Protecting the interests of brokers, consumers
The strength of the Financial Intermediaries Association of Southern Africa (FIA) is that it recognises who its stakeholders are, from intermediaries to consumers, insurers, government and its regulatory bodies, and employees.
“We have developed a more integrated approach to the industry and are focused on aligning the interests of all participants for the sustainable development of the sector,” says Lizelle van der Merwe, CEO of the FIA.
“The FIA recognises the interdependence of all its stakeholders as opposed to looking after the interests of intermediaries in isolation.”
As a trade association the FIA represents a wide range of financial intermediaries, including employee benefit consultants, financial planning advisors, medical schemes brokers and short-term insurance brokers.
“A consumer who needs life and disability insurance, medical aid cover, personal lines and commercial lines insurance cover, a retirement plan or any other financial solution will most likely be advised by an FIA member,” explains Van der Merwe.
“The FIA enjoys a large and steady national membership comprising financial services intermediaries who cover the spectrum of financial planning.
“We represent more than 12,000 licensed employee benefits consultants, financial advisers, medical schemes brokers and short-term insurance brokers throughout southern Africa.
“Our members, in turn, rely on banks, insurers, investment firms and medical schemes to offer innovative products that live up to their promise.
“The ideal consumer outcome is a mix of good financial advice plus world class financial product,” says Van der Merwe.
FIA president Peter Olyott confirms the necessity for the organisation to incorporate the interests of all stakeholders for the benefit of the industry and country. “It is neither possible nor realistic to only look after the interests of one group of stakeholders to the exclusion of others. One of the great things that happened with all the regulatory changes is that it has forced us to re-examine our role with regard to how we benefit FIA members. What has come to the fore is the necessity of being involved in educating consumers, because in an advisor or intermediary model an informed consumer is our best friend.
PRICE ONLY
“If consumers are only buying products on price then they won’t appreciate the value proposition that intermediaries bring to the industry.
“The intermediary is not merely a distributor of insurance products. The added value of an intermediary is based on the fact that insurance is a financial and legal contract — it needs to be interpreted and there is plenty of industry jargon that requires translation.
“A large part of the intermediary’s job is to simplify and explain the contents of what the consumer is buying and what they will ultimately get out of the product.
“Corporate clients and business clients have long done insurance business via intermediaries, because they recognise their specialist resources and we want to try to extend those expert resources to consumers,” says Olyott.
Furthermore, he says many FIA members are small and medium enterprises (SMEs), which the government is promoting the growth of, so the organisation has an onus to introduce new players into the SME space and promote transformation through access.
“As the FIA we have to engage with all stakeholders to facilitate transformation, which should expand and grow the insurance industry through transforming business models to improve access, effectiveness and efficiency.
“We see transformation in a much wider context than race and gender. Business model transformation is also vital. For example the need to incorporate new technologies and deploy them effectively is crucial to the sustainability of both intermediaries and the industry,” says Olyott.
The primary function of the FIA is to represent members’ views to industry stakeholders.
“We want to make sure that legislative changes achieve their desired outcome without hampering our members’ livelihoods,” says Van der Merwe. “We have the ability to canvas our members for their opinions, the expertise to weave their opinions into a formal FIA strategy, and the clout to communicate this strategy to the regulator.”
Other FIA functions include the communication of relevant information to members, industry stakeholders and the broader public as well as engaging in initiatives to further the professionalism of the industry. In short, the FIA exists to make members’ lives easier.