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2010 Annual Report Financial Planning Institute of Southern Africa SETTING THE STANDARD 1 FPI Annual Report 2011 | Setting the Standard The Organisation The Financial Planning Institute (FPI) is regarded as the leading independent professional body for financial planners in South Africa that ensures South Africans have access to, and value, competent financial planning. Professionalism in financial planning rests on competence and ethics. As the custodian of the profession, the FPI is uncompromising in establishing and maintaining world class professional financial planning standards, ensuring that members remain competent and ethical to retain their professional status. Many top financial institutions regard the FPI as an independent standards partner and members include both general practitioners and specialists in particular sectors of financial planning. The FPI was originally formed in 1981 as the Institute of Life and Pension Advisors (ILPA) to improve levels of professionalism amongst financial planners and advisors. To ensure that financial planners in South Africa met international standards, in 1998, the Financial Planning Institute affiliated with the CERTIFIED FINANCIAL PLANNER® Board of Standards in the United States and in April 2000 adopted its new name to more accurately reflect its role as the custodian of competency and ethical standards. The FPI is recognised internationally and is a founding affiliate member of the international Financial Planning Standards Board Ltd (FPSB), along with 23 other affiliate member countries. Vision To be the recognised and respected Professional Body for the Financial Planning profession in Southern Africa. Mission The main object and business of the FPI is to advance and promote the profession of financial planning, to raise the status of professional financial planners and to protect the public they serve by: • Providing a framework within which members can achieve the qualifications and competence to practice as professional financial planners. • Ensuring that members maintain the highest ethical standards in the pursuance of their profession. • Promoting the interest of the members as a whole. FPI Annual Report 2011 | Setting the Standard 2 Contents Chairperson’s Report 4 Chairperson’s Report Chief Executive Officer’s Report 4 6 CEO’s Report Setting the Standards 5 8 The World Class Value Proposition Education Framework 6 10 Setting the Standards Authoritative Voice 8 12 Promoting the Profession Promoting the Profession 10 14 Ethics Enforcement World Class Value Proposition 12 16 The Education Framework Transformation 14 18 Transformation Investment Corporate Social 16 19 Corporate Social Investment Resources 17 20 Financial Sustainability Corporate Governance 18 22 Our People Industry Sector Group Reports 20 23 The Year Ahead Employee Benefits 21 Estates and Trusts Industry Sector Group Reports Health Care 22 Employee Benefits Investments Estates and Trusts Planning Personal Financial Health Care Risk Investments Tax Personal Financial Regional Committee Reports 26 Risk Gauteng Tax North Regional Reports Central 25 ` Gauteng KwaZulu-Natal North Cape Eastern Central Cape Western Kwa-Zulu Natal Affiliate Organisations 28 Eastern cape South Africa (BUSA) Business Unity Western Capeof South Africa (EthicSA) Ethics Institute Our Memberships Planning Standards Board (FPSB) Financial 27 Statutory BUSA Bodies 30 Ethics SA FAIS Ombud FPSB Financial Services Board (FSB) From the RegulatorsSector Education and Training Authority (INSETA) Insurance 29 FAIS Ombud Qualifications Authority (SAQA) South African FSB Education Partners 32 INSETA Business School Milpark Nelson Mandela Partners Our Accredited EducationMetropolitan University Further Education and Training Institute University of Johannesburg University of the School Milpark Business Free State Nelson Mandela Metropolitan University University of Stellenbosch University of University Stellenboschthe Western Cape Further Education University of Johannesburg and Training Institute University of the Free State Industry Bodies 35 From Industry Association for Savings and Investment SA (ASISA) ASISA Financial Intermediaries Association (FIA) FIA South African Savings Institute (SASI) SASI 2010 Headline News 37 2010 Headline News The FPI Team 39 3 2011 FPI Annual Report 2010 | Setting the Standard Chairperson’s Report Chairperson’s Report Today’s financial positively changed the face of financial advice and intermediary services in South Africa. To promote ethical planners continue to conduct in the industry, he presented at a number of live and operate in FPI conventions and regional Continued Professional increasingly interesting Development (CPD) sessions. times. One thing we can Financial Planning Standards Board (FPSB) be sure of is that our Internationally, our contributions to the worldwide environment will always development of the profession, through our participation in FPSB events, make us very proud. On 21 be changing. What April 2010, FPSB hosted the first World Financial Planning remains to be seen is the Summit with the goal of advancing financial planning as speed at which the change will take place. a distinct profession. FPSB members, financial planning leaders and invited guests from around the globe engaged in a global dialogue on how best to support Although there have been some important the emergence of financial planning as a recognised environmental developments over the past few years, and bona fide profession that puts the interests of we have not necessarily experienced rapid change. My clients first. sense is that all of that is about to change, but more on this later. Business Unity South Africa (BUSA) We remained an active member of BUSA during the Looking back on 2010, financial planners around the year to represent the financial planning profession world have experienced an increased demand for on issues that may affect the profession, as well as to professional financial planning services as consumers contribute on a wide variety of issues facing business. began assessing the risk of another financial crisis We were represented at the BUSA Council and on a occurring in their lifetime. What is noteworthy is that number of BUSA committees and working groups during consumers are desperate for professional advice and the year. Senior FPI volunteers also served on the Social a financial plan and not necessarily for the immediate Security and Retirement Reform working group implementation of that advice. More consumers are during 2010. able to separate – and in fact insist on the separation of – professional financial planning advice and the use of Ethics Institute of South Africa (EthicSA) financial products. In November 2010, we became a member of EthicSA as a public declaration of our mutual dedication to a As a profession we have taken great strides in adapting vision of building an ethical South Africa. This relationship to the changing needs of consumers. It remains of the supports our strategic mission of ethics upliftment in the utmost importance that we as professional financial financial planning profession. planners lead the changes required in our own industry. Whenever I am given the honour of addressing any NQF Act and Recognition of Professional Bodies group of graduates standing on the verge of entering During the second half of the year, South African the financial planning profession, I request them to not Qualifications Authority (SAQA) published for public only work in this profession of ours but also to work on comment, a document outlining the policy and criteria it. I urge those of our members who have never served for recognising a professional body and registering on any committee of the FPI to take a turn to do so. a professional designation for the purposes of the The development of the profession is reliant on all of us National Qualifications Framework (NQF) Act of 2008. contributing our thoughts, ideas and skills. This followed a consultative process with the professional Former FAIS Ombud, Mr Charles Pillai body community that started in November 2009 It was with sadness that we said farewell to Mr Charles and is significant as this, for the first time in the South Pillai, the office’s first Ombud, who passed away on African legislative framework, allows for the formal Saturday 6 November 2010 from cancer, aged 57. He recognition of professional bodies and their professional took office as the fourth Pension Funds Adjudicator on 1 designations. Our submission was made, and once this April 2010. As an avid consumer champion, he brought process is finalised we will be well-positioned to apply for international recognition to the FAIS Ombud’s office this formal recognition for the FPI and our designations. through many groundbreaking determinations that FPI Annual Report 2011 | Setting the Standard 4 CEO’s Chairperson’s Report Strategy Review In 2011, we as financial planners will need to embrace During the fourth quarter of 2010 we started work on and play a key role in the development of our a major review of the FPI’s current strategy to ensure environment. We must work with all our stakeholders to that we have what we need in place in order to deliver ensure that we support initiatives such as the National on our mandate. This review centred on our value Treasury’s Safer Financial Sector campaign, which proposition to our stakeholders, our three