FPI | Annual Report 2010

SETTING THE STANDARD

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FPI Annual Report 2011 | Setting the Standard

2010 Annual Report

Financial Planning Institute of Southern Africa

The Organisation

The Financial Planning Institute (FPI) is regarded as the leading independent professional body for financial planners in South Africa that ensures South Africans have access to, and value, competent financial planning.

Professionalism in financial planning rests on competence and ethics. As the custodian of the profession, the FPI is uncompromising in establishing and maintaining world class professional financial planning standards, ensuring that members remain competent and ethical to retain their professional status. Many top financial institutions regard the FPI as an independent standards partner and members include both general practitioners and specialists in particular sectors of financial planning.

The FPI was originally formed in 1981 as the Institute of Life and Pension Advisors (ILPA) to improve levels of professionalism amongst financial planners and advisors. To ensure that financial planners in South Africa met international standards, in 1998, the Financial Planning Institute affiliated with the CERTIFIED FINANCIAL PLANNER® Board of Standards in the United States and in April 2000 adopted its new name to more accurately reflect its role as the custodian of competency and ethical standards. The FPI is recognised internationally and is a founding affiliate member of the international Financial Planning Standards Board Ltd (FPSB), along with 23 other affiliate member countries.

Vision To be the recognised and respected Professional Body for the Financial Planning profession in Southern Africa.

Mission The main object and business of the FPI is to advance and promote the profession of financial planning, to raise the status of professional financial planners and to protect the public they serve by: • Providing a framework within which members can achieve the qualifications and competence to practice as professional financial planners.

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

• Promoting the interest of the members as a whole.

FPI Annual Report 2011 | Setting the Standard

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Contents Chairperson’s Report Chairperson’s Report Chief Executive Officer’s Report

4 4 6

CEO’s SettingReport the Standards The World Value Proposition Education Class Framework

5 8 6 10

Ethics World Enforcement Class Value Proposition The Education Transformation Framework

12 16 14 18

Setting the Standards Authoritative Voice Promoting the Promoting the Profession Profession

Transformation Corporate Social Investment Corporate Resources Social Investment

Financial CorporateSustainability Governance Our People Industry Sector Group Reports The Year Ahead

Employee Benefits

Estates and Trusts Industry Sector

HealthGroup Care Reports

8 12 10 14

16 19 17 20

18 22 20 23 21 22

Employee Benefits Investments Estates and Trusts Planning Personal Financial

Health Care Risk Tax Investments

Regional Committee Personal Financial Reports

Risk Gauteng

26

Tax North Regional Reports Central

25 `

Central

Western Cape Affiliate Organisations Kwa-Zulu Natal

28

Gauteng KwaZulu-Natal North

Eastern Cape

Eastern Businesscape Unity South Africa (BUSA) Western Capeof South Africa (EthicSA) Ethics Institute

Ethics SA FAIS Ombud FPSB Financial Services Board (FSB)

Our Memberships

Financial Planning Standards Board (FPSB) Statutory BUSA Bodies

27

From the Regulators

Insurance Sector Education and Training Authority (INSETA)

FAIS SouthOmbud African Qualifications Authority (SAQA)

29

EducationFSB Partners

INSETA Milpark Business School

30

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Our Accredited Partners

Nelson Education Mandela Metropolitan University

Further Education and Training Institute University of Johannesburg

Milpark Business School University of the Free State Nelson Mandela Metropolitan University University of Stellenbosch

Stellenbosch University University of the Western Cape Further Education

University of Johannesburg and Training Institute Industry Bodies University of the Free State

35

From Industry

Association for Savings and Investment SA (ASISA)

ASISA Financial Intermediaries Association (FIA)

FIA South African Savings Institute (SASI) 2010 Headline SASI News

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2010 Headline The FPI Team News

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FPI Annual Report 2011 2010 | Setting the Standard

Chairperson’s Chairperson’s Report Report positively changed the face of financial advice and intermediary services in South Africa. To promote ethical conduct in the industry, he presented at a number of FPI conventions and regional Continued Professional Development (CPD) sessions.

Today’s financial planners continue to live and operate in increasingly interesting times. One thing we can be sure of is that our environment will always be changing. What remains to be seen is the speed at which the change will take place.

Financial Planning Standards Board (FPSB) Internationally, our contributions to the worldwide development of the profession, through our participation in FPSB events, make us very proud. On 21 April 2010, FPSB hosted the first World Financial Planning Summit with the goal of advancing financial planning as a distinct profession. FPSB members, financial planning leaders and invited guests from around the globe engaged in a global dialogue on how best to support the emergence of financial planning as a recognised and bona fide profession that puts the interests of clients first.

Although there have been some important environmental developments over the past few years, we have not necessarily experienced rapid change. My sense is that all of that is about to change, but more on this later.

Business Unity South Africa (BUSA) We remained an active member of BUSA during the year to represent the financial planning profession on issues that may affect the profession, as well as to contribute on a wide variety of issues facing business.

We were represented at the BUSA Council and on a number of BUSA committees and working groups during the year. Senior FPI volunteers also served on the Social Security and Retirement Reform working group during 2010.

Looking back on 2010, financial planners around the world have experienced an increased demand for professional financial planning services as consumers began assessing the risk of another financial crisis occurring in their lifetime. What is noteworthy is that consumers are desperate for professional advice and a financial plan and not necessarily for the immediate implementation of that advice. More consumers are able to separate – and in fact insist on the separation of – professional financial planning advice and the use of financial products.

Ethics Institute of South Africa (EthicSA) In November 2010, we became a member of EthicSA as a public declaration of our mutual dedication to a vision of building an ethical South Africa. This relationship supports our strategic mission of ethics upliftment in the financial planning profession.

As a profession we have taken great strides in adapting to the changing needs of consumers. It remains of the utmost importance that we as professional financial planners lead the changes required in our own industry.

Whenever I am given the honour of addressing any group of graduates standing on the verge of entering the financial planning profession, I request them to not only work in this profession of ours but also to work on it. I urge those of our members who have never served on any committee of the FPI to take a turn to do so.

The development of the profession is reliant on all of us contributing our thoughts, ideas and skills.

NQF Act and Recognition of Professional Bodies During the second half of the year, South African Qualifications Authority (SAQA) published for public comment, a document outlining the policy and criteria for recognising a professional body and registering a professional designation for the purposes of the National Qualifications Framework (NQF) Act of 2008.

This followed a consultative process with the professional body community that started in November 2009 and is significant as this, for the first time in the South African legislative framework, allows for the formal recognition of professional bodies and their professional designations. Our submission was made, and once this process is finalised we will be well-positioned to apply for this formal recognition for the FPI and our designations.

Former FAIS Ombud, Mr Charles Pillai It was with sadness that we said farewell to Mr Charles Pillai, the office’s first Ombud, who passed away on Saturday 6 November 2010 from cancer, aged 57. He took office as the fourth Pension Funds Adjudicator on 1 April 2010. As an avid consumer champion, he brought international recognition to the FAIS Ombud’s office through many groundbreaking determinations that

FPI Annual Report 2011 | Setting the Standard

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Chairperson’s CEO’s Report Strategy Review During the fourth quarter of 2010 we started work on a major review of the FPI’s current strategy to ensure that we have what we need in place in order to deliver on our mandate. This review centred on our value proposition to our stakeholders, our three professional designations and also our desired role in the broader financial services industry. We expect this process to be completed by the second quarter of 2011, at which time we hope to be in a position to announce a new and exciting strategy that will take the FPI into the future.

Corporate Governance The FPI Board of Directors is committed to ensuring that the organisation is governed appropriately and complies with all the relevant legislation and principles of good corporate governance. The governance processes and structures of the organisation are regularly reviewed to reflect internal developments and to align with best practices. In accordance with the organisation’s bylaws, the following elections were conducted during the year: • Seven Industry Sector Group (ISG) committees • ISG Director

In 2011, we as financial planners will need to embrace and play a key role in the development of our environment. We must work with all our stakeholders to ensure that we support initiatives such as the National Treasury’s Safer Financial Sector campaign, which includes amongst its many critical items under discussion the Treating Customers Fairly initiative driven by the Financial Services Board (FSB).

We must also work with the various regulators and policy makers to provide our insights into the development and implementation of key legislative changes, such as the changes to retirement fund legislation. As a profession, we must also understand how our businesses will change following the implementation of legislation impacting on the broader business community, such as the Protection of Personal Information Bill.

I would like to thank Godfrey and the members of the FPI board, board standing committees, FPI staff and all volunteers who assisted the FPI in its tasks during 2010.

I look forward to working with each of our members during 2011, as all of us contribute to making this profession the leading profession serving consumers.

• Two Nationally Elected Directors.

With the introduction of the King III Report on Corporate Governance and the new Companies Act, the FPI will take cognisance of the guidance provided by the report and will incorporate improvements into the organisation’s governance and management systems, to the extent that they are practical and relevant to the organisation. During the year ahead, the board will also prepare itself for the changes brought about by the Companies Act 71 of 2008.

Gerhardt Meyer CFP , ®

Chairperson

Chief Executive Officer’s Report 2010, we met regularly with the leadership of National Treasury, Financial Services Board (FSB), Council for Medical Schemes (CMS), South African Qualifications Authority (SAQA), FAIS Ombud, Association for Savings and Investment SA (ASISA), Financial Intermediaries Association (FIA) and corporate partners.

We are finding that these stakeholders are increasingly receptive to our message. They are impressed by the strength of the FPI certification requirements and understand that the public is served by standards that involve much more than completion of an educational programme. They recognise the importance of high ethical standards that require financial services professionals to put the interests of their clients ahead of their own. They also recognise that it is essential that ethical standards be accompanied by a rigorous enforcement process.

We can all look back at 2010 with pride and guarded optimism about what the future holds for the South African economy in general and the financial services industry in particular.

My hope is that the silver lining in the recent economic downturn will be more engaged to customers managing their money, and a more responsive and responsible industry building on principles of professionalism to deliver solutions that are in the longterm interest of these customers.

We were represented at these meetings by the FPI Chairperson, Mr Gerhardt Meyer, FPI Vice Chairperson, Mr Solly Keetse, other directors, ISG Chairpersons and myself. We were also grateful to have Noel Maye, CEO of FPSB, join us for some of these meetings.

As the premier professional body in the financial services industry, we have long advocated higher professional standards. The public is right to demand high standards and excellent service from individuals and companies to whom they entrust their financial futures. A higher professional standard in the industry is all the more important at a time when consumers continue to face worrying times with job security, meeting bond payments, retiring with dignity and ensuring that they and their families are properly protected. Financial planners are in a unique position to prove their mettle with these high standards, providing consumers with advice of the best quality, reassuring customers and allowing them to plan confidently for their financial future.

