FPI | Annual Report 2011

Financial Planning Institute of Southern Africa THE PROFESSIONAL STANDARD

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Annual Report 2011

FPI at a Glance

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he Financial Planning Institute of Southern Africa (FPI) is a non-profit professional body formed in 1981 as the Institute of Life and Pension Advisors (ILPA) to improve levels of professionalism in the financial planning industry. Today, we are regarded as the leading independent professional body for financial planners in South Africa. Through our global partnership with Financial Planning Standards Board (FPSB), we are the only institution in Southern Africa able to offer the CERTIFIED FINANCIAL PLANNER®/CFP® certification.

We are uncompromising in establishing and maintaining professional financial planning standards in Southern Africa, and play a major role in ensuring that the public has access to competent financial planners who are professionally qualified, experienced and have agreed to abide by our Code of Ethics and Professional Responsibility. Many top financial institutions have adopted us as an independent standards partner, and our members include both general practitioners and specialists in particular branches of financial planning.

The year 2011 marked the 30th year that the FPI has been in existence as the professional body for financial planners in South Africa. When considering the first ILPA examinations offered in the early 1980s to the current qualifications, competency levels and professionalism – as well as the evolution of the financial services industry – we can be proud of our industry and members for their commitment to the journey to becoming a recognised and respected profession.

Vision Professional financial planning for all.

Mission To advance and promote the pre-eminence and status of financial planning professionals, while at all times acting in the interests of the society (community, constituency) which the profession serves, by:  Improving the quality and accessibility of professional financial planning for all in Southern Africa.  Acting as advocate for professional financial planning, building a recognition of the importance and need for such planning by the general public.  Providing a framework within which members can achieve qualifications and maintain competence to create greater value for their clients, practices and employers.  Ensuring that members maintain the highest ethical standards in the pursuance of their profession.  Providing a leadership role within financial services by providing balanced, credible input and commentary to government and the public.  Facilitating transformation within the profession.

CONTENTS Foreword by Harry Brews

FPI Timeline

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Support from Statutory Bodies

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Financial Services Board Insurance Sector Education and Training Authority South African Qualifications Authority

Chairperson’s Report

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Chief Executive Officer’s Report

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33 33 33

Support from Affiliate Organisations

The Year that Was Re-evaluating the Four Es Upholding the Standards Together Increasing Access to Quality Education Thought Leadership Advocating for Professionalism Mouthpiece for the Industry Transition to Greater Heights Successfully Weathering the Storm

8 10 12 14 16 18 20 22

Industry Sector Group Reports Client Engagement Employee Benefits Estates and Trusts Healthcare Investment Planning Risk Planning Tax Planning

34 34 34

Support from Education Partners Further Education and Training Institute Milpark Business School Nelson Mandela Metropolitan University Stellenbosch University University of the Free State University of Johannesburg

36 36 37 38 38 39

Support from Industry Bodies 25 25 26 26 27 28 28

Regional Committee Reports Central Region Eastern Cape Region Gauteng Region KwaZulu-Natal Region North Region Western Cape Region

Business Unity South Africa Ethics Institute of South Africa Financial Planning Standards Board

29 29 30 30 31 31

Association for Savings and Investment South Africa Black Brokers Forum Financial Intermediaries Association of Southern Africa South African Savings Institute

40 40 41 41

Then… …And Now Board Members FPI Team

42 44 46 47

Foreword

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first became involved in what is today the Financial Planning Institute of Southern Africa (FPI) through my role as Liberty Life’s representative on the Standing Committee on Agency Matters (SCAM). SCAM was an important body in the life assurance industry, reporting directly to the controlling body of the industry – the Management Committee of the Life Offices’ Association (LOA).

This was in the 1970s, and most of us in senior positions in the industry were well aware of the public perception that many life assurance agents were more like used-car salesmen than investment advisors. This may well have been the case, with many agents having little knowledge of the nuances of inflation, taxation, investment options, estate duty, wills and the like – in other words, ‘personal financial planning’.

The industry was doing very little training in this regard. Agents were simply taught how to read their rate books. Their income was commission-based, and many would sell the products that gave them the highest commission. This was not good for the industry, and those who represented major life offices on SCAM (and its successor, the Standing Committee on Intermediary Matters, or SCIM) recognised the need to introduce appropriate training and education, as well as effective methods of controlling the discipline and ethics of intermediaries.

Mike van Greunen, Old Mutual’s representative, was Chairperson of SCIM. It was he who motivated a body of appropriately qualified people, under the leadership of Dr Nigel Wigram, Executive Director of the LOA, to visit the United States to study the underlying principles and activities of what was then the American Society of Chartered Life Underwriters. This was a body of qualified professionals who were educated, trained and controlled in terms of ethics to advise their clients on financial affairs.

In the United States, no lawyer, accountant, bank manager or investment manager would dream of advising a client on the structure of his or her personal financial affairs without consulting a Chartered Life Underwriter (CLU). CLUs were the ultimate advisors

on personal financial affairs, and their education and training were designed to make them so.

The team’s visit to the United States and their reportback literally revitalised our industry. Every representative body enthusiastically supported the initiative, and each party nominated very senior and appropriately qualified representatives as members of the Council mandated to start the process.

Our first meeting was held in July 1981. We wanted to name the proposed new body the ‘Institute of Financial Planners’, but at that stage there was already a worldwide professional body under that name controlling the standards of education and ethics of financial planners.

We therefore started as the Institute of Life and Pension Advisors (ILPA), but always with the intention of changing the name to what it is today – the Financial Planning Institute.

Our first job was to set up an education programme, combined with a binding code of ethics. It took the best part of 18 months to put those programmes together.

ILPA was not to be an educating body; rather, its function was to set and control the required standards of expertise and ethical behaviour.

It would be ILPA’s responsibility to certify the qualification and capability of those who applied to write our examinations, and to watch over their behaviour once they had been granted certified status.

The University of the Free State was the first to come on board as an educating body. Since then, there have been a number of organisations offering education of the standard we require, and most life assurance companies, the larger insurance broker organisations and investment companies have introduced appropriate education and training programmes of their own. We set the standards high at inception; they have been maintained at that high level, and will remain so.

In the early 1980s, things were already moving in the right direction. Nobody challenged what we were doing.

We were all totally in accord, and it was like a wideopen highway. We knew where we were going, and everything went well.

As a result of the improvement in our education and control of ethical behaviour, South Africa was accepted by the international body. Today, the FPI in South Africa is highly regarded throughout the world. We are one of the largest affiliated bodies, and are proud to be part of the team mandated to formulate certification standards that are acceptable worldwide.

I am exceptionally proud to have been involved in the establishment of what is today the FPI, and I wish the Institute all the best for the next 30 years.

Harry Brews, CFP® Chairperson from 14 July 1981 to 1 June 1986

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Timeline

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nstitute of Life and Pension Advisors (ILPA) is formed, and professional examinations are developed for professional membership.

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strategy conference of the ILPA Council is held, at which a generalist level (eventually the Diploma in Financial Planning) and specialist level (eventually the Advanced Postgraduate Diploma in Financial Planning) are conceptualised, as well as the tiered certification structure (RFP™, AFP™ and CFP® professional).

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he new name, ‘Financial Planning Institute of Southern Africa’, or FPI, is introduced, as well as the Financial Planner of the Year Award and the first Postgraduate Diploma in Financial Planning, offered through the University of the Free State.

1981

1986

1996

1998

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LPA signs an agreement with the then University of the Orange Free State to moderate and verify the standards of the professional examinations.

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he CFP® mark is brought into South Africa on licence from the Certified Financial Planner Board of Standards Inc. in the United States, and the first Associate examinations through ILPA are introduced.

2000

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he AFP™ and RFP™ professional designations are introduced.

2002

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he FPI is registered as a not-for-profit Section 21 company. Financial Planning Standards Board (FPSB) is formed in the United States with the FPI as one of the founding members.

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2004

2005

he FPI’s professional designations, RFP™, AFP™ and CFP® mark, become the first-ever designations to be recorded on the National Qualifications Framework (NQF) by the South African Qualifications Authority (SAQA).

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he Board strategy is reviewed to align the Institute’s mission, vision and activities to being a true professional body, and the National Certificate: Wealth Management is introduced.

2007

T 2009

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he FPI celebrates its 30-year anniversary.

he FPI is appointed by the Financial Services Board (FSB) as an examination body for the development and delivery of regulatory exams.

2011

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Chairperson’s Report Solid Foundations for Future Growth There is general acknowledgement around the world that emerging markets will play an increasingly important role in charting the course for the future. This also rings true within the financial planning industry.

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s a founding member and affiliate of Financial Planning Standards Board (FPSB), the Financial Planning Institute of Southern Africa (FPI) plays a pivotal role in the affairs of its mother body. In addition to having a close working relationship with FPSB in terms of ensuring that the FPI benchmarks against international best practice and standards, one of the FPI’s directors, Prem Govender, CFP®, sits on the Board of FPSB, and

Wessel Oosthuizen, CFP®, who is a member and former director of the FPI and currently director at the University of the Free State, which offers financial planning qualifications, has worked with FPSB on a number of projects. These are merely two examples of the way in which the FPI has established itself as a respected member of FPSB, and one that is adding a significant amount of value.

The global financial planning industry is looking to South Africa and other emerging markets to increase the number of CFP® professionals and contribute significantly to the growth of financial planning across the world, and it is with this in mind that the FPI spent 2011 analysing and evaluating its core functions and value offerings.

Maintaining Pre-eminence

Solly Keetse, Chairperson

It is noteworthy that the FPI is not a trade association that lobbies for discounts and other benefits on behalf of its members. Rather, the FPI is a standards-setting body tasked with upholding the professionalism of the CFP designation and other FPI designations.

You may ask whether this means that the FPI is an elitist organisation. In a sense, it is. By its very definition, an organisation dedicated to professionals is elitist, in that its members have been rigorously evaluated in terms of their education level, ethics and experience, and through examination. There is nothing wrong with being elitist in this way, as long as your doors are always open to others who would like to be evaluated against your strict standards.

As such, the FPI’s strategy going forward is premised very much on two key tenets: upholding the preeminence of the CFP designation, and expanding access to the pathways through which people can gain access to the CFP designation.

In terms of the pre-eminence of the CFP designation, it is important to remember that the mark remains the only distinguishing feature in South Africa between a professional financial planner and a general financial advisor. Within the context of the Financial Advisory and Intermediary Services (FAIS) Act, the advice given by financial planners and advisors is defined in terms of its relationship to a product. In other words, it presupposes that the sale of a product should be the focus of all financial planners and advisors when advising customers on financial matters.

However, a professional financial planner is dedicated to putting together a financial plan for a client that may or may not result in the sale of a product. It is therefore a far more holistic and complex approach than the simple

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30 selling of products. This simple explanation demonstrates the importance of attaining legal recognition for financial planning as a profession, since this would set standards and levels of professionalism which will be expected of all financial planners. Obtaining legal recognition for the profession, as well as protection of the term ‘financial planner’, is something that the FPI will continue to lobby for going forward.

Board Succession Planning

During 2011, significant changes took place in the Board of Directors of the FPI (‘the Board’) in terms of the way in which the leadership of the Board is appointed. It is customary for the Chairperson and Vice-Chairperson to spend a significant amount of time throughout the year on the joint mission of advocating the profession to policy makers, regulators and other industry players. This also involves a number of international trips and engagements.

However, in the past, once the Chairperson vacated the position, an entirely new election would take place and there would be no guarantee that the ViceChairperson would take over the Chairpersonship. The result of this state of affairs was that the Board risked losing the institutional memory of the Vice-Chairperson, if he or she was not elected to be Chairperson. In addition, significant financial and other resources would have been spent on assisting the Vice-Chairperson to develop his or her knowledge, with the expectation that the Institute as a whole would be able to reap the benefits.

In order to address this, the Articles of Association (‘the Articles’) of the FPI were changed in 2011 at a Special General Meeting of members so that, if the Chairperson is to vacate the post, the Vice-Chairperson will automatically take over the position. As such, the designation has also been changed from ViceChairperson to Chairperson-Elect. Thereafter, elections will be held for a new Chairperson-Elect.

Changes to Board Composition

In 2011, we said goodbye to two directors whose terms came to an end, namely Artwell Hlengwa, AFPTM, and Sheshi Kaniki, and also welcomed two Board members in their place, namely Ben Raseroka and Bongani Sithole.

I would like to congratulate these two directors on their appointment and I believe that their industry, leadership and Board experience will stand the FPI in good stead.

Finally, I would like to take this opportunity to thank Gerhardt Meyer, CFP®, who preceded me as Chairperson of the Board, for his extraordinary vision and leadership. He has made an enormous contribution to making the FPI the premier professional body in the financial services industry, and I wish him the best of luck in all his future endeavours.

Adapting with the Times

The Companies Act of 2008 (‘the Act’) came into force in 2011, so the Board spent a significant amount

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of time during 2011 analysing the Act to determine its impact on the way in which both the Board and the FPI are governed. This began with a gap analysis to determine where our governance processes stand in relation to the requirements of the legislation.

In terms of the Act, the FPI is no longer regarded as a Section 21 company, but rather as a nonprofit company (NPC). NPCs have less onerous governance requirements than public companies and state-owned enterprises, but there is nonetheless a move towards shifting decision-making power from the shareholders to the Board. So, for example, decisions that previously needed to be made by shareholders at an Annual General Meeting can now be made directly by the Board. However, with this increased decision-making power come increased responsibilities, and directors can now be held personally liable in the execution of their fiduciary duties.

Companies have been given 18 months to align their existing constitutional documents and processes to the requirements of the Act, so the year 2012 will see more work being done by the Board in this regard.

Furthermore, although NPCs are not required to comply with all requirements of the Act, such as having advanced governance structures in place, like the Audit and Risk Committees, the Board is considering maintaining these structures in order to enhance its internal governance processes and maintain the transparency of the FPI. Such elements will be finalised prior to the publishing of our revised memorandum of incorporation (i.e. the Articles).