professional includes amongst its many critical items under discussion designations and also our desired role in the broader the Treating Customers Fairly initiative driven by the financial services industry. We expect this process to be Financial Services Board (FSB). completed by the second quarter of 2011, at which time we hope to be in a position to announce a new and exciting strategy that will take the FPI into the future. We must also work with the various regulators and policy makers to provide our insights into the development and Corporate Governance implementation of key legislative changes, such as the The FPI Board of Directors is committed to ensuring that changes to retirement fund legislation. As a profession, the organisation is governed appropriately and complies we must also understand how our businesses will change with all the relevant legislation and principles of good following the implementation of legislation impacting on corporate governance. The governance processes and the broader business community, such as the Protection structures of the organisation are regularly reviewed of Personal Information Bill. to reflect internal developments and to align with best practices. In accordance with the organisation’s bylaws, I would like to thank Godfrey and the members of the the following elections were conducted during the year: FPI board, board standing committees, FPI staff and all volunteers who assisted the FPI in its tasks during 2010. • Seven Industry Sector Group (ISG) committees I look forward to working with each of our members during 2011, as all of us contribute to making this • ISG Director profession the leading profession serving consumers. • Two Nationally Elected Directors. With the introduction of the King III Report on Corporate Governance and the new Companies Act, the FPI will take cognisance of the guidance provided by the report and will incorporate improvements into the organisation’s governance and management systems, to the extent that they are practical and relevant to Gerhardt Meyer CFP , ® the organisation. During the year ahead, the board will Chairperson also prepare itself for the changes brought about by the Companies Act 71 of 2008. Chief Executive Officer’s Report We can all look back 2010, we met regularly with the leadership of National Treasury, Financial Services Board (FSB), Council for at 2010 with pride and Medical Schemes (CMS), South African Qualifications guarded optimism Authority (SAQA), FAIS Ombud, Association for Savings about what the future and Investment SA (ASISA), Financial Intermediaries holds for the South Association (FIA) and corporate partners. We are finding that these stakeholders are increasingly African economy receptive to our message. They are impressed by in general and the the strength of the FPI certification requirements and financial services understand that the public is served by standards that industry in particular. involve much more than completion of an educational programme. They recognise the importance of high ethical standards that require financial services My hope is that the silver lining in the recent economic professionals to put the interests of their clients ahead downturn will be more engaged to customers of their own. They also recognise that it is essential managing their money, and a more responsive that ethical standards be accompanied by a rigorous and responsible industry building on principles of enforcement process. professionalism to deliver solutions that are in the long- term interest of these customers. We were represented at these meetings by the FPI Chairperson, Mr Gerhardt Meyer, FPI Vice Chairperson, As the premier professional body in the financial services Mr Solly Keetse, other directors, ISG Chairpersons and industry, we have long advocated higher professional myself. We were also grateful to have Noel Maye, CEO standards. The public is right to demand high standards of FPSB, join us for some of these meetings. and excellent service from individuals and companies to whom they entrust their financial futures. A higher Delivery of Technical Information professional standard in the industry is all the more Our Industry Sector Groups (ISGs) remain central to important at a time when consumers continue to our strategy for delivering targeted added value to face worrying times with job security, meeting bond members working within specific disciplines, each payments, retiring with dignity and ensuring that they providing thought-leadership and targeted support and their families are properly protected. Financial to their particular community, while at the same time planners are in a unique position to prove their mettle contributing to the overall objectives of the FPI. At the with these high standards, providing consumers with end of 2010 we created a new department to enhance advice of the best quality, reassuring customers and the work of the ISG committees, which had up to then allowing them to plan confidently for their financial been predominantly run by our volunteers. future. Membership Engagement International Standards The FPI Regional committee structure continues to play During 2010 we put much focus on aligning some of a key role in our ability to engage with our members on the policies and procedures that underpin our coveted the field, especially in the area of channelling member certification standards to ensure that ours is in line expectations to the appropriate quarters within the with our parent organisation, the Financial Planning institute. Throughout the year I also had the pleasure of Standards Board (FPSB) and other international best interacting with many members, which proved to be practice standards. invaluable to me in gaining a better understanding of the challenges they face, as well as their expectations Voice of the Financial Planning Profession of the FPI. I have also been encouraged during my visits As an institute that works in the public interest, we are by members’ determination to raise standards and well positioned to continuously educate policy makers, lead the industry to inspire higher levels of public trust regulators and other industry leaders on the benefit and confidence. In the coming year I hope to continue of financial planning and the important benefit that measuring these member expectations against our our rigorous internationally benchmarked certification current service offering and, where necessary, make and practice standards provide to the South African informed adjustments to our strategy. public. As part of this ongoing advocacy campaign in FPI Annual Report 2011 | Setting the Standard 6 Chief Executive Officer’s Report Industry Regulation Given the economic crisis that we are still recovering • Successfully running over 40 Continued Professional from, it should come as no surprise to anyone to see Development (CPD) events across the country, plus the intense focus on regulation of the financial services eight national Refresher Workshops. industry, as regulators and policy makers in South Africa • Participating in the Citadel Words on Money and South join their counterparts around the world in an attempt to African Savings Institute (SASI) Teach Children to Save prevent a similar crisis in the future. I see the shift in the campaigns to promote the profession. tone of regulation as a massive opportunity for the FPI, its • Running the first ever four-part television series on members and the companies for which they work. CNBC Africa during Financial Planning Month to promote financial planning and the profession. In 2011 and beyond we intend to significantly increase • Welcoming 259 new CFP professionals who joined our effort in the area of engaging with regulators and the FPI community of over 3,700 professionals in policy makers as the voice of the profession, since we South Africa, as well as the global community of well are well positioned to educate and raise awareness over 133,000 CFP professionals practicing in 23 FPSB of the benefits of financial planning and the important countries worldwide. We also welcomed 22 AFP™ and benefits that our rigorous certification standards provide 48 RFP™ professionals. to South African consumers. • Partnering with a number of organisations to launch the Further Education and Training Institute’s Articulation Pilot Project in the Western Cape. Policy discussions tend to be wide-ranging and we intend to cast a similarly wide net for input and dialogue Our greatest asset is not necessarily on our balance as the FPI takes its place in coming debates. The opinions sheet. Our people are the true value of the FPI, inspiring and insights of the FPI member community and others achievement and taking our profession forward. I would working in the public interest will be a vital factor in like to thank our Chairperson, Gerhardt Meyer and our developing our policy positions and priorities. We will board members for their strong leadership, unwavering be updating our members on policy development and support and commitment to raising professional will be actively seeking their input and thoughts on the standards. future of regulation in the financial services industry, as well as on the FPI’s potential role in any new regulatory I am also indebted to our staff, office bearers and all environment as we seek to increase access for the South other volunteer members across the organisation, whose African public to professional, competent and ethical hard