2013 2014 integrated report

2013 / 2014 Integrated Report Raising the Bar

www.fpi.co.za

contents About this report 4 FPI at a glance 5 A word from our Chairperson 6 A word from our Chief Executive Officer 8 To our Stakeholders

Our Developments and 2013 Accomplishments 11 Growth Despite Challenges 15

How we Build a Professional Framework 16 Building our Capacity 17 Looking into 2014 24 Our Financial Position

A Word from our Audit Committee Chairperson 26 Our Financial Performance 27

Auditor’s Report 28 Directors’ Report 29 Statement of Financial Position 30 Statement of Comprehensive Income 31

Statement of Changes In Equity

32 Cash Flow Statement 33 Contributors 34

About this report This is our first integrated report. In this publication, we aim to tell a story about FPI’s strategic developments and future plans. The report is used to explain and update our target audience and to create value for our stakeholders.

What is Integrated Reporting?

Integrated reporting is designed to provide insight about the resources and relationships used by an organisation. The movement towards integrated reporting is being led by the International Integrated Reporting Council (IIRC) with the aim of creating a new form of external reporting that meets the more complex and connected needs of stakeholders.

The International Integrated Reporting Council (IIRC) in its International Integrated Reporting Framework defines the integrated report as “a concise communication about how an organisation’s strategy governance, performance and prospects, in the context of its external environment, lead to the creation of value in the short, medium and long term”.

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2013 / 2014 Integrated Report

FPI at a glance The Financial Planning Institute of Southern Africa (FPI), a South African Qualifications Authority (SAQA) recognised professional body for financial planners, which serves the public by ensuring that people who carry the CFP® designation are qualified, experienced and professional.

We are recognised internationally and are a founding as well as current affiliate member of the international Financial Planning Standards Board Ltd (FPSB) based in the USA, along with 24 other affiliate member countries who offer CFP® certification, the highest recognised professional designation worldwide for a financial planning professional.

Our Vision Professional financial planning for all

Our mission Is to advance and promote the pre-eminence and status of financial planning professionals, while at all times acting in the interests of the society whom the profession serves by: 1. Improving the quality and accessibility of professional financial planning for all in Southern Africa.

2. Acting as advocate for professional financial planning, building a recognition of the importance and need for such planning by the general public.

3. Provide a framework within which members can achieve qualifications and maintain competence to create greater value for their clients, practices and employers.

4. Ensuring that members maintain the highest ethical standards in the pursuance of their profession.

5. Providing a leadership role within financial services by providing balanced, credible input and commentary to government and the public.

6. Facilitating transformation within the profession.

Our values • • • • • • • •

Clients first Integrity Fairness Objectivity Professionalism Competence Confidentiality Diligence

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A word from our Chairperson

Prem Govender, CFP速

I have had the privilege of serving on this board for the 10 years that it has been in existence and as I bow out, it is with a deep sense of pride that I present this my last report.

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2013 / 2014 Integrated Report

As I reflect over the last 10 years I see an organisation that has achieved so much more than it set out to in 2004, and certainly more since its inception as the Institute of Life and Pension Advisers way back in 1981.

This year marks the 10th anniversary of the Financial Planning Institute (FPI) as a section 21 company, now referred as a non-profit company, governed by a Board of Directors.

The reasons at the time for this change in governance structure was that we wanted to differentiate ourselves as a professional body purely for public benefit and not just to protect members. We needed to send a clear message that we are a professional body with credibility in the public space.

I have had the privilege of serving on this board for the 10 years that it has been in existence and as I bow out, it is with a deep sense of pride that I present this my last report.

As I reflect over the last 10 years I see an organisation that has achieved so much more than it set out to in 2004, and certainly more since its inception as the Institute of Life and Pension Advisers way back in 1981. There are several highlights that bear testimony to this and perhaps the most notable would be our recognition by the South African Qualifications Authority (SAQA) as a professional body in 2012. We have always unashamedly regarded ourselves as the only professional body for financial planners and conducted ourselves as such and so the official recognition reinforced this belief in ourselves.

Though such recognition does come with the burden of maintaining and improving this exalted status and I am proud to report that the office of FPI, under the capable leadership of Godfrey Nti and his team continues to ensure that these high standards are met and improved. This achievement ensures that members, particularly the CFP® professionals can hold their heads high, secure in the knowledge that they have a credible body behind them.

2013 / 2014 Integrated Report

While I acknowledge that there are other bodies serving people within the financial services arena, we are proudly the only independent, recognised and internationally affiliated professional body for financial planners in South Africa. Indeed, this international affiliation to the Financial Planning Standards Board (FPSB), owner of the CFP® designation outside the United States, grants FPI sole licence to CFP® certification in Southern Africa. This is no mean feat considering that only 23 other countries world-wide have this privilege, a privilege that come with exacting standards that we as an organisation comply with. Our last assessment in 2012 by FPSB resulted in us obtaining the highest score of all 24 affiliates for delivery of the CFP® certification programme. None of this would have been possible without the dedication and hard work of Godfrey and his team, supported by a stellar board of non-executive directors.

The winds of change continue to blow in the financial services arena. Treating Customers Fairly (TCF) and the impending implementation of the Twin Peaks legislation will further ensure that the consumer is protected within a sound financial environment. The march toward the much needed changes in both the savings and retirement space is gathering momentum and we eagerly await the release of the discussion document from National Treasury.

Again all of these changes will present untold opportunities for ethical planners who believe in putting clients first.

Looking forward I see an even brighter future for our members. In as much as we continue to see and experience the devastating effects of the 2008 global financial crisis, I remain optimistic that our services will

be even more in demand as the economy recovers. Bearing in mind that people are living longer, we have the power to ensure that the people who do, can do so more comfortably financially if they plan correctly and use the professional services that we as CFP® professionals can offer.

And so as I take my leave from the Board of FPI, I am comfortable that the organisation has reached new heights and that there are processes in place to ensure that this status quo continues; processes that were deliberated on at length at many a board meeting resulting in a truly sustainable organisation. Over the years I have worked with so many amazing people, and I would like to salute each and every one of these dedicated volunteers who have put service before self to ensure that FPI continues to uphold this noble profession.

To my fellow directors, may I say that the role you have played has made my task that much easier and I am so grateful for your support over the years. To the incoming board, I wish you every success as you continue to take FPI to even greater heights under the very capable leadership of Sankie Morata, CFP® and Ntai Phoofolo, CFP®.

Finally, a non-executive board can only perform optimally with an effective executive.

We have this in the our CEO, Godfrey Nti and the hardworking and dedicated team that supports him and may I express my gratitude to the amazing people at the FPI office, for whom no task is too big to ultimately make it all happen.

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A word from our Chief Executive Officer

Godfrey Nti

I believe that the founding fathers would be very pleased with the direction in which FPI is headed, and with the progress we have made together with the growing CERTIFIED FINANCIAL PLANNER速 professional community as well as the broader membership base.

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2013 / 2014 Integrated Report

As I have been reviewing FPI’s accomplishments during 2013 it prompted a few reflections on the changes at FPI during recent years that I would like to share.

Our History

Our Journey

The visionaries who established the then Institute of Life and Pension Advisors (ILPA) more than 33 years ago saw the organisation as leading the movement to establish financial planning as a recognised and respected profession that would serve the public. Since then, leadership is naturally something that has been expected of FPI.

As we continue on our quest for the highest levels of professionalism, we remain focused on building a community of qualified experts. A community, who shares best practice ideas, acts as a support network and has strong pro bono and consumer focus. One with an implied trust in their professional colleagues, mentors as well as new entrants and is seen by South Africans as a universally respected profession that can make a significant different to their lives.

I believe that the founding fathers would be very pleased with the direction in which FPI is headed, and with the progress we have made together with the growing CERTIFIED FINANCIAL PLANNER® professional community as well as the broader membership base.

Since the CFP® mark made its entry into South Africa in 1998, its strength wasn’t a foregone conclusion. Its strength today is a testament not only to the many CFP® professionals and others who have supported the CFP® professional community throughout the years; it is a testament to every financial planner who lives up to the standards of the CFP® mark today.