The Board is also conducting a similar review of the King III Codes of Good Corporate Governance with a view to ensuring that the Institute is in compliance therewith.

Looking Ahead

The year 2012 will see the new FPI strategy taking centre stage, and the Board will focus on ensuring the successful implementation of the strategy. The Board has extended the contract of Godfrey Nti, the Chief Executive Officer (CEO) of the FPI, for five years and has given him five specific key performance areas (KPAs) that he will need to address in order to implement the strategy.

These KPAs relate to aspects such as transformation, growing the membership base, the efficient management of human and financial resources, raising public awareness of the FPI and the financial planning profession, and compliance with international standards set by FPSB. Over the past years, the CEO has demonstrated his ability to lead the FPI team to new heights, and I have every confidence in his ability to rally support for the new strategy.

Solly Keetse, CFP® Chairperson

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Chief Executive Officer’s Report

A Year of Introspection The year 2011 was an important milestone for the FPI. We looked back at the founding principles of the Institute, took stock of the challenges that remain, and developed a new strategy that will see the FPI uphold its standing as the premier professional body in the financial services sector and position financial planning as a distinguished profession which can make a meaningful difference in the lives of all South Africans, with the CFP® designation as its symbol of excellence.

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n 1981, a group of seasoned financial planners came together with a clear goal in mind: to develop financial planning into a profession by raising the levels of competence and professionalism in the financial services industry. They realised that the level of competence needed to be raised for the good of the public and for those practitioners who wanted to make a decent career in the industry. After all, people stake their entire financial wellbeing, and often their livelihoods, on the advice of financial planners, so the advice needs to be sound. And so the Institute of Life and Pension Advisors (ILPA) was formed.

As the years passed, ILPA reached a number of critical milestones. Professional examinations were introduced in 1986, and the CFP mark made its debut in South Africa in 1998. When the name was changed from ILPA to the Financial Planning Institute of Southern Africa (FPI) in 2000, the AFPTM and RFPTM marks were introduced to further strengthen career pathways to CFP certification.

Godfrey Nti, Chief Executive Officer

So, in 2011, it had been just over 10 years since the name change to FPI, 10 years since the last major review of its strategy, and 30 years since the establishment of ILPA. Clearly, these milestones indicated that it was time to take stock of the FPI’s achievements and reassess the way forward. This gave birth to the FPI’s new strategy, which is centred on the pre-eminence of the CFP designation.

The Quest for Professionalism

Thirty years since the FPI’s inception, our quest for professionalism in financial services is stronger today than ever before. The FPI (then known as ILPA) was founded by a handful of visionaries who felt the need to raise the levels of professionalism in the financial services industry. Over the years, the FPI has been a very significant player in raising levels of competence in the industry through its advocacy efforts, the strength of its certification programmes, its designations, and its promotion of higher qualification and practice standards in general.

Since the establishment of the Financial Services Board (FSB) in the late 1990s, the pace of professionalism has gathered momentum. With its regulatory powers, the FSB has been able to complement the work of the FPI by introducing certain regulations which all advisors must comply with. The recent introduction of regulatory examinations for all advisors and intermediaries is but one example. Today, the tenets of the FPI’s Six Steps to Good Financial Planning have been incorporated into the Financial Advisory and Intermediary Services (FAIS) Act and subsequent regulations with some degree of success. The FSB has also adopted the tenets of the FPI’s certification standard by requiring Education (qualifications), Examination (regulatory examinations), Ethics (FAIS Code of Conduct), Experience (services under supervision) and, most recently, Continuous Professional Development (FAIS CPD requirements).

While recognising that there is a limit to how far regulation can go in fully achieving required levels of professionalism, the FPI has been supportive of the FSB in its quest to rebuild public trust in the industry by raising levels of professionalism. There is more to professionalism than just complying with the letter of the law; it is something far greater than that – higher levels of competence, ethics, putting the client’s interests first, and so on.

The journey towards professionalism is still a long way from completion and, ultimately, requires individuals to look deep down and make fundamental decisions as to whether or not they want to be a professional – the

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30 kind of soul-searching which all FPI members have had to go through at some point. This is what has happened.

Throughout 2011, we continued to support our members in their quest for professionalism. We organised more than 60 CPD sessions, and kept members up to date with regulatory changes in the industry and with the changes that can impact on the profession. We also finalised work on modernising and strengthening the Institute’s Code of Ethics and Professional Responsibility.

Going forward, we intend to proactively position FPI members in relation to all stakeholders as being amongst the most professional and trustworthy individuals in the industry. We will also continue to support the professional development of all our members to ensure that they continue to be pre-eminent in the industry. These efforts will also be complemented by advocacy efforts aimed at promoting higher practice standards when engaging with policy makers and regulators. Most importantly, we will continue in our quest to have financial planning recognised as a distinct and respected profession, with the CFP mark as its symbol of excellence.

Financial Education

The lack of public trust in the financial services industry overall remains palpable. Sadly, there continue to be daily occurrences of mis-selling and shoddy advice on the part of so-called ‘financial advisors’. In such an environment, it is unfortunate that everyone will be tarred with the same brush. Whilst we are convinced that a change in focus to greater value-adding financial planning and CFP professionals will go a long way to rebuilding public trust, it is clear that such a change in focus cannot happen all by itself.

The FPI has a long way to go in terms of educating consumers regarding the benefits of financial planning, the importance of them dealing with CFP professionals, and how to find their way through the labyrinths of the industry. In 2011, we started to shift our attention to consumer education.

We partnered extensively with the South African Savings Institute (SASI) in various initiatives during the July Savings Month as well as the Festive Season Savings Campaign. In partnership with SASI, National Credit Regulator (NCR), the Johannesburg Stock Exchange (JSE) and the FSB, we also organised the National Youth Financial Literacy Day. In addition, we organised the maiden Consumer Clinic to educate consumers on financial planning. Finally, we renewed our commitment to sponsoring the first prize for the KwaZulu-Natal School Speech Contest for another five years.

Advocacy and Thought Leadership

Just as it is important to uphold the highest standards of competency and practice in financial planning, it is equally important to be at the forefront of advocating to policy makers, regulators, industry bodies, as well as the public in general, on the financial planning profession, the

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independence and public-benefit mandate of the FPI, and the benefits of CFP certification, as well as supporting or proposing solutions to common challenges facing the financial services industry.

We always knew that, for our advocacy efforts to be meaningful, we needed to move past the fact that we have, over the last few years, developed sound relations with policy makers, regulators, industry players and the public in general. We knew that we needed to redefine these relationships by adopting substantive policy positions that should then serve as the basis for future engagements with these stakeholders.

To achieve this, we decided to allocate some resources to developing our capacity to implement a sustained advocacy and thought leadership campaign.

I am pleased to note that, one year down the road, we now have a fully fledged technical team at the office to provide direction and support for the outstanding work being done by a few volunteers.

As a result, we have had many more advocacy engagements in 2011 than in any other year in the last decade, namely with the National Treasury, the FSB, the Financial Intermediaries Association of Southern Africa (FIA), the Insurance Institute of South Africa (IISA), the Association for Savings and Investment South Africa (ASISA), the FAIS Ombud, the South African Qualifications Authority (SAQA), Business Unity South Africa (BUSA), the Insurance Sector Education and Training Authority (INSETA) and NCR. We also provided comments on a number of proposed legislative enactments and/or regulations, including the Taxation Laws Amendment Bill as well as the National Health Insurance. As a result, we are in a far stronger position to play a leadership role concerning important issues impacting on the industry.

Looking Ahead

The year 2011 was dedicated to a great extent to introspection and a thorough investigation of what the FPI is, what it wants to be and how it will get there. Our goal for the future is that financial planning be recognised as a distinct profession, with the CFP designation being seen as a symbol of excellence, with consumers being convinced of the benefits of financial planning, and with the FPI then becoming the premier professional body that espouses the highest standards of professionalism in the financial services industry. This is what the FPI’s new strategy embraces.

It is time for the FPI to assume a leadership role in the industry and to set the bar so much higher. We expect the road to achieving this to be a difficult one. Further, we expect to be required to make difficult decisions and to act swiftly as well. The new strategy provides the framework for achieving our vision, and the leadership of the FPI is determined to pursue this vision.

Godfrey Nti Chief Executive Officer

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The Year that Was Re-evaluating the Four Es Prior to the promulgation of the Financial Advisory and Intermediary Services (FAIS) Act in 2002, financial planners were unregulated and almost anyone could provide financial advice. However, since the formation of the Institute of Life and Pension Advisors (ILPA) in 1981, strong emphasis has been placed on the four Es as the trademark of a professional and competent financial planner.

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t is perhaps fitting, therefore, that the four Es – Education, Examination, Ethics and Experience – were used in the drafting of the FAIS Act. The year 2011 saw the FPI reevaluating these four distinguishing characteristics of a truly competent financial advisor, with a particular focus on increasing access while also maintaining the traditionally high standards of CFP® certification.

Education

There can be no doubt that the demand for CFP® professionals currently outstrips supply, so, in 2011, significant efforts were made to increase access routes to financial planning qualifications, and particularly the entry-level National Qualifications Framework (NQF) Level 5 certificates.

Through its accredited education providers, the FPI has ensured that young people wishing to pursue a career in financial planning can study towards a tailormade qualification in financial planning, after which they can apply for certification as a CFP professional.

However, there are also financial planners who have been in practice and have built up significant experience, and who would like to work towards becoming a CFP professional. Such individuals are given recourse through education providers’ recognition of prior learning (RPL) process, which grants credits on the NQF for knowledge gained through experience. Once these credits have been awarded, the learner can continue on to the next NQF level.

The problem lies in the fact that education providers are limited, in that only 10% of the learner uptake can come through the RPL process. In order to address this, the FPI has created learning pathways from NQF Level 7 through to Level 8 by breaking qualifications into shorter skills programmes. Learners can make up the difference in their education through these skills programmes, which will eventually lead to the learner attaining the qualification. Currently, six higher education providers offer approved qualifications that form part of the pathway to CFP certification.

Also, a number of additional education providers – among them the University of South Africa (Unisa) – are in the process of developing qualifications based on the FPI curriculum. These significant achievements will increase access to financial planning qualifications and, by extension, will also increase the pool of people who have the necessary education to apply for the CFP designation.

Examination

Anthony Campher, Head: Certification and Membership Services

The introduction of regulatory examinations by the Financial Services Board (FSB) is a welcome development in the industry, as they will serve to establish a minimum level of competence for representatives in the industry. However, this development has also highlighted just how significant

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30 the gap between a CFP professional and others is, who simply meet the minimum requirements.

Consider that, of the approximately 120 000 financial planners who are anticipated to complete the first-level regulatory examinations this year, only about 4 100 are CFP professionals. The minimum education requirement set by the Regulator is at NQF Level 5, whereas the Professional Competency Examinations (PCEs) undertaken to qualify as a CFP professional are on NQF Level 8.

The Regulator is now beginning to investigate Continuous Professional Development (CPD), but CPD has been part of the FPI since its establishment. Also, as a result of the stringent PCEs, CFP professionals are exempted from eight of the 20 second-level regulatory examinations.

From these few examples, it is clear that being a CFP professional is a clearly distinguishing factor; the designation implies a superior level of education and experience that simply sets you apart from the majority. The challenge for the FPI is to make both FPI members and the general public aware of what the CFP designation really means.

As such, the year 2011 saw the FPI continuing in its efforts to investigate the incorrect or unauthorised use of the CFP mark. Over 100 cases of incorrect trademark use were brought to the FPI’s attention, and, in many cases, these were related to the fact that the designation was confused with the qualification. In such cases, the FPI engaged with the members involved to clarify the use of the trademark.

To this end, we have also simplified the ‘Use of Marks and Tagline Policy and Procedures’ document, and have included practical examples that we have been witness to over the years. It is our hope that the simplified guide will assist in clarifying misconceptions regarding CFP professionals and other designations.

The FPI also continued to work on the unauthorised use of the CFP designation, which is an ongoing process. One is not a CFP professional simply because one has completed one of the approved qualifications; one can only become a CFP professional if one has been certified as a professional member of the FPI. For this reason, too, there is no difference between being a CFP professional and a member of the FPI – they are one and the same thing.

The CFP designation should be held dear by all, since it is what distinguishes a CFP professional from the other financial advisors and representatives out there. Similarly, the FPI and its members need to work together to inform the public of the meaning of the designation and of what it says about the financial planner.

We need the public to recognise the designation, and to understand that the difference in service,

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expertise and experience is a result of this internationally respected mark.

Ethics

The year 2011 saw a renewed focus on the fundamental responsibility of the financial planner – to put the client first. This may sound obvious, but the reality is that the industry is besieged by product sellers who focus on getting a signature on prepackaged solutions rather than taking a holistic approach to financial planning.

Ultimately, the distinguishing factor of a professional and competent financial planner is putting the client first. It is about investigating and analysing a person’s financial needs and situation, and realising that the relationship with the client is a long-term one that requires trust. It is not about replacing existing packages with new ones, but about looking towards the future needs of a client and realising that, even if today’s meeting does not result in a signature, tomorrow’s might.

The ethics espoused by the FPI are delineated in the Code of Ethics and Professional Responsibility, which forms the basic guideline for professional financial planners. And, once again, the FPI has shown itself ahead of the pack in this regard.

The Code of Ethics and Professional Responsibility covers a far wider number of issues than the General Code of Conduct of the FAIS Act, and it also expects more of its members, thus setting apart the true professionals.

Experience

Experience has always been key to the professionalism of a CFP professional, but, given the demand for competent financial planners, the FPI introduced a new concept in 2011 to speed up the experience-gaining process. In the past, an individual wishing to apply for the CFP designation needed three years of unsupervised experience. However, the ‘oneyear service under supervision’ concept sees the pairing of the individual with a mentor who is an experienced CFP professional.

The process is completely supervised and structured, meaning that the mentee gains practical experience in all aspects of financial planning. The mentee submits a portfolio of evidence to the FPI for assessment, and, if found competent, the mentee will have met the experience requirement.

