2015/2016 Integrated Report
Leading the Profession
Our Vision Professional financial planning for all.
Our Mission FPI’s mission is to advance and promote the pre-eminence and status of financial planning professionals, while at all times acting in the interests of the society (community, constituency) whom the profession serves, by: 1. Improving the quality and accessibility of professional financial planning for all in Southern Africa. 2. Acting as advocate for professional financial planning, building a recognition of the importance and need for such planning by the general public. 3. Providing a framework within which members can achieve qualifications and maintain competence to create greater value for their clients, practices and employers. 4. Ensuring that members maintain the highest ethical standards in the pursuance of their profession. 5. Providing a leadership role within financial services by providing balanced, credible input and commentary to government and the public. 6. Facilitating transformation within the profession.
01
2015/ 2016 Integrated REPORT
CONTENTS About this report
03
FPI at a Glance
04
A word from our Chairperson
05
A word from our Chief Executive Officer
09
To our Stakeholders
12
Growth in the face of challenges
15
Building a Professional Framework
17
Building Capacity
19
How we are Governed
2
Our Financial Position
29
Looking ahead into 2016
36
Contributors
38
2015/ 2016 Integrated REPORT
02
About this report The report is used to explain and update our target audience and to create value for our stakeholders. We aim to tell a story about FPI’s strategic developments, successes and future plans.
What is Integrated Reporting? Integrated reporting is designed to provide insight about the resources and relationships used by an organisation. The International Integrated Reporting Council (IIRC) in its International Integrated Reporting Framework defines the integrated report as “a concise communication about how an organisation’s strategy governance, performance and prospects, in the context of its external environment, lead to the creation of value in the short, medium and long term”.
03
2015/ 2016 Integrated REPORT
FPI at a glance The Financial Planning Institute of Southern Africa (FPI), a South African Qualifications Authority (SAQA) recognised professional body for financial planners, serves the public by ensuring that people who carry the CFP® designation are qualified, experienced and professional. We are recognised internationally and are a founding and a current affiliate member of the international Financial Planning Standards Board Ltd (FPSB) based in the United States of America. Along with 25 other affiliate member countries we offer CFP® certification, the highest recognised professional designation worldwide for a financial planning professional. In 2012, we were highly commended by FPSB and awarded Tier 1 Affiliate Status for receiving 96% in the global assessment. This is the highest achievement any affiliate has ever received.
Our Values Clients first Competence Confidentiality Diligence
Fairness Integrity Objectivity Professionalism
2015/ 2016 Integrated REPORT
04
A word from our Chairperson Board Composition The Board is made up of highly qualified individuals with various levels and degrees of exposure within the financial services industry. Their diverse skills, experience and knowledge has set FPI in a good position as a thought leader within the industry. Johan Erwee, CFP®, finished his term as a director on the board, and even though we said goodbye to a highly skilled gentleman, we also welcomed new board members, Wouter Fourie, CFP® and Kim Potgieter, CFP®, who brought with them a wealth of insights, skills and expertise. In order to provide FPI with the direction and guidance it needs to achieve its strategic objectives, the board adheres to the highest standards and principles of good governance, making our board meaningful and effective.
Our Voice The board has various sub-committees, which add to the level of expertise we have within the team leading FPI. The Advocacy Committee plays an important role when engaging with industry stakeholder such as Financial Services Board (FSB) and National Treasury (NT); ensuring that we are on the same page where the Retail Distribution Review (RDR) is concerned. Having this sub-committee in place we are able to voice the views of our members and share how we see financial planning in South Africa as well as globally.
“H
aving this sub-committee in place we are able to voice the views of our members and share how we see financial planning in South Africa as well as globally.
05
2015/ 2016 Integrated REPORT
”
Governance The board structures are very fair and transparent as we comply with standards and principles of King III codes.
the
Our sub-committees have many members who volunteer their time and expertise and each sub-committee is then chaired by a member of the board. Our disciplinary committee is a good example of the different skills that exist within each sub-committee; where legal experts as well as other skilled professionals give guidance ensuring we follow the correct processes when dealing with disciplinary matters concerning our members.
2015 Highlights One of the biggest highlights for 2015 was having Noel Maye, CEO of Financial Planning Standards Board (FPSB) visit South Africa. The purpose of his visit was to leave us with a clear understanding of the functions and mandate of FPSB. For the board it definitely added value, as we gained invaluable insights into their standards and why ours have been aligned accordingly. Noel’s visit was not only beneficial for FPI, but it also encouraged courageous conversations with some of our stakeholders. We met with the likes of South African Qualifications Authority (SAQA) and National Treasury (NT) and the outcome of these meetings gave us hope that we are recognised and respected as a thought leader in the industry. 2015/ 2016 Integrated REPORT
06
2015 also saw the decision to host Retirement Reform Workshops in 2016, which will form part of the current FPI MYMONEY123™ initiative.
The purpose of this decision was to broaden the understanding of people where financial planning is concerned.
Regulatory relationship in 2015 Since the start of Retail Distribution Review (RDR) we have engaged with our members in different cities regarding the implementation of RDR. It was of utmost importance for us to get the input of our members so that we could give meaningful feedback to FSB and other regulators raising our concerns. FPI’s brand has been positioned fairly well due to our position in making sure our members are always well informed of our goals and objectives; which have been aligned and integrated to regulatory changes to assist in moving the industry changes. Treating Customers Fairly (TCF) is still seen as the most over used word in our business at FPI and that of our CFP® professionals. I strongly believe that we have adopted the TCF principles, which has now been embedded in the way we advocate our cause.
TCF
With regard to the Twin Peaks Model, I believe that we have made great strides in adapting to the two fundamental objectives of the model. Through our stakeholder and member engagements, and in meeting with other member organisations, we have come to the realisation that there is still a lot of room for us to learn from one another in order to remain relevant and move forward.