The CFP® mark is recognised within the financial services industry as the standard of excellence for personal financial planning.

The CFP® certification is sought after and valued by financial planning professionals, and FPI is increasingly becoming a valued resource for regulators, policymakers, the national media and consumers. These developments have helped contribute to the standing of the financial planning profession and the movement towards it being recognised as a bona fide profession.

What I am especially proud of is how our recent accomplishments have made us a relevant organisation. We share with our stakeholders’ clarity of purpose and we are developing the capacity to reach our ambitious goals. With our success in strengthening the Institute’s long-term viability, capacity, growth and relevance, I believe FPI is ready to make important contributions to the ongoing evolution of financial planning, while it pursues its mission of benefitting the public.

As we celebrate these achievements, they also highlight the need for FPI’s leadership to continually challenge our own assumptions about the impact the Institute and the professional community can make on issues of importance to the financial planning profession and people’s lives.

In 2013, the Board of Directors did just that, challenging the organisation to think big.

Together, we identified a set of overarching long term strategic objectives that bring together key aspects of the Institute’s core objectives: Leadership, Standards Upliftment and Recognition and Awareness – FPI’s Vision 2025! For each of these outcomes, we have developed ambitious goals to focus on in coming years. They are concise yet ambitious – and the Board, volunteers and staff are aligned, energised and ready to make progress in each of these areas.

Our ongoing work to maintain rigorous and relevant certification standards, a key focus area of the new FPI strategy, continued in 2013. We were amongst the first to be recognised by the South African Qualifications Authority (SAQA) as a voluntary professional body. The CFP® designation and our other designations were finally registered on the National Learners Record Database (NLRD). We conducted a successful Job Analysis Study as well as produced a draft policy document containing proposals for the next generation of FPI’s certification standards, both of these invaluable in grooming young financial planning professionals of the future.

4500

registered CFP® professionals in south Africa 2013 / 2014 Integrated Report

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A word from our Chief Executive Officer continued...

The opportunities for the CFP® certification are still immense. Increasing public awareness is a central part of FPI’s current strategy. We continued our work to highlight the value of the CFP® certification to the public through vigorous public relations activities, generating “earned media” each month. Our team of FPI volunteers and our Brand Ambassadors around the country shared FPI’s messages with local and national media as well as to individual and consumer groups. And we have seen results, with increased numbers of articles featuring FPI and the CFP® certification, generating the equivalent of millions of rand in paid advertising every month.

Despite these efforts, the percentage of the public that recognises the CFP® mark, even though growing, remains low. So does public awareness of the value of professional financial planning. Unqualified financial agents continue to dress their services as “financial planning” but provide clients with nothing more than product sales without the benefits of true financial planning services.

While the financial planning profession has evolved over the years to establish a model of financial planning that provides definite value for specific segments of the public, questions remain about the value of financial planning benefits for the average South African who does not possess substantial wealth. This area will receive even greater focus from FPI in the coming years.

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Our Collaboration

Our Operations

We were quite pleased to see a growing number of our members respond to our plea to give back to communities by volunteering on any number of our FPI MYMONEY123™ financial education sessions across South Africa. To strengthen FPI’s efforts in this area, we signed agreements with the Financial Services Board (FSB), Gauteng Department of Economic Development and Tswane Community Business Forum. We continue to appeal to our members to get involved in these initiatives and help change lives.

In 2013 we significantly strengthened our long term sustainability outlook by buying office property, and since November 2013 this has become the new head office of FPI. We also invested some money in a new member and certification management system called iMIS. This new system, which is set to be implemented from 2014 onwards, is a significant upgrade from the current NOAH system and we believe that once implemented it will greatly enhance FPI’s operations, ensuring a more pleasant and efficient service delivery to everyone engaging with FPI.

We also sustained our engagement with industry bodies, regulators and other policymakers in our efforts to benefit the public and increase access to competent and ethical financial planning. We released a number of commentary papers in response to various white papers and continued to play an active role on the Treating Customer Fairly (TCF), Micro-Insurance as well as National Financial Education Steering Committees.

I appreciate the confidence the Board shown in FPI’s staff and members, through its challenge to think big. I know from my experience at FPI never to underestimate the insights, talents and energy of those in the financial planning profession. I believe the shared strategic focus we have established will allow us to make the most of the opportunities before us, and I appreciate the generous contributions that so many have made and will make to FPI’s important work.

Last but certainly not the least; I would like to sincerely thank my staff and our ever growing number of volunteers for their hard work, dedication and loyalty to FPI. Together, we are making a positive difference to our professional community, the Institute and assisting South Africans to understand the value that financial planning can add to their lives. Let’s keep at it!

2013 / 2014 Integrated Report

TO OUR STAKEHOLDERS Our Developments and 2013 Accomplishments 2013 was the year we implemented our 2015 strategic plan. Our strategic plan clearly defines the importance of successfully positioning the CFP® mark as the symbol of excellence in financial planning, with a focus on three main areas namely; leadership, standards upliftment as well as recognition and awareness. To ensure that all activities are aligned, the FPI Board of Directors reviews and updates the strategic plan annually.

Leadership In this section we report on all activities that supports the pre-eminent financial planning standards authority for competent and ethical financial planners. As well as ensure that the CFP® certification remains the standard of excellence for financial planning professionalism in South Africa. This was achieved in the following areas:

Our affiliation with the International Centre for Academic Integrity The ICAI was founded to combat cheating, plagiarism, and academic dishonesty in higher education. Its mission has since expanded to include the cultivation of cultures of integrity in academic communities throughout the world. ICAI offers assessment services, resources, and consultations to its member institutions, and facilitates conversations on academic integrity topics each year at its annual conference.

We pride ourselves to have been admitted into membership of this important and noble institute, an institute with a strong international outreach. By joining ICAI, we are committing to further strengthening FPI’s certification standards by integrating into it the highest principles and guidelines of academic integrity espoused by ICAI. This affiliation doesn’t only demonstrate FPI’s commitment to raising the status of the financial planning profession but will also give FPI an important platform to join our peers around the world in networking, learning and sharing our own experiences gathered over the last 32 years of our existence.

2013 / 2014 Integrated Report

Memorandum of Understanding with the Fiduciary Institute of South Africa The Memorandum of Understanding (MoU) is aimed at exploring possible areas of collaboration between the two institutions, most importantly with regards to Continuous Professional Development (CPD).

The Fiduciary Institute of South Africa (FISA) and FPI undertake to co-operate on mutually beneficial terms , in terms of enhancing the value to their respective members, specifically in the area of educational, training and other methods of enhancing member competence.

Which in turn means that FPI members can obtain CPD points for attending certain FISA events and vice versa, with the possibility of hosting joint events in the future.

Employer Engagement In November we celebrated our FPI Corporate Partner™ partnerships with Sasfin and Standard Bank Financial Consultancy, which is aimed at working together to train and develop financial planners and advisors within these institutions into CERTIFIED FINANCIAL PLANNER® professionals. The FPI Corporate Partner™ agreement was established by FPI to provide a framework for working with large corporations in the industry to help raise the competency levels of their financial planners and advisors and ultimately providing them with an enhanced pathway to the coveted CFP® designation.

As we are committed to up skilling financial advisors into ultimately becoming CFP® professionals, in a bid to improve on access to top quality financial planning and advice offered to South Africans, we believe that the FPI Corporate PartnerTM agreement provides an excellent framework for FPI to work together with larger corporations in achieving this shared objective.

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Our Developments and 2013 Accomplishments continued...

Standards Upliftment

Recognition and Awareness

In 2013, we continuously established the highest standards of practice for financial planning and that members and stakeholders are in full compliance with CFP® certification programme standards by:

In the area of recognition and awareness we worked on the implementation of consumer and employer advocacy initiatives that focused on the benefits of financial planning and using a CFP® professional. In 2013 we engaged in a number of activities and with these activities we aimed to achieve the following: • To promote awareness of the value of the CFP® mark and financial planning as a profession.

• To position CFP® professionals as the financial planners of choice.

• To promote career pathways in financial planning.

• To develop a solid value proposition for employers.