Delivery of Technical Information Our Industry Sector Groups (ISGs) remain central to our strategy for delivering targeted added value to members working within specific disciplines, each providing thought-leadership and targeted support to their particular community, while at the same time contributing to the overall objectives of the FPI. At the end of 2010 we created a new department to enhance the work of the ISG committees, which had up to then been predominantly run by our volunteers.

Membership Engagement The FPI Regional committee structure continues to play a key role in our ability to engage with our members on the field, especially in the area of channelling member expectations to the appropriate quarters within the institute. Throughout the year I also had the pleasure of interacting with many members, which proved to be invaluable to me in gaining a better understanding of the challenges they face, as well as their expectations of the FPI. I have also been encouraged during my visits by members’ determination to raise standards and lead the industry to inspire higher levels of public trust and confidence. In the coming year I hope to continue measuring these member expectations against our current service offering and, where necessary, make informed adjustments to our strategy.

International Standards During 2010 we put much focus on aligning some of the policies and procedures that underpin our coveted certification standards to ensure that ours is in line with our parent organisation, the Financial Planning Standards Board (FPSB) and other international best practice standards.

Voice of the Financial Planning Profession As an institute that works in the public interest, we are well positioned to continuously educate policy makers, regulators and other industry leaders on the benefit of financial planning and the important benefit that our rigorous internationally benchmarked certification and practice standards provide to the South African public. As part of this ongoing advocacy campaign in

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Chief Executive Officer’s Report Industry Regulation Given the economic crisis that we are still recovering from, it should come as no surprise to anyone to see the intense focus on regulation of the financial services industry, as regulators and policy makers in South Africa join their counterparts around the world in an attempt to prevent a similar crisis in the future. I see the shift in the tone of regulation as a massive opportunity for the FPI, its members and the companies for which they work.

In 2011 and beyond we intend to significantly increase our effort in the area of engaging with regulators and policy makers as the voice of the profession, since we are well positioned to educate and raise awareness of the benefits of financial planning and the important benefits that our rigorous certification standards provide to South African consumers.

Policy discussions tend to be wide-ranging and we intend to cast a similarly wide net for input and dialogue as the FPI takes its place in coming debates. The opinions and insights of the FPI member community and others working in the public interest will be a vital factor in developing our policy positions and priorities. We will be updating our members on policy development and will be actively seeking their input and thoughts on the future of regulation in the financial services industry, as well as on the FPI’s potential role in any new regulatory environment as we seek to increase access for the South African public to professional, competent and ethical financial planners.

2010 Achievements My thanks to our staff and volunteers for helping us achieve, amongst other things, the following during 2010: • Hosting a very successful convention at Emperors Palace that was attended by over 900 delegates.

• Running another highly credible Financial Planner of the Year competition, won by Natasja Norval Hart.

• Running three NQF Level 5 examination sessions for 1,968 learners, with an average pass rate of 60%.

• Successfully running over 40 Continued Professional Development (CPD) events across the country, plus eight national Refresher Workshops.

• Participating in the Citadel Words on Money and South African Savings Institute (SASI) Teach Children to Save campaigns to promote the profession.

• Running the first ever four-part television series on CNBC Africa during Financial Planning Month to promote financial planning and the profession.

• Welcoming 259 new CFP professionals who joined the FPI community of over 3,700 professionals in South Africa, as well as the global community of well over 133,000 CFP professionals practicing in 23 FPSB countries worldwide. We also welcomed 22 AFP™ and 48 RFP™ professionals.

• Partnering with a number of organisations to launch the Further Education and Training Institute’s Articulation Pilot Project in the Western Cape.

Our greatest asset is not necessarily on our balance sheet. Our people are the true value of the FPI, inspiring achievement and taking our profession forward. I would like to thank our Chairperson, Gerhardt Meyer and our board members for their strong leadership, unwavering support and commitment to raising professional standards.

I am also indebted to our staff, office bearers and all other volunteer members across the organisation, whose hard work and commitment enabled the FPI to set truly professional standards for our members and future members. I look forward to working with you all in 2011 and the years to come.

It is an honour to serve as Chief Executive Officer and I hope that, despite the difficulties our profession and industry must navigate, we will continue to grow from strength to strength to serve the public interest.

Godfrey Nti

Chief Executive Officer

Promoting Setting thethe Standards Profession As the premier professional body in the financial services sector with international outreach, our certification standards are constantly benchmarked against the best in the world.

It is the objective of the FPI’s Standards Department to have the concepts of honesty and integrity reclaim their meaning throughout its membership base. These concepts should be personified in the conduct of all our members and experienced by each and every client that approaches a member for financial advice.

There is obviously more to a profession than just passing of it. It is a declaration to the public at large that the advice given by a financial adviser is of the highest quality, is based solely on the needs of the customer, is provided by someone who is not exceeding his or her level of technical competence, is governed by a code of ethics and is subject to consistent monitoring, with effective discipline applied to those who transgress.

It is with this in mind that we started the year in which we had numerous new initiatives in respect of enforcement of standards and ethics. At the forefront was the development of the new Code of Ethics and Professional Responsibility. The new code has a more detailed and descriptive approach to ethics and the application thereof. Its aim is to set the benchmark for the financial services industry and to inspire conduct from our members that will give our respective designations the status of absolute excellence in service and uncompromising values of professionalism and integrity. We will provide members with the opportunity to comment on the document in 2011 before the new code is implemented.

The importance of self regulation cannot be ignored and is a fundamental in ensuring the protection of the public and the provision of safe, competent advice.

Our long term view is that this would ultimately be the only way in which the public interest can effectively be addressed.

Member Audits In addition to our certification standards, the right to use the FPI professional designation trademarks (RFP™, AFP™ and CFP® professional) is subject to certain conditions. Misuse of these trademarks constitutes a breach of our Code of Ethics and Professional Responsibility as well as being a trademark infringement.

In 2010 we focused on the protection of these trademarks by conducting several random member audits.

Our 4’E principle (Education, Examination, Experience and Ethics) as well as Continued Professional Development (CPD) is the foundation of our certification programmes and is aligned to international best practice.

Education and Examination During 2010, we aligned our curriculum framework and competency profile to the international standards developed by Financial Planning Standards Board (FPSB). We ensured that all accredited education partners also aligned their curriculums accordingly.

Further adjustments were done to ensure that all board exams test what financial planners do in daily practice.

Discipline There was a significant increase in the total number of cases administered by FPI compared to 2009. The following cases were dealt with in 2010:

Experience and CPD New experience and CPD standards were developed

by FPSB for implementation by the 23 affilliate countries.

Our implementation date is planned for 2012 once these documents have been localised.

Ethics The financial services industry has, since the introduction of the FAIS Act, been faced with numerous regulatory challenges. Fit and Proper requirements and concepts such as “honesty” and “integrity” have come to the fore as key elements of compliance, with the looming danger of a Financial Services Provider (FSP) being challenged before the FAIS Ombud by a disgruntled client.

FPI Annual Report 2011 | Setting the Standard

Type of case

Cases opened

Cases concluded

Unauthorised use of mark

6

4

Incorrect use of mark

19

19

Disciplinary cases

4

0

Register of Practising Financial Planners The maintenance of the public register of practising financial planners is core to the FPI operation. As part of our website development, a section will be dedicated to the consumer to assist with finding a financial planner as well as facilitating the verification of FPI membership.

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Setting the Standards Regulatory Exams The appointment of the FPI as an Examination Body in 2009 gave us a unique opportunity to showcase our ability to set standards of competence. This also allowed us to bring more than 29 years of core experience in managing examinations to the FSB licensing examinations.

We spent a considerable amount of time in 2010 dedicated to system development, question bank development, the development of processes and delivery models as well as setting up the examination body operations thereby building the necessary capacity to assist the industry in meeting the deadlines for these exams.

Trial and Pilot Exams A number of trials exams took place in 2010 for the level two exams. These trial exams gave candidates the opportunity to provide feedback on the question design and complexity. We also ran a number of level one pilot exams for Key Individuals and Representatives which was designed to test IT systems, quality management systems and the overall composition of the exams. We offered these exams free of charge and pass results were recognised by the FSB. We continued developing questions for the level two exams during 2010 with pilots exams expected during 2011.We aim to have all level two exams available towards the end of 2011.

Delivery of Exams The Level one exam RE1 for Key Individuals and RE5 for Representatives exams went live in the fourth quarter of 2010. We expect the bulk of the delivery to only come through in 2011. The FPI’s delivery slogan is “any time, any place and any medium”.

Industry Communication We held monthly Examination Body project meetings during the year with the FSB and the other appointed Examination Bodies. We also met regularly with our corporate partners and members in order to keep all informed of developments with the exams as well the delivery methods and preparation for the exams.

The Year Ahead • We will continue to promote our certification model and those who have met the stringent set of criteria to be certified.

• We will continue to raise the levels of competencies across all areas of financial planning amongst our members.

• We will scan our environment on an on-going basis and adjust our business model accordingly which may result in changes to our certification standards.

This requires a shared vision from our members as we must work together in building the profession and creating an awareness of financial planning amongst consumers.

• We will maintain the good relationships we have with all our education partners to ensure that the appropriate standards are maintained.

• We will support employers of financial planners and advisors in their efforts to meet the competency and ethics requirements set out by the regulator.

• We will continue to engage with the FSB’s Enforcement Department and the FAIS Ombud’s office to facilitate an open channel of communication on any relevant matters of transgression.

• We will continuously enforce our certification standards and are committed to ensuring that our standards are in line with international best practice.

Education Framework 1,313 CFP professionals in South Africa completed this survey which was run from August 3 to 31 2010. We will be publishing a comprehensive report of the results of the survey in 2011.

Dedicated to creating and providing an education framework and career pathways.

When choosing a career in financial planning, a wide range of opportunities exist, not only as professional financial planners but as managers, specialists within the life insurance, banking, asset management and investment industries as well as other providers of financial services products. Those with entrepreneurial skills are also able to eventually set up their own businesses.

Board Exams In 2010, the FPI Board approved a three-year transition plan to ensure that we exercise better control over all board exams. According to this plan, effective from 2013, all board exams will be developed and managed in their entirety by the FPI. Upon complete implementation of this plan, candidates will only be allowed to sit for the board exams after they have successfully completed an approved education programme. Board exams will be offered twice a year and are currently planned for May and October 2013.

To support a career in financial planning, we have developed partnerships with accredited education partners to deliver qualifications aligned to our curriculum and assessment standards. These qualifications provide access the FPI board exams, which support our three professional designations.

The structure of these exams will also change, in accordance with the results of the recent job analysis survey, with the first of these changes being introduced in 2011.