The result is that more people will be in a position to apply for the CFP designation and in a shorter period of time, while still maintaining the high standards of the FPI. Going forward, we would like to invite experienced CFP professionals to contact us to be mentors in this unique employment-generating initiative.

Anthony Campher, CFP® Head: Certification and Membership Services

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The Year that Was Upholding the Standards Together The road to becoming a CFP® professional is not an easy one. While there may be those out there who believe that it is a simple matter of writing a quick examination and gaining a bit of experience, the truth is that becoming a CFP professional is an extremely rigorous process.

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o imagine if, after all that hard work and dedication, you were to realise that the CFP designation is a generic one. Suddenly, you see financial advisors on every street corner using the mark, ultimately rendering it meaningless. It is in order to avoid

this scenario ever becoming a reality that the FPI works so diligently to maintain the professional standards of its members.

However, the FPI cannot do this work alone, and the year 2011 really brought into focus for us the pivotal role of our members in ensuring that the CFP designation continues to indicate a professional who is the cream of the crop. This extends to all elements on which the high standards of the CFP designation are based, from our Code of Ethics and Professional Responsibility, through to the requirements of re-certification and attending to transgressions.

A Living Document

Advocate Jacqui Grové, Standards Manager

A lot is said about ethics in today’s business environment, but it is important to realise that ethics are aspirational values. In other words, they are ideals that we aim to work towards, but, in practice, it is often difficult to apply them to everyday situations. So, for example, while we may all agree that it is important to adhere to the principles of integrity, objectivity, professionalism and so forth, when a real situation presents itself one often finds that the ethical course of action is not a straightforward matter.

For this reason, the FPI revised its Code of Ethics and Professional Responsibility in 2011. While the fundamental principles of the Code have remained the same – and they should – a code is a living document that needs to change as the industry and professional context change. Specifically, we wanted the Code to reflect real-life examples of the application of the fundamental principles, so that FPI members can really use this document as a practical, day-today guide.

Therefore, after a lengthy process of initial development, the draft Code was sent to FPI members for comment. We received invaluable feedback from our members, which is critical, since the Code is meant to act as a workable document for professional financial planners.

Thereafter, members’ comments were worked into the document where possible and relevant, the revised Code was approved, and it then came into operation in January 2012.

The revised Code sees a number of changes, the first of which is that, rather than merely explaining the fundamental ethical principles of a professional, it also explains the rationale behind these principles, and how to apply them in the real world.

10 FPI Annual Report 2011 The Professional Standard

30 Also, the Code makes it mandatory for members to disclose their designation and membership of the FPI to clients, as well as advising clients that they have an additional avenue of redress in the form of the FPI. We believe that this new element of the Code will not only increase public awareness of the designation, but will also put clients at ease in understanding that they are dealing with a financial planner who is confident in his or her level of professionalism.

Finally, the regulations around re-certification have also been somewhat revised in that, if a member fails to complete the renewal process properly, this is grounds for suspension, and if the lack of renewal continues, this will be grounds for termination of membership.

The Code of Ethics and Professional Responsibility is not about ‘check list compliance’, and it takes into account the fact that what may be legal may not necessarily be ethical. Ultimately, the best measure of ethical behaviour on the part of a financial planner is whether or not he or she serves the client to the best of his or her ability. If this is the case, it is more than likely that the ethical principles contained in the Code are being adhered to.

A Taste of Excellence

Another activity carried out in 2011 was the FPI membership audit. The audit is a standard control measure and its purpose is twofold: to ensure the high standards set by the FPI and the CFP designation, and to identify problem areas so that they can be addressed immediately.

The audit process begins when we send a questionnaire to a sample of members, covering questions related to evidence of Continuous Professional Development (CPD), disclosure, ethics, the use of the CFP mark and so forth. I am proud to report that, in 2011, all but two of the questionnaires were received by the deadline, with the remaining two questionnaires being submitted soon thereafter.

From the sample of members who completed the questionnaire, we then selected a random sample for an on-site audit. Yet again, we were pleased by the warm welcome we received from each of the members we visited, and while there were a few minor issues that needed to be addressed, the general results of the audit were very satisfactory.

As in previous years, most of the issues identified during the membership audit were not the result of

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an intentional transgression but rather of oversight or misunderstanding.

Nonetheless, there are those out there who misrepresent themselves as CFP professionals, and the FPI has an important role to play in terms of identifying these individuals and taking the necessary action. In this regard, it has been rewarding to see how many such cases are brought to our attention by FPI members, since this demonstrates their vigilance and protectiveness of the CFP designation and mark.

Maintaining the Standard

An ongoing activity of the FPI is to investigate complaints received against members, either from the public or from another member. The disciplinary process is a thorough one, giving both parties an equal opportunity to make their submissions.

When a complaint is received, it is investigated and formulated as an affidavit that sets out all the facts pertaining to the matter, together with the relevant and available documentary evidence. The matter is then investigated by a disciplinary committee and, if the committee believes that there is a prima facie case, it is referred to a disciplinary tribunal. If the member is found guilty, a number of sanctions may be imposed, from payment of a fine through to suspension or termination of membership.

In 2011, the types of disciplinary matters attended to related primarily to a failure to disclose relevant information (including fees and commissions), financial advice that was inappropriate or unsuitable to the client’s needs, and members who did not obtain consent from clients before accessing their financial information.

Also, there were cases where members’ personal estates were sequestrated, and the members failed to inform the FPI accordingly.

The disciplinary committee and tribunal are administered by the FPI and the members are CFP professionals. In other words, they are your peers whose primary purpose is to inform and guide. However, we are increasingly finding that FPI members across the board are assisting in these functions through their alertness and the high esteem within which they hold the CFP mark.

Advocate Jacqui Grové Standards Manager

FPI Annual Report 2011 The Professional Standard

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The Year that Was Increasing Access to Quality Education Given the history of South Africa, large segments of the population were not able to access quality education in the past, and the same is true of the financial planning industry. Increasing access routes and maintaining the quality of education remain challenges, but these challenges were tackled head-on by the FPI in 2011.

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he route towards becoming a CFP® professional is not an easy one and involves a lengthy process that encompasses obtaining the requisite education in the form of an approved qualification, obtaining a certain amount of experience in the field, completing the Professional Competency Examination (PCE), and subscribing to the FPI’s Code of Ethics and Professional Responsibility.

With regard to education and examination, the CFP designation would mean nothing if the quality of these two crucial aspects were to deteriorate, and therefore the FPI engages the relevant education providers on a regular basis, and also revises the financial planning curriculum to ensure that it continues to reflect the needs on the ground. However, together with ensuring quality comes the need to increase access levels for historically disadvantaged South Africans, and, in this regard, the year 2011 was a watershed year for the FPI.

Building Relationships

The FPI has a relationship with a number of education providers that offer the National Qualifications Framework (NQF) Level 5 to 8 qualifications, which form part of the pathway to CFP certification. These education providers met very strict criteria in order to have their programmes approved by the FPI. Specifically, the FPI will analyse their capacity, reputation, structure and governance. For example, is the provider able – in terms of physical and human resources – to offer the qualification and meet the demand? What reputation does the provider have in the marketplace? What is the quality of training provided?

Does the education provider have the requisite internal governance structures in place to uphold the FPI’s high standards? The most important requirement for programme approval is that the programme curriculum must cover at least 80% of the curriculum framework for financial planning determined by the FPI. However, the close working relationship with an education provider does not end once the programme has been approved by the FPI. Biannual meetings are held with the providers where we discuss aspects concerning the qualification, possible challenges to curriculum and content, and aspects relating to the PCEs for the various levels. Annual self-evaluations and on-site visits are undertaken to ensure that the initial criteria are still being met and that all the processes are still managed properly.

Demand and Supply

Sherma Malan, Certification Manager

On the one hand, the FPI needs to ensure that the high standards are maintained in respect of the qualifications by the education providers, and, on the other, we also need to create more access routes to CFP certification. The demand for a qualification in financial planning – and, specifically, for the CFP designation – remains higher than the supply, and a lot of work was

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30 done in 2011 to address this aspect. Specifically, some new access routes were developed for those who struggle to gain access to traditional tertiary institutions.

Chief among these was the initiative involving the FPI, the Further Education and Training Institute (FETI), the Insurance Sector Education and Training Authority (INSETA) and the University of the Western Cape (UWC). The partnership – called the FETI/HETI project as a result of its seamless integration between further and higher education and training institutes – was formalised at the end of 2010, but we saw the implementation of this initiative in 2011.

The reality of South Africa’s education history is that many learners struggle to gain access to tertiary institutions. The FETI/HETI project offers learners the opportunity to obtain an NQF Level 5 qualification, on the understanding that, once they’ve obtained the qualification and passed the FPI board examination, they will be allowed to register for the Advanced Diploma in Management at UWC. This will give them access to the Postgraduate Diploma in Financial Planning that UWC is busy developing.

The FPI is closely involved in this process. UWC will apply for formal programme approval as soon as the registration process of the qualification has been finalised. As such, the partnership makes it easier and more affordable for learners to gain the right accreditation and qualifications, and will also increase the number of qualified financial planners working in South Africa.

The pilot project with 39 learners came to an end in September 2011 and the FPI is confident that all partners will continue with the project as a result of its huge success. Twenty-five learners passed the FPI board examination and thus qualified to study towards the Advanced Diploma in Management through UWC. Twenty-three learners are reported to have registered with UWC. It is hoped that these learners will progress all the way to CFP certification.

Another change that took place in 2011 was that the FPI Academy, the education provider arm of the FPI, transitioned from being a provider of recognition of prior learning (RPL) to a distance education provider.

RPL is an important tool in ensuring that those with experience in the industry are awarded a qualification that recognises the experience they have obtained. The FPI’s RPL programme was hugely successful, with 1 344

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examinations written in 2011, and it became evident that most of the learners who qualified for RPL had made use of the opportunity already. It was time to adapt the delivery model. The FPI will continue offering education opportunities, but as a distance education provider in partnership with the Sanlam Distribution Academy. As a result, learners are now required to attend a minimum amount of face-to-face training, as required by INSETA. These initiatives and others are aimed at increasing the number of potential CFP professionals, while maintaining the FPI standards. A significant part of the FPI’s strategy going forward is to target new entrants to the market by creating requisite education opportunities and also informing them of the preeminence of the CFP designation.

Examination Matters

The PCE for CFP certification is, and will remain, an examination that tests the knowledge, skills and abilities required to be a truly competent financial planner. For this reason, the examination structure is revised on a regular basis to ensure that the examination continues to test the knowledge, skills and abilities required by a financial planning professional in the industry.

One of the ways in which we do this is to conduct a survey of CFP professionals to determine which financial planning competencies, skills and areas of knowledge are deemed important and which ones are practically applied. The main purpose of the survey is therefore to establish what CFP professionals in South Africa do on a day-to-day basis, including those not actively involved in financial planning. During 2011, as in previous years, the information from the last survey was used to adjust the weighting assigned to the various financial planning components in the examination.

Ensuring the high standard of education and examination required to be certified as a CFP professional is not a once-off process. Rather, it is a matter of being in touch with the market and the needs of the industry, and adapting access routes, education formats and examination details accordingly. The year 2011 was yet again a successful one in terms of ensuring that the FPI remains the premier professional body in the industry.

Sherma Malan Certification Manager

FPI Annual Report 2011 The Professional Standard

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The Year that Was Thought Leadership As a professional body within the financial industry, it is critical that the FPI play a thought-leadership role when it comes to legislative and regulatory developments in the sector. The year 2011 saw the further development of the Technical Services Department, which is responsible for exactly this.

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rior to 2010, communicating information on legislative and regulatory changes fell within the marketing function and was regarded as a value-add to our members. However, it was decided that a dedicated department should be established to offer this service not only as a value-add, but also as a strategic imperative. The year 2011 saw the further development of the Technical Services Department, which now boasts extensive technical know-how and insight, as well as relationships with key stakeholders such as the National Treasury, the Financial Services Board (FSB) and the South African Revenue Service (SARS).

The Technical Services Department is tasked with being a technical resource hub that co-ordinates all outputs of a technical nature with expert skill and knowledge, thus assisting the FPI in being regarded as an authoritative voice that speaks on behalf of financial planners. As such, the Department is responsible for co-ordinating the work

of the Industry Sector Groups (ISGs), setting up working groups on topical issues, and conducting our own internal research and communicating the findings to FPI members and the public at large.

Confirming Mandates and Road Maps

The year 2011 saw the ISGs holding a number of strategy sessions that resulted in the formation of specific mandates and road maps. These mandates are as follows:  Client Engagement (previously Personal Financial Planning): To provide specialist input regarding nontechnical matters impacting on advice, as well as practical guidance on the application of the six-step process, whilst also enhancing the soft skills associated with client engagement.  Employee Benefits: To act as a noncompetitive discussion forum for industry peers and so promote the professionalisation of the industry, which will ultimately be to the benefit of the consumer and members.  Estates and Trusts: To act as a forum for the discussion and dissemination of important and topical information concerning estate planning, trusts and other fiduciary issues that might affect CFP® professionals.  Healthcare: To advance and promote the profession of healthcare consulting, raise the status of the professional financial planner, and enhance the experience of the public we serve.  Investment Planning: To provide CFP professionals with sound investment knowledge and to educate the financial planning individual on investment strategies.  Risk Planning: To focus on client-centric issues and matters falling outside practice management, as well as consider business risks for members and educate them on how to manage these risks.  Tax Planning: To provide strategic direction and oversight concerning all tax-related matters, and to drive the processes of communication, education and technical competence in this regard.

Technical Working Groups

Almo Lubowski, Technical Manager

During 2011, a number of working groups were established to investigate legislative and regulatory changes. These groups comprise FPI members from the various ISGs, as well as individuals who were targeted by the Technical Services Department as a result of their knowledge and insight. The Department also drew up terms of reference for each of the working groups, and undertook the various management and liaison functions.