Promotion and protection of trademarks In line with strategy, the institute protects and promotes the correct and authorised use of the CFP® mark. To date, we have successfully resolved 83% of cases relating to the incorrect use and misuse of the mark and 81% cases of unauthorised use of mark by persons who are not CFP® professionals.

In line with making sure that CFP® professionals better apply the mark, we have developed two easy reference guides which are available on the FPI website at www.fpi. co.za/professional.

Conducting the 2013 Job Analysis Survey The Job Analysis Survey conducted indicated how financial planning is practiced in the industry. The survey is designed to benefit the public and the financial planning profession by assuring that individuals who obtain the CFP® certification have satisfactory levels of knowledge and skill to perform competently in the field of financial planning.

The results of the survey are used to: • Develop tests specifications for the CFP® Professional Competency • Examination which is linked to the qualifying criteria which plays a fundamental role indeveloping evidence in support of the CFP® Professional Competency Examination.

• Develop guidance documents,types and topics of Continuous Professional Development (CPD) events required.

• Results also showed that CFP® professionals’ ethnicity, highest level of education, years in this industry and years as a CFP® professional did not make a significant difference in their applicability of tasks. However, age, gender, employer organisation size, nature of organisation and the number of clients did make a significant difference in the applicability of tasks.

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Promoting the CFP® Mark Volunteer Activities We continue to benefit enormously from the assistance of many talented individuals who have volunteered to assist in various capacities. As an institute, we could not undertake the important work we do without the generosity of CFP® professionals and other FPI stakeholders who willingly share their time and expertise.

For all of the activities in 2013, we would like to thank: • The Board of Directors who set policy and direction for FPI’s activities.

• The Regional Committee members who did such an effective job of being the face of FPI on the ground and helping activate FPI’s community revitalisation programme.

• The members of the Industry Sector Groupings (ISGs) for their hard work • in developing competency tools used by the broader membership, their contribution to CPD events as well as FPI publications.

• The Examination Committee members whohold the CFP® Professional • C ompetency Examination to the highest standards, and the other volunteers who support exam development activities.

• The Disciplinary Committee members who oversee FPI’s disciplinary review process.

• The Technical Committee members who are shaping FPI’s advocacy work.

• CFP® mark brand ambassadors who are representing FPI on national and local media platforms, policymakers and community organisations.

• The many CFP® professionals who responded to FPI’s calls and provided consumers with free consultations at Financial Planning Clinics and during Financial Planning Week events around the country.

What did the research reveal?

Of the 179 task statements tested,

107 (60%) of these tasks were rated

high in the applicability scale.

2013 / 2014 Integrated Report

Recognising Excellence in Financial Planning Consumer Initiatives: Professional Financial Planning for All The main aim of consumer initiative is to create awareness around the benefits of using a CFP® professional and having access to professional financial planning.

• In 2013, we reached over 3000 consumers throughout South Africa through various financial planning literacy programmes and initiatives.

Programmes such as FPI MYMONEY123™ sessions were held, which provided consumers with budgeting, debt management as well as savings and investments tips.

• These sessions were provided to employers, schools and universities such as SHELL SA, Hirsch, The Independent Newspaper in Cape Town, SOS Children’s Villages, Office of the Ombud for Financial Services Providers (FAIS Ombud), Water Affairs, Rhema Church, University of Johannesburg students, Grade 12 learners at Progress High School in Soweto.

• One of the biggest consumer initiatives was the Financial Planning Week which took place from 23 - 29 November. We along with the broader financial services industry successfully ran this initiative to introduce financial planning to consumers as a way of improving and managing their finances. Over 50 CERTIFIED FINANCIAL PLANNER® professionals offered free consultations and financial literacy clinics for the public throughout the week. The initiative further received an overwhelmingly positive response from the public with over 750 consumers having attended the workshops.

• We once again participated in the Retirement Expo. This expo saw over 5000 multi-generational visitors, each at different stages of life who all had a common goal of retiring well.

3000 In 2013, we reached over

We recognise the efforts of our members and the FPI Awards are there as a benchmark of success in financial planning, either as a student, a financial planner and as a significant contributor to the financial planning profession. Last year we awarded four members. The awards included the much coveted Financial Planner of the Year, the Harry Brews’ Award, Media Award and the Top Student Awards.

• The Financial Planner of the Year becomes our CFP® mark brand ambassador and was awarded the highest accolade in the financial planning space in South Africa.

• The award formerly known as the Chairman’s Award, now known as the Harry Brews’ Award was awarded to an individual who had made significant contributions to FPI and the financial planning industry as a whole.

• The Media Award recognised an FPI member who had made substantial contributions in the media by promoting the CFP® mark and financial planning amongst consumers.

• We also recognised top students in both the FPI CFP® Professional and FSA™ Professional Competency Examinations.

We not only recognised them as Top Student Award recipients, we also acknowledge their emerging efforts into this growing financial planning industry.

...consumers throughout South Africa through various financial planning literacy programmes.

2013 / 2014 Integrated Report

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Our Developments and 2013 Accomplishments continued...

Creating Brand Awareness Annual Budget Breakfast On 28 February 2013 we hosted the Annual Budget Breakfast together with the South African Institute of Tax Professionals (SAIT), the event took place at the Gallagher Estate Convention Centre in Johannesburg and it was broadcasted live in Western Cape and Durban.

900

This well attended event attracted over

delegates that gathered to listen to a high calibre of speakers and experts analysing the 2013 National Budget, government economic forecast and tax policy issues. The speakers also discussed the proposed National Health Insurance Scheme, implementation of toll roads as well as the Social Security Taxes amongst others. The event is aimed at providing meaningful insights that surround the impact of the National Budget speech.

FPI Professionals Convention The 2013 FPI Professionals Convention, which was declared to be the most successful convention, was held at the Sandton Convention Centre from 11 – 12 June 2013 and it attracted over a 1000 delegates from all corners of South Africa.

The event had over 28 local and international industry, political and business experts who presented on a variety of topics such as; financial planning, regulatory landscape and international trends as well as political updates. As FPI, we are committed to getting the industry to talk about ways of ensuring that we continue building an industry that is inclusive. Of importance however, is to ensure that we continue to promote the role played by financial planners in South Africa.

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The launch of the History of FPI and Financial Services Industry Book Our Inaugural VIP Stakeholder Function was held on 22 August 2013 in Sandton, Johannesburg. This event was aimed at highlighting FPI’s key milestones and developments over the past three decades.

At this event we also celebrated the launch of our book entitled “The evolution of the financial services landscape”.

PUBLIC

RELATIONS

The book described the past three decades as change-driven-years for the financial services industry and particularly the financial planning sector. It also articulates noteworthy successes that have lead the financial services industry’s evolution. The book provides some context into how FPI and broader industry’s landscape have evolved over the years.

Highlighting the industry highs and lows, and focusing on golden moments that have helped us contribute to growing the industry.

KwaZulu-Natal Grade 11 Speech Contest on Finance The initiative by FPI to educate and raise awareness of the financial planning profession amongst young people; as part of our transformation strategy and drive to create awareness and recognition of the CFP® designation, we once again sponsored the KwaZulu-Natal Grade 11 Speech Contest on Finance. The event endorses the financial literacy amongst learners and teachers themselves. Learners were asked to prepare and present on topics such as: • What financial product can I buy with my pocket money?

• Dad/mom; will we be rich one day?

• Me and the Law vs. FSPs- Do we stand a chance?

As the main sponsor, we fund the overall winner with a bursary to study an undergraduate and postgraduate qualification in financial planning, at one of our recognised education providers.

Our 2013 public relations activities that we participated, in together with our appointed PR agency, resulted in free publicity that amounted to R10 412 735.57. The coverage was across trade; consumer and business focused print, online and broadcast media.

We have also engaged with our online community through our social media networks; namely Facebook, Twitter, LinkedIn and continue to share our well captured interviews on our YouTube platform.

free

publicity that amounted to

R10 412 735.57

2013 / 2014 Integrated Report

Growth Despite Challenges

4519 3.76%

The number of CFP® professionals grew by 4% in South Africa, reaching

as at the end of 2013...