CFP professional Job Analysis Survey The job analysis survey of CFP professionals is designed and developed to benefit the public, the financial planning profession and the FPI by assuring that individuals who obtain CFP certification have adequate levels of knowledge and skill to perform competently in the field of financial planning. This job analysis survey, which is used to develop test specifications and linked to the pass/fail decision for the CFP Certification Examination, plays a fundamental role in developing evidence to support the validity of the CFP Certification Examination. ®

Board Exam Results A total number of 649 candidates wrote the CFP board exam in 2010. The pass rate was 47%. 62 candidates wrote the AFP™ board exam with a 41% pass rate. 1968 Candidates wrote the RFP1, RFP2 and RFP3 exams last year with an overall pass rate of just over 60%.

FETI Project One of the many transformation initiatives which FPI undertook in 2010 was the partnering with Further Education and Training Institute (FETI), Higher Education and Training Institute (HETI), INSETA (Insurance Sector Education and Training Authority) and the University of the Western Cape (UWC) to launch a pilot financial planning articulation project in five FET colleges in the Western Cape. We are very excited about this project and hope that in the near future we, in partnership with the other stakeholders, will be able to roll out this programme nationally.

In 2010 we, in partnership with Financial Planning Standards Board (FPSB) and its other affiliates, coordinated the design and development of a job analysis survey questionnaire. We also made use of an external psychometrician to advise on the questionnaire’s development and to analyse the results. The purpose of the job analysis survey questionnaire was to validate the CFP certification assessment standards and provide guidance for the content and format of CFP certification examinations in the future.

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Education Framework The initiative, dubbed FETI/HETI and designed to expand access, offers a “seamless articulation” between FET and HET Institutes and will increase the number of qualified professional financial planners working in South Africa by making it easier and more affordable for students to gain the right accreditation and qualifications.

In terms of the agreement between the partners, UWC will now recognise the NQF level 5 Certificate in Wealth Management as the first year of a B.Com Degree. The NQF level 5 qualification will therefore become a bridge to a higher qualification, which learners can obtain through the UWC. As part of the initiative, FPI accredited the UWC FET Institute and the five FET Colleges to offer FPI board exams which will give the learners the opportunity to become professional members. These are available to be written at differing stages, depending on the applicant’s work experience and qualification.

Graduates of the NQF level 5 certificate will be allowed to enter the UWC School of Business Finance Advanced Diploma in Management Studies, a two year course at NQF level 6 and 7. Graduates will then be able to pursue a B. Commerce Honours Degree.

Having obtained the NQF Level 5 Certificate in Wealth Management and with one year of working experience, learners are allowed to write the RFP™ board exam and apply for membership at RFP™ professional level. With the Advanced Diploma in Management Studies and two years work experience in the insurance industry, learners are be able to write the AFP™ board exam at UWC and then apply for AFP™ professional membership.

Then with a B. Commerce Honours degree and with three years work experience, learners are able to write the CFP board exam at UWC and have access to CFP certification.

The pilot programme was funded by INSETA and allows 100 learners at five Western Cape public FET Colleges to undertake the NQF level 5 Certificate in Wealth Management as the first step on the ladder to gaining a tertiary qualification.

Accredited Education Partners We accredited five FET colleges through the FET Institute which brings the total number of accredited education partners, who have approved programmes and are able to offer access to the FPI professional board exams, to 16. These programmes range from NQF level 5 to NQF level 7/8.

The Year Ahead • We will build and maintain our relationships with our accredited education partners.

• We will continue to monitor and assess our learning framework by ensuring that our curriculum, assessment and board exams meet international standards.

• We will investigate opportunities for additional educational institutions to offer our accredited programmes to provide easy access to learners and promote a career in the financial planning profession.

Financial Authoritative Sustainability Voice Technical Updates In 2010, we launched the Quarterly Technical Update.

Some of the main items under discussion were:

Providing regular and effective technical insight to regulators, policy makers and members.

Employment Benefits • Possible phasing out of Provident Funds • Retrenchment benefits and tax amendments • Social Security and Retirement Fund Reform developments • Trustee Training • PF 130 and King III and the governance of retirement funds.

Research conducted during the year indicated that the FPI, in order to maintain its premier standing, should regularly and effectively provide technical insight to regulators, policy makers and members. FPI members, in particular, have been calling for us to deliver regular, easy to read, understandable and implementable communications on changes to legislation and regulation applicable to their practices.

Estates and Trusts • Repeal of the Stamp Duty Act • Appellate division case of Kruger v Goss & another (rehabilitative maintenance) • The ‘portable’ R3.5 million estate deduction in respect of spouses • Reporting of intestate estates (i.e. no will) • Suicide and wills • Drafting wills and remuneration.

The FPI, with the support of its technical committees, endeavours to be the technical resource hub that ensures that all outputs of a technical nature are coordinated with expert skill and knowledge at all times.

By doing this, we can be recognised as the authoritative voice to speak for the financial planning profession.

We implemented the following technical insight communication services during 2010:

Healthcare • National Health Insurance (NHI) • The new Code of Conduct for prescribed minimum benefits.

• Technical Updates • Continued Professional Development (CPD) Events • Website • Journal – The Financial Planner

Investments • The review of the Collective Investment Schemes Control Act, 2001 (CISCA) • Draft Regulation 28 and the prudential limits of pension fund investments.

Technical Committees The FPI’s Technical Committee is made up of the chairpersons of the Industry Sector Groups (ISGs) who contributed their technical expertise in the following areas of financial planning:

Personal Financial Planning • Amendments to the FAIS General Code of Conduct in terms of Conflict of Interest • Business succession planning and practice audits

• Employee Benefits • Estates and Trusts • Investments • Healthcare • Personal Financial Planning • Risk • Tax

Risk • Risk Benefit Definitions • FPI’s Indemnity Policy for members • Code of Good Practice for Dread Disease Benefits.

The role of these committees is to take all reasonable steps to promote the aims and objectives of the FPI and the financial planning profession by:

Tax • Budget 2010 • Provisional Tax and the 80 20 rule • Registration as a Tax Practitioner • Cross-Border Collective Investment Schemes • Turnover Tax • Proposals for miscellaneous and technical tax law changes • Exchange Control • Voluntary Disclosure Programme • The Taxation Laws Amendment Act (No 7 of 2010) and the Taxation Laws Second Amendment Bill.

• Staying abreast of developments in the industry.

• Arranging for engagement with Government at all levels to influence and take part in consultation about legislation impacting the profession, • Providing members with feedback in order to keep members abreast of changes.

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Authoritative Voice CPD Events We successfully organised over 40 CPD events across the country with a total attendance of over 2900 delegates.

These events included quarterly breakfast and afternoon sessions, mini conventions and eight Refresher Workshops. The Refresher Workshops were the second highest attended FPI event second to the Annual FPI Convention.

New Website The website redevelopment was started during the second half of the year with changes aimed at improving access of technical information as well as events, online discussion forums and other important resources for our stakeholders.

Journal – The Financial Planner We issued our journal every alternate month during 2010, which was rated as the journal of choice for members according to the 2010 member satisfaction survey.

The journal included quality, informative articles and included contributions from our members across a wide range of financial planning topics.

The Year Ahead As part of the planning for the Technical Services Department, we scheduled various strategy sessions for early 2011 with information sessions planned to communicate the outcomes of these sessions to members.

Some of the activities planned for 2011 include: • Increasing relationship building with key stakeholders, namely, the Financial Services Board (FSB), National Treasury, the South African Revenue Services (SARS) and Council for Medical Schemes (CMS) amongst others.

• Investigating and developing a research policy that addresses the technical research needs of the members and the financial planning profession.

• Developing and implementing a technical communication strategy on best ways to communicate technical information to members, obtaining member opinion and input on technical matters.

• Developing and implementing a strategy to ensure that the FPI can take informed positions on matters affecting financial planning and the industry as a whole.

Ethics Promoting Enforcement the Profession PR and Media We actively monitor our media exposure via an online media monitoring service in order to gauge the exposure we receive in the various print, online and broadcast media. Over 400 articles were published during the year with reference to the FPI and our professional designations, creating a total advertising value equivalent (AVE) of over R7 million. We also placed various other advertising in print publications to promote the profession and our members.

Promoting our designations and the financial planning profession to key stakeholders and the public at large.

The public needs professional advice to guide them through the growing complexity, diversity, miscommunication and uncertainty in financial services and more specifically, the setting of personal financial goals to achieve sound retirement and financial security though a well structured financial plan based on sound financial planning principles. To ensure that the consumer is best served, the FPI has the following consumer-facing objectives:

GIBS Expo and Sci-Bono Finance Week In July, we participated in the Gordon Institute of Business Science (GIBS) Career Expo and the Sci-Bono Finance Week, which attracted over 3000 grade 9 to grade 12 learners. We interacted with many learners and educated them about financial planning as a profession.

• To create awareness of professional financial planners.

• To demonstrate that they are experts in their field just like doctors, lawyers and other professionals.

• To communicate that they are learned and qualified to do financial planning.

• To create a desire among non FPI-accredited financial advisors to become members.

Financial Planner of the Year The FPI’s Financial Planner of the Year was announced at the Annual Convention Gala Dinner at Emperors Palace, Kempton Park on 26 May 2010. The 2010 award went to Ms Natasja Norval Hart CFP®. Finalists in the competition were Ms Pat Blamire and Mr Jan-Carel Botha.

Although we faced a few challenges to ensure that resources were fully available to market our members and the profession, opportunities were seized to ensure maximum awareness of the FPI’s brands by launching new initiatives during 2010.

Inaugural World Financial Planning Day In celebration of the Inaugural World Financial Planning Day initiated by Financial Planning Standards Board (FPSB), we ran radio advertisements on three national radio stations to promote financial planning to consumers. In addition, FPI leadership attended a World Financial Planning Summit on 21 April 2010 in Taipei, hosted by FPSB, the preeminent international standardssetting organisation for financial planning and owner of the CFP marks outside the United States.

As a financial planning professional, our Financial Planner of the Year Award is the highest accolade a financial planner can obtain.

The competition was launched in 2000 to honour and promote excellence in financial planning and the process of the competition is independent and transparent, with judges ranging from industry experts, academics and FPI personnel.

Financial Planning Month In November, we launched Financial Planning Month, a consumer awareness campaign aimed at educating consumers about the FPI, CFP mark and dealing with a professional financial planner.

We would like to acknowledge those who entered the 2010 competition as a tribute to those financial planners who are committed to being at the top of their game.

We ran a weekly series during November on CNBC Africa titled “Secure your Financial Future” with the shows providing consumers with information about the financial planning landscape, the financial planning process, how to choose a financial planner and their rights and recourse. We also held exhibitions at various malls in Gauteng to promote the use of professional financial planners to consumers.

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Promoting the Profession Chairman’s Award We awarded the inaugural FPI Chairman’s Award to Ms Prem Govender at the Annual Convention Gala Dinner. This award was introduced to recognise those individuals who have made lifelong outstanding contributions to the financial planning profession in the areas of service to society, academia, training, government, media or any other professional activities.