Improvement of misconduct and bad practices within the financial planning industry We believe in the highest level of standards, integrity and professionalism and we ensure that our members adhere to them at all times. We have channels that allow clients, board members or any other member of the public to raise their concern when dealing with unethical CFP® professionals. We encourage them to approach FPI at all times when these concerns are identified. Our code of conduct plays a very important role, so when it comes to complaints we believe in making informed decisions. This means that we would
take the necessary steps to look into the matter and interrogate all the evidence we are presented with. Our members are required to adhere to our code of conduct, so when a complaint is presented to us, we don’t take it lightly. The FAIS Ombud invites us to look at the statistics of complaints launched against our members on a yearly basis. This assists us in making sure our members are constantly measured and held accountable for their actions based on the FPI Code of Ethics they subscribe to, also encouraging continuous professional development. • Regulator relations – to position the CFP® mark as the global symbol of excellence.
Our international affiliation within the financial planning industry Our affiliation with FPSB has presented us with the opportunity to engage with many international countries that have also been licenced to offer the CFP® designation. It’s allowed us to benchmark our standards to international standards; and we’ve been fortunate to represent South Africa in FPSB council meetings. Gerhard Meyer, CFP®, an FPI board member, was also appointed in 2015 as a director on the FPSB board. In his capacity as a board member of FPSB, it has given FPI a healthy opportunity to positively influence this international body. I have also been reappointed as chairperson of FPSB’s Developing Markets Forum. The key strategic areas that we look at are: • Consumer engagement – to increase their knowledge of the profession
These strategic areas are not only challenges unique to South Africa, but a common area of development across all territories offering the CFP® certification. I am also the member representative of Member Advisory Council (MAC) representing the Developing Markets Forum.
Moving forward and improving consumer awareness in 2016.
Our cause has not changed; our mission to play a leading role in getting practices and organisations to adopt a learning pathway, where all students studying towards a financial planning qualification, is still on track. In 2016 we want to advocate this cause more; we want to embrace and create a culture of transformation; transformation in the future of CFP® professional membership; also transformation in creating avenues for students with a disadvantaged background to be presented with equal opportunities.
Closing We have the role and responsibility to ensure that as CFP® professionals we embrace the spirit of good will; have courageous conversations and continue educating the public about unplanned risks and help them manage it. As CFP® professionals let’s continue advocating, as the ambassadors of financial planning and treating our clients with their best interests at heart.
Adv.Sankie Morata, CFP®
2015/ 2016 Integrated REPORT
08
A word from our Chief Executive Officer We went into 2015 knowing that the year will be very pivotal in shaping the future evolution of the financial planning and advisory profession. It didn’t disappoint, but in the midst of all the turbulence and regulatory developments, we explored a number of silver linings as we worked on advocating to policymakers and regulators on how best to carve out a profession from our industry, which enjoys parity with other established professions.
Member Growth Our membership growth prospects remain strong despite our phasing out of the RFP™ and AFP™ designation as well as our decisions a few years ago to add a separate layer of CFP® Professional Competency Exams (PCE) to the underlying requisite academic qualification for membership. FPI added over 200 new CFP® professionals in 2015, but also lost many through voluntary relinquishments as well as terminations for not meeting FPI’s ongoing certification requirements. In the international context, we maintained our place of being the seventh largest FPSB affiliate in the world, with over 4500 CFP® professionals, a number that matches the number of CFP® professionals in Europe combined.
“
W
e were also proud to join FPSB’s Chief Executive Committee, a committee made up of the top seven FPSB affiliates around the world, established to play a leading role in driving some of FPSB’s key strategic programmes.
09
2015/ 2016 Integrated REPORT
”
FPI’s involvement in putting SA on the map As we strengthened the Institute and its associated brands locally, we also strengthened our contribution to the global community. We were privileged to be asked to join FPSB’s mentorship programme to help mentor other FPSB affiliates. We were also proud to join FPSB’s Chief Executive Committee, a committee made up of the top seven FPSB affiliates around the world, established to play a leading role in driving some of FPSB’s key strategic programmes. A number of South Africans were also asked to play critical roles within FPSB in 2015. FPI’s Board Chairperson, Adv. Sankie Morata, CFP® continued to chair FPSB’s Emerging Markets Forum. FPI director, Adv. Gerhardt Meyer, CFP® continued chairing FPSB’s Regulatory Advisory Panel. Our academic experts, Wessel Oosthuizen, CFP®, Esther Venter, CFP® and Shirly Hyland, CFP®, have worked tirelessly and made a huge difference as part of various FPSB task teams devoted to setting FPSB’s new certification standards. We were also pleased to have FPSB’s CEO, Noel Maye, pay a visit to South Africa and helped tremendously to reinforce our advocacy work with regulators and policymakers. 2015/ 2016 Integrated REPORT
10
Finally, we also retained the record of highest score ever achieved by an FPSB affiliate in their ongoing assessment of how its affiliates comply with best practice standards for its certification and professional body programme – a score of 96%!
Pro bono Initiatives We deeply appreciate the efforts of all members who are involved in our pro bono and financial education activities and we encourage other members to join in on the effort. We are already seeing tangible results that our collective effort is making in the lives of beneficiaries as well as policymakers and regulators taking good notice.
Transformation within the profession With transformation being a moral and business imperative, FPI has to do significantly more to lead, and be seen to be leading, on this important topic. In 2016, and as part of the new medium-term strategy, we plan on developing and publishing a detailed transformation strategy for the profession.
The importance of standards, adding on the code of ethics We received overwhelmingly positive feedback from members about the new code, touting its comprehensiveness and simplicity. We plan on routinely developing guidance notes to help members embed the code in their businesses and daily lives. We however also know that to a large degree, the willingness and capacity to uphold such a code is equally as important, if not more important, than the code itself. Ultimately, we want to reach the point where the public instinctively trusts the competence, integrity and professionalism of all who hold themselves out to be financial planners.
11
2015/ 2016 Integrated REPORT
Looking into 2016 We are confident that in the near future some of the painstaking efforts that we are putting into FPI’s three strategic focus areas of Leadership, Awareness and Standards will culminate in very tangible results. In late 2015 the FPI Board approved a new and robust three-year medium-term strategic plan for the Institute for 2016 – 2018. Together with the executive team, we are looking forward to implementing the new plan to its fullest. The new strategy (on page 35) is premised on FPI’s Long Term Vision (FPI Vision 2025) of Leadership, Recognition and Awareness, and Standards Upliftment. I want to conclude by saying thank you to all our members, to all our volunteers – past and present – and to all those who are committed in assisting FPI achieve its goals – we appreciate your insight, we appreciate your time and we are excited to continue our work, together with you, going forward. Lastly, I would like to thank my staff, their diligent work behind the scenes, together with our members and volunteers makes FPI what it is today.