The globally growth of CFP® professionals

Reaching

153 376 5500 THIS IS UP BY ALMOST

...as at the end of 2013

from year-end 2012.

Breakdown per Quarter Q1

Q2

Q3

Q4

CFP® professional

4472

4565

4497

4519

FSA™ professional

20

28

31

40

AFP™ professional

759

729

678

645

RFP™ professional

856

826

718

695

6107

6148

5924

5899

Continuous Professional Development (CPD) Accreditation

604

2013 / 2014 Integrated Report

In 2013 FPI approved 604 programmes, as FPI Recognised CPD Programmes, offered by industry training and product providers as well as 24 training providers as FPI Recognised CPD Providers.

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How we Build a Professional Framework Professional Development The Centre for Professional Development (the Centre) plans, manages and delivers quality Continuous Professional Development (CPD) events that add value and enhance the skills and knowledge of the participants. This is achieved through providing CPD events that are focused on offering a unique FPI experience, improving the current offering by including a variety of CPD events. Moreover, by increasing the offering and member experience through the means of robust communication, interaction, feedback and extending the CPD offering to the industry as whole with the view of creating additional income for FPI. Its primary goal is delivering quality CPD events to members through face to face and online interactions.

In 2013 the Centre delivered events such as the Annual Refresher Workshop for CFP® professionals, Tax Workshop, Retirement Planning Workshop and Estate Planning Workshop, with a total of

4838 994

delegates attending these face to face events.

The programme delivered over

online CPD courses CPD courses and sold over 745 DVDs With the perception that “engaging in CPD is only a means to gain points”, the second goal of the Centre is to improve the perception to one where individuals and organisations identify the need and are challenged to engage in an ongoing journey of selfdevelopment and personal growth.

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FPI Code of Ethics and Professional Responsibility The FPI’s Code of Ethics and Professional Responsibility (the code) refers to how the conduct of all FPI members will be measured against. The Code sets the benchmark for the values, principles and standards that an FPI member must obey when dealing with the public. It is meant to set the standards for business practice and individual business conduct in professional financial planning, it also aims to assist, guide and direct all stakeholders with ethics thoughts, choices, decisions and conduct.

The Code is made up of three components: • The Principles of Conduct, which refers to the qualities professional members should portray in practicing their profession.

• The Standards of Conduct, which relates to the type of conduct that should be adopted by professional members when engaging with their stakeholders.

• The Financial Planning Practice Standards is the process that professional members should follow accordingly when practising their profession.

It should be noted by professional members that all components are interdependent and none of them are more important than the others. The code is due for review in 2014.

Regulating Members The Membership Regulations outlines, amongst other matters, the rules and regulations for original certification, annual mandatory re-certification, categories of professional designation and the reasons that could lead to the suspension or termination of membership and the reinstatement of membership.

Member Discipline Our Board of Directors, on 10 June 2013, approved the new Disciplinary Regulations; the regulations provide a re-organised process for administration and judgement of disciplinary proceedings against professional members of FPI. The Disciplinary Regulations are there to: • Protect the public • To maintain public confidence in the financial planning profession • To declare and uphold the highest standards of conduct among FPI professional members.

In 2013 we administered 13 complaints, some of these will continue into 2014.

29 complaints were received in total of which 16 matters were referred to the FAIS Ombud, due to the institute lacking jurisdiction. Six went to an investigation phase, two matters were scheduled for hearing, one of these matters was determined through a consent order and four matters were concluded.

The complaint investigated relate mainly to the following: 1. Failure to disclose fees/commissions accurately or in terms that is clear and understandable 2. Quality or appropriateness of advice and/or recommendations made 3. Misleading statements as to the characteristics and/or performance of products 4. Failure to adhere to regulatory or professional body requirements such as licensing or certification 5. Integrity-related complaints such as civil judgments for money owning, misappropriation of client funds, fraudulent use of client signatures, FAIS Ombud determinations 6. Failure to disclose and/or manage Conflict of Interest particularly those relating to business interests.

2013 / 2014 Integrated Report

Membership Termination

2013 Member Audit

Regulatory Examinations

In line with the mission of benefiting the public, we will be publishing the names of all terminated members in accordance with section 6.6 of the FPI Membership Regulations. Over 320 individuals have had their membership terminated with effect from 1 July 2013 for failing to adhere to FPI’s re-certification requirements within the given timeframe.

FPI prides itself in setting and upholding the highest professional standards and by examining the standards of compliance with the FPI certification and membership requirements we, in terms of section 2.7 of the Membership Regulations, conduct a mandatory annual Member Audit.

The year 2013 saw

This is a necessary step towards giving the industry and the public assurance that all FPI professional members continue to put their interest first by annually maintaining the highest ethical and competency standards set by FPI.

When the first phase of the audit took place, a sample of members were randomly selected and each member received a request for the completion of an electronic audit questionnaire as well as submission of supporting documents.

A smaller sample of members was randomly selected and site visits were conducted at a mutually agreed time during the second phase of the audit.

The audit results are reviewed and compared, with a summary of the most relevant findings being distributed ahead of the 2014 audit.

The audit process will be reviewed in 2014.

16,560 Regulatory Examinations written through us.

This was a considerably higher number than we had forecast, and was a result of some of the following: • The Financial Services Board (FSB) extended a number of cut-off dates, allowing many candidates who had previously failed to re-write.

• The number of examination bodies delivering the examinations on behalf of FSB decreased from four to two during 2013.

• The steady improvement in service, efficiency and customer care by the FPI Examination Body led to many financial institutions and individual candidates using our services.

We have always been fully committed to the Regulatory Examinations as an important means of ensuring the ongoing improvement in the quality of advice given to consumers. The efficiencies that have resulted from a combination of increased skill and experience among staff and the implementation of the new system, in July 2013, have enabled us to deliver ever improving quality.

Building Capacity Our People In 2013 we saw the implementation of the internal audit which had an objective of ensuring compliance with applicable policies and legislation; this is in line with enhancing internal controls. The company’s structure was reviewed and this led to the identification of key focus areas, moreover, a process of identifying talent within the company was undertaken and three promotions were made

2013 / 2014 Integrated Report

namely; Head of Department: Certification, Human Resource and Head: Membership and Corporate Relations. The company moved from a non-compulsory 13th cheque system to a performance based incentive system; a Performance Management Policy was drafted, introduced and accepted by all staff.

In addition, the staffs Key Performance Areas (KPAs) were aligned to the company’s overall

strategic objectives to reflect and support the 2015 FPI Strategic Plan. One of FPI’s strategic targets relates to transformation, and this was and will continue to be a key focus area in staff recruitment. Another focus was on skills development, specifically the association with the Insurance Sector Education and Training Authority (INSETA).

Page 17

Systems to empower our people During the previous year we had a primary focus of setting the foundation for a world class service offering. The Information Technology (IT) department has a vision of “transforming the IT services from a business strategic partner to a business partner”. With regards to achieving this vision the following has been done: • Transform from best effort services to managed service delivery • Educate and empower the user base to better utilise the IT tool set • Enhance IT security by creating IT Risks and Compliance awareness throughout the business • Implement IT Governance ensuring a sustainable IT organisation for the future The year 2013 was one that tells a good story about the growth of FPI. The story entails the movement in to the new building and the launch of the Core System Refresh Project.

The project will enable users to access web presence that is personalised to their specific interest. Also, users will be able to manage their own contact data and easily do business with our organisation online or through a mobile device such as renewals, donations, product purchases, registration and more.

Moreover, the system will enable FPI to manage its member data, online communities, e-commerce, events, e-learning, examin-ations and more. The implementation of this project is meant to assist in building a vibrant member community that inspires increased engagement, retention and boost visibility by encouraging members to share FPI campaigns and content on social media platforms. The role of IT in a business has never been as crucial as it is now.