work and commitment enabled the FPI to set financial planners. truly professional standards for our members and future members. I look forward to working with you all in 2011 2010 Achievements and the years to come. My thanks to our staff and volunteers for helping us achieve, amongst other things, the following during 2010: It is an honour to serve as Chief Executive Officer and I hope that, despite the difficulties our profession and • Hosting a very successful convention at Emperors industry must navigate, we will continue to grow from Palace that was attended by over 900 delegates. strength to strength to serve the public interest. • Running another highly credible Financial Planner of the Year competition, won by Natasja Norval Hart. • Running three NQF Level 5 examination sessions for 1,968 learners, with an average pass rate of 60%. Godfrey Nti Chief Executive Officer Setting the Standards Promoting the Profession As the premier professional body in the It is the objective of the FPI’s Standards Department to have the concepts of honesty and integrity reclaim financial services sector with international their meaning throughout its membership base. These outreach, our certification standards are concepts should be personified in the conduct of all our constantly benchmarked against the best in members and experienced by each and every client that approaches a member for financial advice. the world. There is obviously more to a profession than just passing It is with this in mind that we started the year in of it. It is a declaration to the public at large that the which we had numerous new initiatives in respect of advice given by a financial adviser is of the highest enforcement of standards and ethics. At the forefront quality, is based solely on the needs of the customer, is was the development of the new Code of Ethics and provided by someone who is not exceeding his or her Professional Responsibility. The new code has a more level of technical competence, is governed by a code detailed and descriptive approach to ethics and the of ethics and is subject to consistent monitoring, with application thereof. Its aim is to set the benchmark for effective discipline applied to those who transgress. the financial services industry and to inspire conduct from our members that will give our respective The importance of self regulation cannot be ignored designations the status of absolute excellence in service and is a fundamental in ensuring the protection of the and uncompromising values of professionalism and public and the provision of safe, competent advice. integrity. We will provide members with the opportunity Our long term view is that this would ultimately be the to comment on the document in 2011 before the new only way in which the public interest can effectively be code is implemented. addressed. Member Audits Our 4’E principle (Education, Examination, Experience In addition to our certification standards, the right to and Ethics) as well as Continued Professional use the FPI professional designation trademarks (RFP™, Development (CPD) is the foundation of our certification AFP™ and CFP® professional) is subject to certain programmes and is aligned to international best practice. conditions. Misuse of these trademarks constitutes a breach of our Code of Ethics and Professional Education and Examination Responsibility as well as being a trademark infringement. During 2010, we aligned our curriculum framework In 2010 we focused on the protection of these and competency profile to the international standards trademarks by conducting several random member developed by Financial Planning Standards Board audits. (FPSB). We ensured that all accredited education partners also aligned their curriculums accordingly. Discipline Further adjustments were done to ensure that all board There was a significant increase in the total number exams test what financial planners do in daily practice. of cases administered by FPI compared to 2009. The following cases were dealt with in 2010: Experience and CPD New experience and CPD standards were developed Type of case Cases opened Cases concluded by FPSB for implementation by the 23 affilliate countries. Unauthorised use 6 4 Our implementation date is planned for 2012 once of mark these documents have been localised. Incorrect use of 19 19 mark Ethics Disciplinary cases 4 0 The financial services industry has, since the introduction of the FAIS Act, been faced with numerous regulatory Register of Practising Financial Planners challenges. Fit and Proper requirements and concepts The maintenance of the public register of practising such as “honesty” and “integrity” have come to financial planners is core to the FPI operation. As part of the fore as key elements of compliance, with the our website development, a section will be dedicated looming danger of a Financial Services Provider (FSP) to the consumer to assist with finding a financial planner being challenged before the FAIS Ombud by a as well as facilitating the verification of FPI membership. disgruntled client. FPI Annual Report 2011 | Setting the Standard 8 Setting the Standards Regulatory Exams Industry Communication The appointment of the FPI as an Examination Body in We held monthly Examination Body project meetings 2009 gave us a unique opportunity to showcase our during the year with the FSB and the other appointed ability to set standards of competence. This also allowed Examination Bodies. We also met regularly with our us to bring more than 29 years of core experience corporate partners and members in order to keep all in managing examinations to the FSB licensing informed of developments with the exams as well the examinations. delivery methods and preparation for the exams. We spent a considerable amount of time in 2010 The Year Ahead dedicated to system development, question bank • We will continue to promote our certification model development, the development of processes and and those who have met the stringent set of criteria to delivery models as well as setting up the examination be certified. body operations thereby building the necessary • We will continue to raise the levels of competencies capacity to assist the industry in meeting the deadlines across all areas of financial planning amongst our for these exams. members. Trial and Pilot Exams • We will scan our environment on an on-going basis A number of trials exams took place in 2010 for the level and adjust our business model accordingly which two exams. These trial exams gave candidates the may result in changes to our certification standards. opportunity to provide feedback on the question design This requires a shared vision from our members as we and complexity. We also ran a number of level one pilot must work together in building the profession and exams for Key Individuals and Representatives which was creating an awareness of financial planning amongst designed to test IT systems, quality management systems consumers. and the overall composition of the exams. We offered • We will maintain the good relationships we have these exams free of charge and pass results were with all our education partners to ensure that the recognised by the FSB. appropriate standards are maintained. • We will support employers of financial planners and We continued developing questions for the level two advisors in their efforts to meet the competency and exams during 2010 with pilots exams expected during ethics requirements set out by the regulator. 2011.We aim to have all level two exams available • We will continue to engage with the FSB’s Enforcement towards the end of 2011. Department and the FAIS Ombud’s office to facilitate an open channel of communication on any relevant Delivery of Exams matters of transgression. The Level one exam RE1 for Key Individuals and RE5 for • We will continuously enforce our certification standards Representatives exams went live in the fourth quarter of and are committed to ensuring that our standards are 2010. We expect the bulk of the delivery to only come in line with international best practice. through in 2011. The FPI’s delivery slogan is “any time, any place and any medium”. Education Framework Dedicated to creating and providing an 1,313 CFP professionals in South Africa completed this survey which was run from August 3 to 31 2010. We will education framework and career pathways. be publishing a comprehensive report of the results of When choosing a career in financial planning, a wide the survey in 2011. range of opportunities exist, not only as professional financial planners but as managers, specialists within Board Exams the life insurance, banking, asset management and In 2010, the FPI Board approved a three-year transition investment industries as well as other providers of plan to ensure that we exercise better control over financial services products. Those with entrepreneurial all board exams. According to this plan, effective skills are also able to eventually set up their own businesses. from 2013, all board exams will be developed and managed in their entirety by the FPI. Upon complete To support a career in financial planning, we implementation of this plan, candidates will only be have developed partnerships with accredited allowed to sit for the board exams after they have education partners to deliver qualifications aligned successfully completed an approved education to our curriculum and assessment standards. These programme. Board exams will be offered twice a year qualifications provide access the FPI board exams, and are currently planned for May and October 2013. which support our three professional designations. The structure of these exams will also change, in CFP professional Job Analysis Survey ® accordance with the results of the recent job analysis The job analysis survey of CFP professionals is designed survey, with the first of these changes being introduced and developed to benefit the public, the financial in 2011. planning profession and the FPI by assuring that individuals who obtain CFP certification have adequate Board Exam Results levels of knowledge and skill to perform competently in A total number of 649 candidates wrote the CFP board the field of financial planning. This job analysis survey, exam in 2010. The pass rate was 47%. 