The COFI Bill will redefine professionalism in South African financial advice, and advisers who adapt early will lead the field, says Johan Minnie, CEO at Consult by Momentum

South Africa’s financial advice sector is entering a decisive new era.

The Conduct of Financial Institutions (COFI) Bill, expected to take effect in 2026, will redefine what quality advice means and how it must be proven. Instead of showing that documents were completed correctly, advisers will need to demonstrate how clients were supported, what they understood and whether the guidance made a meaningful difference.

Unlike the current rules-and-regulations approach that dominates the financial services industry, COFI – much like Treating Customers Fairly (TCF) – is principles-based. It places a clear obligation on advisers to demonstrate, on principle, that they have given sound advice in the client’s best interests, charged fair compensation in line with the effort involved, and disclosed what needs to be disclosed. The burden of proof shifts to the adviser, and ultimately, this is fairer to the client.

Some advisers may view this as a regulatory burden. But I urge you to rather see it as an opportunity to earn trust and modernise how you work. The current compliance culture still leans heavily on paperwork as the evidence that advice was appropriate and if you ticked all the boxes, you were covered. COFI asks something more purposeful, and this is not a small adjustment – it changes how trust is earned and how the profession will be evaluated.

Yes, change is always hard. We see this in our health: we all know we should walk 10 000 steps a day, avoid smoking, drink less – yet often we say, “Tomorrow is another day.” Then one day a heart attack forces a lifestyle overhaul, and change is thrust upon us. The point is simple: those who adopt better habits early avoid the shock later. Advisers who begin applying COFI principles consistently now, will avoid the pain of sudden change when the legislation comes into effect.

What will define good advice when paperwork is no longer enough

The question is no longer whether advisers understand the rules, but whether they can show value when tested. This will be especially difficult where ongoing product fees have continued long after genuine engagement faded. COFI does not only address poor conduct; it highlights weak value propositions and outdated service models that once passed without challenge.

Advisers should use the months ahead as active preparation for this new world. Those who begin now will be ready, with service models that can be explained and evidenced. COFI will favour advisers who already work with structure and consistent client contact, supporting those who communicate clearly, keep accurate records and treat advice as an ongoing professional relationship rather than a once-off interaction.

Part of this involves managing expectations. Advisers need to ensure clients’ expectations are reasonable – you cannot save R500 a month and expect to retire as the next Warren Buffett. But equally important is understanding what the client wants to achieve: asking the right questions, playing their goals back to them, and building a plan tailored to their unique outcomes.

This shift will also increase the importance of strong support systems. Advisers aligned with organised, well-resourced platforms will transition with less friction than those trying to redesign processes alone. At Consult by Momentum, our frameworks, systems and processes are already aligned to COFI principles, so advisers do not need to build from zero. Consult’s trademarked “Business Lab” is our tool to ensure advisers are ready for these changes. But remember, support only creates value if it is used consistently, not occasionally or only when audited.

COFI will reward preparation and courage

COFI is not a punishment. It signals a more mature sector that serves people better. South Africa faces widespread financial insecurity and low financial literacy, which makes the quality of advice even more important. If COFI is embraced with enthusiasm rather than fear, it could help families make better decisions, improve planning and strengthen financial resilience.