Page 18

2013 FPI’s Team CEO’s Office Godfrey Nti, CAE Chief Executive Officer Sandra Taylor PA to Chief Executive Officer

Membership and Corporate Relations David Kop, CFP® Head: Membership Services and Corporate Relations Lucille Wessels PA to Head Membership Services and Corporate Relations Hannah Brill Membership Services Manager Carla Letchman Competency Specialist Tertia Ndlovu Consumer Awareness Co-ordinator Mandisa Magwaza Value Proposition Consultant Patrick De Nation Business Development Officer Carla Wingrave Membership Services Administrator Loraine De Waal Membership Services Administrator Marinda Joubert Membership Services Administrator

Cathryn Stevens Bookkeeper Mpho Nkuna Creditors Clerk Carol Hardie Accounts Clerk Nicky Wessels Legal and Compliance Services Assistant Yolanda Koen Office Administrator Ohna Norval Receptionist Rosina Lekhelebane Tea lady Evodia Rasiile Cleaning Services

Marketing and Communications Tsholofelo Dihutso, CPRP Communications Specialist Maryke Duvenhage Marketing Assistant

FPI Centre for Professional Development Adele Whyte Project Manager Charmaine Bedworth Executive Consultant

Certification

Adel Victor Events Co-ordinator

Sherma Malan, MBA Certification Manager

Toni Santana Events-Coordinator

Joan Sallie Certification Administrator

Kirsten Stevens Events Assistant

Frances Creighton Certification Administrator

Examination Body (EB)

Corporate Services

Chris Busschau, CFP® Head: Examination Body

Nomaxabiso Tyhutyhani Financial Manager

Penny Willemse Logistics Co-ordinator

Adv. Jacqui Grové Legal and Compliance Manager

Renny Mmusi Admin Corporate Co-ordinator

Dennis Swanepoel IT Manager

Anna Fick Admin Corporate Co-ordinator

Clayton Lautenberg Senior Policy Advisor

Lesedi Mahupela EB Administration Officer

Desmond Matsane Management Accountant

Lania Wheeler EB Administration Logistics Clerk 2013 / 2014 Integrated Report

How we are Governed?

The institute benefits enormously from the contribution of volunteers who give their time and skills to support the FPI mission.

Our Board of Directors Our Board of Directors consists of 11 Non-Executive Directors and 1 Executive Director (Chief Executive Officer), with the roles of the Chairperson and Chief Executive Officer clearly defined.

The Board fully embraces the principles of ethical leadership in setting and implementing the strategy of the company, guided by the principles of the King III, the Companies Act 71 of 2008 and other applicable laws, standards and codes of best practice. In addition, the Board takes full responsibility for the management, direction and performance of the company by making independent decision on all issues reserved for its review and approval while taking note of the needs of all of the company’s stakeholders. In line with the King III recommendations, the company’s Board of Directors adopted a Board Charter. The purpose of the Board Charter has been implemented to identify, define and record the roles, rights, responsibilities, functions and composition of the Board as well as to serve as a reference to new and existing board members, in performing their duties.

During the reporting period the Board met six times, i.e. four formal face-to-face meetings and two special teleconference meetings (see table below for an attendance report).

Board meeting dates

21/02/2013

17/04/2013

10/06/2013

01/07/2013

22/08/2013

01/12/2013

• •

• •

• •

• •

a

Board member Ben Raseroka

Non-executive Director

a

a

Bongani Sithole

Non-executive Director

a

a

David Thomson, CFP®

Non-executive Director

Denver Fortuin, CFP®

Non-executive Director

Esther Venter, CFP®

Non-executive Director

Godfrey Nti

Executive Director

Johan Erwee, CFP®

Non-executive Director

Kim Potgieter, CFP®

Non-executive Director

Logie Govender, CFP®

Non-executive Director

a

Natasja Norval-Hart, CFP®

Non-executive Director

Ntai Phoofolo, CFP®

Non-executive Director

Prem Govender, CFP®

Chairperson

Ronald King, CFP®

Non-executive Director

• • • •

Sankie Morata, CFP

Chairperson-Elect

Warren Wheatley, CFP®

Non-executive Director

®

a

•

• •

•

• •

•

• •

• •

• a

a

a

•

•

•

•

•

In attendance a Absent with apology • Pre-appointment/post resignation

2013 / 2014 Integrated Report

Page 19

How we are Governed? continued...

Audit Committee The Audit Committee has an independent role with accountability to both the Board and members of the company. The purpose this committee is to assist the Board in implementing its duties such as; safeguarding of assets, accounting systems and practices, the integrity of internal financial control processes as well as the preparation of accurate financial reporting and statements, in compliance with all legislative requirements, governance principles and recognised accounting practice standards.

The Audit Committee is further tasked to implement and review an effective policy and plan for risk management that will enhance the company’s ability to achieve its strategic objectives and disclose and manage risk in a complete, timely and relevant manner. Part of its role is to also develop, implement, monitor and review company’s policies, procedures, practices and guidelines to ensure that the company’s goals and strategic objectives, on the provision and support of information and information technology infrastructure and services, are met. The committee, from time to time, co-opts or invites people with certain expertise to attend its meetings and assist the committee on an advisory level. The Audit Committee had four formal meetings during the reporting period (see table below for an attendance report).

Meeting date

04/02/2013

30/05/2013

13/08/2013

24/11/2013

•

•

•

•

Committee member Bongani Sithole

Committee Member

Esther Venter, CFP

Chairperson (pre-June 2013)

Godfrey Nti

Chief Executive Officer

Logie Govender, CFP®

Committee Member

Natasja Norval-Hart, CFP®

Committee Chairperson (post-June 2013)

Prem Govender, CFP

Committee Member

®

®

a

•

•

a

a

a

In attendance a Absent with apology • Pre-appointment/post resignation

Nominations and Compliance Review Committee The Nomination and Compliance Review Committee, a Board sub-committee, formed to assist the Board, on an advisory capacity, with recruitment, selection and appointment of appointed directors as well as the recruitment and selection of elected directors. The process is completed in a formal and transparent fashion to ensure that the board succession planning is well-thought-out and the advice is carried out.

In addition, the committee is given the responsibility to assist the Board, in an advisory capacity, with reviewing of the Board and Board sub-committees’ structure, size and arrangement on an on-going basis, facilitating succession planning of Board members in relation to the position of Board Chairperson, Chairperson-Elect and Chief Executive officer, facilitating a plan and policy for transformation within company and reviewing compliance with relevant legislation, the principles of good corporate governance and best practice codes. During the reporting period, the committee had four formal meetings (see table below for an attendance report).

Meeting date

08/02/2013

30/04/2013

31/07/2013

19/11/2013

Committee member Godfrey Nti

Chief Executive Officer

Prem Govender, CFP

Committee Member

Ronald King, CFP

Committee Member

Sankie Morata, CFP®

Committee Chairperson

®

®

In attendance a Absent with apology • Pre-appointment/post resignation

Page 20

2013 / 2014 Integrated Report

Strategy Committee The Strategy Committee has been established by the Board of Directors to assist the Board in fulfilling its primary supervision responsibilities with respect to matters relating to or affecting the company’s strategic direction and socio-ethical responsibilities. The committee provides oversight and advice to the executive in the development and implementation of all strategic initiatives; and makes recommendations to the Board on such matters. The Strategy Committee met four times during the reporting period (see table below for an attendance report).

Meeting date

04/02/2013

30/05/2013

13/08/2013

24/11/2013

Committee member Ben Raseroka

Committee Member

a

a

•

•

Bongani Sithole

Committee member

a

a

•

•

Godfrey Nti

Chief Executive Officer Committee Member

•

•

Natasja Norval-Hart, CFP

Committee member

•

•

Ntai Phoofolo, CFP

Committee Chairperson (post June 2013)

•

•

Prem Govender, CFP®

Committee Member

Sankie Morata, CFP®

Committee Chairperson (pre June 2013)

Kim Potgieter, CFP® ®

®

In attendance a Absent with apology • Pre-appointment/post resignation

Remuneration Committee The formation of the Remuneration Committee by the Board is mainly to serve as a medium to monitor and strengthen the objectivity and credibility of the remuneration as well as the bonus system for the FPI executive and staff. The committee is also tasked to review current industry practice on remuneration and to make recommendations to the Board on remuneration packages and policies applicable to the FPI executive and staff as a whole. During the reporting period the Remuneration Committee met four times (see table below for an attendance report).