The Year Ahead We will continue to market, build and maintain a viable and sustainable financial planning profession through various initiatives to the benefit of the consumers we serve and the nation as a whole.

We are committed to creating maximum awareness of the financial planning profession and to improve communications to all our members and stakeholders. To achieve this, the following initiatives will be undertaken in 2011: • Focussed marketing and communications activities to attract potential members.

• Brand Ambassador Campaigns to raise the FPI’s and our members’ profile.

• Consumer clinics to educate customers about the financial planning profession.

• Advertising campaigns to promote the FPI as the premier professional body in South Africa.

• Introducing a Media Award to recognise individuals who have made outstanding contribution to the media to promote financial planning amongst consumers, the financial planning professional the FPI and its marks.

Setting World Class the Standards Value Proposition • Member rates and discounts to attend international events.

Developing and delivering a differentiated, world class value proposition to the market, based on stakeholders needs.

Surveys In June, we ran our annual member satisfaction survey which provided us with an in-depth analysis of our membership. 548 members completed the survey, which represented a response rate of 8% of our membership.

Some of the outcomes were:

The FPI’s commitment to our stakeholders is to deliver a value proposition built on developing a sustainable financial planning profession, thereby creating confidence in the financial services, promoting professionalism and enhancing consumer awareness.

• 70.5% CFP professionals, 14.8% AFP™ and 14.7% RFP™ members responded to the survey.

• Their preferred communication methods were monthly newsletters, ad hoc alerts and the website. 65% indicated we always communicated clearly.

• The FPI Journal, The Financial Planner, was the highest rated at 47% (out of eight publications).

• The need for technical information was the highest rated at 41%.

• 66.4% rated webinars as an important communication tool.

• 95.2% of our members value their professional designation, 81.6% display this on their business cards and 68.3% advise their clients of their professional designation.

• 91.1% value their FPI membership, with the highest reasons rated being recognition as a professional.

Our Member Value Proposition During 2010, we focussed on providing opportunities for our members to nurture their knowledge and professional development in order to stay current in the rapidly changing financial planning environment.

We provided the following valuable benefits to our members: • Regional and Industry Sector Groups (ISGs) focussed on ensuring that the needs of our members are effectively channelled.

• Consumer awareness campaigns to promote the benefits of using a professional financial planner.

• Delivery of technical information to keep members informed.

• Networking opportunities at various events.

• Business solutions through associations with value chain partners.

• Career pathways for those wishing to access the CFP® mark through accredited programmes and board exams.

• Access to potential employers to gain the necessary financial planning experience as well as career development opportunities.

• A Code of Conduct and Professional Responsibility to ensure that the highest standards of ethics are adhered to.

We also participated in the annual Magnet Young Professional Survey which was conducted by Magnet Communications, a Stockholm-based company. The feedback from the analysis delivered was significant as it provided us with insight of what young professional members’ expectations are in terms of employer preference, their careers and benefit expectations.

Annual Convention Our 2010 Annual FPI Convention themed Beyond the Recession was held on 26 and 27 May 2010 at Emperors Palace. Some of the key speakers included Dr Monde Mnyande, Ahmed Jooma, Mitch Anthony.

Prof. Walter Geach, David Shapiro and Gary Bailey who closed the convention with an inspiring presentation on leadership and the FIFA 2010 World Cup South Africa™. We were pleased that even though we had experienced a recessionary period, attendance exceeded 900 delegates.

International Affiliation During 2010 we aligned our local standards to international best practice to ensure that our professionals are on par with the best in the world.

As the only marks licensing authority for the CFP mark in South Africa, through agreement with Financial Planning Standards Board (FPSB), we were able to offer members with the following during 2010:

We ran an exhibition concurrently with the convention and over 30 companies exhibited and showcased the very latest products, services and technology in the marketplace.

• Facilitation of cross border practices and certification for those members wishing to practice outside South Africa.

• Access to international research and trends.

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World Class Value Proposition At the Induction Ceremony, we welcomed over 200 new CFP professionals.

We are very proud that the Gala Dinner was attended by over 600 guests including senior representatives from the statutory bodies, industry associations, education partners, media, FPI board members and senior FPI volunteers. At the dinner, in recognition of excellence, we awarded top student prizes for the Post Graduate Diploma in Financial Planning/B Com Honours in Financial Planning and the Advanced Diploma in Financial Planning amongst other prizes.

Website During the second half of 2010, we started working on the development of our new website to improve access to information for our members and the public.

We plan to launch the website in early 2011 and part of the development includes an online application and renewal process, discussion forums, shopping facility, new event registration system and a section dedicated to keeping consumers informed.

The Year Ahead During 2011, to further enhance our value proposition to our stakeholders, we plan to: • Review our communication strategy to ensure that our communications mechanisms are effective.

• Conduct research to determine the needs of our stakeholders to develop and implement a compelling value proposition for all stakeholders.

• Conduct research to establish market segmentation, trends and characteristics to ensure that our development of the profession is in line with market expectations.

• Continue to develop strategic relationships and partnerships with value chain partners and key stakeholders.

• Investigate ISO17042 and ISO22222 accreditation.

Transformation Discharging our transformation responsibilities with respect to the implementation of relevant Acts and practices that are consistent with good corporate citizenship.

All South Africans deserve a dignified and prosperous life. We know that meeting our transformation expectation is not only a morally imperative but also pragmatic one and aims to realise the country’s full economic potential. We therefore constantly strive to align our efforts to the Department of Trade and Industry’s (DTI) Code of Good Practice to ensure that we contribute to a sustainable and equitable society.

BBBEE Rating In 2009 FPI achieved a LEVEL FIVE Broad Based Black Economic Empowerment (BBBEE) contributor status from ratings agency BEE Verification Agency CC, following a comprehensive audit of FPI’s BBBEE performance.

In 2010, we believe that we made good progress across all our transformation measures. We are eagerly awaiting the results of the 2010 BBBEE verification which is currently underway.

Transformation Committee Given the huge importance that we place on transformation, during 2010 the Board of Directors approved the charter creating a Transformation Committee to serve as the vehicle for discharging our transformation imperatives. The objectives of the FPI Transformation Committee are: • Develop a shared model and framework for understanding transformation within FPI. • Create internal awareness for the implementation of the transformation strategy.

• Demonstrate commitment to transformation.

• Facilitate the effective implementation of our transformation strategy.

• Monitor and evaluate the performance on transformation and the achievement of set targets.

During 2010 the Board of Directors also approved a far reaching Transformation Policy and Implementation Framework which sets out FPI’s transformation objectives, strategy and implementation timelines. The full document is available on our website or from the office on request.

Corporate Social Investment Woman’s Day We partnered with the Principle Officer’s Association (POA) and Institute of Retirements Fund (IRF) for their annual Women’s Day events in Johannesburg and, for the first time, in Cape Town. The theme of the event in Johannesburg was Help Seniors and the charity selected was the Olievenhoutbosch Retirement Centre.

Committed to all our employees, the communities in which we conduct our business, the environment in which we operate, the sustainability of the environment, and to the sustainable development of our country.

The Cape Town event was held on 27 August 2010 and the charity selected was Matla A Bana, a project for children affected by crime.

The FPI, through its corporate social investment initiatives finds an integrated “strategic fit” between community needs and opportunities to which we can harness our expertise, and resources, to the benefit of both FPI and the community.

We focus on forming strategic, sound and meaningful partnerships with the communities, civil society and government, in dealing with community needs and problems in an integrated and sustainable way. Focus is given to areas of strategic importance to FPI and where maximum and sustainable community development impact can be achieved.

Teach Children to Save (TCTS) In August we took part in the South African Savings Institute (SASI) Savings Month: Teach Children to Save (TCTS) campaign targeted at grade 4-7 learners. Our members were invited to take part in this initiative to provide savings education throughout South Africa and to promote the importance of a savings culture among our future leaders.

Donations of food and other items were collected for the charities at these events. FPI staff were at the event to hand over the items at the Olievenhoutbosch Community Centre on 30 August.

Financial Services Board (FSB) Draft National Consumer Financial Education Strategy During 2010, we were invited by the FSB to comment on its draft National Consumer Financial Education Strategy and also attended a meeting with the FSB, alongside other industry bodies, in November to discuss the draft document and plan the way forward. We would like to thank Prem Govender (SASI Chairperson and FPI board member), Elizabeth Lwanga Nanziri (CEO of the South African Savings Institute) as well as the FPI executive staff who contributed in putting together our response.

The Year Ahead We will continue to engage industry stakeholders and support initiatives aimed at the upliftment of all South Africans. Various internal initiatives are also planned for 2011.

Teach Children to Save South Africa (TCTS SA) was adopted as a key event by SASI during the July National Savings Month, following the successful pilot launch on 25 July 2008. The initiative aimed to take the savings message to our youths, equipping them with the basic financial skills to help them become better savers now and in future.

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FPI Annual Report 2011 | Setting the Standard

Our Resources People Creating a long term, financially sound and sustainable organisation with maximum utilisation of resources.

Summary Statement of Comprehensive Income

Financial Sustainability In 2010 we focussed on ensuring financial stability, sound reporting and improvement of financial controls. We also grew our strategic cash reserves from R4.91 million to R5.59 million, a growth of 33% year on year.

Description

Year ended 31 December 2010 2010 Membership

We were also pleased that our independent auditors, Zeelie de Kock, after an audit of our financial statements, gave FPI an unqualified audit report for the 2010 year.

Rm

Rm

11.20

10.76

Board Exams & Courses

3.00

4.04

Revenue

14.20

14.80

Operating Surplus

0.25

2.63

Other Income

1.15

0.90

Expenses

1.80

2.32

(0.39)

1.20

Total (Loss)/Surplus

Summary Statement of Financial Position

2009

Year ended 31 December 2010

Description

2010

2009

Rm

Rm

Non-current Assets

1.16

1.02

Current Assets

8.43

8.75

Total Assets

9.59

9.77

Equity

7.23

7.63

General Reserves

5.00

5.00

Retained Surplus

2.32

2.63

Current Liabilities

2.36

2.14

Total Equity & Liability

9.59

9.77

Our membership dues revenue increased in 2010 by 4% from 2009. This growth, albeit smaller than we hoped for, was mainly attributable to members finding it difficult to retain their membership in a recessionary environment.

We also experienced an expected drop in revenue from board exams and courses as the industry was beginning to redirect its attention, away from obtaining FAIS credits as a licensing requirement, to the new Regulatory Exams (RE), which came into effect from 1 January 2010. We also experienced a decrease in revenue from health care courses.

Equity & Liabilities

The resultant 2010 deficit of R0.39 million can also be explained by unrealised income from the Examination Body operations due to postponement of the launch date for REs by the FSB. It is important to note however that this did not result in a loss of cash.