62 candidates which is used to develop test specifications and linked wrote the AFP™ board exam with a 41% pass rate. 1968 to the pass/fail decision for the CFP Certification Candidates wrote the RFP1, RFP2 and RFP3 exams last Examination, plays a fundamental role in developing year with an overall pass rate of just over 60%. evidence to support the validity of the CFP Certification Examination. FETI Project One of the many transformation initiatives which FPI undertook in 2010 was the partnering with Further In 2010 we, in partnership with Financial Planning Education and Training Institute (FETI), Higher Education Standards Board (FPSB) and its other affiliates, co- and Training Institute (HETI), INSETA (Insurance Sector ordinated the design and development of a job analysis Education and Training Authority) and the University survey questionnaire. We also made use of an external of the Western Cape (UWC) to launch a pilot financial psychometrician to advise on the questionnaire’s planning articulation project in five FET colleges in the development and to analyse the results. The purpose Western Cape. We are very excited about this project of the job analysis survey questionnaire was to validate and hope that in the near future we, in partnership the CFP certification assessment standards and with the other stakeholders, will be able to roll out this provide guidance for the content and format of CFP programme nationally. certification examinations in the future. FPI Annual Report 2011 | Setting the Standard 10 Education Framework The initiative, dubbed FETI/HETI and designed to expand Then with a B. Commerce Honours degree and with access, offers a “seamless articulation” between FET and three years work experience, learners are able to write HET Institutes and will increase the number of qualified the CFP board exam at UWC and have access to professional financial planners working in South Africa by CFP certification. making it easier and more affordable for students to gain the right accreditation and qualifications. The pilot programme was funded by INSETA and allows 100 learners at five Western Cape public FET Colleges In terms of the agreement between the partners, UWC to undertake the NQF level 5 Certificate in Wealth will now recognise the NQF level 5 Certificate in Wealth Management as the first step on the ladder to gaining a Management as the first year of a B.Com Degree. The tertiary qualification. NQF level 5 qualification will therefore become a bridge to a higher qualification, which learners can obtain Accredited Education Partners through the UWC. We accredited five FET colleges through the FET Institute which brings the total number of accredited education As part of the initiative, FPI accredited the UWC FET partners, who have approved programmes and are able Institute and the five FET Colleges to offer FPI board to offer access to the FPI professional board exams, to exams which will give the learners the opportunity to 16. These programmes range from NQF level 5 to NQF become professional members. These are available level 7/8. to be written at differing stages, depending on the applicant’s work experience and qualification. The Year Ahead • We will build and maintain our relationships with our Graduates of the NQF level 5 certificate will be allowed accredited education partners. to enter the UWC School of Business Finance Advanced Diploma in Management Studies, a two year course at • We will continue to monitor and assess our learning NQF level 6 and 7. Graduates will then be able to pursue framework by ensuring that our curriculum, assessment a B. Commerce Honours Degree. and board exams meet international standards. • We will investigate opportunities for additional Having obtained the NQF Level 5 Certificate in Wealth educational institutions to offer our accredited Management and with one year of working experience, programmes to provide easy access to learners and learners are allowed to write the RFP™ board exam and promote a career in the financial planning profession. apply for membership at RFP™ professional level. With the Advanced Diploma in Management Studies and two years work experience in the insurance industry, learners are be able to write the AFP™ board exam at UWC and then apply for AFP™ professional membership. Authoritative Voice Financial Sustainability Providing regular and effective technical Technical Updates In 2010, we launched the Quarterly Technical Update. insight to regulators, policy makers and Some of the main items under discussion were: members. Employment Benefits Research conducted during the year indicated that • Possible phasing out of Provident Funds the FPI, in order to maintain its premier standing, should • Retrenchment benefits and tax amendments regularly and effectively provide technical insight to • Social Security and Retirement Fund Reform regulators, policy makers and members. FPI members, developments in particular, have been calling for us to deliver regular, • Trustee Training easy to read, understandable and implementable • PF 130 and King III and the governance of retirement communications on changes to legislation and funds. regulation applicable to their practices. Estates and Trusts The FPI, with the support of its technical committees, • Repeal of the Stamp Duty Act endeavours to be the technical resource hub that • Appellate division case of Kruger v Goss & another ensures that all outputs of a technical nature are co- (rehabilitative maintenance) ordinated with expert skill and knowledge at all times. • The ‘portable’ R3.5 million estate deduction in respect By doing this, we can be recognised as the authoritative of spouses voice to speak for the financial planning profession. • Reporting of intestate estates (i.e. no will) • Suicide and wills We implemented the following technical insight • Drafting wills and remuneration. communication services during 2010: Healthcare • Technical Updates • National Health Insurance (NHI) • Continued Professional Development (CPD) Events • The new Code of Conduct for prescribed minimum • Website benefits. • Journal – The Financial Planner Investments Technical Committees • The review of the Collective Investment Schemes The FPI’s Technical Committee is made up of the Control Act, 2001 (CISCA) chairpersons of the Industry Sector Groups (ISGs) who • Draft Regulation 28 and the prudential limits of pension contributed their technical expertise in the following fund investments. areas of financial planning: Personal Financial Planning • Employee Benefits • Amendments to the FAIS General Code of Conduct in • Estates and Trusts terms of Conflict of Interest • Investments • Business succession planning and practice audits • Healthcare • Personal Financial Planning Risk • Risk • Risk Benefit Definitions • Tax • FPI’s Indemnity Policy for members • Code of Good Practice for Dread Disease Benefits. The role of these committees is to take all reasonable steps to promote the aims and objectives of the FPI and Tax the financial planning profession by: • Budget 2010 • Provisional Tax and the 80 20 rule • Staying abreast of developments in the industry. • Registration as a Tax Practitioner • Arranging for engagement with Government at all • Cross-Border Collective Investment Schemes levels to influence and take part in consultation about • Turnover Tax legislation impacting the profession, • Proposals for miscellaneous and technical tax law • Providing members with feedback in order to keep changes members abreast of changes. • Exchange Control • Voluntary Disclosure Programme • The Taxation Laws Amendment Act (No 7 of 2010) and the Taxation Laws Second Amendment Bill. FPI Annual Report 2011 | Setting the Standard 12 Authoritative Voice The Year Ahead CPD Events As part of the planning for the Technical Services We successfully organised over 40 CPD events across the Department, we scheduled various strategy sessions country with a total attendance of over 2900 delegates. for early 2011 with information sessions planned to These events included quarterly breakfast and communicate the outcomes of these sessions to afternoon sessions, mini conventions and eight Refresher members. Workshops. The Refresher Workshops were the second highest attended FPI event second to the Annual FPI Some of the activities planned for 2011 include: Convention. • Increasing relationship building with key stakeholders, namely, the Financial Services Board (FSB), National New Website Treasury, the South African Revenue Services (SARS) The website redevelopment was started during the and Council for Medical Schemes (CMS) amongst second half of the year with