Meeting date

01/02/2013

23/05/2013

•

•

15/08/2013

15/11/2013

Committee member Godfrey Nti

Chief Executive Officer

Johan Erwee, CFP®

Committee Member Committee Chairperson

Logie Govender, CFP

®

Natasja Norval-Hart, CFP

Committee Member

Sankie Morata, CFP®

Committee Member

®

a a

•

•

In attendance a Absent with apology • Pre-appointment/post resignation

2013 / 2014 Integrated Report

Page 21

How we are Governed? continued...

Regional Co-ordinating Committee The Regional Co-ordinating Committee is formed to assist the Board in supervising the company’s Regional Committees mandate by taking all reasonable steps to promote the mission of the company and the financial planning profession in the six identified regions. The committees also need to keep abreast of developments in every region that may impact the interest of FPI and where necessary, report on such developments to the Board. The committee is made up of elected Chairpersons from each Regional Committee: Western Cape, Eastern Cape, KwaZulu-Natal, Gauteng, Central and Northern Regions as well as the Regional Director, who is the Chairperson for this committee. During the reporting period, the Regional Co-ordinating Committee met four times (see table below for an attendance report).

Meeting date

01/02/2013

23/05/2013

•

•

15/08/2013

15/11/2013

•

•

Committee member Christo Saayman, CFP®

Regional Committee Chairperson (Central Region)

Colin Long, CFP®

Regional Committee Chairperson (KwaZulu-Natal post June 2013)

Esther Venter, CFP®

Regional Committee Chairperson (Western Cape pre June 2013) Regional Committee Chairperson (Eastern Cape Region)

a

a

Johan Erwee, CFP®

Regional Committee Chairperson (Northern Region post June 2013) (Regional Director post June 2013)

•

•

Lizl Budhram, CFP®

Regional Committee Chairperson (Western Cape post June 2013)

•

•

a/x

Logie Govender, CFP®

Regional Committee Chairperson (KwaZulu-Natal pre June 2013)

Willie Snyman, CFP

Regional Committee Chairperson (Northern Region pre June 2013)

a

a

•

Regional Committee Chairperson (Gauteng)

a

a

Jackie Palframan, CFP®

®

Yzelle McKane, CFP

®

a/x

•

In attendance a Absent with apology • Pre-appointment/post resignation x Regional Vice-Chairperson representation

Disciplinary Committee The Disciplinary Committee oversees the start and administration of disciplinary proceedings against FPI professional members, in terms of the Disciplinary Regulations. Their purpose is to protect the public, maintain public confidence in the financial planning profession and upholding the highest standards of conduct among FPI professional members. During the reporting period, the Technical Committee met four times (see table below for an attendance report).

Meeting date

08/02/2013

30/04/2013

31/07/2013

19/11/2013

Committee member Louis Van Vuren, CFP®

Committee Member

Michael Jackson, CFP®

Committee Member

Paul Rabenowitz, CFP®

Committee Member

•

•

Sankie Morata, CFP®

Committee Chairperson

•

a

In attendance a Absent with apology • Pre-appointment/post resignation

Page 22

2013 / 2014 Integrated Report

Technical Committee The Technical Committee’s main objective is to assist the Board developing technical policies that will help shape the financial planning profession, as well as advocating for these policy positions with relevant stakeholders. The committee is further tasked to stay abreast of developments in the industry and to engagement with relevant stakeholders at all levels to pro-actively influence and take part in consultation on strategic issues impacting the financial planning profession. The committee also undertakes extensive research on topical issues in support of policy positions.

The committee consists of elected Chairpersons from each Industry Sector Group (ISG) Committees, namely; Employee Benefits Planning, Estates and Trusts Planning, Healthcare Planning, Investment Planning, Client Engagement, Risk Planning and Tax Planning as well as a Technical Director who is the Chairperson of this committee. The committee met four times during the reporting period (see table below for an attendance report).

Meeting date

01/02/2013

23/05/2013

•

•

15/08/2013

15/11/2013

•

•

Committee member Andre Jacobs, CFP®

Health ISG Chairperson

David Thomson, CFP®

Estates and Trusts ISG Chairperson (Technical Director)

Hesta Vd Westhuizen, CFP®

Risk ISG Chairperson

Janet Hugo, CFP®

Investment ISG Chairperson

a

a

Jerry Botha, CFP®

Tax ISG Chairperson

•

•

Mark Cronje, CFP

Client Engagement ISG Chairperson

•

•

Pieter Cronje, CFP®

Employee Benefit ISG Chairperson

®

a/x

a/x

In attendance a Absent with apology

2013 / 2014 Integrated Report

Page 23

Looking into 2014 The year 2014 will see a continuation of 2013 activities and initiatives with renewed focus on the following areas: Brand Awareness

Member Growth Strategy

We anticipate a challenging, yet interesting year ahead of us. As we work towards raising our public profile and maintaining our position as the only professional body in the financial planning industry that offers the CFP® mark, we will once again co-host the 2014 Annual Budget Breakfast together with the South Africa Institute of Tax Professionals (SAIT). This annual event is the country’s largest independent post budget speech breakfast, with a line-up of high profile speakers who engage in a lively discussion over how the National Budget impacts South Africa with regards to taxation, the economy, socio-economic and political environments.

Member Retention Programme

One of our biggest events, also regarded as largest annual event on the South African financial planning calendar, which we will host again in 2014 is the FPI Professionals Convention (the convention). This event will include keynote sessions from local and international industry experts covering a wide range of financial planning topics as well as include a variety of practical workshops.

The convention also serves as an excellent platform for delegates and exhibitors to network and build relations with other likeminded individuals.

If you recruit them, they will come. However, if you engage them, they will stay. By understanding where our members stand, FPI can build up its levels of engaged members and move a larger percentage of them up the scale from “check-book” or “disengaged” to ultimately being FPI brand ambassadors.

Research proves that members, who are involved, stay longer in the organisation.

Involvement is key and FPI intends to engage members by emotional attachment to the Institute and its value offering.

Beyond membership benefits, great tools, resources and opportunities that they gain by being a member we intend to create a strengthened community of professionals.

This requires a fundamental mind shift from traditional membership growth and retention strategies, to building a community and considering FPI as an Institute with open professional communities rather than a closed membership organisation. Every member has a role to play, value to add and should be considered as a valued member of the community.

Continuous Professional Development Events The FPI Centre for Professional Development will, in 2014, introduce the following seminars or workshops: • Risk and Business Assurance workshop - a practical event that will outline the buyand-sell agreements, common mistakes made by financial advisors giving financial advice on these agreements, and business insurance.

Page 24

• T rust seminar – a half day event aimed at affording delegates with a better understanding of how to deal with estate planning and trusts, as well as the latest in Trust case law rulings, ensuring that a trust is used to its advantage as an estate planning tool within the law relating to Trusts.

• FPI Membership Value-add seminar - this seminar promises to add real value for members. Members and their clients will be invited to attend sessions in more than nine areas where the value of using FPI members will be highlighted to clients. These sessions will also focus on financial planning for consumer education.

Profiling our CFP® Professionals The aim of the exercise is to promote the CFP® mark, recognise designation holders and to provide a glimpse into their professional and personal lives. We feel that their significant works, levels of success and pride in the CFP® designation could inspire fellow members.

Employer Outreach Programme We plan to engage with more financial services corporates in line with our employer engagement strategy to promote the value of employing CFP® professionals. As at the end of 2014 we aim to have signed five FPI Corporate Partner™ agreements.

In addition, we will roll out the revised FPI Corporate Partner™ value proposition with the existing partners using the key findings from the Comparator Research: The value of CFP® certification to be released in 2014.

2013 / 2014 Integrated Report

Certification and Professional Body Standards

People, Systems and Process Human Capital

1. The launch and implementation of the Next Generation Certification Standards, will look at consultation and implementation, and will consider the following areas: • Education - expanding the learning outcomes into a set of specific and detailed outcomes per financial planning component.