Two working groups in particular were very active in 2011.

14 FPI Annual Report 2011 The Professional Standard

30 The Social Security Working Group was constituted to investigate the impact of social security reform on the FPI, the financial planner and the industry as a whole.

A social security survey questionnaire was submitted to members in order to assess the type of employee benefits and retirement products they deal with, and the resulting data is proving useful in discussions with the government bodies that are driving the reform.

In addition, members of the working group are representing the FPI on other industry bodies such as the Association for Savings and Investment South Africa (ASISA) and Business Unity South Africa (BUSA), where the FPI hopes to have far-reaching influence.

The National Health Insurance (NHI) Working Group was established to assist the FPI in taking a strong and informed position on this significant government initiative.

Although the FPI supports the NHI in principle, it wishes to be in a position to formulate suggestions and positions to help government steer the process in the right direction by finding a place for health insurance practitioners in the system. As such, comment was delivered on the NHI Green Paper and, through its involvement in BUSA, more specific commentary will be given going forward. We are proud to report that the FPI’s voice is being heard in government and industry deliberations around the NHI. Through these and other working groups, comments were given on a number of government Acts and regulations, including the document ‘A Safer Financial Services Sector to Serve South Africa Better’ published by the Treasury, the Taxation Laws Amendment Bills of 2011 and the Consumer Protection Act.

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The Year Ahead

The Technical Services Department made significant progress in 2011, but much remains to be done. Specific focus areas for the year ahead include the following:  Aligning the goals of the Department with the broader FPI strategy, and amending the ISG mandates accordingly.  Maintaining member competence through the further filtering and streamlining of information from the ISGs to the relevant division within the FPI.  Producing more position documents on behalf of the FPI through the operation of working groups.  Increasing the quality of the Quarterly Technical Update and other means of communication, and exploring additional communication avenues.  Enhancing the internal research capacity of the Department, and building relationships with external research bodies.  Becoming more recognised in the financial services sector through increased stakeholder engagement.

Almo Lubowski, CFP® Technical Manager Carla Letchman Technical Research Analyst

Communicating Findings

In 2011, the Technical Services Department was tasked with developing and implementing a communication strategy that outlines better ways to communicate technical information to members, and to obtain member opinions and input on technical matters.

The communication strategy was approved, and a significant effort was made during the year to streamline and improve the various operational means of communication, namely Quarterly Technical Update, alerts, the website and website discussion forum, The Financial Planner, and Continuous Professional Development (CPD) sessions.

With regard to CPD, significant progress was made during the year in streamlining the communications process. The ISGs communicate information on suggested topics and speakers directly to the Technical Services Department, which then engages in the necessary liaison within the rest of the FPI. This free flow of information between the FPI departments serves to fulfil the mandate of the ISGs, which is to maintain member competence.

FPI Annual Report 2011 The Professional Standard

Carla Letchman, Technical Research Analyst

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The Year that Was Advocating for Professionalism Over the past years, the financial planning industry has undergone significant changes as the Financial Services Board introduced mandatory regulatory examinations for all financial planners, advisors and representatives.

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he Financial Services Board (FSB) introduced these regulatory examinations to ensure that key individuals and representatives are fully competent to apply the processes required by the Financial Advisory and Intermediary Services (FAIS) Act.

The first-level regulatory examinations are compulsory for everyone rendering financial services – regardless of their experience and/or qualifications.

These regulatory examinations focus specifically on the regulatory roles of key individuals and representatives as defined in the FAIS Act. Furthermore, these first-level regulatory examinations cover generic aspects common to all in the industry, including aspects such as the FAIS Act, Board notices, the Fit-and-Proper requirements, the General Code of Conduct, as well as anti-money laundering legislation. In other words, the focus is on the basic and fundamental regulatory requirements for providing financial advice.

Candidates who have passed the first-level regulatory examinations will then be required to write the second-level regulatory examinations, which are product-specific. The second-level regulatory examinations that a practitioner is required to write are determined by the product categories that the representative is licensed for or mandated to advise on.

Representatives could be exempt from writing some second-level regulatory examinations based on their existing qualifications. CFPÂŽ professionals are exempt from seven second-level regulatory examinations.

Committed to Enhancing Professionalism

Adele Whyte, Examination Body Manager

Since the FSB’s announcement of the introduction of regulatory examinations, the FPI has embraced this initiative, in that it will assist in uplifting the level of professionalism in the industry, thus creating a healthier minimum benchmark for practitioners.

As a result of its expertise and experience, the FPI assisted the FSB in developing five of the second-level regulatory examinations covering aspects related to long-term insurance, retail pension benefits, collective investment schemes and healthcare benefits.

In addition, the FPI is one of only four approved regulatory examination bodies that have been mandated by the FSB to conduct the regulatory examinations on its behalf.

Within this role, the FPI arranges the regulatory examinations, books and prepares venues, contracts regulatory examination invigilators, marks the regulatory examinations, and liaises with the FSB with regard to the results. This is no mean feat, as the FPI

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30 runs an average of 2 500 regulatory examinations each month across the country, which take place from Monday to Saturday.

In addition, the FPI has been involved in road shows with the Insurance Sector Education and Training Authority (INSETA) to inform practitioners about the requirements of the regulatory examinations, how the questions have been designed, and how they should prepare for writing the regulatory examinations.

A Challenging Year

The year 2011 was a challenging one for many financial planners and practitioners as a result of the need to write the regulatory examinations. Some practitioners have been in the industry for many years, only to find that they needed to go back to their books to write what they had assumed to be an entry-level examination, but which was in fact a searching test of their knowledge.

As a result, the FPI fielded numerous calls from concerned members and non-members alike, and we responded by sending out reminders as to key deadlines and informing practitioners as to where they could go to obtain the necessary resources.

Also, we regarded it as important to explain that the first-level regulatory examinations were primarily focused on the requirements of the FAIS Act, which is indeed a relatively new piece of legislation that needs to be understood thoroughly. For this reason, experience alone could not exempt one from the need to write the regulatory examinations.

Another challenge was the expectation among practitioners that, since the first-level regulatory examinations use a multiple-choice format, they would be quick and easy to pass.

However, we soon realised that those who were passing were putting in between 30 to 50 hours of study time, and this information needed to be communicated so that those preparing for the regulatory examination would know what to expect.

Similarly, many practitioners were shocked when they realised how high the failure rate was, and there were also misconceptions regarding the remarking

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and appeals process. These processes resulted in additional complexity with regard to the administration of the regulatory examinations.

On the whole, the industry has been slow to embrace the FSB’s regulatory examinations, and consequently the deadline for completing the regulatory examination was extended from 31 December 2011 to 30 June 2012. Practitioners who have failed the regulatory examination prior to 30 June will then have until September to rewrite the examination.

Although it is not possible to provide accurate statistics, it is assumed that as many as 80 000 candidates will need to pass the first-level regulatory examination before 30 June 2012.

We therefore urge all financial planners and advisors who have not yet done so to take the regulatory examination and assist in uplifting the standards of the industry as a whole. The FPI is expecting a significant influx of practitioners prior to 30 June 2012, and is preparing accordingly.

The FPI welcomes the introduction of the regulatory examinations, as it is true that many people offering financial advice are ill-equipped and inexperienced, and it is the consumer who ends up paying the price.

However, the regulatory examinations have also highlighted yet again the exceptional standard of CFP professionals.

With its focus on National Qualifications Framework (NQF) Level 5 to 8 qualifications, continuous learning through Continuous Professional Development (CPD) and adherence to an advanced Code of Ethics and Professional Responsibility, the FPI is ensuring that the CFP designation remains the most sought-after mark of professional excellence in the industry.

With the introduction of the regulatory examinations, consumers can rest assured that financial advisors have met the minimum requirements, but for true professionalism there remains only one designation that counts – the CFP designation.

Adele Whyte Examination Body Manager

FPI Annual Report 2011 The Professional Standard

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The Year that Was Mouthpiece for the Industry As a professional body within the financial planning industry, the FPI has a number of stakeholders with whom it needs to communicate. These range from its members, who need to remain informed of developments in the sector, through to the public at large, whom we constantly educate about the benefit of professional financial planning.

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he year 2011 saw a number of new marketing and business development initiatives, as well as some well-known activities that received a bit of a face-

lift. Specifically, a review of the FPI’s communications strategy resulted in a more co-ordinated approach to getting out the message.

Resource Hub

One of the primary goals of the FPI is to be the resource hub for members and, in this regard, we communicate regularly with our members, and through a variety of different channels. The website revamp carried out in 2010 assisted us to stay in touch with our members. Throughout the year, we updated the website with the latest news and regulatory changes taking place in the industry.

We experienced some disruptions with regard to the production and delivery of the official members’ journal, The Financial Planner. Through engaging with members, however, we were able to put some measures in place to ensure the uninterrupted delivery of the magazine, beginning in 2012.

The year 2011 also saw the launch of NewsBrief, the electronic newsletter published by the FPI. The Institute uses this and other electronic communication means – such as technical alerts – to communicate information on aspects such as regulatory examinations, and quarterly Continuous Professional Development (CPD) events and other workshops.

With regard to CPD, in addition to the events organised by the FPI, a special reduced rate for access to MCAtv was also arranged. This independent subscription television service broadcasts programmes on topics such as tax, the Companies Act and ethics.

The television service offers members 10 guaranteed hours of CPD. Finally, the year saw the launch by Financial Planning Standards Board (FPSB) of Financial Planet, an online gathering place for those who share the vision of gaining recognition for financial planning as a distinct global profession. We encourage all members to log onto the website, www.financialplanet.org, and join others in promoting the profession and upholding the high standards espoused by FPSB and the FPI.

Promoting the Profession

Tsholofelo Dihutso, Marketing and Communications Manager

The year 2011 saw a diverse array of initiatives aimed at interacting with the public and informing them of the benefits of financial planning. The FPI took part in the Gordon Institute of Business Science’s (GIBS) career expo, the first South Africa Retire in Style expo, Sci-Bono Finance Week, and the Association of Certified Fraud

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30 Examiners’ (ACFE) conference. We also partnered with the South African Savings Institute’s (SASI) initiatives, namely the Festive Season Savings Campaign, the July Savings Month Campaign and the Teach Children to Save Campaign.

We are proud to have partnered with the Johannesburg Stock Exchange (JSE), SASI, National Credit Regulator (NCR) and the South African Reserve Bank (SARB) in organising the National Youth Financial Literacy (NYFL) Day in Johannesburg. In attendance were high-school learners, university students, teachers and other young people who came to increase their level of knowledge of financial literacy. The response to the NYFL Day was overwhelming and we are looking forward to partnering once more with these institutions in organising a similar event in August 2012.

July 2011 marked the 30th anniversary of the FPI, and a number of initiatives were launched in this regard.

The FPI logo was redesigned, and articles appeared in the media on this momentous occasion of the 30th anniversary. Getting industry news into the mainstream media has been facilitated by the appointment of a dedicated public relations agency, Fleishman-Hillard.

Also, a book chronicling the 30-year history of the FPI and the industry has been commissioned and is due for publication later in 2012.

However, the most exciting initiative was National Financial Planning Week. This was celebrated from 26 November to 2 December 2011 by way of various public initiatives, including the FPI’s hosting of a fivehour Consumer Clinic in Johannesburg. The Clinic included presentations on the financial services industry, the financial planning process, consumer rights and recourse, and how to go about choosing the best financial advisor. The event was a major success, and we are hoping to expand the Consumer Clinic to additional cities in 2012.

Recognising Excellence

In recognition of the hard work and commitment of our CFP® professionals, the FPI hosts a yearly convention and exhibition, followed by a glittering Gala Dinner where we hand over the Financial Planner of the Year, Chairman’s, Top Student and Media Awards.

The Financial Planner of the Year Award follows a rigorous judging process. Candidates submit a portfolio of evidence containing three actual financial plans. Once

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these have been evaluated, a site visit is conducted at the financial planner’s premises, and then face-to-face interviews are conducted to determine the winner. In 2011, five candidates made it through to the on-site visit round and, of these, three were selected for the face-toface interviews. In total, more than 20 expert judges are used at different stages of the judging process.

The coveted Financial Planner of the Year Award is the highest accolade that can be bestowed on a financial planner in the industry.

The winner of the 2011 competition was Warren Ingram, CFP®, Co-founder and Executive Director at Galileo Capital. We would also like to congratulate the two finalists, namely Shaun Latter, CFP®, from Quaestor Wealth, and Jan-Carel Botha, CFP®, from Ultima Financial Planners.

The Chairman’s Award was introduced in 2010 and recognises a person who has made a lifelong and outstanding contribution to the FPI through promoting the Institute, its marks and the financial planning profession as a whole. The recipient of this award also exemplifies the FPI’s ethical principles. The winner of the 2011 Chairman’s Award was Wessel Oosthuizen, CFP®, Director of the University of the Free State’s Centre for Financial Planning Law in the Faculty of Law, and Panel Chairperson of FPSB Work Group.

The year 2011 also marked the first year in which the Media Award was handed out. This award recognises an FPI member who not only contributes regular articles and commentary to the media, but also makes a point of promoting the profession, mentioning his or her membership of the FPI and/or the CFP designation. In 2011, the Media Award went to Nico van Gijsen, CFP®, Managing Director of Finlac Risk & Legal Management, who has 20 years’ experience in the financial services sector.

The 2011 Annual Convention and Gala Dinner were a resounding success, with over 800 people attending the convention and about 600 attending the Gala Dinner.

We received positive feedback from attendees, with over 80% stating that they were likely to attend the 2012 event. However, we will not be resting on our laurels, and planning has already started for the coming years’ events. We hope that these events will be even more rewarding.

Tsholofelo Dihutso, CPRP Marketing and Communications Manager

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The Year that Was Transition to Greater Heights The financial planning industry is an ever-changing one, and as such the FPI must constantly evaluate the way it operates in order to ensure that it reaches even greater heights. The year 2011 in particular was one that saw the Institute in the midst of a significant transition.

