There’s one topic dominating conversations across the financial services industry right now:

The Conduct of Financial Institutions (COFI) Bill.

But here’s the problem:

Most professionals have heard of COFI but very few understand what it will actually require them to do differently.

And that gap is where risk sits.

What COFI Really Is 

COFI is not just a new piece of legislation.

It represents a complete shift in how financial institutions are regulated, moving toward a single, unified framework that governs conduct across insurance, banking, investments, and advice.

This means that instead of navigating multiple overlapping laws, businesses will operate under one consistent conduct standard.

But simplicity at a legislative level does not mean simplicity in practice.

The Real Shift: From Rules to Accountability

Under current frameworks like the Financial Advisory and Intermediary Services Act (FAIS), many FSPs operate in a rules-based environment:

• Follow the process
• Complete the documentation
• Tick the compliance box

COFI changes that.

The focus is shifting to:

• How decisions are made
• How clients are treated
• What outcomes are actually achieved

In other words:
Compliance will be judged on behaviour — not just process.

 RLP Insight

Many FSPs are currently structured to pass audits, not to consistently deliver fair client outcomes.

Under COFI, that approach will not hold up.

Licensing: What Will Actually Change

COFI introduces an activity-based licensing model.

This means licences will no longer simply reflect what products you offer but rather what activities you perform within the value chain.

In practical terms:

• FSPs will need to reassess how their current licences align with their actual business activities
• Some businesses will need to restructure their licence categories
• Others may need to apply for additional permissions depending on how their services are classified

Even where a full reapplication is not required, most FSPs should expect a restructuring exercise.

RLP Insight

Many businesses are licensed broadly but operate narrowly  or vice versa.

This misalignment is likely to create compliance gaps under COFI if not addressed early.

Governance: Accountability Moves to the Top

COFI significantly increases expectations around governance.

This is not just about compliance officers, it’s about:

• Key Individuals
• Senior management
• Decision-makers

Accountability will sit with those who:
Design processes
Approve products
Oversee client outcomes

This means governance will need to be:

• Active
• Measurable
• Consistently applied

RLP Insight

Rubber-stamping oversight structures will not meet COFI expectations.

If governance cannot be demonstrated in practice, it will be treated as non-existent.

Compliance: From Documents to Demonstration

One of the biggest misconceptions in the industry is that compliance equals documentation.

COFI moves away from that.

It requires FSPs to demonstrate:

• How advice is actually given
• How decisions are made
• How customer outcomes are monitored

In other words:

•  It’s no longer enough to have a policy
• You must prove that it is being lived

RLP Insight

Training that focuses only on passing exams — without real-world application — will become a major risk under COFI.

Customer Outcomes: The New Centre of Everything

COFI places the client at the centre of the entire value chain.

Every decision will be measured against one key question:

Did the client receive a fair outcome?

This applies to:

• Product design
• Advice processes
• Sales practices
• After-sales service

What Most FSPs Are Getting Wrong Right Now

A common response in the industry is:

 “We’ll deal with COFI when it’s implemented.”

This is a mistake.

Because:

• The regulatory direction is already clear
• Enforcement is already aligning with COFI principles
• Expectations are already shifting

By the time COFI is fully implemented, the standard will already be in place.

What You Should Be Doing Now

FSPs that want to stay ahead should already be:

✔ Reviewing how their business activities align with current licences
✔ Strengthening governance and accountability structures
✔ Moving beyond paper-based compliance to real-world application
✔ Embedding customer outcome thinking into daily operations
✔ Investing in practical, ongoing training — not once-off certification

Final Thought

COFI is not just another compliance requirement.

It represents a shift toward a more accountable, transparent, and outcome-driven financial services industry.

And the reality is:

• Businesses that start aligning now will adapt smoothly
• Those that wait will face operational and compliance pressure

 Industry Resources & References

• Financial Sector Conduct Authority (FSCA) – Market conduct regulation and COFI readiness
• Conduct of Financial Institutions (COFI) Bill – Draft legislative framework
• Twin Peaks Regulatory Reform – South Africa’s financial regulatory model