Coaching as an empowerment tool for financial advisors to transform the South African life assurance industry.

Abstract

Life assurance remains one of the most recognised effective mitigating tool to reduce risks faced in people’s daily lives (Naidoo, 2010). This is effectively done through a financial planning process conducted by financial advisors. In South Africa, 60% of financial advisors at present are white males 50 years and older, while only 10% of financial advisors are mostly black advisors under 30 years of age (The Institute of Practice Management, 2010). This is despite the fact that in the general population white people form only 8.9% of South African population (Department of Labour, 2013). Employment transformation in general remains slow and as of 2012, 72.6% of top managerial positions were occupied by white people (Department of Labour, 2013). This is despite the efforts being made by financial services companies through the Financial Services Charter, where they are paying 1.5% of payroll (in addition to the skills development levy) for training. Training provided by life assurance companies to Financial Advisors is mostly classroom style which focuses on the sales cycle, the law and product information. It does not take into account differences in financial advisor backgrounds. Using the current training methods being employed, more financial advisors from ‘suburb’ schools (mostly white) will have better outcomes compared to financial advisors from ‘township’ schools (mostly black) (Equal Education, 2011). This means transformation, as desired by life houses remains unachieved. Inequality that can be aligned with cultural, race, religious identity or ethnicity (horizontal inequality) is more likely to lead to conflict (Kanbur, 2007 & Steward, 2005). The majority of sales people reach their full potential through effective training and sales coaching (Rich, 1998, p. 52). Sales coaching of financial advisors is done haphazardly by life assurance companies as great emphasis is put on classroom based training. This thesis argues that life assurance companies should include coaching as a fundamental part of their training programme, if they want to achieve transformation. I suggest using a Gestalt approach to coaching of financial advisors. In this thesis, the conflict race theory (CRT) is used to have an in-depth understanding of conflict transformation in the South African life assurance sector.