Keith Peter, Advice Manager at Old Mutual Personal Finance

With the anticipated promulgation of the Conduct of Financial Institutions (COFI) Bill in September 2026, Independent Financial Advisers (IFAs) must act now to position their practices and take advantage of the opportunities it presents.

COFI, which makes up the bulk of the legislation needed to complete South Africa’s shift to a Twin Peaks regulatory framework, was submitted to Parliament in March 2026, and is expected to be enacted before the end of the year.

The recent Old Mutual Independent Distribution (OMiD) IFA Association Roadshow, marketed as a dynamic event focused on how IFAs can adapt, innovate, and thrive in a rapidly evolving landscape, allowed OMiD to frame the COFI legislation as a positive ‘next step’ in the journey from rules-based to outcomes-based conduct regulation.

We identified six positives for IFAs to focus on as the current Financial Advisory and Intermediary Services (FAIS) Act and its accompanying codes give way to the COFI framework.

1. You are already doing it right

The first positive is that the financial advice process remains largely unchanged with an 80-90% overlap between the steps set out under COFI, and those in FAIS.

An intensive side-by-side comparison of the incoming and outgoing conduct legislation shows that expectations around advice principles, business models, customer engagement processes, customer relationships and professional standards and ethics are broadly similar. IFAs who have adhered to FAIS when providing advice will have no trouble complying with the six Treating Customers Fairly (TCF) principles being embedded though COFI.

2. COFI creates a level playing field

The second positive is that COFI levels the playing field across the competitive advice industry. COFI requires that IFAs document their processes and product recommendations to show they embed TCF principles and are in the best interest of customers.

This requirement has been made abundantly clear to the advising community by the Financial Sector Conduct Authority (FSCA). Over the last few years, the FSCA has used the powers conferred on it by the Financial Sector Regulation (FSR) Act to expand its conduct oversight function, taking strong enforcement action through debarments and administrative penalties.

3. Flexibility over rigidity

The third positive under COFI is that it creates a flexible, outcomes-based advice environment. Under the old, rules-based FAIS regulation, IFAs had to follow steps in sequence; under COFI, you have more freedom in how you achieve fair outcomes for your customer, provided you can demonstrate how this is achieved. FSPs can articulate their own business policies provided they meet ethical and TCF outcomes.

4. Proportionality protects you

One of the biggest fears entering the COFI era was that smaller FSPs would be forced to comply with conduct requirements designed with much larger institutions in mind.

The fourth positive is that COFI introduces a proportionality principle, allowing the FSCA to apply oversight, standards and enforcement in a manner that reflects the nature, size, scale, complexity and risk of a particular institution or activity.

This does not mean that small FSPs get an exemption from core market conduct obligations. Rather, it means the framework can be applied more appropriately, with less unnecessary burden on smaller firms. The policy intent is that proportionality should support a more level playing field while still protecting customers and maintaining conduct standards.

Your answers to the 12-section Omni-Risk Return will stand alongside your entity profile to assist the regulator in deciding the level of oversight your practice will be subject to. OMiD used the IFA Roadshow to remind IFAs that their first Omni-Risk Return submission will be due in September 2026 regardless of whether COFI is enacted or not. The FSCA wills use provisions in the FSR Act to make this possible.

5. Quality becomes your competitive advantage

An interesting spin-off from the incoming COFI regulation is that it gives FSPs another way to differentiate in a competitive market, the fifth positive.

It requires IFAs to track and demonstrate pro-customer outcomes using metrics like customer retention, customer satisfaction, customers’ financial outcomes, new business referrals and Ombud complaints, to name a few.

Having these metrics on hand allows you to focus your marketing efforts on your customers and customer outcomes. You will stand out from competitors by how well you embed culture, governance and the six TCF principles across your practice.

6. Strategic partnership opportunities

OMiD has run the numbers, and reckons that a small, standalone business will have to set aside 6-10% of total revenue to maintain a compliance-fit stance, including a compliance officer and CRM system and the annual costs linked to the Omni-Risk Return, B-BBEE consulting for transformation plans; and professional indemnity (PI) cover. This cost reduces to 3-5% of total revenue in a suitable partnership.

The sixth positive to emerge from the COFI legislation involves exploring partnership opportunities to build scale in your advice practice and offset the costs associated with an expanding compliance function. There are three partnership structures worth considering.

The first, a network or federation, allows you to retain independence in your current FSP and share compliance support and systems. The second, a practice merger, requires joining up with a similar-sized practice and benefitting from shared ownership and resources. And the third, is to join a larger, established FSP and operate under its licence, compliance framework and support structure.

Addressing transformation

Complying with South Africa’s Employment Equity Act introduces another layer of complexity, and the R10 million turnover threshold means that the proportionality principle may not help smaller FSPs in this area.

If you are close to the R10 million threshold, then you need to begin planning your transformation strategy now. This means developing a credible transformation plan with measurable milestones; documenting all transformation efforts to demonstrate progress; and considering B-BBEE partnership or strategic alliances. The suggestion is to engage with compliance officers or B-BBEE consultants to develop compliant structures.

Technology solutions

There is good news for IFAs who are concerned with the complexities in the new conduct regulation. OMiD has leveraged Artificial Intelligence (AI) to create a web platform-based COFI Assistant that simplifies the 360 pages of the COFI Bill and allows IFAs to interrogate aspects of the bill.

This is just one of the ways we will help IFAs to thrive under COFI, a regulatory framing which ensures integrity, professionalism and customer focus across the financial services industry.