Godfrey Nti
To Our Stakeholders Our Developments and 2015 Accomplishments Our strategic plans continue unabated and are focused on three main areas namely: leadership, standards upliftment and recognition and awareness. We will remain focused on promoting and strengthening the importance of the CFPÂŽ mark as the symbol of excellence in financial planning.
The Year 2015 in Review The CFPÂŽ mark is the symbol of excellence in financial planning and in the year under review we have forged ahead with initiatives designed to uphold excellence in our industry. In pursuit of these initiatives we have undertaken a number of activities that we share with you in the pages that follow.
Quality and Service The quality and pace of service delivery to our members is an important function. We are therefore happy to report that service delivery improved dramatically after the introduction of the new service desk. The availability of systems also improved as a result of good IT governance and the introduction of the change control policy and process.
Testing Knowledge It was previously anticipated that the exam sittings would likely exceed 2014’s by 11% (1 300). In the end the 2015 numbers exceeded 2014 by 1 903 candidates, which is more than was envisaged at the outset. A combination of factors contributed to this success. These, for example, include: efficiency, new corporate accounts, services and commitment along with support from key role players. A combination of the above and the general energy, awareness and eagerness focused on getting the numbers up, were part of the recipe for success. The Examinations Body conducted 12 923 Regulatory Examinations. A total of 7737 individuals have undertaken these examinations.
Remuneration Benchmarking Salary Survey Participation in a salary survey revealed that we are generally in line with industry standards in terms of salary grading of jobs. The survey did reveal that our levels of pay were in some instances, particularly with regard to higher graded job roles, lower than the industry norm. With regard to medium and lower graded job roles, our pay levels were higher than industry norms.
2015/ 2016 Integrated REPORT
12
Staff Empowerment INSETA provided employees an opportunity to further their studies through bursaries. INSETA sponsored diploma and degree studies for three staff members.
Remaining Vigilant A number of disciplinary matters were concluded during the year, providing closure to all parties involved. We have also remained vigilant with respect to the use of the CFP® mark and in all cases where letters were issued to persons infringing a trademark, corrective action has been taken by the person concerned.
Professional Development Major events and accomplishments took place within the FPI Centre of Professional Development, with a number of events hosted across the country. In 2015 the
11
2015/ 2016 Integrated REPORT
Centre introduced webinars and online courses for the first time. Both of these offerings were well received. The Centre also hosted the ‘Retirement and Investment Planning’ event over two days. This is another first for us in terms of the size of the event and the hosting of local and international speakers with top quality content.
Member Recognition Our members remain central to all the activities that we undertake. Therefore recognising their achievements and showcasing their success is important to us. While we have a number of coveted awards that are bestowed upon deserving professionals at our annual awards, we are proud of the launch of the FPI It Starts with Me Award last year. It recognises the CFP® professional who embodies a holistic approach to the profession and reflects the attitude and approach we encourage our members to consistently work toward.
Contributing to Sector Growth and Financial Literacy Industry Transformation We carried out various advocacy activities in 2015 and this continues into 2016 and the future. Many of these activities have changed the financial planning landscape and we believe their effect will be felt for many years. Some of these activities include, but are not limited to those listed below: • Retail Distribution Review (RDR) • Draft Pension Fund Regulations
Our online community
{
7000+ Reach and engagement
Promoting Professional Planning In line with providing professional financial planning for all, we organised, hosted and participated in industry events. These include FPI MYMONEY123™ financial literacy programme, where we hosted 78 workshops attended by 3558 people and the Financial Planning Week 2015, where many of our members offered one on one sessions and financial planning workshops.
Joint Activities We continue our partnership with the Road Accident Fund to support them at their consumer clinics and we participate and contribute to the National Treasury Consumer Financial Education Committee.
Technology as Enabler The main drive behind our technology changes has been to allow people and business empowerment, through the provision of a world class IT service. Evidence of this approach is found in the implementation of a shared service desk, which services all departments and is used to action, track and monitor service requests. The new website project includes consolidating line of business systems into one system that can be accessed via the new website, thereby improving our client self-service functionality. Thereby further enhance the service to members.
2015/ 2016 Integrated REPORT
14
Growth in the face of challenges Membership breakdown
4570 Globally the number of CFPÂŽ Professionals reached
161,821 Membership Figures for 2015 Active members
01-Jan-15
31-Dec-15
CFPÂŽ professionals
4530
4570
FSATM professionals
131
170
AFP professionals
480
367
TM
RFP professionals
569
463
Affiliates
54
58
1063
1708
TM
Student/Candidates 15
2015/ 2016 Integrated REPORT
Member Discount Programme We launched the member discount programme that awards our members exclusive discounts on products and services relating to financial planning.
Member Engagement Events We had a successful countrywide roadshow visiting 15 different locations. Some of the events offered free ethics training. The information sessions allowed members to network with senior executives of FPI.
Industry Relationships
FPI Professionals Convention >1000 delegates
We concluded Memorandum of Understandings (MoUs) with the Fiduciary Institute of South Africa (FISA) and the South African Institute of Tax Professionals (SAIT). Collaborations of this nature add value to our members and encourage continuous professional development.
Employer Engagement We signed on four new FPI Approved Professional Practice™ firms during the course of 2015 and one FPI Corporate Partner™ joined us in the same year. One of the aims of the FPI Strategy Implementation Plan is to institutionalise professionalism, CFP® certification and holistic financial planning in the corporate environment in the South African financial services industry.
2015/ 2016 Integrated REPORT
16
Building a Professional Framework Standards Bearers Enabling access to information and services, defending and promoting people’s rights and responsibilities as well as allowing them to express their views and concerns are all part of advocacy. We carried out various advocacy activities in 2015 and continues into 2016 and the future. Many of these activities have changed the financial planning landscape and their effect will be felt into the future. Some of these activities include, but are not limited to those listed below.