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eing a public-benefit entity, the FPI’s decisions are made with due consideration not only to how such decisions impact on our members and the financial planning profession, but also on the community as a whole.

FPI’s New Strategy

With the FPI Board’s approval of a new strategy for the Institute, it finally brought to a close a year’s worth of painstaking work in terms of reviewing the Institute and its environment, and trying to envision what the Institute should become. The new strategy – to be implemented from 2012 onwards – is a bold but necessary step in taking the FPI to new and greater heights.

The Transformation Initiative

The FPI’s view on transformation is that embedding a clear transformation agenda within all facets of the Institute is not only a moral imperative but also makes good business sense. During the year, we took significant transformation initiatives. To highlight the importance of transformation, the Board created a separate transformation subcommittee in 2011 with the mandate to ensure that this issue receives proper attention. For the first time, over 50% of the FPI’s directors are black.

The number of black employees has also increased to over 40%.

Going forward, we will turn our attention to transformation in our membership base by growing the number of black CFP® professionals. We will also devise and implement strategies to ensure that the benefits of the financial planning profession, as well as access to CFP professionals, can be spread further into historically disadvantaged communities.

Corporate Social Investment Initiatives

Batwa Mzamane, Manager: Management Services

There are so many worthy causes in South Africa that are in dire need of support – so much so that companies risk taking on too broad a Corporate Social Investment (CSI) mandate and as a result having very little impact. For this reason, the FPI finalised its CSI Agenda in 2011, which articulates the Institute’s CSI approach.

The FPI’s CSI strategy is embodied in its revised CSI policy, which was approved by the Board during the year. With a myriad of worthy causes in the country that are in dire need of support, the choice of which ones to lend support to can be daunting. The FPI’s CSI strategy is to narrowly focus the span of its CSI programme on initiatives that are best aligned with the core competencies that the financial planning community possesses. Our CSI strategy therefore focuses on financial education initiatives and programmes.

20 FPI Annual Report 2011 The Professional Standard

30 During the year, we carried out a number of financial education initiatives. For example, we partnered with the Johannesburg Securities Exchange (JSE), National Credit Regulator (NCR), South African Reserve Bank (SARB) and South African Savings Institute (SASI) to organise a very successful National Youth Financial Literacy Day, which brought together over 280 high school learners, university students and young people from youth organisations around Gauteng.

In partnership with SASI during July Savings Month, FPI members volunteered to take part in the Teach Children to Save Campaign.

During Financial Planning Week in November, we also held our maiden Consumer Clinic in Johannesburg, where a number of volunteer CFP professionals educated members of the public in attendance on how to deal with common financial issues faced by individuals and households across South Africa. This event was a great success, and so we intend to roll out similar initiatives across the country in 2012 and beyond.

In 2011, in recognition of the work that the FPI has been doing in the area of consumer education, and with the endorsement of the Financial Services Board (FSB), the FPI was admitted as an associate member of the International Network on Financial Education of the Organisation for Economic Co-operation and Development (OECD).

We once more participated in the 2011 Speech Contest, which was held in KwaZulu-Natal, by sponsoring the full tuition costs of the winner to study towards a three-year tertiary-level qualification in the financial planning field.

Also, working with SOS Children’s Villages, our staff members visited an SOS Children’s Village where they gave of their time in assisting in setting up a resource centre for the children. We are working closely with the SOS Children’s Villages and our education partners to put in place a small bursary programme to benefit

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talented children living in one of the villages to be able to take up a qualification in financial planning.

Internal Controls

During 2011, we conducted the first-ever external review of all the FPI’s policies and procedures, with a view to testing their adequacy, efficiency and effectiveness. We are very pleased with the outcome of the exercise, as by and large it confirmed that we have sound policies in place. However, it also gave us a road map to strengthening some aspects of our operations.

The next area that we will be placing more emphasis on and subjecting to external reviews in 2012 is risk management.

Our People

You will not find our most valuable asset, our staff, on our balance sheet. However, they are the reason why 2011 was a good year for the FPI. As the FPI’s regulatory examination delivery operations kicked into high gear in 2011, our staff complement doubled with the addition of a number of temporary staff who assisted in ensuring that the FPI could adequately deal with the very high volumes of examinations we had to deliver.

We are thankful to the FPI staff for their continued dedication and hard work, and for ensuring the success we have seen in 2011.

During 2011, we bid farewell to Phillip Kruger (Standards Manager), Eugene Vermeulen (Head of the Examination Body) and Mersey Booysen (Head of Marketing and Business Development). We welcomed Jacqui Grové (Standards Manager), Sherma Malan (Certification Manager), Adele Whyte (Examination Body Manager) and Clayton Lautenberg (Technical Analyst).

Batwa Mzamane Manager: Management Services

FPI Annual Report 2011 The Professional Standard

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The Year that Was Successfully Weathering the Storm The year 2011 was a difficult one for the South African economy as we largely remained in the throes of the global economic slowdown. However, despite these constraints, the FPI realised exceptionally positive financial results, reflecting the Institute’s willingness to adapt with the times and remain relevant to its members and others in the financial planning industry.

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rom 1993 to 2011, growth in South Africa’s annual gross domestic product (GDP) stood at an average of 3.32%. However, after reaching a two-year high of 4.6% in early 2011, growth levels fell to 1%, before increasing slightly to 1.7% towards the end of the year.

Furthermore, consumer confidence declined when compared with 2010 levels, and the rand weakened significantly against the United States dollar towards the last quarter of 2011.

The fundamentals of the FPI’s financial position remain very sound. We have recorded the strongest net surplus to date, growing strategic cash reserves from R5.59-million to R6.23-million, a growth of 13% year-on-year.

This was a result of good financial stewardship of the Institute, but also, in large part, as a result of our regulatory examination delivery operations. It should however be noted that, because the FPI’s involvement in delivering the regulatory examinations is a short-term proposition, we do not expect such positive results to be a regular occurrence in the years to come.

From an FPI group perspective, we achieved an impressive 149% growth in revenues year-on-year. A combination of impressive revenue growth and also better cost management meant that we were able to record the highest ever yearly net surplus for the Institute, a year-on-year growth from a negative R0.4million in 2010 to R10.4-million in December 2011.

As a result of improved cost management strategies employed across the board during the year, we also saw the expense-to-total-income ratio decrease from 102% in 2010 to 73% in 2011.

It is therefore with pleasure that we present you with some extracts from the annual consolidated financial statements for the year ended 31 December 2011, as audited by the FPI’s auditors, Zeelie De Kock Chartered Accountants.

Nomaxabiso Tyhutyhani Financial Manager

Nomaxabiso Tyhutyhani, Financial Manager

22 FPI Annual Report 2011 The Professional Standard

Independent Auditors’ Report Independent Auditors’ Report to the paidup members of Financial Planning Institute of Southern Africa (Association incorporated under Section 21) Report on the financial statements

We have audited the annual consolidated financial statements of Financial Planning Institute of Southern Africa (Association incorporated under Section 21), which comprise the directors’ report, the statement of financial position and consolidated statement of financial position as at 31 December 2011, the statement of comprehensive income and consolidated statement of comprehensive income, the statement of changes in equity and consolidated statement of changes in equity, statement of cash flows and consolidated statement of cash flows for the year then ended, a summary of significant accounting policies and other explanatory notes.

Directors’ responsibility for the financial statements

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

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

Auditors’ responsibility

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

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

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

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

Opinion

In our opinion the financial statements fairly present, in all material aspects, the financial position of the company as at 31 December 2011, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards, and in the manner required by the Companies Act of South Africa.

Zeelie De Kock Chartered Accountant

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The Year that Was STATEMENT OF FINANCIAL POSITION AND CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2011

Group 2011 R ASSETS Non-current assets

Property, plant and equipment

Investment in subsidiary

Company 2011 R

Company 2010 R

1,785,297 1,785,297 -

1,785,597 1,785,297 300

1,157,634 1,157,634 -

Current assets

Trade and other receivables

Bank and cash balances

20,262,926 4,388,885 15,874,041

20,121,969 4,254,807 15,867,162

8,430,710 1,462,908 6,967,802

TOTAL ASSETS

22,048,223

21,907,566

9,588,344

EQUITY AND LIABILITIES Equity

General reserve

Retained earnings

17,616,915 5,000,000 12,616,915

17,576,406 5,000,000 12,576,406

7,232,458 5,000,000 2,232,458

-

127 127

-

4,431,308 3,745,505 15,754 670,049

4,331,033 3,660,984 670,049

2,355,886 1,835,842 520,044

22,048,223

21,907,566

9,588,344

Non-current liabilities

Group loan payable Current liabilities

Trade and other payables

Taxation payable

Short-term provisions TOTAL EQUITY AND LIABILITIES

STATEMENT OF COMPREHENSIVE INCOME AND CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AS AT 31 DECEMBER 2011 Group 2011 R Revenue Operating profit before other income and other expenses

Company 2011 R

Company 2010 R

37,189,436 13,536,788

35,429,800 13,317,399

14,202,923 908,685

Other income Change in accounting estimate Interest received

1,012,663 403,841 608,822

1,012,663 403,841 608,822

1,145,731 531,886 613,845

Expenses Amortisation of examination body setup costs Auditors’ remuneration Depreciation Directors’ remuneration Operating lease – premises

4,149,240 656,397 120,680 1,017,592 942,702 1,411,869

3,986,114 656,397 92,555 1,017,592 942,702 1,276,868

2,449,425 70,000 860,739 863,929 654,757

Profit / (loss) before taxation Taxation

10,400,211 15,754

10,343,948 -

(395,009) -

Total comprehensive income / (loss) for the year

10,384,457

10,343,948

(395,009)

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FPI Annual Report 2011 The Professional Standard

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Kathryn Franz

Jennifer Grefen

Industry Sector Group Reports

Client Engagement

Employee Benefits

he Client Engagement Industry Sector Group (ISG) underwent major changes in 2011, most notably a change in name from Personal Financial Planning ISG to its current one. The ISG developed a new mandate at the beginning of 2011, which is as follows: “The Committee sees its mandate as providing specialist input into nontechnical matters impacting on advice (including global trends and legislative changes), as well as practical guidance on the application of the six-step process whilst enhancing the soft skills associated with client engagement. This will ultimately result in a better consumer experience, heightened professionalism of the planner, and more robust practice management.”

In order to achieve its 2011 objectives, the Committee looked at whether the skills set of its members would suffice, and, upon completion of the analysis, new members were co-opted onto the Committee. The Committee also decided to share resources with other financial institutions as well as with academic institutions.

A representative from the Behavioural Finance Institute has agreed to participate in Committee meetings and in future activities.

One of the Committee’s main aims is to educate the FPI member on how to build a sustainable relationship with his or her client. To this end, a member of this ISG will put together six articles on the financial planning process and the soft skills associated therewith.

The Committee sees much more thorough research being made available to members through a collaborative effort with other bodies and academia.

This resource will be made available to members through the website, magazine, media and other mechanisms.

The aforementioned will be the focus of the Committee in 2012, for, by doing this, the Committee will fulfil its mandate of maintaining member competence.

he year 2011 was an interesting one in the retirement fund space, with the 2011 Budget Speech introducing proposals which will have far-reaching implications in the retirement fund environment.

These proposals include the effective phasing out of provident funds, as well as a proposed change to the tax deductibility of retirement fund contributions and the introduction of a rand cap for these deductions. The 2012 Budget Speech stated that these changes would be effective as from 2014, and this may require some thought as to how best to structure our retirement funds going forward.

We are however still awaiting the joint government social security and pension fund proposals, which are expected to outline the proposals regarding a national retirement scheme that encourages compulsory membership of such scheme.

We are expecting a paper out for comment later in 2012, which will then be debated in the National Economic Development and Labour Council (Nedlac).

In the investment arena, we saw changes to Regulation 28, which now effectively requires a lookthrough approach, as well as various retirement funds adopting the voluntary Code for Responsible Investing in South Africa (CRISA).

The year 2012 promises to be equally exciting, so watch this space.

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Jennifer Grefen, CFP® Chairperson

Kathryn Franz, CFP® Chairperson

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Industry Sector Group Reports

David Thomson

We were consulted on the speakers to address members on estate planning and trusts at the FPI Annual Convention and believe that they are of the highest quality. The Committee is involved in the organising and hosting of the upcoming Continuous Professional Development (CPD) workshops focusing on estate planning and trusts, which members are encouraged to attend.

We are permitted to co-opt persons onto the Committee. Therefore, if any members are of the view that they can strengthen the ISG, they should not hesitate to contact our current members.

It is essential that the ISG communicates with its regional committees and forums; hence regional Chairpersons should engage with this Chairperson if such communication is not taking place.

Estates and Trusts

David Thomson, CFP® Chairperson

strategy session was held in Durban on 10 May 2011 to discuss the mandate of the Industry Sector Group (ISG), the composition of the Committee, liaison with key stakeholders, and plans for the future. Various face-to-face and telephonic meetings were held by the Committee as well.

The Committee posted useful ‘check lists’ on the Resources page of the FPI website to assist members with estate planning, reporting a deceased estate, and drafting wills properly. The latest judgments continue to be posted on the website. The ‘Road map’ for our ISG was finalised and also posted on the website.

The Committee also made contributions to the technical alerts that are sent out to members by e-mail from time to time by the FPI, and the Chairperson attended the technical ISG meetings and strategy session. Submissions for publication in The Financial Planner magazine were also drafted and/or edited.

We participated, albeit in a small way, in National Wills Week organised by the Law Society of South Africa.

It is hoped that this initiative will expand in the future.

Experiences with Masters’ offices vary. Complaints about inefficiency at the Pretoria and Johannesburg Masters’ offices are still coming in and are a source of great frustration to practitioners.

This should be addressed with the Department of Justice. The Pietermaritzburg Master is delivering improved service, according to some members.

Concern was expressed by some members about certain businesses holding themselves out as ‘trust experts’ and seemingly using inter vivos trusts as an expedient tool to solicit life insurance policies and substantial fees.

