With the recent announcement of some higher-than-expected increases to medical cover products for 2017, many people are reconsidering their medical cover for the immediate future and re-assessing their financial plans to ensure that they are still working with the best portfolio for their lifestyles, their families and their businesses.
Whilst the year-ahead increases will cause some to question what they are paying for in medical cover, the larger question - one that is much older than the passed few weeks - receives new vitality. That is: What are you paying for?
The financial planning industry (our industry) is currently undergoing some strategically significant changes to bring clarity to that exact question. This change is called the Retail Distribution Review (RDR).
The first phase of RDR is set to arrive on 1 January 2017.
The reason for introducing RDR in South Africa is because the old models for giving advice and selling financial products have created a number of areas that need to be addressed.
RDR is an attempt to focus on the advice rather than the products. One of the key objectives of RDR is to create sustainable business models for financial advice, similar to those of medical and legal advice.
Financial advisors have something far more valuable than just policies or fund wrappers to offer, that is, a financial planning model in which the client is treated more holistically.
“RDR is not about regulation,” said Brian Foster, the co-founder of Beyond RDR. “It’s about business models. We have been running a business model that’s been broken for a long time. Now is the time to change it.”
“You come into the industry by learning to sell policies,” Foster said. “The industry has trained us with this industrial mindset. They build these factories, and send us out to distribute their products. That’s industrial age thinking.”
“I don’t think people buy a financial planner,” Foster said. “But if you ask someone whether they would like you to help them to have the lifestyle you want without running out of money, they will buy that.”
I’m here to help you live the lifestyle that you want - comfortably. Let’s get in touch.