In 2024, nearly two-thirds of South African household income went towards debt repayments. Yet despite this financial strain, insurance penetration remains low at just 11.54%, and most households are only one salary away from destitution.
The majority of existing cover is limited to funeral policies, while essential products such as life insurance, health cover, and asset protection remain underutilised. Many consumers also hold overlapping or misaligned financial products, often without understanding what they’re paying for or how they’re protected.
According to industry experts, the problem lies in a flawed financial advice model – one that prioritises product sales over people’s needs.
A Product-First Industry Failing the Public
Pedri Reyneke, CEO of Multilink, says the problem stems from a long-standing “product-first” culture.
“For decades, the industry has had it backwards. Too often the conversation begins with the product – be it life cover, an investment, or a retirement annuity – rather than the person. This leads to mismatched solutions, hidden terms, and inflated commissions that don’t serve the client’s best interests.”
In a commission-driven environment, jargon and high-pressure sales tactics dominate. The result is a population that is over-insured, under-invested, and often trapped in debt cycles.
Reyneke’s solution is simple: advice first, product second.
What Real Financial Advice Looks Like
A genuine financial planning process begins with listening, not selling.
“A proper process starts with a detailed needs analysis, assessing existing products, and setting financial goals. Only after that should quotes be sourced, and clients should see all the results – even the less favourable ones,” Reyneke explains. “If the advice is truly right for them, there’s no need for pressure.”
Sometimes, the best advice may be to pay off debt before buying a new policy – even if that means no commission for the advisor.
For example, a client who divorces later in life might face reduced retirement savings and higher debt. Instead of selling more insurance, an advice-led approach could focus on paying off high-interest credit, restructuring investments, and setting a realistic retirement age.
“In one case, I advised a client to extend her working life to 70 to protect her income,” says Reyneke. “It’s about building a plan that works for the person and adjusting it when circumstances change. That’s real financial advice.”
A Broken System and the Need for Literacy
Reyneke believes South Africa’s financial challenges are both systemic and behavioural. Low financial literacy, a culture of instant gratification, and an industry built for sales rather than sustainability all contribute to the problem.
“We should be teaching financial basics in schools – how interest works, what bank fees are – and making product information so simple that a Grade 9 learner can understand it.”
His advice to consumers is equally direct:
“If your advisor can’t explain it simply, they either don’t understand it or they don’t want you to. And if they lead with the product, they’re not an advisor – they’re in it for the wrong reasons.”
A Call for Advice-First Financial Planning
As the cost of living rises and household debt soars, South Africans need trustworthy, strategy-first advice more than ever.
“People don’t just need better products – they need advisors who put the person before the policy,” says Reyneke. “That’s the standard we live by at Multilink.”
In a financial environment defined by uncertainty, advice-first planning isn’t just ethical – it’s essential for long-term financial security.