The persons involved do not appear to be CFP® professionals or FPI members. The FPI therefore cannot intervene, but members are urged to consider our Code of Conduct in this regard and be vigilant regarding such practices.

André Jacobs

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Healthcare

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he Healthcare Industry Sector Group (ISG) adopted a strategic road map during 2011. This road map was used to guide the activities of the ISG. The ISG fulfilled its mandate in terms of its interaction with the Regulator.

However, member interaction was less successful owing to the Continuous Professional Development (CPD) sessions that had already been committed to for 2011. This seriously hampered the ISG’s ability to interact with members.

The ISG, together with the Chief Executive Officer (CEO) and the Chairperson of the Board, held a successful meeting with the Registrar of Medical Schemes, clearly establishing the credentials of the FPI. The ISG also submitted comments to the National Treasury on the proposed tax changes regarding medical scheme contributions. In this regard, the ISG identified that vulnerable groupings like

26 FPI Annual Report 2011 The Professional Standard

30 pensioners and people with disabilities would be negatively impacted.

We provided comments in order to protect these vulnerable groupings of our society. The ISG therefore welcomes the subsequent protection of these vulnerable groupings. The Healthcare ISG is also represented on the Business Unity South Africa (BUSA) National Health Insurance (NHI) Task Team. The eventual release of the Green Paper on the NHI required the ISG to shift its focus to be able to respond to the Green Paper. In this regard, we identified the need to encourage business not only to respond, but also to establish an ongoing consultative process. This encouragement of such a structure was well received by business.

The ISG then established a working group to draft the FPI’s response to the NHI proposals. The working group was expanded to include participants and experts outside the FPI, but who were aligned to our objectives, as well as FPI members who were not members of the ISG. These additional resources served the objectives of the FPI well and enabled us to present a quality response.

The ISG also commented on the Draft National Health Bill and, in collaboration with BUSA, made oral submissions to the Portfolio Committee on Health.

The presentation and the proposals made to codesign, co-own and comanage a transformed healthcare system where government, business, organised labour and civil society in concert ensure a successful transformation of our healthcare system was well received by members of Parliament.

André Jacobs, CFP® Chairperson

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the United States of America still at high levels. Emerging markets have lost their shine as demand for their resources and goods has decelerated.

Around the world, there is a confidence crisis or enough uncertainty to make market wizards and economists talk about a (usually indefinable) ‘New Normal’.

This environment has made clients more reliant than ever on the attention of financial planners and investment advisors. The challenge is how to balance risk while managing investor expectations of participating in stock market recoveries. In vulnerable and recovering markets, sound investment strategies are critically important and remain a focus for our Committee.

In 2011, our industry watched and adjusted as the Financial Services Board (FSB) made amendments to Regulation 28. In 2012, we see the Regulator becoming increasingly aware of the impact and relevance of investment strategies. The Investment Planning Industry Sector Group (ISG) has run a series of workshops to educate our members on how to select and manage investments in the context of a client’s long-term investment plan. We hope this is a positive development that will educate our members to lead the industry with a documented investment process.

During 2011, we ran a series of educational articles by Franco Busetti, CFA®, in The Financial Planner magazine.

We intend this ongoing series to form the foundation of an educational library on the FPI website. This will give our outlying members access to excellent Continuous Professional Development (CPD) points and to practical and useful educational opportunities. Our CPD seminar last year, led by Busetti and Rowan Williams-Short, CFA, was well attended and very well received.

Janet Hugo

Janet Hugo, CFP® Chairperson

Investment Planning

I

nvestments still find themselves in particularly complex and challenging times, with the continuing vulnerability of the global financial system. There has been slow and patchy growth, with national debt in Europe, Japan and

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Jerry Botha

Andrew Crawford

Industry Sector Group Reports

Risk Planning

Tax Planning

he Financial Advisory and Intermediary Services (FAIS) Act RE1 and RE5 examinations have brought into focus a number of issues. Besides basic risk management and continuity planning, the Industry Sector Group (ISG) has looked at a list of issues on which the FPI can assist members if Independent Field Advertisers (IFAs) are audited by the Financial Services Board (FSB). The Committee is engaging with Wendy Hattingh of the FSB on this matter. The ISG is also looking to distribute a list of risks that an IFA should consider within its business with a view to mitigating any exposures that may exist.

The social security reform discussions currently under way in South Africa will not only affect investment and administration, but a key component will also be riskbenefit provision. The Risk Planning ISG has been an active participant in the FPI’s Social Security Working Committee. The ISG has extended its review to the shortterm insurance industry, since we have become aware that a number of FPI professionals also provide short-term insurance advice.

The ISG has been involved in the discussions relating to the changes to Section 11(w) of the Income Tax Act and the deductibility of group-policy premiums. The Tax Planning ISG has provided technical input and an update for the membership, whilst the Risk Planning ISG has provided inputs on the practicality and application of the changes. For example, early on, the ISG highlighted the unforeseen impact of the changes on group permanent health insurance (PHI) policies, which was then dealt with when the Act was promulgated. We are pleased to note that, ultimately, the group PHI policies continue to receive tax relief and have not been treated in the same manner as other employer-paid group policies.

Other newsworthy issues have been dealt with through the FPI’s quarterly updates and magazine articles.

he Tax Planning Industry Sector Group (ISG) Committee focused on the tax changes resulting in the Tax Amendment Act promulgated on 10 January 2011. There were also significant tax changes in the Budget Announcement that impacted on our profession.

The Committee submitted comprehensive comments on the draft legislation, and many of these comments were accepted in the National Treasury’s response. We anticipate that tax law will continue to change, especially with the planned introduction of national health and social security.

In addition, workshops were held in Johannesburg, Pretoria, Cape Town and Durban on the latest tax law changes, with such workshops being attended by well over 450 persons. These workshops focused on the various tax changes impacting directly on the profession and provided insights into some useful planning.

The Committee received very positive feedback and hopes that more members will view the workshops as a must-attend for the future. Also, feedback from any member on how the workshops can be made even more needs-specific will be much appreciated.

A video recording was made for DStv on the various tax announcements in the Budget, and members also made various contributions to publications, which are available on the website.

The Committee encourages and welcomes wider participation by, and feedback from, all FPI members. It will remain a critical value-add for members to be able to advise clients on the latest tax amendments that impact directly on personal financial planning, employee benefits, estate planning, and other related and specialised areas.

As Chairperson, I personally wish to thank my excellent team for the work they have done over the past year and for the significant amount of personal time invested by each Committee member.

Andrew Crawford, CFP® Chairperson

Jerry Botha, CFP® Chairperson

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Christo Saayman

Jackie Palframan

Regional Committee Reports

Central Region

Eastern Cape Region

he Committee succeeded in greatly increasing attendance at its Continuous Professional Development (CPD) sessions.

The members of the Committee are Percy Mudzusi, CFP®, Annemarie Trinder-Smith, CFP®, Strauss Jordaan, CFP® and Shirly Hyland, CFP®.

At the first two meetings, we had 27 and 16 persons attending respectively. When we took over, we realised that communication would be a big challenge. We started phoning, compiled a list of members and contacted them to promote the region and our CPD events. As a result, at the last two events, between 50 and 60 people attended. In this regard, we see ourselves as back-up for head office and enjoy a very good working relationship with it.

For these two meetings, we invited experts in our region such as Dr Stefan Joubert (Trusts) and Dolf Schutte (Wills), but people such as Marius Botha, CFP® (Company Policies), Jennifer Grefen, CFP® (Social Security Reform), Ian Bester, CFP® (Investment Portfolio Construction) and Taryn Hirsch, CFP® (New Investment Legislation) also added great value.

We as a Committee trust that we can continue to provide excellently qualified speakers and thus grow the numbers that benefit from their expertise.

he Eastern Cape Region has proved to be no exception when it comes to the increased demands placed on financial planners by the requirement of having to pass the RE1 and RE5 regulatory examinations.

Many members of the FPI in the region have already written the regulatory examinations, and many more are making their final preparations to write the examinations before the deadline of 30 June 2012.

The Committee in the Eastern Cape has brought quarterly seminars to the regional FPI membership, covering relevant topics such as: regulatory examination preparation, compliance, ethics , estate planning, offshore clients, new code of ethics and practice standards, practice management, and changes to the regulatory environment.

The Annual Refresher Workshop remains very well supported and a highlight of the year for members in the Eastern Cape. This year was no exception, with Marius Botha and Wessel Oosthuizen, CFP®, providing a morning full of new and relevant information for financial planners to take back to their practices.

I wish to thank Godfrey Nti and the FPI office for their support, and especially the Eastern Cape FPI Committee members who volunteer in increasingly difficult times to bring Continuous Professional Development (CPD) functions to members in the Eastern Cape Region.

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Christo Saayman, CFP® Chairperson

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Jackie Palframan, CFP® Chairperson

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Yzelle McKane

Logie Govender

Regional Committee Reports

KwaZulu-Natal Region

Gauteng Region

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he Committees of the FPI’s Gauteng and West Rand Regions were combined as it was believed that this would hold a number of benefits, including an increase in the number of regional Continuous Professional Development (CPD) events, higher attendance figures at the events, and an increase in the number of volunteers to co-ordinate and run the Committee.

The Gauteng Region held its CPD sessions according to the different Industry Sector Groups (ISGs) in order to ensure that all relevant issues were attended to, and that all members were granted the opportunity to attend those CPD sessions that interest them. CPD sessions were held on a quarterly basis, each with speakers whose topics complemented each other. We are pleased to report that our CPD sessions were well attended.

The Gauteng Region aims to have attendance of at least 100 members at each CPD session, but also to grow this number for each session. Some topics attract more members than others, and we are always aware of the need to maintain the correct balance.

During 2011, the Committee consisted of the following members: Lara Warburton, CFP® (Investment Planning ISG), Elena Zorio, CFP® (Tax Planning ISG), Natasja Hart, CFP® (Client Engagement ISG), Clive Salgado, AFPTM (Risk Planning ISG), Mark Cunningham (Estates and Trusts ISG), Felicity Stuurman, AFPTM (Employee Benefits ISG), Joanne Gloag, CFP® (Healthcare ISG), Tian Barnard, CFP®, and Mauro Forlin, CFP®.

I would like to thank Committee members for their commitment and attendance at the CPD sessions, as well as for their continuous endeavour to encourage members to attend the sessions, canvass for FPI members and market our brand. From the FPI head office, Adel Victor has been instrumental in arranging CPD sessions.

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he Committee put together four Continuous Professional Development (CPD) sessions in 2011 that were attended by 331 delegates. This generated a profit of R25 000. Some of the keynote speakers for 2011 were David Shapiro, Bruce Cameron, Ricardo Teixeira, CFP®, and Craig Aitchison, CFP®.

We had 160 delegates at the November CPD session, which was our highest attendance in the last three years.

We attribute this to the excellent line-up of speakers as mentioned above. A great highlight for the Committee was having lunch with Godfrey Nti, the Chief Executive Officer of the FPI. The Regional Committee is involved in various aspects of the greater FPI. Nasrat Edoo, CFP®, and Prem Govender, CFP®, are FPI Board members, David Thomson is the Chairperson of the Estates and Trusts Industry Sector Group (ISG), and George Chasomeris, CFP®, is the ViceChairperson of the Tax Planning ISG. Prem Govender, CFP®, is also a member of Financial Planning Standards Board (FPSB).

As Regional Chairperson, I am also involved in the Employee Benefits ISG. Colin Long, CFP®, Jay Ramsunder, CFP®, Logie Naidoo, CFP®, and Wynand Venter, CFP®, are also ISG representatives and contribute to the smooth functioning of the KwaZulu-Natal Committee.

The newcomer is Elana Honiball, CFP®, who is our superefficient secretary. Our success is measured by the excellent teamwork and spirit that each member brings to the Committee.

Logie Govender, CFP® Chairperson

Yzelle McKane, CFP® Chairperson

30 FPI Annual Report 2011 The Professional Standard

Western Cape Region

North Region

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he Committee arranged the following seven Continuous Professional Development (CPD) events during 2011:

 24 February – Mini-convention with Pieter van Zyl (Economy), Jerry Botha, CFP® (Tax) and Louis Niemand (Fund Modelling and Investment Strategies)  19 April – Mini-convention with Ricardo Teixeira, CFP® (Saleable Practices), Anne Cabot-Alletzhauser (Behavioural Finance) and Simon Pearse  23 May – Prof Bernadene de Clercq (Consumer Financial Vulnerability)  18 July – Jan-Carel Botha, CFP® (Fee-based Practices)  25 August – Anthony Campher, CFP® (Legislation/Future of Financial Planners), Chris Brits (Employee Benefits) and Steve Watson (Behavioural Finance)  19 September – Melissa Dyer, CFP® (Economics)  3 November – Andrew Crawford, CFP® (Social and Health Security) and Melissa Dyer, CFP® (Economy).

The events provided members with an opportunity to enhance their knowledge of highly relevant subjects and to interact on a professional level, whilst earning CPD points.

With all the regulatory requirements facing financial planners, the need to gain more knowledge will grow. The Pretoria Committee will continue to support any efforts that make life easier for financial planners, whilst simultaneously giving the best and most appropriate advice to clients.

We support the concept of Treat Your Clients Fairly, and are looking forward to working together with all institutions to enhance the profession of financial planning.

Willie Snyman, CFP® Chairperson

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Esther Venter

Willie Snyman

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ttendance by our members during 2011 of the Western Cape Region’s Continuous Professional Development (CPD) events was good. One of the core functions of the Regional Committee is to plan and organise these CPD events, and, once again, we attracted high-calibre speakers who covered a variety of topical issues pertaining to financial planning. The positive feedback received from our membership has indicated to us that our CPD sessions are definitely adding value. After a very successful 2010, it was a challenge to improve on previous achievements, but we can certainly see 2011 as another successful year.

