Financial Advisory and Intermediary Services Bill

Kent Durr, MP (NCOP) – ACDP

Wednesday, September 18, 2002

African Christian Democratic Party MP and member of the National Council of Provinces, Kent Durr gave the following speech today:

The experience world-wide has been that financial advice and intermediary services have often been unreliable. Consistently good, sound, honest, objective and skillful financial advice is very hard to get indeed.

Furthermore it is also true to say that a national saving ethos is vital for any country in order to found, develop and grow a pool of capital to make growth and investment possible and to raise standards of living. South Africa is currently experiencing very low savings rates which holds out no good for our financial health as a nation.

Historically the insurance industry was the main vehicle to mobilize the savings of ordinary people and this industry remains important. But it is only one avenue of saving, and not always the best one.

There are of course many factors that persuade people to delay consumption to save and to accumulate wealth.

Amongst the most important is of course confidence; faith in ones currency and its value and in ones country. That is why on the U.S. currency is written – In God we trust. The supreme acknowledgement in the ultimate creator of all things. So of course high inflation is a major disincentive to saving.

One has to have confidence also in ones institutions and advisors and they need to be worthy of that faith. One also has to have confidence in the regulations and in the law and the regulators governing those bodies.

Here is the classic role for the state. To so regulate that environment that the ordinary person can expect and indeed obtain the necessary objective advice and guidance and thus have the confidence to invest and grow his funds in on his own and in the national interest.

There have been too many failures here and worldwide for the State to stand back and to allow a lax attitude to prevail. We are fortunate to have strong institutions and a lot of good practice to build upon in order to establish best practice, which indeed this Bill seeks to achieve, along with a family of other legislation.

The Bill builds upon what was best in our system and elsewhere and the consultation has been wide and worldwide. The Financial Services Board seeks to retain and build upon our national position as a well regulated regional financial center co-operating with the world. We can indeed be ambitious for the future of our country and sub-continent. (If NEPAD is to succeed, we will need to be a vibrant financial center. This we cannot be without mobilizing savings.)

The Bill is user friendly and relies very much on affordable self-regulation.

This is not a Bill without teeth. There are enforcement measures which also mobilize provisions in other legislation.

This Bill is pre-eminently consumer legislation and one hopes the consumer courts will gain the teeth to protect particularly the small investor that needs to become far more savings orientated.

The Bill will rely upon the ability of the Financial Service Board to work with the education authorities to see that bench-mark courses and training is offered so that the regulations do not become barriers to entry into the business, and that standards can be established and built upon.


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For further comment please call Kent Durr MP at (021) 403 2472 or ACDP Media Liaison Liza Bloemetje at 082 478 1037