Becoming a financial advisor in South Africa

When I resigned from Old Mutual on 1 April 2011 I decided to become a financial advisor, and also to document the process I followed to allow others to learn from my mistakes. The following describes the path I followed, and my understanding of the ins and outs of the various options (if you see areas where my understanding is incorrect, please email me at yzerfontein@gmail.com so that I can rectify the errors).

The FAIS act says that "a person may not act or offer to act as a financial services provider unless such person has been issued with a licence under section 8", so being a financial advisor boils down to either using somebody elses licence or getting one yourself:

I chose the independent finanical advisor path (ifa) as I didn't want to work full time, and I wanted the freedom to be able to advise on the products from the financial service provider that I considered to be best (I would feel incredibly conflicted if I had to always pitch a certain company's products - I don't think any one company has a monopoly over the best financial service products).

I quickly became aware of how well financial service companies treat independent financial advisors, for example getting invited to an investment presentation by RE:CM when I told them I was considering becoming an IFA.

My plan

To succeed as an IFA you've got to have a plan to get clients in touch with you and to add value for them once they arrive. I'm a semi-competent web developer, I have a good knowledge of html, and a working knowledge of php. My initial focus will be on developing a website providing the best info on preservation funds in South Africa, and to attract people there through organic and paid search. I chose preservation funds as I did a complete study of them when changing jobs (which I've done twice in the last 5 years), and I'm confident of my ability to provide best advice in that area. I'm also lucky that with 17 years of experience working as an actuary in financial services, including the last 3 as an investment actuary I will in some senses be overqualified for the job.

Maintaining a phone list

Being an adviser revolves around contacts, and I resolved to maintain a phone list of all the important contacts at the various companies.

TO DO list

Apply for a financial services provider licence.

I was advised to contact Moonstone to assist with the compliance side of things.

What I like reading

RE:CM asset management

Allan Gray March 2011

Allan Gray Orbis

Contrarius

To find a financial advisor:

Offshore investment

A brief description of how I do my offshore investment.