We held four mini-conventions during 2011. Our first session focused as usual on income tax matters, a subject well presented by Marius Botha. He dealt with taxation of lump sums as well as company-owned policies, with special emphasis on the new aspects of Section 11(w).

Since income tax is a fairly complex subject, his sessions usually generate a number of questions by members. A very interesting and enlightening topic presented by Dr Eric Starke highlighted the ‘Lost Value in Products’. This topic was very well received by all attendees.

The second quarterly session traditionally focuses on practice management and recent influences on financial planning. Peter Stephan, CFP®, covered ‘Practice-building in a Changing Regulatory Environment’, and Ricardo Teixeira, CFP®, covered the issue of business continuity, something that all practising financial planners have to deal with in the context of the new regulations. His topic was entitled, ‘Going Concern or Gone – Do You Have a Saleable Business?’. A very thought-provoking and interesting topic was also covered by renowned author Chantel Ilbury, namely ‘Scenarios, Flags and Probabilities…a Foxy Way to Look at the Future’. Her presentation was certainly an interesting take on the possibilities in the next few months or even years.

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Regional Committee Reports

In the third session, which usually focuses on employee benefits, we covered topics related to employee benefits at this time, and Andrew Canter dealt with the topic, ‘Bonds, Credit and Regulation 28 – Looking at the Impact of Regulation 28 on Bonds Which Are Held by Retirement Funds’. Selwyn Feldman, CFP®, dealt with the topic, ‘Insights into the Retirement Provision of Working South Africans’.

We were also fortunate to have Judge Dennis Davis back to speak on ‘Recent Case Law Affecting Taxation’, as he highlighted a few judgments that will influence the way the South African Revenue Service will deal with certain taxes based on these court rulings.

Our final session for the year focused mainly on health issues. Okore Okorafo, an economist, dealt with ‘The Impact of the Proposed National Health Insurance’.

There were many questions asked during this session.

Esme Prins spoke about ‘The Changes in the Medical Scheme Industry’, and, finally, Johan Lambrechts from the Treasury dealt with ‘The Impact of Changing to Medical Tax Credits’.

Once again, the FPI’s Annual Refresher Workshop attracted large numbers of our members. These workshops are usually slightly longer than the usual quarterly miniconventions and tend to attract other members to the sessions.

Current and thorough knowledge of the topics covered in these sessions is essential for all CFP® professionals.

Esther Venter, CFP® Chairperson

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Support from Statutory Bodies

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Dube Tshidi Executive Officer

Dube Tshidi

he Financial Services Board (FSB) recognises the important role played by the FPI in contributing to the financial services sector in the interest, ultimately, of the consumer.

Not only do the activities of the FPI and the Institute itself assist in adding to the high regard in which the South African financial services sector is held, but, importantly, by providing training opportunities, the FPI also enables individuals to become better equipped and to professionalise.

The FSB welcomes this opportunity to congratulate the FPI on the occasion of its 30th anniversary in 2011.

The FPI remains supportive of INSETA and is represented on INSETA’s advisory committees. Godfrey Nti, the Chief Executive Officer of the FPI, still serves on INSETA’s Audit Committee.

The role that the FPI plays in the development of financial planners is a crucial and commendable one.

You do excellent work! We look forward to strengthening our relationship and together making meaningful contributions to the sector that we both serve.

Sandra Dunn Chief Executive Officer

Sandra Dunn

Financial Services Board

South African Qualifications

Authority

T

Training Authority

he Insurance Sector Education and Training Authority (INSETA) would like to congratulate the FPI on its 30th anniversary and wish the FPI another 30 successful years. INSETA is very proud of its association with the FPI, and we enjoy a very sound professional relationship grounded in mutual trust.

he South African Qualifications Authority (SAQA) congratulates the FPI on its 30th anniversary and wishes it well as it continues to serve the financial-planner community in South Africa.

Further, SAQA commends the FPI on the role it plays in the further education and training (FET) and higher education and training (HET) sectors with respect to the development of appropriate and relevant financial planning qualifications to serve the industry.

SAQA also commends the FPI on its ongoing collaboration with the Insurance Sector Education and Training Authority (INSETA) and the Financial Services Board (FSB) in developing sector skills and supporting professionalisation within the financial services sector in South Africa.

Joe Samuels Chief Executive Officer

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Joe Samuels

Insurance Sector Education and

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Support from Affiliate Organisations

T

he FPI is a strategic member of Business Unity South Africa (BUSA), and we wish it well going forward on its 30th anniversary.

The FPI aims to play a central role in ensuring that high standards of professionalism and ethics are maintained by its members, and this remains an expectation that we as BUSA have of all our nearly 60 member organisations.

Within the business community, ethical and moral behaviour is the founding tool by which clients rate a business community or sector, and it remains the cornerstone of any profession. We wish the Institute well in its task of overseeing and promoting ethical standards in the financial planning profession.

Prof GJ (Deon) Rossouw Chief Executive Officer

Prof GJ (Deon) Rossouw

Business Unity South Africa

 EthicsSA’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, in its sector of the economy, and in Africa as a whole.

We wish the Institute well in its important task of overseeing and promoting ethical standards in the financial planning profession.

Financial Planning Standards

Board

Financial Planning Standards Board Congratulates the FPI on 30 Years of Excellence in Financial Planning

A

Ethics Institute of South Africa

W

e would like to congratulate the FPI on its 30th anniversary. The FPI has a vital and indispensable role in ensuring that high standards of professionalism and ethics are maintained by its members.

Ethical behaviour in the best interests of clients is one of the distinguishing marks of any profession. The FPI has played an important role in promoting ethical and professional standards amongst the ranks of financial planners.

As an organisational member of the Ethics Institute of South Africa (EthicsSA), the FPI has committed itself to:

s a valued member of Financial Planning Standards Board (FPSB), the FPI is one of 24 pre-eminent certifying bodies worldwide with the singular vision of establishing financial planning as a distinct profession.

The FPI is home to the seventh-largest number of CFP® professionals in the world, adding more than 250 new CFP professionals in 2011, representing an increase of nearly 7% over 2010.

CFP professionals in South Africa are part of a growing global population of CFP professionals who, at the end of 2011, stood at nearly 140 000.

The FPI’s International Role

In 2011, then-FPI Chairperson Gerhardt Meyer, CFP®, then-Chairperson-Elect Solly Keetse, CFP®, Chief Executive Officer (CEO) Godfrey Nti, and Head: Certification and Membership Services Anthony Campher, CFP®,

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represented the FPI at FPSB’s global meetings in Frankfurt and Washington, DC, where FPSB members held strategic discussions on regulatory and market trends affecting financial planning and the CFP certification programme.

The FPI’s leadership also joined FPSB at the International Organization of Securities Commissions’ (IOSCO) Annual Conference in Cape Town to educate global financial services regulators on the value of financial planning and the importance of globally recognised professional standards.

In October 2011, several noted CFP professionals from South Africa joined an editorial team of financial planning thought leaders to blog for Financial Planet (www.financialplanet.org), a website created by FPSB to generate awareness and support for financial planning as a distinct professional practice worldwide. John Campbell, CFP®, Warren Ingram, CFP®, Natasja NorvalHart, CFP®, and Alec Riddle, CFP®, have all shared their views on topics related to ethics and regulation, and on their hopes for the future of the profession.

Service to the Financial Planning Profession

A Proud Partnership

As FPSB looks to the future, we count on the active participation and ongoing support of the FPI, and of all CFP professionals in South Africa, to communicate the value of financial planning to our key stakeholders, including consumers, educators, and financial services employers and regulators. Congratulations to the FPI for its leadership, both at home and around the world.

We look forward to working with you in 2012!

Noel Maye Chief Executive Officer

Noel Maye

FPI volunteers continued to support the financial planning profession through their service as global ambassadors and thought leaders in 2011.

Gerhardt Meyer, CFP®, represented South Africa on FPSB’s Professionalism Framework Working Group together with volunteers and staff from other FPSB members in Australia, Canada, the United Kingdom and the United States of America. The working group developed a set of criteria to assist FPSB members in evaluating their readiness to serve as professional bodies for financial planning.

Wessel Oosthuizen, CFP®, a former director of the FPI, pilot-tested a new FPSB Integrated Financial Planning education course in South Africa.

He continues to work with FPSB as a member of FPSB’s Standards Committee and Pathway Program Working Group on a variety of initiatives, including the development of a sample financial plan to guide FPSB member organisations and candidates on CFP certification, as well as a new FPSB advisor-level credential targeted for launch in 2012.

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, by agreement with FPSB.

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Support from Education Partners

Further Education and

Milpark Business School

T

M

Training Institute

he Further Education and Training Institute (FETI) wishes to thank the FPI for its continued support of the Further Education and Training Institute-Higher Education and Training Institutions (FETI-HETI) articulation project involving public further education and training (FET) colleges and universities.

Twenty-three graduates from FET colleges entered the University of the Western Cape’s (UWC) School of Business and Finance Advanced Diploma in Management Studies in 2012. A critical factor underpinning the UWC’s decision to enter into an articulation agreement with the Insurance Sector Education and Training Authority (INSETA) and FET colleges was that all students would write the FPI’s REGISTERED FINANCIAL PLANNERTM board examination.

Whilst the RFPTM board examination may be phased out for future provision, the FPI’s commitment to playing a key role in professional quality assurance of FET College NQF (National Qualifications Framework) Level 5 financial planning provision is welcomed and respected.

INSETA intends to fund the expansion of this successful articulation project to another province in 2012. The FPI’s professional quality assurance is recognised as an integral part of this articulation process.

FETI also wishes to acknowledge the support of FPI staff, particularly Anthony Campher, CFP®, and Joan Salie, who played critical roles in ensuring that the FPI board examinations were flexibly administered at FET colleges, often at very short notice. The FPI’s professionalism is highly regarded by FETI, the UWC School of Business and Finance and the FET colleges.

FETI looks forward to the opportunity of partnering with the FPI in 2012 in order to advance systemic articulation between FET colleges and universities with regard to financial planning qualifications.

Seamus Needham Department of Research and Planning

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

We congratulate the Institute on its successes in raising standards in the financial planning profession for the past 30 years.

As consumer education increases and the financial services industry and its products are scrutinised almost weekly in the media, the need for competent, ethical financial planners has never been greater.

The various industry ombuds have, through a range of determinations, highlighted the fact that unethical and negligent behaviour by industry role-players will no longer be tolerated.

Great strides have been made in the past year – through the implementation of the compulsory first level of Financial Advisory and Intermediary Services (FAIS) regulatory examinations – towards ensuring that individuals providing financial planning services maintain a minimum standard of competence. This level of quality control will remain, and will in fact increase as the second level of regulatory examinations is rolled out to test advice-givers and intermediaries with respect to the product they deal with daily.

Recent legislation as well as legislative amendments anticipated in the next two or three years underline the value that the professional financial planner offers to clients. Legislation is impacting on a variety of planning areas – from retirement, to tax, to business, to healthcare planning. Those with existing financial plans will have to review these plans together with their planners to gauge the impact of these changes on their provision and on their ability to achieve financial goals. In some instances, urgent steps may be required to accommodate these amendments. The attention of those South Africans without any kind of financial plan, regardless of how basic, will ideally be focused on the need to plan.

A financial plan does not have to involve complex planning structures in all instances. What it must entail,

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Nelson Mandela Metropolitan

University

N

elson Mandela Metropolitan University (NMMU) is a university ‘for tomorrow’. We nurture innovation, foster creativity, embrace technology, and develop people to meet the challenges of the world of tomorrow.

In the sphere of financial planning, we are developing the next generation of financial planners to meet the unique needs of our diverse country and those of Southern Africa.

We are proud partners of the FPI in bringing financial planning education to various levels of learning: to school leavers seeking a Bachelor’s Degree in financial planning, to current financial planners who wish to upskill by way of postgraduate education, and to those wishing to make a mid-career change to financial planning.

We view financial planning as a critical area in which we as an education partner can positively impact our community in a sustainable manner through the development of young financial planners and consumer education. With the focus of the Regulator clearly on the Continuous Professional Development (CPD) of the industry, we are proud to be able to assist the FPI and the financial planning community in providing lifelong learning solutions.

We congratulate the FPI for its ongoing interventions designed to provide a framework within which professional financial planners can practice successfully.

Furthermore, we support the FPI in its continued development of the practice standards aimed at leading the industry towards becoming a fully fledged profession.

Jackie Palframan, CFP® Head of Financial Planning Programmes

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Jackie Palframan

Julian van der Westhuizen Chief Executive Officer

Julian van der Westhuizen

however, is a realistic assessment of a person’s financial and other goals – over the short, medium and long term – and the ability of the person to achieve those goals given the current provision. ‘Where do you want to be?’ is a question that the client must answer. The question of ‘Will you be able to get there?’ is the one that the financial planner must assess through conducting a needs analysis and considering products that the client already owns.

Naturally, the financial planner has an even greater role if the answer to the last question is ‘No’, that is, to provide the client with a road map, through a financial plan, which indicates the steps that can be taken to ensure that, in time, the answer becomes ‘Yes, you are/will be able to reach your goal’. Through building a lifelong relationship with his or her client, the financial planner is more than just the road sign pointing the way; he or she becomes the guide who walks the route with the client and, through constant communication, assessment and review, ensures that the financial plan remains current and capable of achieving the client’s goals.

Through its rich history and international affiliation, the FPI ensures that South Africans in need of financial planning assistance can have the confidence that, in a CFP®, they are dealing with a competent and ethical person. Through its new Code of Ethics and Professional Responsibility, the FPI has further entrenched the values and behaviours that are required of a professional financial planner.

Milpark Business School remains committed to providing quality education for current and prospective members of the FPI across all levels. We are proud to be associated with the FPI and wish to pledge our continued support of the Institute in its future endeavours.

YEARS

Support from Education Partners of the international CFP mark, which ensures that international standards of quality and certification for the financial planning process are maintained, and congratulated SU on doing that splendidly.

SU would like to congratulate the FPI on turning 30 in 2011 and will strive to continue this valued partnership with the FPI in the future.