Retail Distribution Review • The Retail Distribution Review (RDR) was released in November 2014 with •
•
•
•
17
a deadline of March 2015 for a response. Our Advocacy Committee debated the proposals and prepared a response. Roadshows took place in six regions − Johannesburg, Pretoria, Cape Town, Durban, Bloemfontein and Port Elizabeth. RDR workshops were also held with our members and these helped inform our response. After the submission of the written response, there were several bilateral meetings with the FSB to discuss our submissions. We also participated in five out of the six FSB working groups to examine the feedback and provide further insight to the FSB. The FSB established the Market Conduct Regulatory Framework Steering Committee as a consultation body to the FSB in the change to a market conduct regulator. We are represented on this committee. In support of the expected capping of fees, a guide was launched on Transition to a Fee-based Practice and included several tools for members to use in the transition. Further work will be done in 2016 as the timeline and proposals in RDR become clearer.
2015/ 2016 Integrated REPORT
Draft Pension Fund Regulations Another momentous piece of legislation was the draft pension fund regulations that was issued by National Treasury in October 2015. The regulations introduced default options and the concept of a retirement benefits counsellor. We responded to the call for comments and specifically further defined the role that a financial plan and financial planner can play in ensuring a better retirement for South Africans.
Promoting Interaction In line with providing professional financial planning for all, we organised, hosted and participated in industry events. FPI MYMONEY123™ - We hosted 78 workshops which were attended by 3558 people. We continue to work on growing the numbers of people we reach through partnerships with the Gauteng Education Department (GED). Financial Planning Week 2015. Many of our members offered one on one sessions and workshops. FPI MYMONEY123™ workshops were offered to gardeners and domestic workers as well as other groups. Workshops were also offered on other financial planning topics. In the Western Cape several practices joined forces to offer workshops and one on one consultation.
Free publicity to promote the CFP® mark 307 pieces = R21 864 094 media value
Some of our individual members promoted Financial Planning Week on their radio shows and also offered free consultations. The volunteer base in this respect keeps on growing. We co-hosted, with the South African Instutite of Tax Professionals (SAIT), what is regarded as the country’s largest, independent post budget speech breakfast. This provided a platform to showcase our thought leadership across a range of socio-economic issues.
Joint Activities We continue our partnership with the Road Accident Fund to support them at their consumer clinics. We participate and contribute to the National Treasury Consumer Financial Education Committee and have been appointed to o Money Smart Week o The Financial Wellness Bureau o Financial Education in the school curriculum We support and sponsor the first prize of the KwaZulu-Natal Speech Contest on Finance We continued our relationships with the Gauteng Provincial Government and provided the FPI MYMONEY123™ workshop for their staff. Various workshops were also facilitated for clients from ASI Financial Services. We entered into a Memorandum of Understanding with Life Line. We distributed FPI MYMONEY123™ consumer newsletter to over 1580 consumers.
2015/ 2016 Integrated REPORT
18
Staff Empowerment
Building Capacity Staff Empowerment During 2015 the Institute participated in a salary survey. The survey showed we are generally in line with industry standards in terms of salary grading of jobs. The survey did reveal that our levels of pay were in some instances, particularly with regard to higher graded job roles, lower than the industry norm. With regard to medium and lower graded job roles, our pay levels were higher than industry norms. It was noted that the Institute operates in a non-profit environment, whereas the survey completed was specific to private industry.
19
2015/ 2016 Integrated REPORT
Empowering staff is a major internal drive. INSETA provided employees an opportunity to further their studies through bursaries. INSETA sponsored diploma and degree studies for three FPI staff members. In 2016, INSETA will sponsor two interns in our marketing and communications department.
Performance Management The internal performance management system is linked to staff development, and from this, individual training plans are built, where opportunities are provided to staff to study further, attend relevant conferences and/or events; and gain new skills and experiences that will assist in personal and professional growth.
Strategic Re-alignment In line with the key strategic objectives and strategy, we began focussing on realigning company resources, whilst adapting to support the overall company strategy. The re-alignment focussed mainly on re-aligning staff to ensure that core business activities are adequately staffed and supported.
Service Provider Review The review of service providers (provident fund and medical aid) were conducted and are overseen by the Tender Committee. The service provider review was completed in 2015 and towards the end of the year Chartered Employee Benefits were appointed as new service providers for both the medical aid services as well as the administration of the Sanlam Provident Fund. This year will see the formation of the Provident Fund Management Committee – a committee comprised of representatives from Chartered Employee Benefits as well as employee and company representatives from the Institute. This committee will focus on making decisions relevant to the fund. Chartered Employee Benefits will also provide employees with important information, employee information sessions and are responsible for all staff queries relating to the medical aid or the provident fund.