changes aimed at others. improving access of technical information as well as • Investigating and developing a research policy events, online discussion forums and other important that addresses the technical research needs of the resources for our stakeholders. members and the financial planning profession. • Developing and implementing a technical Journal – The Financial Planner communication strategy on best ways to We issued our journal every alternate month during 2010, communicate technical information to members, which was rated as the journal of choice for members obtaining member opinion and input on technical according to the 2010 member satisfaction survey. matters. The journal included quality, informative articles and • Developing and implementing a strategy to ensure included contributions from our members across a wide that the FPI can take informed positions on matters range of financial planning topics. affecting financial planning and the industry as a whole. Promoting the Profession Ethics Enforcement Promoting our designations and the financial PR and Media We actively monitor our media exposure via an online planning profession to key stakeholders and media monitoring service in order to gauge the the public at large. exposure we receive in the various print, online and broadcast media. Over 400 articles were published The public needs professional advice to guide during the year with reference to the FPI and our them through the growing complexity, diversity, professional designations, creating a total advertising miscommunication and uncertainty in financial services value equivalent (AVE) of over R7 million. We also and more specifically, the setting of personal financial placed various other advertising in print publications to goals to achieve sound retirement and financial promote the profession and our members. security though a well structured financial plan based on sound financial planning principles. To ensure that GIBS Expo and Sci-Bono Finance Week the consumer is best served, the FPI has the following In July, we participated in the Gordon Institute of consumer-facing objectives: Business Science (GIBS) Career Expo and the Sci-Bono Finance Week, which attracted over 3000 grade 9 to • To create awareness of professional financial planners. grade 12 learners. We interacted with many learners • To demonstrate that they are experts in their field just and educated them about financial planning as a like doctors, lawyers and other professionals. profession. • To communicate that they are learned and qualified to do financial planning. Financial Planner of the Year • To create a desire among non FPI-accredited The FPI’s Financial Planner of financial advisors to become members. the Year was announced at the Annual Convention Gala Dinner Although we faced a few challenges to ensure that at Emperors Palace, Kempton resources were fully available to market our members Park on 26 May 2010. The 2010 and the profession, opportunities were seized to ensure award went to Ms Natasja maximum awareness of the FPI’s brands by launching Norval Hart CFP®. Finalists in new initiatives during 2010. the competition were Ms Pat Blamire and Mr Jan-Carel Inaugural World Financial Planning Day Botha. In celebration of the Inaugural World Financial Planning Day initiated by Financial Planning Standards Board As a financial planning (FPSB), we ran radio advertisements on three national professional, our Financial radio stations to promote financial planning to Planner of the Year Award is the consumers. In addition, FPI leadership attended a World highest accolade a financial Financial Planning Summit on 21 April 2010 in Taipei, planner can obtain. hosted by FPSB, the preeminent international standards- setting organisation for financial planning and owner of The competition was launched in 2000 to honour the CFP marks outside the United States. and promote excellence in financial planning and the process of the competition is independent and Financial Planning Month transparent, with judges ranging from industry experts, In November, we launched Financial Planning Month, academics and FPI personnel. a consumer awareness campaign aimed at educating consumers about the FPI, CFP mark and dealing with a We would like to acknowledge those who entered the professional financial planner. 2010 competition as a tribute to those financial planners who are committed to being at the top of their game. We ran a weekly series during November on CNBC Africa titled “Secure your Financial Future” with the shows providing consumers with information about the financial planning landscape, the financial planning process, how to choose a financial planner and their rights and recourse. We also held exhibitions at various malls in Gauteng to promote the use of professional financial planners to consumers. FPI Annual Report 2011 | Setting the Standard 14 Promoting the Profession Chairman’s Award The Year Ahead We will continue to market, build and maintain a viable We awarded and sustainable financial planning profession through the inaugural various initiatives to the benefit of the consumers we FPI Chairman’s serve and the nation as a whole. Award to Ms Prem Govender We are committed to creating maximum awareness at the Annual of the financial planning profession and to improve Convention Gala communications to all our members and stakeholders. To Dinner. This award achieve this, the following initiatives will be undertaken was introduced to in 2011: recognise those individuals who have made life- • Focussed marketing and communications activities to long outstanding attract potential members. contributions • Brand Ambassador Campaigns to raise the FPI’s and to the financial our members’ profile. planning profession in the areas of service to society, • Consumer clinics to educate customers about the academia, training, government, media or any other financial planning profession. professional activities. • Advertising campaigns to promote the FPI as the premier professional body in South Africa. • Introducing a Media Award to recognise individuals who have made outstanding contribution to the media to promote financial planning amongst consumers, the financial planning professional the FPI and its marks. World the Standards Setting Class Value Proposition Developing and delivering a differentiated, • Member rates and discounts to attend international events. world class value proposition to the market, based on stakeholders needs. Surveys In June, we ran our annual member satisfaction survey The FPI’s commitment to our stakeholders is to deliver which provided us with an in-depth analysis of our a value proposition built on developing a sustainable membership. 548 members completed the survey, which financial planning profession, thereby creating represented a response rate of 8% of our membership. confidence in the financial services, promoting Some of the outcomes were: professionalism and enhancing consumer awareness. • 70.5% CFP professionals, 14.8% AFP™ and 14.7% RFP™ Our Member Value Proposition members responded to the survey. During 2010, we focussed on providing opportunities • Their preferred communication methods were monthly for our members to nurture their knowledge and newsletters, ad hoc alerts and the website. 65% professional development in order to stay current in the indicated we always communicated clearly. rapidly changing financial planning environment. • The FPI Journal, The Financial Planner, was the highest rated at 47% (out of eight publications). We provided the following valuable benefits to our • The need for technical information was the highest members: rated at 41%. • 66.4% rated webinars as an important communication • Regional and Industry Sector Groups (ISGs) focussed tool. on ensuring that the needs of our members are • 95.2% of our members value their professional effectively channelled. designation, 81.6% display this on their business cards • Consumer awareness campaigns to promote the and 68.3% advise their clients of their professional benefits of using a professional financial planner. designation. • Delivery of technical information to keep members • 91.1% value their FPI membership, with the highest informed. reasons rated being recognition as a professional. • Networking opportunities at various events. • Business solutions through associations with value chain partners. We also participated in the annual Magnet Young • Career pathways for those wishing to access the CFP® Professional Survey which was conducted by Magnet mark through accredited programmes and board Communications, a Stockholm-based company. The exams. feedback from the analysis delivered was significant as • Access to potential employers to gain the necessary it provided us with insight of what young professional financial planning experience as well as career members’ expectations are in terms of employer development opportunities. preference, their careers and benefit expectations. • A Code of Conduct and Professional Responsibility to ensure that the highest standards of ethics are Annual Convention adhered to. Our 2010 Annual FPI Convention themed Beyond the Recession was held on 26 and 27 May 2010 at Emperors International Affiliation Palace. Some of the key speakers included During 2010 we aligned our local standards to Dr Monde Mnyande, Ahmed Jooma, Mitch Anthony. international best practice to ensure that our Prof. Walter Geach, David Shapiro and