Stellenbosch University

D

University of the Free State

H

eartfelt congratulations go to the FPI for being committed to high standards of skill, ability and knowledge for the past 30 years. During this time, the FPI was, and still is, the only organisation in the financial services industry in Southern Africa that is committed to professional financial planners.

The University of the Free State’s support for the FPI is reflected by our long-standing relationship of 26 years – first, as the quality assurer of the Institute’s board examination (professional examination) for almost 16 years, and then, later, as the first education provider accepted and approved to deliver a recognised financial planning qualification that would allow members of the FPI to acquire the most prestigious status of a CFP® professional.

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 the standards of the FPI and Financial Planning Standards Board (FPSB).

The Centre for Financial Planning Law prides itself on providing a top-quality programme to ensure that the members of the FPI who attain CFP credentials and represent the FPI can do so with the skills, knowledge and abilities expected of a professional of this calibre.

Wessel Oosthuizen, CFP® Director at the Centre for Financial Planning Law

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Wessel Oosthuizen

Prof Johann de Villiers

Prof Niel Krige

uring the past eight years, the Department of Business Management at Stellenbosch University (SU) has been partnering with the FPI in offering formal postgraduate qualifications in financial planning to students at SU. This partnership not only gives students access to membership of the FPI, but also affords them global CFP® certification.

The partnership was initiated by Prof Niel Krige, the Programme Director and former Deputy Chairperson of the Momentum Group, with financial support provided

by Allan Gray, Old Mutual and Sanlam. SU was the first South African university to offer a residence-based CFP qualification, and received full accreditation from the FPI soon after the diploma was launched at SU. Annually, our successful diploma students pass the demanding qualifying FPI examination with a pass rate in excess of 80% and, recently, Prof Krige commented: “We are proud of both our Prof Niel Krige students and our lecturers. A Head of Financial CFP professional is qualified Planning, Department of to provide clients with Business Management professional advice on various financial issues on a personal as well as a corporate level.

The FPI is the quality-standards body for the profession, which recognised some time ago that a career path for learners to enter the profession was necessary.”

During a recent annual FPI/SU induction ceremony, where our successful students Prof Johann de Villiers Dean of the Faculty were awarded their CFP of Economic and designation, the FPI stated Management Sciences that it is the local custodian

30

University of Johannesburg

T

Carl Anschutz, CFP®, CA (SA) Deputy Head of Department: Department of Finance and Investment Management and Programme Manager: Financial Planning

Carl Anschutz

he University of Johannesburg (UJ) is honoured to be associated with the FPI. We like the fact that we are one of your preferred suppliers in your quest to set standards for financial planners to strive towards. It is good to know that there is a professional body, looking after the interests of financial planners, that wants to be more than a mere ‘product pusher’, and that your members are aware they may be taken to task if your standards are not adhered to.

At UJ, we are proud of our ability to consistently prepare our financial planning students for the workplace, and are aware that we can count on the FPI to support us through the standards you set.

Congratulations to the team at the FPI on your 30th anniversary. Over the past 30 years, you have grown into a dynamic organisation that your members can be proud of. Being the only institution that is able to bestow the CFP® certification on South Africans wishing to attain it, is a huge responsibility that you have embraced professionally. We look forward to our continued collaboration.

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Support from Industry Bodies

Black Brokers Forum

ASISA

Black Brokers Forum

T

O

Leon Campher Chief Executive Officer Peter Dempsey Deputy Chief Executive Officer

Peter Dempsey

Leon Campher

he Association for Savings and Investment South Africa (ASISA) and its members recognise the important role that expert financial advice plays in encouraging consumers to save and invest, as well as prepare for unexpected events like death and disability.

We are therefore supportive of organisations like the FPI that exist to establish and maintain professional financial planning standards in Southern Africa.

Quality advice is critical in helping the savings and investment industry achieve its goal of encouraging more people to save towards their long-term goals.

This can only happen if consumers are given access to competent financial planners who are professionally qualified and have the necessary experience.

The FPI has focused on improving levels of professionalism for the past 30 years, and we would like to wish the Institute well as it continues to ensure that local practices remain of the highest standards, in line with global developments.

ne of the reasons for the formation of the Black Brokers Forum (BBF) was to concretise ties and relationships with industry bodies which seemingly did not have solid ties with blacks. The BBF found the FPI accessible, and talks started in 1999. When the FPI started categorising its membership in progressive steps, we as members of the BBF were encouraged to apply, and full benefits of FPI membership were discussed. It is important to note that, historically, the market serviced by black brokers and the market serviced by most FPI members was different, and so were the approaches.

The guidelines of the FPI to be followed when offering financial products seemed to be too difficult to implement, as they were designed for the informed market, whereas black brokers were predominantly servicing the financially literate and semiliterate market.

The introduction of the Financial Advisory and Intermediary Services (FAIS) Act in 2002 and its implementation in 2004 brought the BBF and the FPI together, as they had to find common ground when submitting comments to committees, set up by the Financial Services Board (FSB), the Department of Finance and the National Treasury, regarding the formulation of policies and the fine-tuning of the FAIS Act. The BBF then became involved in financial literacy by running a speech contest in schools on the South Coast of KwaZulu-Natal. The FPI subsequently joined the campaign, which started with more or less 50 schools. The FPI negotiated with Financial Practitioner Development regarding the choice of topics for the Speech Contest and, together with the FSB, expanded the programme so that it is now a provincial project.

Plans are already under way to make the Speech Contest a national contest as from 2013. It is important to mention that the FPI offers a learner who obtains a place in the contest enrolment for a full degree in management or finance at any university of his or her choice, provided that such learner obtains exemption.

In 2008, the FPI appointed me, then the Deputy President of the BBF, to its Board of Directors, and I served on the Board in different portfolios. This assisted the BBF in understanding fully how the FPI operates and also cemented ties with the organisation. The BBF is now

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ready to organise workshops to be addressed jointly by the FPI and the BBF, as it is felt that both organisations need to understand each other and the respective cultures in order to better service the market.

A number of industry issues demand co-operation and collaboration between the two organisations.

It is therefore hoped that we can establish a formal structure and engage in bilateral meetings to assist in the professionalisation of the industry.

Artwell Hlengwa, AFPTM Stakeholder Relations Officer

South African Savings

Institute

P

C

Justus van Pletzen, CFPÂŽ Chief Executive Officer

Justus van Pletzen

ongratulations to the FPI for taking the lead 30 years ago in an effort to professionalise the life insurance and investment industry in South Africa.

The FPI has succeeded in setting the standards which have encouraged the industry to strive towards achieving a high level of professionalism. This commitment to professionalism has certainly inspired the industry as a whole to commit to achieving excellence when it comes to factors such as reliability, demeanour, ethics and accountability.

We are all proud to play a role in this dynamic industry, yet the longevity and sustainability of the industry can only be guaranteed if we have happy customers. This can only happen if we, as an industry, can provide professional advice, service and appropriate solutions.

Let us all join forces in trying to achieve the ultimate goal of pure professionalism, so we can be proud of our industry and not only attract more professionals but also more customers.

Elizabeth Lwanga Nanziri Chief Executive Officer

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Elizabeth Lwanga Nanziri

Financial Intermediaries Association of Southern Africa

ersonal financial planning is a necessary and recommended exercise for all financially active individuals. Yet the lack of financial literacy has seen many consumers compromising their financial wellbeing.

The envisaged complexity of this exercise quickly disappears if one takes advantage of the wealth of knowledge possessed by financial advisors. In a dynamic financial environment such as South Africa’s, the role of the FPI in ensuring that these financial advisors meet internationally accepted standards is extremely important. It not only ensures that consumers receive a quality service, but it also helps them engage meaningfully in the financial sector by making optimal decisions for their financial wellbeing.

This complements the role played by institutions such as the South African Savings Institute (SASI), namely that of ensuring that consumers receive all necessary information to aid them in making financial decisions for their financial health and that of our country.

SASI is therefore privileged to have worked with the FPI on projects that improve personal financial planning skills such as the Teach Children To Save (TCTS), Tertiary Financial Literacy, and Festive Season Savings Campaigns. In the decade of SASI’s existence, we have seen the rewards of these campaigns. There is no doubt that the existence of the FPI over the past 30 years has left positive footprints in the financial sector.

SASI thus congratulates the FPI on its 30th anniversary, and we look forward to continued collaboration with the FPI in building a financially responsible citizenry.

Then...

Mike van Greunen presenting the Old Mutual Pension & Retirement Provision prize to the winner, C J Roussouw

Harry Brews, Chairperson of ILPA from 14 July 1981 to 1 June 1986

Back row (left to right): Cas Potgieter, Trevor Labuschagne (Executive Director), Prof W Herbst, Stephen Bishop, Ian Solomon, Allan Chettle, Arnold Berns Front row (left to right): Louw van Wyk, Dr Nigel Wigram, Harry Brews (President), Paul Nel, John Dittmer

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Left to right: Lawrence Davies, Southern Life Alexander Thompson, Old Mutual, Top Life Prize Michael Budden, Old Mutual Debra Hellmann, Southern Life, Top Pension Prize Andries Cronje, Old Mutual

Wynand du Toit, Managing Director of Volkskas Versekeringsmakelaars, presents the Top Life candidate in the 1983 ILPA Examinations, J E de Waal, with his prize – a trip to the United States plus R500 spending money and a trophy from the donors

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YEARS

Godfrey Nti (left) and Paul Rabenowitz from Lightbulb Learning (right) present the 2011 Top Student Award in the RFPTM Board Examination to Alex Cook (centre)

Godfrey Nti (left) and Martin Lessing from Glacier by Sanlam (right) present the 2011 Top Student Award in the AFPTM Board Examination to Suzette Naude (centre)

Gerhardt Meyer (right) presents the 2011 Chairman’s Award to Wessel Oosthuizen (left)

Godfrey Nti (left) and Ronald King from PSG Konsult (right) present the 2011 Top Student Award in the CFPÂŽ Board Examination to Ruan Schroder (centre)

FPI 2011 Annual Convention

Lionel Karp (left) talking to consumers during the Johannesburg Consumer Clinic

...And Now

44 FPI Annual Report 2011 The Professional Standard

Mersey Booysen (left) and Joe Bester from Citadel (right) present the 2011 Media Award to Nico van Gijsen

FPI staff members helping out at an SOS Children’s Village

30

Warren Ingram, winner of the 2011 Financial Planner of the Year Award

Finalists for the 2011 Financial Planner of the Year Awards, from left to right: Jan-Carel Botha, Warren Ingram and Shaun Latter

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Board Members

Solly Keetse, CFP® Financial Services Board Chairperson Non-executive

Godfrey Nti Chief Executive Officer Executive

Sankie Morata, CFP® BOE Trust Ltd Chairperson-Elect Non-executive

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

Bongani Sithole Liberty Appointed Director Non-executive

Nasrat Edoo Sirkissoon, CFP® Sanlam Director Non-executive

Ben Raseroka Legal Exchange Corporation Appointed Director Non-executive

Raimund Snyders, CFP® Old Mutual Director Non-executive

Kathryn Franz, CFP® Acsis Ltd Technical Director Non-executive

Ronald King, CFP® PSG Konsult Director Non-executive

Esther Venter, CFP® Milpark Business School Regional Director Non-executive

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FPI Team

YEARS

Finance and Operations Top left to right: Yolanda Grobler, Thando Madiba, Martin Pheiffer, Ohna Norval, Cathryn Stevens, Rosina Lekhelebane Bottom left to right: Evodia Rasile, Mpho Nkuna, Nomaxabiso Tyhutyhani, Batwa Mzamane, Nicky Wessels

Examination Body Top left to right: Penny Willemse, Anna Fick, Zanele Xaba, Adele Whyte Bottom left to right: Toni Santana, Renny Mmusi, Lucille Wessels Insert: Christopher Busschau

Office of the CEO Godfrey Nti, Chief Executive Officer Sandra Taylor, Personal Assistant

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FPI Team

Certification and Membership Services Top left to right: Yolanda van Niekerk, Vusi Xaba, Jacqui Grov辿, Anthony Campher, Joan Sallie, Loraine de Waal Bottom left to right: Frances Creighton, Carla Wingrave, Sherma Malan, Hannah Brill, Marlyn Veldman

Technical Services Left to right: Carla Letchman, Almo Lubowski, Clayton Lautenberg

Marketing and Communications Top left to right: Adel Victor, Kirsten Stevens Bottom left to right: Tsholofelo Dihutso, Kate Goliath

The CERTIFIED FINANCIAL PLANNER速 and CFP速 trademarks each appear with the appropriate superscript symbol (速) in their first use in printed materials. Thereafter the trademarks, correctly, appear without the relevant superscript symbol. Kindly contact the FPI should you have any queries relating to the proper use of trademarks.

48 FPI Annual Report 2011 The Professional Standard

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The FPI ensuresexpersp its members maintain soluptatur, officiundit et hiciae ra nonsentis Reach the next level of your financial planning career with the erovit, the highest ethical standards, and provides financial planners et volupta volesto ipsa cor the sunto dolupti orrorec professional standard: a CFP certification. with a CFP designation, opportunity to stand out. atemolo rectur am alique et ea qui consed que esectet endent quat ute aetCFP dolupThe Financial Planning Institute of Southern Africa (FPI) is For volori furthervelenim information on becoming professional, please committed to excellence in the financial planning industry. The visit www.fpi.co.za or call 086 1000 FPI (374). For more leading independent professional body for financial planners, information regarding the global CFP certification programme, the FPI serves its members and the public by ensuring that please visit the Financial Planning Standards Board (FPSB) people who carry the CFP designation are qualified, experiwebsite at www.fpsb.org.

Contact us Financial Planning Institute of Southern Africa Palms Office Court, Block A, Ground Floor, Kudu Avenue, Allen’s Nek PO Box 6493, Weltevredenpark, 1715 Tel: 086 1000 FPI (374) E-mail: fpi@fpimail.co.za

www.fpi.co.za