Wellness Wellness programmes and team building programmes which encouraged good relations between staff members took place in 2015. Roughly mid-year a 10 pin bowling team building event was held with the theme being Embracing Change and Change Management. All staff were placed in teams, where team members were constantly being rotated to encourage all to work together. 2015/ 2016 Integrated REPORT
20
Our People CEO’s Office • Godfrey Nti Chief Executive Officer • Sandra Taylor PA to Chief Executive Officer Membership and Corporate Relations • Sherma Malan, CFP® HOD: Member Services and Corporate Relations • Lucille Wessels PA to HOD: Member Services and Corporate Relations • Patrick De Nation Corporate Relations Manager • Mandisa Magwaza Member Engagement Manager • Zena Crowie Team Leader (Member Support) • Loraine De Waal Member Services Consultant (Retention) • Carla Wingrave New Business Consultant • Marinda Joubert Member Services Consultant (Member Support) • Dudu Mpshane Membership Consultant • Kim Charles Membership Consultant Advocacy and Consumer Affairs • David Kop, CFP® HOD: Advocacy and Consumer Affairs • Barbara Mundell, CFP® Technical Specialist • Riana Badenhorst Consumer Awareness Co-ordinator Certification • Lelane Bezuidenhout, CFP® HOD: Certification
21
2015/ 2016 Integrated REPORT
• • •
Fatima Fakier Certification Manager Amanda Dry Certification Consultant Frances Creighton Certification Consultant
Shared Services • Dennis Swanepoel Manager: IT and Facilities • Nomaxabiso Tyhutyhani Manager: Finance and HR Services • Kobus Oosthuizen, CFP® Legal and Compliance Manager • Tsholofelo Dihutso, CPRP Communications Specialist • Wende Davids Customer Experience Officer • Clayton Lautenberg HR Officer • Sibongile Mdluli Business Analyst • Chrisjan Pieterse IT Systems Engineer • Roweda Petersen Marketing and Events Coordinator • Elmyra Willemse Junior Marketing and Communications Coordinator • Nicky Wessels Legal and Compliance Services Assistant • Penelope Willemse Facilities Coordinator • Ohna Norval Receptionist • Rosina Lekhelebane Facilities Assistant • Evodia Rasiile Facilities Assistant
FPI Centre for Professional Development • Wessel Oosthuizen, CFP® General Manager • Adele Whyte Project Manager • Adel Victor Events Coordinator • Toni Santana Events Coordinator • Kirsten Stevens Events Coordinator • Jane Scully Events Coordinator Examination Body • Johan Aucamp, CFP® HOD: Examination Body • Hannah Brill Examination Quality Assurer and Supervisor • Mittah Radebe RE Registrations Coordinator • Anna Fick RE Registrations Consultant • Bonnie Mincher Specialist consultant • Lesedi Mahupela RE Finance and Debtors Clerk • Lania Wheeler RE Logistics Coordinator • Angeline Mveng RE Logistics Coordinator
How We are Governed Our Board of Directors Our Board of Directors take full responsibility for the management, direction and performance of FPI by making independent decisions on all issues reserved for its review and approval while taking cognisance of the needs of all of the company’s stakeholders. The Board adopted the Board Charter which serves as a reference to new and existing board members, in performing their duties. The Board consists of 11 non-executive directors and one executive director (with the roles of the chairperson and CEO clearly defined).
Board Sub-Committees
Nominations and Compliance Review Committee The Nomination and Compliance Review Committee assists the Board, in an advisory capacity, with recruitment, selection and appointment of appointed directors and sub-committees in a formal transparent manner.
Regional Co-ordinating Committee
Our Board sub-committees assist the Board in implementing its duties and exercising its powers. The Board delegates to each sub-committee.
The Regional Co-ordinating Committee is made up of elected chairpersons from each Regional Committee: Western Cape, Eastern Cape, KwaZulu-Natal, Gauteng, Central and Northern Regions as well as the Regional Director, who is the chairperson for this committee.
Audit Committee
Strategy Committee
The Audit Committee assists the Board in implementing its duties such as; safeguarding of assets, accounting systems and the integrity of internal financial control processes as well as the preparation of accurate financial reporting and statements.
The Strategy Committee assists the Board in fulfilling its primary supervision responsibilities, this is with respect to matters relating to, or affecting, the company’s strategic direction and socio-ethical responsibilities.
Disciplinary Committee The Disciplinary Committee’s purpose is to protect the public, maintain public confidence in the financial planning profession and [to] uphold the highest standards of conduct among FPI professional members.
2015/ 2016 Integrated REPORT
22
Board and Board Sub-Committees’ attendance reports During the reporting period, the Board met six times. Four formal face-to-face meetings and two special teleconference meetings.
Board meeting dates
25/02/2015
17/04/2015
23/06/2015
01/07/2015
16/09/2015
26/11/2015
Board member David Thomson, CFP®
Non-executive Director
o
Denver Fortuin, CFP®
Non-executive Director
o
Gerhardt Meyer, CFP®
Non-executive Director
o
Godfrey Nti
Executive Director
Johan Erwee, CFP®
Non-executive Director
Kim Potgieter, CFP®
o
o o
Logie Govender, CFP®
Non-executive Director Non-executive Director
o
Navin Ramparsad, CFP®
Non-executive Director
Non-executive Director
o
o
Chairperson-elect
Ntai Phoofolo, CFP® Ronald King, CFP®
o o
o
Sankie Morata, CFP®
Chairperson
Warren Wheatley, CFP®
Non-executive Director
o
Wouter Fourie, CFP® In attendance
Non-executive Director
23
2015/ 2016 Integrated REPORT
o
Absent with apology
o Pre-appointment/post resignation
Our Board of Directors
David Thomson, CFP® Non-executive Director
Denver Fortuin, CFP® Non-executive Director
Gerhardt Meyer, CFP® Non-executive Director
Godfrey Nti Executive Director
Kim Potgieter, CFP® Non-executive Director
Logie Govender, CFP® Non-executive Director
Navin Ramparsad, CFP® Non-executive Director
Ntai Phoofolo, CFP® Chairperson-Elect
Ronald King, CFP® Non-executive Director
Sankie Morata, CFP® Chairperson
Warren Wheatley, CFP® Non-executive Director
Wouter Fourie, CFP® Non-executive Director
2015/ 2016 Integrated REPORT
24
Board Sub-Committees During the reporting period, all Board Sub-Committees met four times except for the Disciplinary, Regional Co-ordinating and Strategic Committees who met three times, as well as the Advocacy Committee who only met twice in the year.