The summary statement of our financial position above reflects a largely unchanged financial position year on year.

In the years to come, we hope to significantly grow our non-membership dues revenue in a bid to reduce our over-dependence on membership fees. Projected revenue from our Examination Body operations is an integral part of this plan.

During 2010, we invested R1.31 million into starting up the FPI’s Examination Body operations. We were able to do this without the need to draw on our strategic cash reserves.

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The Year Resources Ahead Human Resources You would not find FPI’s greatest asset on the balance sheet. Our people are the true value of the institute, their hard work and dedication inspiring achievement and taking the institute to new heights.

During the year we filled some key positions to help ensure the smooth running of our operations. Mr Almo Lubowski, CFPÂŽ joined our team as Manager: Technical Services. Ms Carla Letchman also joined our technical services department as a Research and Technical Analyst.

Mr Phillip Kruger and Mrs Tsholofelo Dihutso joined our team as Manager: Professional Standards and Manager: Communications and Marketing respectively.

These new additions to our team have been instrumental in helping us run an effective operation in 2010.

We also implemented a new performance management policy which we hope will maximise the productivity of our team whilst being fair to all. The next phase in this exercise will be the development of a talent management system that will hopefully assist us in identifying, growing and retaining good talent within the institute.

Corporate Governance Committed to adherence to the rules, laws and processes by which the business is operated, regulated, and controlled.

All directors, with the exception of the Chief Executive Officer (CEO), are non-executive directors. This provides the necessary objectivity for the effective functioning of the Board.

Our corporate governance structures remained largely unchanged in 2010.

King III and the new Companies Act With the King III Code on Corporate Governance coming into effect in March 2010, we conducted a gap analysis to determine what the FPI, already in compliance with King II, needed to do to comply with the new code.

New Directors During 2010, the members of the institute elected Mr Ronald King CFP®, Mr Raimund Snyders CFP® and Ms Kathryn Franz CFP® to serve as directors of the FPI for a two-year term.

On completion of the gap analysis, the board decided that, given the many overlaps with the new Companies Act which was then in draft form, it would be prudent to delay FPI’s compliance with King III until such time that the new Companies Act came into effect in 2011.

Re-Appointed Directors The board also re-appointed Ms Nasrat Edoo Sirkissoon CFP® and Sankie Morata CFP® to the board for a further two-year term.

Meet the Board:

Gerhardt Meyer, CFP® Acsis Ltd Chairperson Non Executive

Solly Keetse, CFP® Advantage Asset Managers (Pty) Ltd Vice Chairperson Non Executive

Artwell Hlengwa, AFP™ Self Employed Appointed Director Non Executive

Sheshi Kaniki Momentum Appointed Director Non Executive

Godfrey Nti CEO Executive

Ronald King, CFP® PSG Konsult Director Non Executive

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Nasrat Edoo Sirkissoon, CFP® Sanlam Director Non Executive

Kathryn Franz, CFP® Acsis Ltd Technical Director Non Executive

Prem Govender, CFP® Mosswick Invest Pty Ltd Appointed Director Non Executive

Sankie Morata, CFP® BOE Trust Ltd Appointed Director Non Executive

Raimund Snyders, CFP® Old Mutual Director Non Executive

Esther Venter, CFP® Milpark Business School Regional Director Non Executive

Industry Industry SectorSector GroupGroup Reports Reports Chairpersons reflect on 2010

Estates and Trusts The year 2010 was a busy one for the Estates and Trusts Planning ISG. Teleconferences between members were held on a quarterly basis, as well as one face-to-face meeting, to ensure that everyone stays abreast of developments in the sector.

Employee Benefits Legislation in the employee benefits industry continues to change, and as such, this committee spent a lot of time during 2010 discussing the implications of the various changes and keeping track of social security and pension fund reform discussions.

The committee made presentations at CPD events in Durban, Empangeni, Port Elizabeth and Bloemfontein, wrote articles for Financial Planner and posted important judgments and articles on the FPI website.

Some changes in legislation that took place in 2010 include the following:

Changes to Section 11(w) of the Income Tax Act – together with the introduction of a new section, Section 23B(4) – effectively restrict the conditions under which employers can claim a deduction from their taxable income with regard to the premiums payable for the disability policy of employees.

• Section 4A of the Estate Duty Act was amended, affecting the regulations surrounding abatement.

• The Reform of Customary Law of Succession and Regulation of Related Matters Act was introduced.

Also, the proposals in the 2011 Budget Speech will have a significant impact on retirement funds and employers going forward. Although much of the enabling legislation has not been drafted as yet, and there are still discussions with the regulator about various issues, it is prudent to take cognisance of the proposed changes to both the structuring of employee remuneration and income tax deductions relating to employee benefits.

• Master’s fees (such as for trusts and estates) are now payable in cash or EFT to the Department of Justice as the use of revenue stamps has been discontinued.

The committee will continue to monitor developments in the sector in 2011. Important issues in this regard are various court judgments that probe and even broaden the definition of a valid last will and testament, as well as litigation concerning the reconciliation of life insurance beneficiaries with the stipulations of a will.

For example, it has been proposed that, as of 1 March 2012, individuals will be allowed to deduct up to 22.5% of their taxable income for contributions to retirement funding, with a maximum deduction of R200,000 and a minimum deduction of R12,000. In addition, any contribution by employers to retirement funding on behalf of employees, for which the employer claims a tax deduction, will be taxed in the hands of the employees as a fringe benefit. However, employees will be able to offset their fringe benefit tax via the 22.5% taxable deduction. The industry is liaising with authorities to obtain clarity in respect of the implications of these proposals.

Financial planners need to stay abreast of these cases and others concerning the rights and obligations of spouses (as broadly defined) and those who merely live together.

David Thomson CFP®, Chairperson

In addition, the Minister confirmed government’s commitment to the removal of provident funds. The changes proposed in the Budget Speech will effectively equalise the tax regime of contributions being paid into the fund, and it is anticipated that shortly thereafter all funds will be required to pay a maximum of one-third at retirement, effectively removing provident funds from the arena.

Jennifer Grefen CFP®, Chairperson

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FPI Annual Report 2011 | Setting the Standard

Industry Sector Group Reports Health Care

increase financial planners’ knowledge of investment strategies.

As such we organised a series of educational articles written by Chartered Financial Analyst (CFA) Franco Busetti, author of The Effective Investor. These will be published in Financial Planner and will become part of our educational library on the FPI website.

The South African healthcare market consists of a dual system, with approximately 16% of the population enjoying a first-class private healthcare asset while the rest make use of an ailing public healthcare system.

Busetti has also agreed to present countrywide educational investment workshops with Rowan Williams-Short, who is part of the team that sets CFA examination questions in the United States of America. During 2010 we also held two mini-investment conventions for CPD points that were well received. Our efforts as a committee to build relationships with other industry bodies, government, educational institutions and the media are ongoing.

We support government’s initiatives to provide universal access to quality healthcare to all South African citizens, and as financial planners we need to contribute actively to this goal. Our interaction with the newly appointed Registrar of Medical Schemes at the end of 2010 was very positive, emphasising the important role that we as financial planners can play.

Janet Hugo CFP®,

The focus of this committee for 2011 will be to advance and promote the profession of healthcare consulting in order to raise the status of the professional financial planner and enhance the experience of the public we serve. We will do this through education, communication and regular interaction with the regulator.

Chairperson

Personal Financial Planning This committee traditionally dealt with a variety of topics and discussions that fell outside of the other ‘technical’ areas of financial planning, and as such there was a need to renew the focus of the committee in order to provide its members with a clearer mandate and direction for the way forward.

André Jacobs CFP®, Chairperson

Investments The investment sector experienced a particularly complex and challenging year in 2010 due to the continuing vulnerability of the global financial system. Growth was slow and patchy, and debt levels remained high. This demanded particular attention from financial planners and advisors in terms of balancing risk and managing investor expectations with regard to participating in stock market recoveries. Sound investment strategies were therefore very important.

This was successfully achieved in 2010, partly through the introduction of the Technical Department and the appointment of Almo Lubowski (Technical Manager) and Carla Letchman (Technical Research Analyst), who have become the driving force behind keeping committee members focused and active in their respective fields.

Besides the regular feedback and collation of relevant information, two activities that ranked high on the ISG calendar in 2010 were the ongoing research and discussions on global trends in fee-based financial planning. Another noteworthy activity that saw the involvement of this committee was the fourpart Secure your financial future series on CNBC Africa that was flighted in November 2010.

From a legislative perspective, changes to Regulation 28 challenged both institutions and investors with regard to the mix of investments in pension funds. A trend is evident on the part of the regulators towards increased acceptance of active strategies or hedge funds in pension and conservative portfolios. In coming years it will therefore be important to educate our members on how to select and manage these investments in the context of a client’s long-term investment plan.

Going into 2011, the committee will continue to provide specialist input on non-technical matters (including global trends and legislative changes), as well as practical guidance on the application of the six-step process of financial planning and the enhancement of the soft skills involved in client engagement.

This will ultimately result in a better consumer experience, the

During 2010, the committee resolved to promote Certified Financial Planners® of sound investment knowledge and to

FPI Annual Report 2011 | Setting the Standard

24

Industry Industry SectorSector GroupGroup Reports Reports Tax

heightened professionalism of the financial planner and more robust practice management.

The year 2010 was a particularly active one in the tax sector. A number of extensive and far-reaching changes were made to tax law and policy, not least of which are the changes announced during the Budget Speech.

Related to this is the introduction of the FSB’s Treating Customers Fairly (TCF) approach, as well as the potential introduction of ISO standards for financial planning practices in South Africa (ISO 22222). These topics are significant in the current business landscape, and therefore the committee will provide input on these issues to the Technical Team for the broader focus of the FPI Board.

These include changes to: • The Secondary Tax on Companies (STC) and corporate tax.

The year ahead will see the committee focusing on providing content and input that is not only interesting but also useful for professionalising members’ own businesses.

• Section 11(w), impacting on buy-and-sell policies, deferred compensation and employee health insurance.

Kathryn Franz CFP®,

• Fringe benefits on company vehicles, the travel allowance rate and travel claims.

Chairperson

• Retrenchment and retirement tax, and severance payments.

Risk The risk sector did not experience many changes in 2010, perhaps in anticipation of greater changes that will stem from the social security reform process.

Although the Inter-Departmental Task Team (IDTT) paper on social security reform has not been released as yet, informal discussions in this regard gave greater insight into the thinking behind social security reform and a national risk pool.

The Risk committee hopes to make a key contribution when the IDTT paper is released since insurance prior to retirement is a key focus area.

• The SARS penalty regime and pay-now-argue later – debt is now due immediately even if the taxpayer has been incorrectly assessed.