Gary Bailey who professionals are on par with the best in the world. closed the convention with an inspiring presentation on leadership and the FIFA 2010 World Cup South As the only marks licensing authority for the CFP mark in Africa™. We were pleased that even though we South Africa, through agreement with Financial Planning had experienced a recessionary period, attendance Standards Board (FPSB), we were able to offer members exceeded 900 delegates. with the following during 2010: We ran an exhibition concurrently with the convention • Facilitation of cross border practices and certification and over 30 companies exhibited and showcased the for those members wishing to practice outside South Africa. very latest products, services and technology in the • Access to international research and trends. marketplace. FPI Annual Report 2011 | Setting the Standard 16 World Class Value Proposition At the Induction Ceremony, we welcomed over 200 new CFP professionals. Website During the second half of 2010, we started working We are very proud that the Gala Dinner was attended on the development of our new website to improve by over 600 guests including senior representatives from access to information for our members and the public. the statutory bodies, industry associations, education We plan to launch the website in early 2011 and part of partners, media, FPI board members and senior FPI the development includes an online application and volunteers. At the dinner, in recognition of excellence, renewal process, discussion forums, shopping facility, we awarded top student prizes for the Post Graduate new event registration system and a section dedicated Diploma in Financial Planning/B Com Honours in to keeping consumers informed. Financial Planning and the Advanced Diploma in Financial Planning amongst other prizes. The Year Ahead During 2011, to further enhance our value proposition to our stakeholders, we plan to: • Review our communication strategy to ensure that our communications mechanisms are effective. • Conduct research to determine the needs of our stakeholders to develop and implement a compelling value proposition for all stakeholders. • Conduct research to establish market segmentation, trends and characteristics to ensure that our development of the profession is in line with market expectations. • Continue to develop strategic relationships and partnerships with value chain partners and key stakeholders. • Investigate ISO17042 and ISO22222 accreditation. Transformation Discharging our transformation Transformation Committee responsibilities with respect to the Given the huge importance that we place on implementation of relevant Acts and practices transformation, during 2010 the Board of Directors that are consistent with good corporate approved the charter creating a Transformation Committee to serve as the vehicle for discharging our citizenship. transformation imperatives. The objectives of the FPI Transformation Committee are: All South Africans deserve a dignified and prosperous life. We know that meeting our transformation • Develop a shared model and framework for expectation is not only a morally imperative but also understanding transformation within FPI. pragmatic one and aims to realise the country’s full • Create internal awareness for the implementation of economic potential. We therefore constantly strive the transformation strategy. to align our efforts to the Department of Trade and • Demonstrate commitment to transformation. Industry’s (DTI) Code of Good Practice to ensure that we • Facilitate the effective implementation of our contribute to a sustainable and equitable society. transformation strategy. • Monitor and evaluate the performance on BBBEE Rating transformation and the achievement of set targets. In 2009 FPI achieved a LEVEL FIVE Broad Based Black Economic Empowerment (BBBEE) contributor status from During 2010 the Board of Directors also approved a far ratings agency BEE Verification Agency CC, following a reaching Transformation Policy and Implementation comprehensive audit of FPI’s BBBEE performance. Framework which sets out FPI’s transformation objectives, strategy and implementation timelines. The In 2010, we believe that we made good progress full document is available on our website or from the across all our transformation measures. We are eagerly office on request. awaiting the results of the 2010 BBBEE verification which is currently underway. Corporate Social Investment Committed to all our employees, the Woman’s Day We partnered with the Principle Officer’s Association communities in which we conduct our (POA) and Institute of Retirements Fund (IRF) for their business, the environment in which we annual Women’s Day events in Johannesburg and, for operate, the sustainability of the environment, the first time, in Cape Town. The theme of the event in Johannesburg was Help Seniors and the charity selected and to the sustainable development of was the Olievenhoutbosch Retirement Centre. our country. The Cape Town event was held on 27 August 2010 and The FPI, through its corporate social investment initiatives the charity selected was Matla A Bana, a project for finds an integrated “strategic fit” between community children affected by crime. needs and opportunities to which we can harness our expertise, and resources, to the benefit of both FPI and the community. We focus on forming strategic, sound and meaningful partnerships with the communities, civil society and government, in dealing with community needs and problems in an integrated and sustainable way. Focus is given to areas of strategic importance to FPI and where maximum and sustainable community development impact can be achieved. Teach Children to Save (TCTS) In August we took part in the South African Savings Donations of food and other items were collected Institute (SASI) Savings Month: Teach Children to Save for the charities at these events. FPI staff were at the (TCTS) campaign targeted at grade 4-7 learners. Our event to hand over the items at the Olievenhoutbosch members were invited to take part in this initiative to Community Centre on 30 August. provide savings education throughout South Africa and to promote the importance of a savings culture among Financial Services Board (FSB) Draft National Consumer our future leaders. Financial Education Strategy During 2010, we were invited by the FSB to comment on its draft National Consumer Financial Education Strategy and also attended a meeting with the FSB, alongside other industry bodies, in November to discuss the draft document and plan the way forward. We would like to thank Prem Govender (SASI Chairperson and FPI board member), Elizabeth Lwanga Nanziri (CEO of the South African Savings Institute) as well as the FPI executive staff who contributed in putting together our response. The Year Ahead We will continue to engage industry stakeholders and Teach Children to Save South Africa (TCTS SA) was support initiatives aimed at the upliftment of all South adopted as a key event by SASI during the July National Africans. Various internal initiatives are also planned Savings Month, following the successful pilot launch on for 2011. 25 July 2008. The initiative aimed to take the savings message to our youths, equipping them with the basic financial skills to help them become better savers now and in future. 19 FPI Annual Report 2011 | Setting the Standard Resources Our People Creating a long term, financially sound and Summary Statement of Comprehensive Income sustainable organisation with maximum Year ended 31 December 2010 utilisation of resources. 2010 2009 Financial Sustainability Description Rm Rm In 2010 we focussed on ensuring financial stability, sound Membership 11.20 10.76 reporting and improvement of financial controls. We Board Exams & Courses 3.00 4.04 also grew our strategic cash reserves from R4.91 million Revenue 14.20 14.80 to R5.59 million, a growth of 33% year on year. We were also pleased that our independent auditors, Operating Surplus 0.25 2.63 Zeelie de Kock, after an audit of our financial statements, gave FPI an unqualified audit report for the Other Income 1.15 0.90 2010 year. Expenses 1.80 2.32 Total (Loss)/Surplus (0.39) 1.20 Summary Statement of Financial Position Year ended 31 December 2010 Our membership dues revenue increased in 2010 by 4% 2010 2009 from 2009. This growth, albeit smaller than we hoped for, Description Rm Rm was mainly attributable to members finding it difficult to Non-current Assets 1.16 1.02 retain their membership in a recessionary environment. Current Assets 8.43 8.75 We also experienced an expected drop in revenue from Total Assets 9.59 9.77 board exams and courses as the industry was beginning to redirect its attention, away from obtaining FAIS credits as a licensing requirement, to the new Regulatory Exams Equity & Liabilities (RE), which came into effect from 1 January 2010. We Equity 7.23 7.63 also experienced a decrease in revenue from health General Reserves 5.00 5.00 care courses. Retained Surplus 2.32 2.63 The resultant 2010 deficit of R0.39 million can also be explained by unrealised income from the Examination Current Liabilities 2.36 2.14 Body operations due to postponement of the launch Total Equity & Liability 9.59 9.77 date for REs by the FSB. It is important to note however that this did not result in a loss of cash. The summary statement of our financial position above In the years to come, we hope to significantly grow reflects