Advocacy Committee
Meeting date
05/02/2015
04/06/2015
19/08/2015
15/10/2015
06/11/2015
Committee member Almo Lubowski, CFP®
Committee Member
David Thomson, CFP®
Committee Member
o
Gerhardt Meyer, CFP®
Committee Chairperson
Godfrey Nti Navin Ramparsad, CFP®
Chief Executive Officer Committee Member
o
Rodver Simmons, CFP®
Committee Member
Ronald King, CFP®
Committee Member
o
o
Sankie Morata, CFP®
Committee Member
o
In attendance
Absent with apology
Pre-appointment/post resignation
Audit Committee
Meeting date
16/02/2015
13/04/2015
17/06/2015
27/08/2015
16/11/2015
23/11/2015
Committee member Denver Fortuin, CFP®
Committee Member
o
o
Godfrey Nti
Chief Executive Officer
Logie Govender, CFP®
Committee Member
o
Warren Wheatley, CFP®
Committee Chairperson
25
In attendance
2015/ 2016 Integrated REPORT
o
Absent with apology
Pre-appointment/post resignation
Disciplinary Committee Meeting date
03/06/2015
27/08/2015
10/11/2015
Committee member David Thomson, CFP®
Committee Chairperson
Johan Erwee, CFP®
Committee Member
Louis Van Vuren, CFP®
Committee Member
Michael Jackson, CFP®
Committee Member
Navin Ramparsad, CFP®
Committee Member
o
Warren Wheatley, CFP®
Committee Member
In attendance
o
Absent with apology
o Pre-appointment/post resignation
Nomination and Compliance Review Committee Meeting date
11/02/2015
08/06/2015
26/08/2015
12/11/2015
Committee member Denver Fortuin, CFP®
Committee Member
o
Godfrey Nti
Chief Executive Officer
Ntai Phoofolo, CFP®
Committee Chairperson
o
Sankie Morata, CFP®
Committee Member o Absent with apology
Pre-appointment/post resignation
In attendance
Remuneration Committee
Meeting date
23/02/2015
09/06/2015
25/08/2015
25/11/2015
Committee member Godfrey Nti
Chief Executive Officer
Logie Govender, CFP®
Committee Chairperson
Navin Ramparsad, CFP®
Committee Member
o
Ntai Phoofolo, CFP®
Committee Member o Absent with apology
o Pre-appointment/post resignation
In attendance
Regional Co-ordinating Committee
Meeting date
09/02/2015
26/08/2015
05/11/2015
Committee member Christo Saayman, CFP®
Regional Committee Chairperson (Central Region)
Colin Long, CFP®
Regional Committee Chairperson (KwaZulu-Natal Region)
Jackie Palframan, CFP®
Regional Committee Chairperson (Eastern Cape Region)
o
Johan Erwee, CFP®
Regional Committee Chairperson (Northern Region)
Kagisho Mahura, CFP®
Regional Committee Chairperson (Gauteng Region)
o
Lizl Budhram, CFP®
Regional Committee Chairperson (Western Cape Region)
Leslie Strydom, CFP®
Regional Committee Chairperson (Eastern Cape Region)
Shirly Hyland, CFP®
Regional Committee Chairperson (Central Region)
Wouter Fourie, CFP®
Regional Committee Chairperson (Northern Region)
27
In attendance
2015/ 2016 Integrated REPORT
o
Absent with apology
Pre-appointment/post resignation
Strategy Committee
Meeting date
18/06/2015 28/08/2015
25/11/2015
Committee member Godfrey Nti
Chief Executive Officer
Kim Potgieter, CFP®
o
Committee Member
o
Navin Ramparsad, CFP®
Committee Member
Ntai Phoofolo, CFP®
Committee Chairperson
Ronald King, CFP®
Committee Chairperson
Sankie Morata, CFP® Warren Wheatley, CFP®
Committee Chairperson
o
Committee Member
o
Wouter Fourie, CFP®
Committee Member
In attendance
Pre-appointment/post resignation
o
Absent with apology
o
2015/ 2016 Integrated REPORT
28
Our Financial Position A word from our Audit Committee Chairperson
We are pleased to present our report for the financial year ended 31 December 2015.
The committee also identified and suggested corrective actions to enhance current controls and processes.
Audit and Risk Committee members
External audit
The Audit and Risk Committee consists of independent non-executive directors. During 2015 four meetings were held (refer to page 24 for the attendance report). The current committee members are: • Warren Wheatley, CFP® (Chairperson) • Denver Fortuin, CFP® • Logie Govender, CFP® • Prem Govender, CFP®
Audit and Risk Committee responsibility We have complied with the responsibilities as set out in the Audit Committee Regulations and complied with the requirements of the Companies Act. The committee also acts as the Audit committee for FPI subsidiaries
Internal controls and risk management The system of internal control for the period under review was efficient and effective. The committee considered both the reports presented by internal auditors and external auditors and it was noted that no significant or material non-compliance with policies or procedures have been reported.
29
2015/ 2016 Integrated REPORT
In the conduct of its duties, the committee performed the following statutory duties: • Considered the independence of Zeelie De Kock Registered Auditor and therefore nominated for re-appointment them as the external auditor. • Approved in consultation with management, the audit fee and engagement terms for the external auditors for the 2015 financial year. • Ensured that the auditors were appointed in accordance with the Companies Act and any other legislation relating to the appointment of auditors. • Reviewed the annual financial statements prior to their approval by the board. • Considered the appropriateness of accounting policies and any changes made. • Reviewed the external auditor’s reports and management response and considered the effect on the financial statements. • Met with management and external auditors and were satisfied that no material control weakness exists.
Consolidated annual financial statements The committee had recommended the approval of the annual financial statements as set out on page 31 by the Board and the Board had subsequently approved the audited financials.
Warren Wheatley, CFP
®
Auditor’s Report Presented is the abridged version of the Audited Annual Financial Statements
Report on the financial statements
Opinion
The committee had recommended the approval of the annual financial statements as set out on page 31 by the Board and the Board had subsequently approved the audited financials.
In our opinion the financial statements present fairly, in all material respects, the financial position of the company as at 31 December 2015, and its financial performance and 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.
Directors’ responsibility for the financial statements Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Other reports required by the Companies Act As part of our audit of the financial statements for the year ended 31 December 2015, we have read the Directors’ report for the purpose of identifying whether there are material inconsistencies between this report and the audited financial statements. This report is the responsibility of the respective preparers. Based on reading this report we have not identified material inconsistencies between this report and the audited financial statements. However, we have not audited this report and accordingly do not express an opinion in this report.
Registered Auditors - Zeelie Auditors
2015/ 2016 Integrated REPORT
30
Directors’ Report General Review The Financial Planning Institute of Southern Africa NPC and its subsidiary is a company incorporated in the Republic of South Africa. The principal activities of the company are to operate as a professional body to the financial planning industry. Group 2015 R
Group 2014 R
Company 2015 R
Company 2014 R
1 791 170
(4 825 612)
1 652 320
(4 472 645)
Financial results The group/company retained a surplus/(accumulated a deficit) of:
No dividends were declared or proposed during the year under review.