• The medical aid employer contribution, which is now fully taxable.

• Estate duty and capital gains tax.

The changes were complex, and the result is that only professional advisors who are familiar with these changes will be able to give the best service to their clients. The committee therefore focused on communicating clearly and regularly with its members in order to ensure that they are up to date with the changing legislation.

The committee also made a number of representations to SARS and the National Treasury in an attempt to confirm the implications of the complicated legislative amendments. These comments were taken into account, and the result is that the final promulgated legislation contains the important changes suggested by the committee.

Other developments include the fact that the Association for Savings & Investment SA (ASISA) began looking at the standardisation of policy terms following approaches by the FPI to the previous Life Offices’ Association of South Africa (LOA).

During 2010, the committee responded to member queries on technical matters, for example the aggregation of insurance benefits, and identified speakers that could enhance members’ risk and insurance knowledge. As always, the FPI provided operational, secretarial and planning support to the committee.

Jerry Botha CFP®, Chairperson

Andrew Crawford CFP®,

Chairperson

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FPI Annual Report 2011 | Setting the Standard

Regional Reports 2010 in review

Central Region (Free State and Northern Cape) The Central Region faced some challenges in the 2010 financial year.

Unfortunately the committee had insufficient members, which meant that we could not deliver all four planned events in the region.

Gauteng Region Gauteng is the biggest region, and in 2010 we held successful monthly events that were well attended. In order to ensure that our members receive quality information, we organised the following sessions during the year:

However, despite these challenges, a very successful two-day CPD session was held. The first day saw an informative investment session followed by a cocktail function where participants were offered the opportunity to network and get to know one another.

The following day started off with a breakfast and a session on compliance and retirement planning.

• Regulatory protection for medical scheme beneficiaries.

• Tax development planning.

In October, a number of speakers attended a seminar on how to apply trust law to estate planning. Some of the committee members were also involved in the Financial Planner of the Year competition.

• Developments in estate planning and the duties of trustees.

• Investment planning: The art of making the plan work.

• The business case for comprehensive financial planning.

Shirly Hyland CFP®,

The biggest highlight during the year was that one of our committee members won the prestigious Financial Planner of the Year Award. The winner will be travelling to the various regions in 2011 to inspire other members to enter the competition.

Chairperson

KwaZulu-Natal Region The KwaZulu-Natal Region had a strong committee in 2010 in the form of seven elected members, two co-opted members and one honorary member. Many of its members are also representatives on the Industry Sector Group (ISG) Committees, and the committee has a satellite office in Empangeni.

Yzelle McKane CFP®, Chairperson

North Region (Pretoria) The primary focus of this committee over the past year was the organisation of mini-conferences, in conjunction with the FPI marketing office. The aim of the bimonthly committee meetings was to obtain suitable speakers for these conferences and to discuss other issues relevant to the region. Several such mini-conferences were held and were a great success.

Some logistical changes were made in 2010, namely that committee sessions were changed from monthly to quarterly, and three points were allocated for a three-hour session.

The committee was honoured to have finance journalist Bruce Cameron as a speaker at one of its sessions, and the event attracted over 158 members. Members of the committee have also written articles for publication and have spoken at other CPD sessions in South Africa.

The committee received invaluable assistance from the FPI in the form of visits and the arrangements of logistics surrounding the events, such as following up with speakers, arranging accommodation and providing backup in terms of registrations.

In 2011, the committee will continue focusing on increasing its membership, lining up knowledgeable speakers and upping attendance at its quarterly sessions.

The CPD points gained at the conferences remain very relevant and contribute to the high regard in which the profession is held.

Willie Snyman CFP®,

Logie Govender CFP®,

Chairperson

Chairperson

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Regional Reports Regional Reports Eastern Cape Region

Western Cape Region

The Eastern Cape Region has over 300 members and is the smallest region.

In 2010 it held three CPD events, one of which was a joint seminar with the Nelson Mandela Metropolitan University. The seminar focused on economic conditions and financial markets, that is, making sense of confusing times. The event was well attended as it provided members with a relevant and informative overview of the markets. The other two events covered the following topics:

The Western Cape Region enjoyed its most successful year ever if measured by the number of members attending CPD sessions and their feedback on the value of such sessions. Attendance numbers soared to as high as 200 at our quarterly mini-conventions, and members’ feedback on the standard of presentations was excellent.

The committee focused on delivering top-quality continuous professional development to FPI members in the region, and as such four mini-conventions were held that focused on the following topics:

• Key issues impacting members of DC funds.

• Professionalism and the science of financial planning.

• Investment, with an excellent economic overview provided by Prof Brian Kantor.

• Estate planning: An update, recent cases and changes to the law.

• Practice management and recent influences on financial planning, with former Financial Planner of the Year, Alec Riddle, inspiring members with his life story and approach to financial planning.

Like the Central Region we had inadequate committee members.

However, we managed to successfully support the Eastern Cape members in ensuring that they obtain the required CPD points.

Jackie Palframan CFP®,

• Employee benefits and the current state of estate planning in South Africa, with the latter topic covered by Judge Dennis Davis.

Chairperson

• Recent developments in the health sector and a thoughtprovoking presentation by Andrew Bradley on the savings culture in South Africa.

Members have indicated that the CPD sessions add a lot of value to their practices and careers, as well as providing a useful forum for networking with other members in the region.

Esther Venter CFP®, Chairperson

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FPI Annual Report 2011 | Setting the Standard

Affiliate Organisations Our Memberships Statements of Support

Financial Planning Standards Board

A Member of

Partners in achieving excellence in financial planning Financial Planning Standards Board (FPSB) and its 24 member organisations, including the FPI, have gained a lot of momentum in our quest to establish financial planning as a distinct, global profession. Interest in CFP certification – the global symbol of excellence for financial planning – continues to be strong, with the total number of CFP professionals reaching nearly 134,000 worldwide at the end of 2010.

Ethics Institute of South Africa Building an ethically responsible society

In South Africa, the FPI now boasts the seventh-largest population of CFP professionals, with a number standing at more than 3,700. FPSB congratulates the FPI on its leadership in the global financial planning community and for its continued support for setting global financial planning standards that place the interests of consumers first.

The FPI joined the Ethics Institute of South Africa (EthicSA) as a corporate member in 2010. Through its membership contribution, the FPI supports EthicSA in fulfilling its vision of “building an ethically responsible society”.

Focused on the future FPSB’s strategic planning efforts for the future of the financial planning profession kicked off in 2010 with the World Financial Planning Summit, held in Chinese Taipei. The summit brought together regulators, academics, financial services firm representatives, members of the consumer media and representatives from FPSB’s member organisations – including the FPI – to challenge FPSB’s thinking and help shape our strategy.

EthicSA plays a thought leadership role in South Africa and the rest of the African continent. It also provides ethics training and consultation services to private and public-sector organisations and to professional associations.

As an organisational member of EthicSA, the FPI has committed itself to: • EthicSA’s mission of building an ethically responsible society.

• Operating according to the highest ethical standards.

• Creating an ethical work environment.

• Encouraging responsible business conduct in the FPI, its sector of the economy and Africa as a whole.

Prof GJ (Deon) Rossouw,

Chief Executive Officer of the Ethics Institute of South Africa

FPI Annual Report 2011 | Setting the Standard

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Our Memberships Affiliate Organisations Guidance on implementing global standards South Africa’s CFP professional community also played a leading role in developing guidance for implementing FPSB’s global standards. Former FPI director Wessel Oosthuizen, CFP, led five expert panels and working groups to create tools, content, templates and guidance documents to support FPSB member organisations in their implementation of the standards that have been adopted since 2008. Marius Botha, CFP, Nasrat Edoo Sirkissoon, CFP, Shirly Hyland, LL.M, CFP, Esther Venter, CFP, and Jackie Palframan, CFP, participated as members of the working groups and panels.

Building for the future As FPSB looks to the future, we have a clear vision of what we need to do to ensure that consumers can identify and access the services of competent, ethical financial planners. We also have a plan to get there, thanks to the support of organisations like the FPI and its membership.

The recommendations made by summit participants helped fuel FPSB 2025, a far-reaching plan for how FPSB can achieve global recognition for financial planning as a distinct profession.

We look forward to continuing our momentum in 2011 through engaged dialogue with FPSB members such as the FPI and the community of CFP professionals in South Africa, and to keeping the needs of consumers front and centre in our strategic discussions, our certification programmes and our global financial planning standards.

FPSB 2025 reinforced our commitment to working cooperatively with key global stakeholders – including regulators, financial services institutions, consumer groups and educators – to reach our vision.

Oversight and regulation As a member of FPSB’s Regulation Advisory Panel, FPI Chairperson Gerhardt Meyer joined representatives from FPSB member organisations around the world to contribute to FPSB’s global position paper, Regulation and Oversight of the Financial Planning Profession. The paper articulated those elements of financial planning that lend themselves to regulation and oversight as an activity separate from other forms of financial services, particularly product-based advice. In the paper, FPSB supported professional bodies working closely with regulators to oversee the financial planning profession.

Noel Maye,

Chief Executive Officer of the Financial Planning Standards Board

FPSB is a nonprofit organisation that sets global professional standards for financial planning. FPSB owns the CFP, Certified Financial Planner® and CFP® logo trademarks outside the United States of America. The FPI is the marks licensing authority for the CFP® marks in South Africa, through an agreement with the FPSB.

Understanding the profession The FPI was one of 10 FPSB members to conduct a job analysis in 2010, using a template questionnaire based on FPSB’s Financial Planner Competency Profile. The resulting data provided a platform for the FPI to create CFP certification examination specifications for South Africa, and for FPSB to create a global set of examination specifications for CFP certification globally. The job analysis also contributed to a greater understanding of the practice of financial planning in South Africa and around the world.

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FPI Annual Report 2011 | Setting the Standard

Statutory BodiesFrom the Regulators Statements of Support

Financial Services Board

FAIS Ombud I was humbled by my appointment as the Ombud on 1 March 2010 and thankful for the confidence shown in me by the

The FPI has for many years been recognised as an important cog

Minister of Finance. During my three

in the role that it plays in the South African financial services

years as Deputy Ombud, I was involved

industry.

in many of the decisions that set the tone and direction of the institution that is

Its internationally recognised CFP® accreditation and other

already firmly established within the financial services sector. I

educational initiatives are increasingly been sought by

am thankful for having a formidable team of professionals in our

professionals in the industry which goal gels with one of the main

office who are committed to the cause of protecting consumers

objectives of the Financial Advisory and Intermediary Services

and strengthening the integrity of the financial services industry.

(FAIS) Act.

