FAIS Act,
CoFI or any future market conduct legislation. It is one of
the provider obligations that has been firmly established since
the implementation of the Financial Advisory and Intermediary
Services (FAIS) Act in 2004, which is that a provider must maintain
a record of the advice furnished to a client.
Some advisors refer to the client proposal as the record of
advice and others refer to a quotation as the record of advice, both
of which are only partially correct. Others refer to the following
provisions in section 9 of the General Code of Conduct as the
definition of a record of advice:
(1) A provider must, subject to and in addition to the duties imposed
by section 18 of the Act and section 3(2) of this Code, maintain a
record of the advice furnished to a client as contemplated in section
8, which record must reflect the basis on which the advice was given,
and in particular -
(a) a brief summary of the information and material on which the
advice was based;
(b) the financial products which were considered;
(c) the financial product or products recommended with an
explanation of why the product or products selected, is or are likely
to satisfy the client’s identified needs and objectives; and
Provided that such record of advice is only required to be maintained
where, to the knowledge of the provider, a transaction or contract
in respect of a financial product is concluded by or on behalf of the
client as a result of the advice furnished to the client in accordance
with section 8.
Even though the title of section 9 of the General Code of Conduct
refers to a record of advice, only complying with these provisions
without other supporting documentation will fall way short of
what a record of advice is.
From most determinations, it appears that the FAIS Ombud
expects to see a record of advice as a specific document in a
specific format when considering client complaints. It is our
interpretation, in accordance with the Financial Services Tribunal
decision, that all documentation used during the advice process,
and all correspondence during this process, forms part of the
record of advice.
According to the Financial Services Tribunal decision, Johannes
Mostert and Leoni Landman [FAB 127/2018], all documentation
used during the advice process and all correspondence during this
process form part of the record of advice. After more than 20 years
of market conduct legislation through the FAIS Act, many of the
industry stakeholders in the financial services industry still refer to
the record of advice as one single document, which often leads to
the unnecessary duplication of information and documentation.
This interpretation by the Financial Services Tribunal is further
supported by the following provisions in the FAIS Code of Conduct:
66 www.bluechipdigital.co.za

2
TECHNICAL
VERIFIABLE HOURS
COFI Update with
Anton Swanepoel, CFP
17th June 2025
®

BLUE
CHIP
PRACTICE MANAGEMENT | Compliance
When a provider renders a financial service, representations made
and information provided to a client by the provider need not be
duplicated or repeated to the same client unless material or significant
changes affecting that client occur, or the relevant financial service
renders it necessary, in which case a disclosure of the changes to the
client must be made without delay. [1]
According to my research pertaining to FAIS Ombud determinations,
the safest way for any FSP to construct a record of advice would be
to maintain the following documents:
1. A client service request or agreement, which confirms the
financial service that you agree to render to the client as implied
in sections 3(1)(d) and 8(4) of the FAIS General Code of Conduct.
2. A client proposal which contains the following:
2.1 Confirmation of the client’s circumstances, needs, objectives
and risk profile, as required in terms of section 8(1)(1)(a) of
the General Code of Conduct.
2.2 Financial planning recommendations.
2.3 Product recommendations.
3. Signed quotation which contains product disclosures as
required in terms of section 7 of the General Code of Conduct.
4. Advice agreement which contains the following, as required in
terms of section 3(1)(d) and 3(1)(e) of the General Code of Conduct:
4.1 A summary of the information on which the advice was based.
4.2 Products considered.
4.3 Product(s) recommended and the reason(s) why.
In the event of a client compliant,
the FAIS Ombud will always
request a Record of Advice.
That is why it is so important
to know exactly what it is.
Who is accountable for maintaining the record of advice?
It is commonly accepted that the FSP is accountable. However,
according to the definition in the FAIS Act, “provider” means an
authorised financial services provider, and in terms of the General
Code of Conduct, “provider” also includes a representative. Where
the General Code of Conduct refers to a provider must, …, maintain
a record of the advice, the obligation is not just that of the FSP, it
includes an obligation on the representative as well.
Yes, the FSP must ensure that there are resources and procedures
in place to manage and oversee the rendering of financial services
and compliance with the Act and its subordinate measures, but
technically, both the FSP and the representative can be held equally
accountable for non-compliance. As more and more responsibilities
will be added to FSPs under CoFI, I will not be surprised if more and
more FSPs will demand more accountability in this regard from
representatives in future.
[1] See section 3(1)(a)(viii) of the FAIS General Code of Conduct Anton Swanepoel, Founder, Trusted Advisors
68 www.bluechipdigital.co.za

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