Property, plant and equipment The group/company acquired assets to the value of:
893 597
Revaluation of land and buildings to the value of:
-
2 495 869 500 000
893 597
2 099 496
- -
There were no changes in the authorised and issued share capital of the company during the year under review. The directors of the group during the accounting period and up to the date of this report were as follows: Name
Nationality
Date appointed
Date resigned
GN Nti
Cameroonian
2009-05-01
-
WJ Fourie
South African
2015-06-23
-
N Ramparsad
South African
2014-06-24
-
WG Wheatley
South African
2013-08-22
-
GE Meyer
South African
2014-06-24
-
DC Fortuin
South African
2013-08-22
-
K Potgieter
South African
2013-06-10
-
NPO Phoofolo
South African
2012-12-05
-
L Govender
South African
2012-06-19
-
DJ Thomson
South African
2012-06-19
-
SS Morata
South African
2009-12-02
-
RN King
South African
2009-06-02
-
South African
2013-06-10
2015-06-23
JA Erwee 31
2015/ 2016 Integrated REPORT
Statement of Financial Position and Consolidated Statement of Financial Position as at 31 December 2015 Group 2015 R
Group 2014 R
Company 2015 R
Company 2014 R
Assets Non-current assets
Property, plant and equipment
18 241 201
18 663 791
13 617 731
12 673 242
18 241 201
18 663 791
3 692 446
3 294 611
Investment in subsidiary
-
-
Group loan receivable
-
-
Current Assets
Trade and other receivables Taxation refundable
300 9 924 985
300 9 378 331
11 915 647
9 675 766
11 039 277
9 351 557
932 966
1 384 555
341 413
1 123 465
123 091
-
-
-
Bank and cash balances
10 859 590
8 291 211
10 697 864
8 228 092
Total Assets
30 156 848
28 339 557
24 657 008
22 024 799
13 080 885
11 289 715
14 377 811
12 725 491
5 000 000
5 000 000
5 000 000
5 000 000
Equity and liabilities Equity
General reserve Revaluation surplus
450 000
475 000
-
Retained earnings
7 630 885
5 814 715
Non-current liabilities
6 084 511
6 535 213
-
-
Interest bearing borrowings
5 991 271
6 535 213
-
-
-
-
Deferred tax liabilities
93 240
-
9 377 811
7 725 491
10 991 452
10 514 629
10 279 197
9 299 308
8 406 351
7 831 832
8 242 894
7 308 590
Deferred income
21 811
183 294
-
-
Current portion of Interest bearing borrowings
526 987
508 785
-
-
Current liabilities
Trade and other payables
Short-term provisions Total equity and liability
2 036 303
1 990 718
2 036 303
1 990 718
30 156 848
28 339 557
24 657 008
22 024 799 2015/ 2016 Integrated REPORT
32
Statement of Comprehensive Income and Consolidated Statement of Comprehensive Income as at 31 December 2015 Company 2014 R
Group 2015 R
Group 2014 R
Company 2015 R
Revenue
38 639 687
31 073 118
33 024 354
27 295 920
Other income
1 671 770
1 665 675
1 150 265
1 126 215
Change in accounting estimate
608 679
575 358
608 679
575 358
Interest received
549 487
550 857
541 586
550 857
Rental income
513 604
539 460
-
-
14 793 963
12 509 398
349 274
269 960
Depreciation
1 924 866
1 929 706
1 104 441
1 084 281
Direct cost
11 027 499
8 799 571
9 497 745
6 837 145
Director’s remuneration
1 486 939
1 510 161
1 486 939
1 510 161
5 385
-
1 917 760
2 111 216
Other income (not included above)
1 933 281
1 843 820
4 341 996
3 400 519
Other administrative expenses
24 801 477
26 670 453
22 596 692
24 596 016
Surplus/(deficit) before finance charges
2 649 298
(4 597 238)
1 652 320
(4 472 645)
699 500
728 374
-
-
1 949 798
(5 325 612)
1 652 320
(4 472 645)
158 628
-
-
-
1 791 170
(5 325 612)
1 652 320
(4 472 645)
-
500 000
1 791 170
(4 825 612)
Expenses Auditors’ remuneration
Operating lease - premises
Finance charges Surplus/(deficit) before taxation Taxation Net surplus/(deficit) after taxation
14 267 603 260 718
11 699 283 156 480
Other comprehensive income Gain on revaluation of properties Total comprehensive surplus/(deficit) for the year
33
2015/ 2016 Integrated REPORT
- 1 652 320
(4 472 645)
Statements of Changes In Equity and Consolidated Statement of Changes in Equity as at 31 December 2015 General Reserve R
Revaluation Surplus R
Accumulated Surplus R
Total R
Group 5 000 000
-
11 115 327
16 115 327
Gain on revaluation of properties
-
500 000
-
500 000
Transfer of revaluation surplus to retained earnings
-
(25 000)
25 000
-
Total acumulated deficit for the year
-
-
(5 325 612)
(5 325 612)
5 000 000
475 000
5 814 715
11 289 715
Transfer of depreciation on revaluation surplus portion
-
(25 000)
25 000
-
Total comprehensive surplus for the year
-
-
1 791 170
1 791 170
5 000 000
450 000
7 630 885
13 080 885
Balance at 31 December 2013
Balance at 31 December 2014
Balance at 31 December 2015
Revaluation Surplus R
Accumulated Surplus R
Total R
Company Balance at 31 December 2013
Total accumulated deficit for the year Balance at 31 December 2014 Total comprehensive surplus for the year Balance at 31 December 2015
5 000 000
12 198 136
17 198 136
-
(4 472 645)
(4 472 645)
5 000 000
7 725 491
12 725 491
-
1 652 320
1 652 320
5 000 000
9 377 811
14 377 811
2015/ 2016 Integrated REPORT
34
Consolidated Statement of Cash Flows as at 31 December 2015 Company 2015 R
Company 2014 R
(1 391 228)
3 910 023
1 661 875)
39 091 276
31 070 932
33 806 406
27 472 666
(34 765 068)
(32 284 643)
(30 437 969)
(29 685 398)
4 326 208
(1 213 711)
3 368 437
(2 212 732)
Interest received
549 487
550 857
541 586
550 857
Finance charges
(699 500)
(728 374)
-
-
Taxation paid
(188 479)
-
-
-
Cash flows from investing activities
(893 597)
(2 495 869)
(1 440 251)
(2 561 568)
Purchase of property, plant and equipment
(893 597)
(2 495 869)
(893 597)
(2 099 496)
To increase operating capacity
(893 597)
(2 495 869)
(893 597)
(2 099 496)
Advances of group loans receivable
-
-
(546 654)
(462 072)
Cash flows from financing activities
(525 740)
(481 884)
-
-
Proceeds from interest bearing borrowings
(525 740)
(481 884)
-
-
Net increase/(decrease) in cash and cash equivalents
2 568 379
(4 368 981)
2 469 772
(4 223 443)
Cash and cash equivalents at beginning of year
8 291 211
12 660 192
8 228 092
12 451 535
Cash and cash equivalents at end of year
10 859 590
8 291 211
10 697 864
8 228 092
Group 2015 R
Group 2014 R
Net cash retained in / (withdrawn from) operating activities
3 987 716
Cash receipts from customers Cash paid to suppliers and employees Cash generated from/(utilised by) operating activities
35
2015/ 2016 Integrated REPORT
Looking Ahead into 2016 Leadership, awareness and recognition, along with the development of standards, are going to be placed at the pinnacle of our mid-term strategic plan. We continue to believe that delivering on these objectives will cement the professionalism of our industry going forward.