During November 2010, I was invited to take part in FPI’s Financial Planning Month campaign as a panel member for a

The FSB is proud to be associated with the FPI and values not only

CNBC Africa special four part television series titled Securing

the ongoing interaction with the Institute but also the role played

your Financial Future sponsored by the FPI. The show was

by the members in striving towards greater investor protection in

dedicated to informing consumers about their rights and the

a continuously changing environment to the ultimate benefit of

recourse available to them. We encourage this and other initiatives

the South African financial services consumer.

of this nature as we believe that a lot more needs to be done to raise awareness amongst consumers about the services and the

Dube Tshidi

complaints mechanism available to them. We believe that the

Executive Officer Financial Services Board

annual increase in the number of complaints lodged at our office is largely due to increased consumer awareness which has developed over time. In the short time that the office has been in existence, it is our view that we have only scratched the surface. Many South Africans are still unaware of the existence of the FAIS Ombud.

In so far as setting standards and encouraging compliance with the law, this office will support the FPI initiatives. In this regard we look forward to working with the FPI.

Noluntu Bam CFP®, FAIS Ombud

FPI Annual Report 2011 | Setting the Standard

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Statutory Bodies Insurance Sector Education and Training Authority

South African Qualifications Authority Supporting world-leading development

One of INSETA’s core values is “partner to enable others”. INSETA is very proud of its association with Financial Planning Institute (FPI) and includes supporting the FPI in its role of professional development in the Financial Services Sector.

The South African Qualifications Authority (SAQA) understands the NQF as a framework for communication, collaboration and coordination across education, training, development and work that: • Integrates learning and career pathways.

A ground breaking project that INSETA is partnering with the FPI on is the Further Education and Training (FET) Higher Education and Training (HET) articulation project whereby learners completing the level 5 Wealth Management Diploma will be able to progress to second year B. Comm. at the University of the Western Cape. The Colleges in this project are Western Cape based. The Financial Planning Institute was the initiator of this project and in partnership with INSETA is a nationally replicable model and will contribute greatly to the transformation of the FET environment.

• Ensures quality.

• Facilitates access, progression, articulation and redress.

• Contributes to a better life for all.

This can only be achieved with the support of all NQF stakeholders, partners and role players.

I am pleased to say that the FPI has been exemplary in its commitment to SAQA and the NQF through its leadership, which continues through its present CEO, Godfrey Nti. Not only has it ensured that FPI financial planner learning pathways are NQF-aligned and integrated across further and higher education and training levels, but it has also made a significant contribution to SAQA through its past CEO, John Arnesen, as a SAQA Board member and now Project Director: NQF Advocacy.

The FPI has always been supportive of INSETA and is represented on INSETA’s advisory Committees. In addition Mr Godfrey Nti, the Chief Executive Officer of FPI also serves on INSETA’s Audit Committee.

We look forward to strengthening our future relationship and to make meaningful contribution to the sector that we both serve.

The NQF Act, which was introduced in 2008 to further enhance the NQF (which was originally established in terms of the SAQA Act of 1995), now provides for the recognition of professional bodies and the registration of professional designations within the NQF. The FPI has proactively supported this world-leading development.

Sandra Dunn,

Chief Executive Officer INSETA

We look forward to receiving the FPI’s application early in 2012 for its recognition as a professional body and the registration of its professional designations on the NQF.

Samuel Isaacs,

Chief Executive Officer of the South African Qualifications Authority

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FPI Annual Report 2011 | Setting the Standard

Education Partners Statements of Support

Nelson Mandela Metropolitan University Changing perceptions

Milpark Business School Commitment and contribution to the upliftment of financial planning standards

In the midst of an eventful year for financial planners, it is the people committed to making a difference who will become beacons in our industry. Consumers want financial planners they can trust, who are competent and ethical practitioners. Financial planners want an environment in which their work is valued, respected and rewarded, and they wish for financial planning to be recognised as a distinct profession.

Milpark Business School is proud to be associated with the FPI as one of its preferred education partners.

While most people would not hesitate to contract experts for everyday tasks such as fixing geysers or drafting plans for building alterations, few people in South Africa realise the importance of consulting a financial planner for help with managing their financial affairs.

This situation is the result of some unscrupulous product pushers who operated in the pre-FAIS era, but is also because many people think that they have their financial matters under control if they belong to a pension fund and own a life policy.

The FPI has been instrumental in bringing about a new environment for financial planning in which both the consumer and financial planner will benefit. At the Nelson Mandela Metropolitan University (NMMU) we are proud to be associated with the FPI as strategic partners in delivering undergraduate and postgraduate financial planning qualifications that will assist the FPI in developing financial planning into a profession.

Financial planning is about so much more. It is about enabling you to reach your goals. Whether those goals entail enjoying a carefree retirement, providing a good education for your children or saving for a deposit on a new car, they are your life goals and are thus important enough to warrant expert advice. A qualified financial planner will conduct a proper needs analysis for you, based on your goals.

In supporting the growing academic environment and the development of high-level financial planning practitioners, the FPI is making a difference to the perception of the financial planning industry, and is assisting the public to recognise the value of good advice.

We often read news stories of collapsing pyramid schemes and other fraudulent activities where investors lose their life savings.

Invariably the investor’s response is: “But I trusted my financial planner!” The big question for many is where to find a trusted financial advisor.

Jackie Palframan CFP®,

Head of Financial Planning Programmes at the Nelson Mandela Metropolitan University

With its rich history and international affiliations, the FPI provides South Africans looking for financial planning assistance with the peace of mind that comes from dealing with a Certified Financial Planner®. A CFP® professional is competent, has the necessary experience and is held accountable in ways that exceed the minimum legislative requirements.

Milpark Business School remains committed to providing quality education to the current and prospective members of the FPI across all levels. We commend the FPI on its exceptional commitment and contribution to the upliftment of financial planning standards in South Africa over the past year. We are proud to be associated with the FPI and pledge our continued support to the institute in its future endeavours.

Julian van der Westhuizen,

Chief Executive Officer of Milpark Business School FPI Annual Report 2011 | Setting the Standard

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Education Partners University of Johannesburg

University of the Free State

Encouraging ethical and professional behaviour

Longstanding education relationship

The FPI (previously known as the ILPA) has been committed to high standards of skills, abilities and knowledge since its inception in the early 1980s. For the past 30 years, the FPI has been the only organisation in the financial services industry in Southern Africa that is committed to professional financial planners. The FPI underlined this commitment by becoming a member of the Financial Planning Standards Board (FPSB) in 1999, and it is still a member to this day.

At the University of Johannesburg (UJ) we are committed to delivering employable students to the corporate world. It is vital that students who choose financial planning as a career understand the importance of ethical behaviour as well as of establishing themselves as individuals worthy of their clients’ trust.

FPSB is a global nonprofit association that, through its members, manages, develops and operates certification, education and related programmes for financial planning organisations. This enables them to benefit and protect the global community by establishing, upholding and promoting worldwide professional standards in financial planning.

The FPI’s drive towards instilling financial planning as a profession has created an awareness in consumers that they have a right to demand professional and ethical behaviour from their financial advisors. This will go a long way in ridding the industry of some of the unwanted elements that have tarnished its reputation. At UJ, we are proud to be associated with the FPI as a strategic partner.

The University of the Free State’s support for the FPI is reflected in its longstanding relationship of 25 years with the institute – first as the quality assurers of the FPI’s Board Examination (professional examination) for almost 15 years, and then as the first education provider to be accepted and approved to deliver a recognised financial planning qualification that allows FPI members to assume the most prestigious status as a CFP® professional. In addition, for five years the university was the only provider of this qualification.

With the support of the FPI it is easy to develop a culture of professionalism among the financial advisors of the future that will serve the public.

Carl Anschutz CFP®,

Programme Manager of the Honours BCom (Financial Planning) at the University of Johannesburg

The University of the Free State, through its Centre for Financial Planning Law, certainly values the relationship and association with the FPI as one of the recognised and approved universities delivering financial planning education in terms of FPI and FPSB standards.

Wessel Oosthuizen CFP®,

Director at the University of the Free State’s Centre for Financial Planning Law

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FPI Annual Report 2011 | Setting the Standard

Our Accredited Education Partners Education Partners University of Stellenbosch

University of the Western Cape Further Education and Training Institute

Smoothing the way for professional integration

Coherent articulation pathways in financial planning qualifications

Since the inception of the Postgraduate Diploma in Financial Planning at the University of Stellenbosch (US), the FPI has been instrumental in ensuring a solid base for the programme.

The University of the Western Cape Further Education and Training Institute (UWC FETI) would like to thank the FPI for its unstinting support during 2010. The FPI’s guidance and contribution has directly assisted in the FET College provisioning of financial planning curricula at a higher education level.

After extensive discussions with the FPI, collaboration with the Centre of Law at the University of the Free State, and many hours of planning and preparation, the programme was launched in February 2005. This was celebrated with a welcoming function that was attended by various stakeholders, including the President of the FPI.

The FPI’s work with the university and UWC FETI has enabled us to develop a coherent articulation pathway in financial planning qualifications, from NQF Level 5 in FET Colleges through to the Advanced Diploma in Management Studies at NQF Level 6 at the university’s School of Business and Finance. The credibility and recognition of the FPI as a professional quality assurance body for the financial planning industry has been critical to the development of this articulation pathway.

Frequent visits and input from the FPI, including visits by its international executive officers, kept the US on the forefront of CFP® certification and smoothed the way for graduates to integrate into the professional ranks of the FPI. Over the past six years, the Department of Business Management, in partnership with the FPI, has continued to offer students formal postgraduate studies, affording them global CFP accreditation, and successful US candidates are awarded their CFP certificates during an annual FPI/US Induction Ceremony.

The US is very proud of the consistently high pass mark that its students have achieved in the annual CFP examination.

UWC FETI’s partnership with the FPI has enabled it to contribute to the integration of education and training at a national level. Through the piloting of a professional qualification at higher education level, UWC FETI is able to demonstrate that professional workplace training can be integrated with disciplinary knowledge qualifications through the involvement of Department of Higher Education and Training sectoral bodies, namely FET Colleges, higher education institutions and the Insurance Sector Education and Training Authority (INSETA).

The US regards the FPI as the local custodian of the international CFP mark and will continue to strive towards maintaining the international standards of quality and verification for the financial planning profession.

We look forward to consolidating this partnership with the FPI in 2011 through the development of a nationally replicable model for FET higher education articulation, and we are proud to be associated with the FPI.

Prof Johann de Villiers,

Dean of the Faculty of Economic and Management Sciences at the University of Stellenbosch

Seamus Needham,

Department of Research and Planning at the University of the Western Cape Further Education and Training Institute

FPI Annual Report 2011 | Setting the Standard

34

Industry From Industry Bodies Statements of Support

Leon Campher,

Chief Executive Officer of the Association for Savings & Investment SA and

Association for Savings & Investment SA

Peter Dempsey,

At the forefront of continuous professional development

Deputy Chief Executive Officer of the Association for Savings & Investment SA

Financial Intermediaries Association of Southern Africa Professionalising the financial planning industry

The Association for Savings & Investment SA (ASISA) represents the majority of South Africa’s asset managers, collective investment scheme management companies, linked investment service providers, multimanagers and life insurance companies.