a largely unchanged financial position year our non-membership dues revenue in a bid to reduce on year. our over-dependence on membership fees. Projected revenue from our Examination Body operations is an During 2010, we invested R1.31 million into starting up integral part of this plan. the FPI’s Examination Body operations. We were able to do this without the need to draw on our strategic cash reserves. FPI Annual Report 2011 | Setting the Standard 20 Resources The Year Ahead Human Resources We also implemented a new performance management You would not find FPI’s greatest asset on the balance policy which we hope will maximise the productivity sheet. Our people are the true value of the institute, their of our team whilst being fair to all. The next phase hard work and dedication inspiring achievement and in this exercise will be the development of a talent taking the institute to new heights. management system that will hopefully assist us in identifying, growing and retaining good talent within During the year we filled some key positions to help the institute. ensure the smooth running of our operations. Mr Almo Lubowski, CFP® joined our team as Manager: Technical Services. Ms Carla Letchman also joined our technical services department as a Research and Technical Analyst. Mr Phillip Kruger and Mrs Tsholofelo Dihutso joined our team as Manager: Professional Standards and Manager: Communications and Marketing respectively. These new additions to our team have been instrumental in helping us run an effective operation in 2010. Corporate Governance Committed to adherence to the rules, laws All directors, with the exception of the Chief Executive Officer (CEO), are non-executive directors. This provides and processes by which the business is the necessary objectivity for the effective functioning of operated, regulated, and controlled. the Board. Our corporate governance structures remained largely King III and the new Companies Act unchanged in 2010. With the King III Code on Corporate Governance coming into effect in March 2010, we conducted a New Directors gap analysis to determine what the FPI, already in During 2010, the members of the institute elected Mr compliance with King II, needed to do to comply with Ronald King CFP®, Mr Raimund Snyders CFP® and Ms the new code. Kathryn Franz CFP® to serve as directors of the FPI for a two-year term. On completion of the gap analysis, the board decided that, given the many overlaps with the new Companies Re-Appointed Directors Act which was then in draft form, it would be prudent to The board also re-appointed Ms Nasrat Edoo Sirkissoon delay FPI’s compliance with King III until such time that CFP® and Sankie Morata CFP® to the board for a the new Companies Act came into effect in 2011. further two-year term. Meet the Board: Gerhardt Meyer, CFP® Solly Keetse, CFP® Godfrey Nti Nasrat Edoo Sirkissoon, CFP® Kathryn Franz, CFP® Prem Govender, CFP® Acsis Ltd Advantage Asset CEO Sanlam Acsis Ltd Mosswick Invest Pty Ltd Chairperson Managers (Pty) Ltd Executive Director Technical Director Appointed Director Non Executive Vice Chairperson Non Executive Non Executive Non Executive Non Executive Artwell Hlengwa, AFP™ Sheshi Kaniki Ronald King, CFP® Sankie Morata, CFP® Raimund Snyders, CFP® Esther Venter, CFP® Self Employed Momentum PSG Konsult BOE Trust Ltd Old Mutual Milpark Business School Appointed Director Appointed Director Director Appointed Director Director Regional Director Non Executive Non Executive Non Executive Non Executive Non Executive Non Executive FPI Annual Report 2011 | Setting the Standard 22 Industry Sector Group Reports Industry Sector Group Reports Chairpersons reflect on Estates and Trusts The year 2010 was a busy one for 2010 the Estates and Trusts Planning ISG. Teleconferences between members were held on a quarterly basis, as well as Employee Benefits one face-to-face meeting, to ensure that everyone stays abreast of developments Legislation in the employee benefits in the sector. industry continues to change, and as such, this committee spent a lot of time The committee made presentations at CPD events in Durban, during 2010 discussing the implications Empangeni, Port Elizabeth and Bloemfontein, wrote articles for of the various changes and keeping Financial Planner and posted important judgments and articles track of social security and pension on the FPI website. fund reform discussions. Some changes in legislation that took place in 2010 include Changes to Section 11(w) of the Income Tax Act – together with the following: the introduction of a new section, Section 23B(4) – effectively restrict the conditions under which employers can claim a • Section 4A of the Estate Duty Act was amended, affecting the deduction from their taxable income with regard to the premiums regulations surrounding abatement. payable for the disability policy of employees. • The Reform of Customary Law of Succession and Regulation of Also, the proposals in the 2011 Budget Speech will have a Related Matters Act was introduced. significant impact on retirement funds and employers going forward. Although much of the enabling legislation has not • Master’s fees (such as for trusts and estates) are now payable in been drafted as yet, and there are still discussions with the cash or EFT to the Department of Justice as the use of revenue regulator about various issues, it is prudent to take cognisance stamps has been discontinued. of the proposed changes to both the structuring of employee The committee will continue to monitor developments in the remuneration and income tax deductions relating to employee sector in 2011. Important issues in this regard are various court benefits. judgments that probe and even broaden the definition of a For example, it has been proposed that, as of 1 March 2012, valid last will and testament, as well as litigation concerning the individuals will be allowed to deduct up to 22.5% of their taxable reconciliation of life insurance beneficiaries with the stipulations income for contributions to retirement funding, with a maximum of a will. deduction of R200,000 and a minimum deduction of R12,000. In Financial planners need to stay abreast of these cases and others addition, any contribution by employers to retirement funding concerning the rights and obligations of spouses (as broadly on behalf of employees, for which the employer claims a tax defined) and those who merely live together. deduction, will be taxed in the hands of the employees as a fringe benefit. However, employees will be able to offset their fringe benefit tax via the 22.5% taxable deduction. The industry David Thomson CFP®, Chairperson is liaising with authorities to obtain clarity in respect of the implications of these proposals. In addition, the Minister confirmed government’s commitment to the removal of provident funds. The changes proposed in the Budget Speech will effectively equalise the tax regime of contributions being paid into the fund, and it is anticipated that shortly thereafter all funds will be required to pay a maximum of one-third at retirement, effectively removing provident funds from the arena. Jennifer Grefen CFP®, Chairperson 23 FPI Annual Report 2011 | Setting the Standard Industry Sector Group Reports Health Care increase financial planners’ knowledge of investment strategies. As such we organised a series of educational articles written by The South African healthcare market Chartered Financial Analyst (CFA) Franco Busetti, author of The consists of a dual system, with Effective Investor. These will be published in Financial Planner approximately 16% of the population and will become part of our educational library on the FPI enjoying a first-class private healthcare website. asset while the rest make use of an ailing public healthcare system. Busetti has also agreed to present countrywide educational We support government’s initiatives to investment workshops with Rowan Williams-Short, who is part provide universal access to quality healthcare to all South African of the team that sets CFA examination questions in the United citizens, and as financial planners we need to contribute actively States of America. During 2010 we also held two mini-investment to this goal. Our interaction with the newly appointed Registrar conventions for CPD points that were well received. Our efforts of Medical Schemes at the end of 2010 was very positive, as a committee to build relationships with other industry bodies, emphasising the important role that we as financial planners government, educational institutions and the media are ongoing. can play. Janet Hugo CFP®, The focus of this committee for 2011 will be to advance and Chairperson promote the profession of healthcare consulting in order to raise the status of the professional financial planner and enhance the experience of the public we serve. We will do this Personal Financial Planning through education, communication and regular interaction with the regulator. This committee traditionally dealt with a variety of topics and discussions André Jacobs CFP®, that fell outside of the other ‘technical’ Chairperson areas of financial planning, and as such there was a need to renew the focus of Investments the committee in order to provide its members with a clearer mandate and The investment sector experienced a direction for the way forward. particularly complex and challenging year in 2010 due to the continuing This was successfully achieved in 2010, partly