• Examination structure – Introducing a multi-tiered approach to the CFP® Professional Competency Examination (PCE) in the form of a closed book, multiple choice PCE1 exam; an open book, constructed response PCE2 exam as well as the evaluation of a financial plan and incorporating a Challenge Examination for specific designated professional or applicants with relevant qualification and senior experience in financial planning.

• Experience evaluation – some criteria has been established to ensure a fairer and more defensible experience evaluation.

Introducing the compulsory Mentorship Programme for all new entrants to the financial planning industry, and in support of this, award a Mentorship Centre status to recognised financial planning employers.

• Ethics –Upon application for membership on any level, candidates will be required to attest their abiding of the FPI Code of Ethics and Professional Responsibility.

2. Professional Competency Examination (PCE) opportunities in February, May, August and October to assist addressing membership growth. The more frequent the exams, the easier it is for candidates to attempt the exam and take up membership as and when it suits them.

3. To form a Certification Advisory Panel that will provide input and advice on certification best practice including Financial Planning Standards Board’s (FPSB) certification standards as well develop and implement Continues Professional Development (CPD) standards.

2013 / 2014 Integrated Report

In 2014 we look forward to a number of activities that are meant to help us reach strategic transformation targets, improve staff productivity and fill all vacant positions.

Over and above this, we are also looking at implementing staff wellness and retention programmes. We look forward to implementing the revised internal department process mapping procedures to identify internal deficiencies.

Systems and Processes In the year ahead we look forward to start of our website project. Together with IT, governance and compliance, the new website will aim to address the needs of all our members, customers and stakeholders.

As we work towards increasing the efficiency of our communication, we will start working on the introduction of a new system. This system will allow for professional email communication with a simple, easy-to-use interface; bridging the communication gaps with all our stakeholders.

Social and Ethics Committee To establish the Social and Ethics Subcommittee whose responsibility is to: • Monitor the company’s social and economic development activities; • Ensure responsible corporate citizenship; • Promote environmental, health and safety relating to the impact of the company’s activities and services; • Regulate consumer as well as stakeholder relationships and promote an anticorruption culture; • Develop sustainable labour and employment practices by formulating a suitable work and proper working conditions protocol. As well as promote educational, social and cultural development of employees.

Research Initiatives • The release of the Comparator Research: The value of CFP® certification study.

• Conduct the 2014 Project Value survey to further investigate the key drivers of loyalty amongst FPI members.

• Conduct the FPI member survey aimed at understanding what our members hold valuable and see as relevant. We continually thrive to enhance our service offering to our members and rely on their invaluable feedback to make sure we fulfil our mandate.

Consumer Advocacy and Initiatives In line with our vision to provide professional financial planning to all South Africans, we will in 2014 continue to make CFP® professional accessible to all citizens through our Financial Planning Week initiative.

FPI MYMONEY123TM programmes will also continue to unroll as we work towards reaching all South Africans with the objective of educating them more about the benefits of financial planning and its importance.

As a professional body, committed to benefiting the public, in the year ahead our joint activities with the likes of the South African Savings Institute (SASI) and the Financial Services Board (FSB) in a bid to empower South Africans with financial literacy will continue. We aim to sign up more partnerships that will assist us and prospective partners to educate more consumers.

Page 25

Our Financial Position A Word from our Audit Committee Chairperson The Audit Committee’s responsibilities and roles include its legal duties regarding the Companies Act and further responsibility assigned to it by the board. In addition, the Audit Committee looks at the subsidiaries of FPI; namely the FPI Centre for Professional Development. The committee consists only of non-executive directors who are appropriately qualified, skilled and experienced to serve in this committee.

During its term and, among other matters, the committee: • Re-appointed Zeelie De Kock Registered Auditors, including the determined fees to be paid to the auditors for their services.

• It aligned its process and appointment of auditors in line with the Companies Act and other legislations.

• Together with FPI management, the committee approved the audit fee and auditors engagement for the 2013 financial year. Also, the external auditors reports and management’s response was reviewed and the effect on the financial statements was taken into consideration.

• Reviewed and approved the internal audit and controls, as well as all 2013 internal auditor’s reports, in line with the internal audit’s plan.

• Reviewed the annual financial statements prior to board approval. The correctness of accounting policies and any changes made were also taken into consideration.

(Refer to page 28 for an abridged version of the audited annual financial statements)

Risk Management The committee reviewed and suggested changes as well as updates to the risk register, prior to board approval. It will continue to oversee risk items which fall within the Financial and Information Technology’s mandate.

Investment Strategy Natasja Norval Hart, CFP®

The committee will provide support and review the overall FPI investment strategy along with its subsidiary strategic investment.

In closing; to ensure that no material control weakness exist, the committee met regularly with FPI management as well as the internal and external auditors.

Page 26

2013 / 2014 Integrated Report

Our Financial Performance Our financial performance presents a picture of commitment to the company’s sustainability. Below is a summary of our performance for the past four years.

Year

2010

2011

2012

2013

(R14 202 923-R0)/ R14 202 923

(R37 189 436-R0)/ R37 189 436

(R38 632 382-R0)/ R38 632 382

(R30 906 068-R0)/ R30 906 068

(-R395 009/ R14 202 923)

(R10 384 457/ R37 189 436)

(R4 307 498/ R 38 632 382)

(-R5 809 086/ R30 906 068)

2,78%

27,92%

11,15%

-18,80%

((R 1 462 908+ R560 067)/R14 202 923) X365

((R 4 388 885 + R 1 462 908)/R37 189 436)X 365

((R 3 457 999+ R 4 388 885)/R 38 632 382) x 365

(( R 1 382 369+ R 3 457 999)/R 30 906 068) x 365

52 days

57 days

74 days

57 days

R 8 430 710 : R2 355 886

R20 262 926 : R4 431 308

R24 745 685 : R4 522 756

R14 042 561 : R7 927 273

3.58 : 1

4.57: 1

5.47 : 1

1.77 : 1

R14 202 923 : R9 588 344

R37 189 436: R22 048 223

R38 632 382 : R26 447 169

R30 906 068 : R31 064 831

1.48: 1

1.69 : 1

1.46 : 1

(i) Gross Profit Ratio (Revenue- Cost of Sales)/ Revenue (ii) Profit ratio Total comprehensive income (deficit)/ Revenue (iii) Average Collection period (Average Debtors)/Revenue x 365

(iv) Current Ratios Current Assets: Current Liabilities

(v) Addition to non-current assets Net Sales/ Total Assets

0.99: 1 R7 022 231 : R31 064 831

(v) Total Debt Ratio Total Debt / Total Assets

N/A

N/A

N/A

0.23 : 1

Fixed Assets and Cash Balances Inforgraphics) Fixed Assets

1 157 634

1 785 297

1 701 484

17 022 270

Cash Balances

6 967 802

15 874 041

21 287 686

12 660 192

Total

8 125 436

17 659 338

22 989 170

29 682 462

Focus on investment on fixed assets and growing cash balances Fixed assets and cash balance in the last four years (Rm)

29%

35 30 25 20 15 10

R6 693 292

5 Fixed assets

Cash balances 2010

2013 / 2014 Integrated Report

2011

Total 2012

2013

Page 27

Auditor’s Report Presented is the abridged version of the Audited Annual Financial Statements

Report on the Financial Statements

Directors’ responsibility for the financial statements

Auditors’ Responsibility

We have audited the annual consolidated financial statements of Financial Planning Institute of Southern Africa NPC, which comprise the statement of financial position and consolidated statement of financial position as at 31 December 2013, the statement of comprehensive income and consolidated statement of comprehensive income, the statement of changes in equity and consolidated statement of changes in equity and statement of cash flows and consolidated statement of cash flows for the year then ended, a summary of significant accounting policies and other explanatory notes, as set out on pages 4 to 20.

The company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and in the manner required by the Companies Act of South Africa.

This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Page 28

2013 / 2014 Integrated Report

Directors’ Report General review

Financial Planning Institute of Southern Africa NPC is a company incorporated in the Republic of South Africa. The principal activities of the company are to operate as professional body for the financial planning industry.