At the end of December 2010, a total of 160 member companies managed R3.2 trillion in assets.

One of the core strategies of the Financial Intermediaries Association of Southern Africa (FIA) is to support the current move in the financial services industry towards greater professionalism.

ASISA aims to be an active participant in creating an environment that promotes equal opportunities for its members through holistic legislation, while at the same time considering the interests of consumers and ensuring the sustainability of the industries it represents and the intermediaries who promote these industries and their products. ASISA will work towards promoting a culture of savings and investment in South Africa by playing a significant role in the development of the social, economic and regulatory framework in which its members operate, thereby assisting members to serve their customers better.

In order for any industry to claim that its members have a ‘profession’, it is essential to have a governing body or authority that not only takes responsibility for setting guidelines and standards, but is also involved in equipping its members – in this case, financial planners – with the necessary knowledge and information to carry out their careers professionally.

The FPI has certainly proven itself as an organisation that sets high standards, both for itself and for its stakeholders in South Africa. The FPI’s six-step approach to financial planning is yet another example of its commitment to raising the bar, thereby supporting the move towards professionalising the financial planning industry. Perhaps even more important is the fact that these standards are also aligned with international trends.

ASISA firmly believes that intermediaries who render sound and professional advice to consumers are a vital component of a healthy savings culture. We know that the vast majority of our citizens do not have enough life and disability protection. In addition, less than 10% of our citizens are able to retire and enjoy financial security or comfort. These facts reinforce the value of sound, professional advice.

It is every financial planner’s goal to obtain CFP® professional status, and I am certainly proud of my own. Congratulations to the FPI for assisting so many of its members through its hard work and determination.

We acknowledge the role that the FPI has played over nearly three decades in helping to professionalise the financial planning and advice sector within South Africa. The FPI is at the forefront of the continuous professional development of the South African advice profession.

Justus van Pletzen CFP®,

Chief Operating Officer of the Financial Intermediaries Association of Southern Africa

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FPI Annual Report 2011 | Setting the Standard

Industry Bodies South African Savings Institute Instilling a savings culture

We are privileged to have had the support of the FPI on a number of our key initiatives over the years, in particular its direct participation in the 2010 Festive Season Campaign.

During this campaign we urge consumers to exercise caution and restraint in their spending leading up to the holiday season, reminding them that the new year comes with new and ongoing financial commitments. At the press conference that normally marks the launch of the campaign, we were pleased with the contribution of the FPI by way of an awareness of the benefits of financial planning to consumers.

It is common knowledge that the low levels of financial literacy in South Africa contribute directly to our low rate of savings.

The two initiatives that we at SASI drive annually are the Teach Children to Save and the Varsity Literacy Campaign, aimed at young schoolchildren and university students respectively.

Over the years we have had positive and active participation on both these campaigns from the FPI, and we look forward to its continued support in the years ahead as we attempt to instil a culture of savings in our youngsters.

There can be no doubt that savings and financial planning are linked, and we are honoured to have the FPI endorse and support the work we do, particularly as the FPI is the gatekeeper of the profession of financial planning and plays a vital role in the financial services sector.

Elizabeth Lwanga Nanziri,

Chief Executive Officer of the South African Savings Institute

FPI Annual Report 2011 | Setting the Standard

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2010 Headline News 2010 FIFA World Cup South Africa

Visitors praised the warm welcome and infectious enthusiasm of all South Africans. The national flag was evident everywhere and the honking of vuvuzelas was a permanent feature in the streets. Perhaps more important than anything else, the World Cup succeeded in changing perceptions of the country and the continent. Africa, and South Africa in particular, has now proved beyond a shadow of a doubt that its people are ready and willing to host international events, and that they will give visitors a taste of African hospitality to take home with them.

In May 2004, FIFA president Sepp Blatter uttered two words that will ring in our hearts and minds for years to come: “South Africa”. Beating Egypt and Morocco in the bidding process, South Africa became the first African country to host this prestigious event.

Preparations for the tournament were not without their challenges. Some stadiums had to be revamped or rebuilt, while others were built from scratch.

Infrastructure improvements were necessary so that spectators could travel the vast distances between venues. Foreign visitors were concerned about safety and security, and the media abroad was fraught with tales of the certain death awaiting those who would risk coming here.

Did you know?

• South African winger Siphiwe Tshabalala was the first player to score a goal in the 2010 World Cup. • Soccer City is the largest stadium in Africa.

• Bafana Bafana was the lowest-ranked host country team in World Cup history.

Then, on 11 June, a warm winter sun shone onto the calabash formation of Soccer City on the opening day of the tournament. The sound of 90,000 vuvuzelas filled the air, and the green-and-gold Bafana Bafana players made their way onto the field. At that moment the world knew that it would experience a World Cup like no other.

• Green Point Stadium has a retractable dome to protect spectators from nasty weather.

• The tournament had a total attendance of 3.18 million people.

• The match ball for the tournament generated controversy as some players argued that the new design made the ball unpredictable.

Bafana Bafana left the tournament during the group stages after valiant efforts against Mexico, Uruguay and France, but we all then rallied behind Ghana to lift high the African flag, until they lost against Uruguay in the quarter-finals. The final between the Netherlands and Brazil saw the latter winning its first World Cup title ever, but the true victory was for South Africa.

• French player Patrice Evra blamed vuvuzelas for France’s poor performance in the tournament.

• Magaliesburg decorated the entire town in Portuguese style as a sign of welcome to the Portuguese team.

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FPI Annual Report 2011 | Setting the Standard

From 2010 Industry Headline News Local Headlines

Increase in electricity tariff In February, the National Energy Regulator granted Eskom a 24.8% tariff increase for the 2010/11 financial year, as well as similar increases for the following two years. The anticipated consequences of the price hike include the loss of an estimated 250,000 jobs and severe financial implications for energy-intensive industries such as mining, the automotive sector and agriculture.

However, there can be no doubt that additional powergeneration capacity and more stable supply are key to economic development.

Soweto paints itself blue In May, Blue Bull supporters made their way to the Super 14 final in their droves. But instead of going to Loftus Versveld, the home of the Blue Bulls, they went to Orlando Stadium in Soweto. An all-South-African final between the Blue Bulls and the Stormers would have been memorable enough, but the traditional soccerobsessed city changed its colours from the black and yellow of the Orlando Pirates and Kaizer Chiefs to the Blue Bulls blue. Complete with vuvuzelas and shouts of “Soweto loves the Bulls”, South African rugby spectators were shown how to celebrate, Soweto style.

Box office hit The year 2010 saw the release of the science fiction thriller District 9. Directed by Johannesburg-born Neill Blomkamp and shot in Chiawelo in Soweto, District 9 took South African film making to new levels, following on the heels of acclaimed films such as Tsotsi and Yesterday. District 9 was nominated for four Academy Awards and earned $37 million in its opening weekend.

From BRIC to BRICS In December, South Africa was invited to join the BRIC group, whose members are Brazil, Russia, India and China. These four countries have in common large emerging economies, and it is estimated that they will account for 61% of global growth in 2014. The group is now officially known as BRICS, with the ‘S’ denoting South Africa’s membership. Membership of BRICS offers South Africa a unique opportunity to influence African economic growth and investment.

Better Matric results The year 2010 saw a 7.2% increase in the Matric pass rate to 67.8%, with the increase being evident in all nine provinces. This marks only the third time since 1994 that so large an increase has been achieved, and this despite a longer winter holiday to accommodate the World Cup, as well as a nationwide teachers’ strike just weeks before the final exams.ate, Soweto style.

Rhinos top of mind Last year saw a total of 333 rhinos killed by poachers – nearly three times the number killed in 2009. The increase in the number of poaching incidents is primarily the result of rising interest in rhino horns from Asia, where the horns are used as an ingredient in traditional medicine. On the bright side, however, approximately 162 poaching-related arrests were made in 2010, and the cause of the rhino is now top of mind for many South Africans.

International headlines On 12 January, a 7.0 magnitude earthquake hit about 25 kilometres from Port-au-Prince, the capital of Haiti.

The earthquake is one of the deadliest on record and over 230,000 people lost their lives.

15 minutes to the airport In June 2010, the first phase of the Gautrain network – from Sandton to OR Tambo International Airport – was completed. Instead of an hour on the roads, a short 15-minute train drive will get you from the underground station beneath Rivonia Road right up to the Central Terminal at the airport. Once the Gautrain network is complete, it is estimated that 100,000 people will use the train each day, minimising traffic on the N1 by 20%.

On 20 April, the drill rig Deepwater Horizon exploded off the Louisiana coast in America, resulting in a threemonth oil spill. An estimated 4.9 million barrels of oil were released into the ocean, causing extensive damage to marine and wildlife habitats.

Leading South Africa August 2010 saw the launch of LeadSA, an initiative started by Primedia Broadcasting and supported by Independent Newspapers. By encouraging ordinary people to commit to ‘doing the right thing’, LeadSA aims to make South Africa a better country for all who live in it. From placing pointspeople on busy intersections through to fixing potholes, arranging crime summits and exposing corruption, LeadSA shows how even the smallest gestures by everyday people can go a long way towards improving South Africa.

On 5 August, a cave-in at a copper-gold mine in Chile leads to 33 miners being trapped underground.

After 69 days and the assistance of local and foreign governments, all miners were brought to the surface in an event that is estimated to have been watched by 1 billion people worldwide.

On 25 July, Wikileaks makes public over 90,000 classified documents on the war in Afghanistan, following with a leak of documents related to the war in Iraq in October.

The FPI Team

CEO’s Office Godfrey Nti (CEO) and Sandra Taylor (PA)

Technical Services From the left: Almo Lubowski and Carla Letchman

Marketing and Business Development From the left: Mersey Booysen, Tsholofelo Dihutso and Adel Victor

Certification and Membership Services Back, from the left: Zanele Xaba, Phillip Kruger, Anthony Campher, Vusi Xaba and Joan Sallie Front, from the left: Marlyn Veldman, Hannah Brill and Francine Creighton

Examination Body Department Back, from the left: Eugene Vermeulen, Anna Fick and Andre Rossouw

Finance and Management Services Back, from the left: Carol Hardie, Yolanda Grobler, Ohna Norval, Cathryn Stevens, Tinyiko Khoza, Rosie Lekhelebane

Front, from the left: Lucille Wessels, Renny Mmusi and Toni Santana

Front, from the left: Nomaxabiso Tyhutyhani, Batwa Mzamane and Mpho Nkuna

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FPI Annual Report 2011 | Setting the Standard

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