FPI long-term strategic plan – (FPI vision 2025)
FPI medium-term strategic plan 2016 – 2018 Leadership
Leadership
L1. FPI leads the financial planning profession and professional financial advice space through a articulation and implementation of a robust and well-defined strategy.
FPI is the pre-eminent financial planning standards authority for competent and ethical financial planners. CFP® certification is the standard of excellence for competent financial planning in South Africa.
L3. Lead transformation and diversity in the financial planning profession.
Awareness and Recognition
AR1. Empower consumers by creating awareness of the benefit of professional financial planning through financial education.
AR2. FPI designations, and in particular CFP® designation, the must-have designations for consumers of financial planning and financial advice. AR3. Achieve public/regulatory/legislative recognition and protection of financial planning as a distinct, evolving profession and FPI as the standards setting body for the profession.
Standards
Success Aspiration
L2 Secure organisational sustainability (governance, financial, operational excellence and BBBEE).
Awareness and Recognition The public is widely aware of the value of the financial planning process and of CFP® certification. Financial planning is recognised as a distinct professional practice. FPI is recognised by regulation/legislation as the standards setting body for the profession.
Standards FPI has established standards of excellence for financial planning and members and stakeholders are in full compliance with CFP® certification programme standards.
S1. Establish pre-eminent standards for practicing financial planning and financial advice. S2. Establish, maintain and uphold world-class certification standards for FPI designations. S3. Establish, maintain and uphold world-class professional body standards.
2015/ 2016 Integrated REPORT
36
Upholding Integrity Leveraging Technological Opportunities Future technology projects are designed to create innovation and foster vibrant member communities within the institute, while delivering end user improvements.
Our new revised Code of Ethics and Practice Standards have been created and, with effect from 1 February, the Code will be implemented. We will, as always, remain vigilant and act upon infringement of our trademarks and work towards corrective action where infringement cases have been identified.
To this end we anticipate the launch of a new website and an online community (with discussion forums) to facilitate greater communication between members. Internally improvements in technology will bring about a new member database system and a refreshed email system.
In order to bolster the provision of high standards and professionalism in the legal and compliance space we will also actively seek to employ a director with specific experience in, and who will be tasked with, inter alia, consumer affairs. This reflects our intent to fulfil the \ Institute’s consumer protection mandate.
Balancing Cost and Quality
Professional Development
In the examinations arena the focus will mainly be on two areas: firstly increasing profits, and secondly improving quality. From a profitability point of view, the focus will be on increasing the number of exams written through our examination body division and minimising expenses.
An online subscription offering will be made available where subscribers will receive two hours of content every second month which can be completed at their own pace.
In terms of quality, the new QMS process that was initiated should bring about many improvements in this area, but there will also be deliberate actions – firstly the recruitment of a FPI Examinations Body Quality Project Manager, to do a full review/audit of our QMS. The Project Manager will also focus on specific areas like our archives, debt collection and implementing a client satisfaction questionnaire, in order to have a mechanism in place to measure complaints vs compliments.
37
2015/ 2016 Integrated REPORT
The content will cover a broad spectrum of offerings including: ethics and compliance; best practice and professionalism and retirement; tax; estate and investment planning.
Spreading the Word We expect to empower South Africans with financial literacy and our advocacy and consumer activities will be critical in this respect.
Contributors Adele Whyte – Project Manager: Centre for Professional Development We see great opportunity in the FPI MYMONEY123™ workshops and will be putting a drive in place to secure more volunteers and pro bono presenters of these workshops.
Clayton Lautenberg – Human Resources Officer
There is also great scope in engaging with employers to make financial literacy an integral part of their employee wellness programmes. There is also much to be gained from participation in events and expos such as Money web and Money Expo, Financial Planning Week and Money Smart Week and we will seek to capitalise on the financial literacy empowerment opportunities they present.
David Kop, CFP® – Head: Advocacy and Consumer Affairs
We will also continue to distribute the FPI MYMONEY123™ Consumer newsletter to consumers and anticipate that the results of the global consumer survey will provide much thought provoking information for both consumers and our members to consider.
Kobus Oosthuizen, CFP® – Manager: Legal and Compliance Services
Godfrey Nti – Chief Executive Officer Johan Aucamp, CFP® – Examination Body (Regulatory Examinations)
Lelane Bezuidenhout, CFP® – Head of Certification Mandisa Magwaza – Member Engagement Manager Nomaxabiso Tyhutyhani – Financial Manager and Human Resources Riana Badenhorst – Consumer Affairs Co-ordinator Sankie Morata, CFP® – FPI Board Chairperson Sherma Malan, CFP® – Head: Membership and Corporate Relations Tsholofelo Dihutso CPRP – Communications Specialist Wende Davids – Customer Experience Officer
2015/ 2016 Integrated REPORT
38
CONTACT INFORMATION
Financial Planning Institute of Southern Africa NPC 84 Sophia Street (Cnr 11th Avenue), Fairland, Johannesburg, 2170 PO Box 6493, Weltevredenpark, 1715 Tel: 086 1000 FPI (374) E-mail: fpi@fpi.co.za www.fpi.co.za