Group 2013 R

Group 2012 R

Company 2013 R

Company 2012 R

(5 809 086)

4 307 498

(4 743 965)

4 365 724

Financial results The group / company accumulated a (deficit) / surplus of:

No income statement is provided as the company did not commence with trading during the period under review.

Property, plant and equipment The group / company acquired assets to the value of: The group / company disposed of assets to the value of:

16 311 173

587 023

799 039

587 023

4 833

-

4 833

-

The company did not acquire or dispose of any assets during the current year of review.

The group / company scrapped assets to the value of:

111 607

-

111 607

-

The directors of the company during the accounting period and up to the date of this report were as follows: Name

Nationality

Date appointed

Date resigned

GN Nti

Cameroonian

2009/05/01

-

E Venter

South African

2009/06/02

2013/06/10

RG Govender

South African

2009/06/02

-

SS Morata

South African

2010/05/26

-

BN Raseroka

South African

2011/06/01

2013/06/10

BC Sithole

South African

2011/06/01

2013/06/10

L Govender

South African

2012/06/19

-

R King

South African

2012/06/19

-

DJ Thompson

South African

2012/06/19

-

N Norval-Hart

South African

2012/07/18

-

NP Oeso Phoofolo

South African

2012/12/05

-

JA Erwee

South African

2013/06/10

-

K Potgieter

South African

2013/06/10

-

DC Fortuin

South African

2013/08/22

-

WG Wheatley

South African

2013/08/22

-

Auditors

Zeelie De Kock will continue as auditors of the company.

2013 / 2014 Integrated Report

Page 29

Statement of Financial Position and Consolidated Statement of Financial Position Group 2013 R

Group 2012 R

Company 2013 R

Company 2012 R

Non-current assets

17 022 270

1 701 484

10 620 597

1 766 321

Property, plant and equipment

17 022 270

1 701 484

1 704 038

1 701 484

Investment in subsidiary

-

-

300

300

Group loan receivable

-

-

8 916 259

64 537

Current assets

14 042 561

24 745 685

13 751 746

24 676 448

Trade and other receivables

1 382 369

3 457 999

1 300 211

3 452 887

Bank and cash balances

12 660 192

21 287 686

12 451 535

21 223 561

TOTAL ASSETS

3 1 06 4 831

26 447 169

24 372 343

26 442 769

16 115 327

21 924 413

17 198 136

21 942 101

-

-

-

-

5 000 000

5 000 000

5 000 000

5 000 000

Accumulated surplus

11 115 327

16 924 413

12 198 136

16 942 101

Non-current liabilities

7 022 231

-

-

-

Interest bearing borrowing

7 022 231

-

-

-

Current liabilities

7 927 273

4 522 756

7 174 207

4 500 668

Trade and other payables

6 766 462

3 834 716

6 517 047

3 812 628

Current portion of interest bearing borrowing

503 651

-

-

-

Short-term provisions

657 160

688 040

657 160

688 040

31 064 831

26 447 169

24 372 343

26 442 769

ASSETS

EQUITY AND LIABILITIES Equity Share Capital General reserve

TOTAL EQUITY AND LIABILITIES

Page 30

2013 / 2014 Integrated Report

Statement of Comprehensive Income and Consolidated Statement of Comprehensive Income

Group 2013 R

Group 2012 R

Company 2013 R

Company 2012 R

30 906 068

38 632 382

27 060 278

38 458 654

1 451 564

1 718 648

1 451 564

1 718 648

328 005

425 141

328 005

425 141

1 123 559

1 293 507

1 123 559

1 293 507

12 779 497

12 183 177

10 441 675

11 469 792

-

658 5 11

-

658 511

135 748

130 001

105 748

130 001

Depreciation

1 206 785

1 095 977

1 012 883

1 095 977

Direct costs

8 384 462

7 003 934

5 935 050

6 290 549

Director's remuneration

1 439 168

1 453 929

1 439 168

1 453 929

Operating lease- premises

1 613 334

1 840 825

1 948 826

1 840 825

Other income (not included above)

1 486 148

470 139

1 203 417

470 139

Other administrative expenses

26 653 522

24 330 494

2 4 017 549

24 811 925

(Deficit) / surplus before finance charges

(5 589 239)

4 307 498

(4 743 965)

4 365 724

219 847

-

-

-

(5 809 086)

4 307 498

(4 743 965)

4 365 724

-

-

-

-

(5 809 086)

4 307 498

(4 743 965)

4 365 724

Revenue Other income Change in accounting estimate Interest received Expenses Amortisation of examination body setup cost Auditors' remuneration

Finance charges (Deficit) / surplus before taxation Taxation Total (deficit) / surplus for the year

2013 / 2014 Integrated Report

Page 31

Statements of Changes In Equity and Consoldated Statement of Changes in Equity General Reserve R

Accumulated Surplus R

Total R

5 000 000

12 616 915

17 616 915

-

4 307 498

4 307 498

5 000 000

16 924 413

2 1 924 413

-

(5 809 086)

(5 809 086)

5 000 000

11 115 327

16 115 327

General Reserve

Accumulated Surplus

Total

R

R

R

5 000 000

12 576 377

17 576 377

-

4 365 724

4 365 724

5 000 000

16 942 101

21 942 101

-

(4 743 965)

(4 743 965)

5 000 000

12 198 136

17 198 136

Group Balance at 31 December 2011 Total surplus for the year Balance at 31 December 2012 Total deficit for the year

Company Balance at 31 December 2011 Total surplus for the year

Total deficit for the year

Page 32

2013 / 2014 Integrated Report

Statement of Cash Flows and Consolidated Statement of Cash Flows

Group 2013 R

Group 2012 R

Company 2013 R

Company 2012 R

152 964

6 000 668

873 902

6 008 086

32 981 698

39 563 268

29 212 954

3 9 26 0 561

(33 732 446)

(34 840 353)

(29 462 611)

(34 545 982)

Cash (utilised by) generated from operating

(750 748)

4 722 915

(249 657)

4 714 579

Interest received

1 123 559

1 293 507

1 123 559

1 293 507

Finance charges

(219 847)

-

-

-

-

(15 754)

-

-

Cash flows from investing activities

(16 306 340)

(587 023)

(9 645 928)

(651 687)

Purchase of property, plant and equipment

(16 311 173)

(587 023)

(799 039)

(587 023)

To increase operating capacity

(16 311 173)

(587 023)

(799 039)

(587 023)

4 833

-

4 833

-

Advances of group loans receivable

-

-

(8 851 722)

(64 664)

Cash flows from financing activities

7 525 882

-

-

-

Proceeds from interest bearing borrowing

7 525 882

-

-

-

Net (decrease) / increase in cash and cash equivalents

(8 627 494)

5 413 645

(8 772 026)

5 356 399

Cash and cash equivalents at beginning of year

21 287 686

15 874 041

21 223 561

15 867 162

Cash and cash equivalents at end of year

12 660 192

21 287 686

12 451 535

21 223 561

Net cash retained in operating activities Cash receipts from members and other customers Cash paid to suppliers and employees

Taxation paid

Disposal of property, plant and equipment

2013 / 2014 Integrated Report

Page 33

Contributors The following people contributed to our first 2013 / 2014 Integrated Report:

Adele Whyte Project Manager: Centre for Professional Development

Adv. Jacqui Grové Compliance and Legal Manager

Chris Busschau, CFP® Head: Examination Body (Regulatory Examinations)

David Kop, CFP® Head: Membership and Corporate Relations

Godfrey Nti, CAE Chief Executive Officer

Nomaxabiso Tyhutyhani Financial Manager and Human Resources

Prem Govender, CFP® Chairperson

Sherma Malan, MBA Senior Certification Manager

Tsholofelo Dihutso CPRP Communications Specialist

Wessel Oosthuizen, CFP® General Manager: Centre for Professional Development

Page 34

2013 / 2014 Integrated Report

Notes

2013 / 2014 Integrated Report

Page 35

Financial Planning Institute of Southern Africa NPC 84 Sophia Street (Cnr 11th Avenue), Fairland, Johannesburg, 2170 PO Box 6493, Weltevredenpark, 1715 Tel: 086 1000 FPI (374) E-mail: fpi@fpi.co.za www.fpi.co.za