through the vulnerability of the global financial introduction of the Technical Department and the appointment system. Growth was slow and patchy, of Almo Lubowski (Technical Manager) and Carla Letchman and debt levels remained high. This (Technical Research Analyst), who have become the driving force demanded particular attention from behind keeping committee members focused and active in their financial planners and advisors in terms respective fields. of balancing risk and managing investor expectations with regard to participating in stock market recoveries. Sound investment Besides the regular feedback and collation of relevant strategies were therefore very important. information, two activities that ranked high on the ISG calendar in 2010 were the ongoing research and discussions on global From a legislative perspective, changes to Regulation 28 trends in fee-based financial planning. Another noteworthy challenged both institutions and investors with regard to the mix activity that saw the involvement of this committee was the four- of investments in pension funds. A trend is evident on the part of part Secure your financial future series on CNBC Africa that was the regulators towards increased acceptance of active strategies flighted in November 2010. or hedge funds in pension and conservative portfolios. In coming years it will therefore be important to educate our members on Going into 2011, the committee will continue to provide how to select and manage these investments in the context of a specialist input on non-technical matters (including global trends client’s long-term investment plan. and legislative changes), as well as practical guidance on the application of the six-step process of financial planning and the During 2010, the committee resolved to promote Certified enhancement of the soft skills involved in client engagement. Financial Planners® of sound investment knowledge and to This will ultimately result in a better consumer experience, the FPI Annual Report 2011 | Setting the Standard 24 Industry Sector Group Reports Industry Sector Group Reports heightened professionalism of the financial planner and more Tax robust practice management. The year 2010 was a particularly active Related to this is the introduction of the FSB’s Treating one in the tax sector. A number of Customers Fairly (TCF) approach, as well as the potential extensive and far-reaching changes introduction of ISO standards for financial planning practices were made to tax law and policy, in South Africa (ISO 22222). These topics are significant in the not least of which are the changes current business landscape, and therefore the committee will announced during the Budget Speech. provide input on these issues to the Technical Team for the broader focus of the FPI Board. These include changes to: The year ahead will see the committee focusing on providing • The Secondary Tax on Companies (STC) and corporate tax. content and input that is not only interesting but also useful for • Section 11(w), impacting on buy-and-sell policies, deferred professionalising members’ own businesses. compensation and employee health insurance. Kathryn Franz CFP®, • Fringe benefits on company vehicles, the travel allowance rate Chairperson and travel claims. • Retrenchment and retirement tax, and severance payments. Risk • The SARS penalty regime and pay-now-argue later – debt is The risk sector did not experience many now due immediately even if the taxpayer has been incorrectly changes in 2010, perhaps in anticipation assessed. of greater changes that will stem • The medical aid employer contribution, which is now from the social security reform process. fully taxable. Although the Inter-Departmental Task • Estate duty and capital gains tax. Team (IDTT) paper on social security The changes were complex, and the result is that only professional reform has not been released as yet, advisors who are familiar with these changes will be able to give informal discussions in this regard gave greater insight into the the best service to their clients. The committee therefore focused thinking behind social security reform and a national risk pool. on communicating clearly and regularly with its members in The Risk committee hopes to make a key contribution when the order to ensure that they are up to date with the changing IDTT paper is released since insurance prior to retirement is a legislation. key focus area. The committee also made a number of representations to Other developments include the fact that the Association SARS and the National Treasury in an attempt to confirm the for Savings & Investment SA (ASISA) began looking at the implications of the complicated legislative amendments. These standardisation of policy terms following approaches by the FPI comments were taken into account, and the result is that the to the previous Life Offices’ Association of South Africa (LOA). final promulgated legislation contains the important changes During 2010, the committee responded to member queries on suggested by the committee. technical matters, for example the aggregation of insurance benefits, and identified speakers that could enhance members’ Jerry Botha CFP®, risk and insurance knowledge. As always, the FPI provided Chairperson operational, secretarial and planning support to the committee. Andrew Crawford CFP®, Chairperson 25 FPI Annual Report 2011 | Setting the Standard Regional Reports 2010 in review Central Region (Free State and Northern Cape) The Central Region faced some challenges in the 2010 financial year. Gauteng Region Unfortunately the committee had Gauteng is the biggest region, and in insufficient members, which meant 2010 we held successful monthly that we could not deliver all four events that were well attended. In planned events in the region. order to ensure that our members However, despite these challenges, a very successful two-day CPD receive quality information, we session was held. The first day saw an informative investment organised the following sessions session followed by a cocktail function where participants were during the year: offered the opportunity to network and get to know one another. The following day started off with a breakfast and a session on • Regulatory protection for medical scheme beneficiaries. compliance and retirement planning. • Tax development planning. In October, a number of speakers attended a seminar on how • Developments in estate planning and the duties of trustees. to apply trust law to estate planning. Some of the committee members were also involved in the Financial Planner of the • Investment planning: The art of making the plan work. Year competition. • The business case for comprehensive financial planning. Shirly Hyland CFP®, The biggest highlight during the year was that one of our Chairperson committee members won the prestigious Financial Planner of the Year Award. The winner will be travelling to the various regions in 2011 to inspire other members to enter the competition. KwaZulu-Natal Region The KwaZulu-Natal Region had a Yzelle McKane CFP®, strong committee in 2010 in the Chairperson form of seven elected members, two co-opted members and one honorary North Region (Pretoria) member. Many of its members are also representatives on the Industry The primary focus of this committee Sector Group (ISG) Committees, and over the past year was the organisation the committee has a satellite office of mini-conferences, in conjunction in Empangeni. with the FPI marketing office. The aim of the bimonthly committee meetings Some logistical changes were made in 2010, namely that was to obtain suitable speakers for these committee sessions were changed from monthly to quarterly, and conferences and to discuss other issues three points were allocated for a three-hour session. relevant to the region. Several such mini-conferences were held and were a great success. The committee was honoured to have finance journalist Bruce Cameron as a speaker at one of its sessions, and the event The committee received invaluable assistance from the FPI in attracted over 158 members. Members of the committee have the form of visits and the arrangements of logistics surrounding also written articles for publication and have spoken at other CPD the events, such as following up with speakers, arranging sessions in South Africa. accommodation and providing backup in terms of registrations. In 2011, the committee will continue focusing on increasing The CPD points gained at the conferences remain very relevant its membership, lining up knowledgeable speakers and upping and contribute to the high regard in which the profession is held. attendance at its quarterly sessions. Willie Snyman CFP®, Logie Govender CFP®, Chairperson Chairperson FPI Annual Report 2011 | Setting the Standard 26 Regional Reports Regional Reports Eastern Cape Region Western Cape Region The Eastern Cape Region has over 300 The Western Cape Region enjoyed its members and is the smallest region. most successful year ever if measured In 2010 it held three CPD events, one by the number of members attending of which was a joint seminar with CPD sessions and their feedback on the Nelson Mandela Metropolitan the value of such sessions. Attendance University. The seminar focused on numbers soared to as high as 200 at economic conditions and financial our quarterly mini-conventions, and markets, that is, making sense of members’ feedback on the standard of confusing times. The event was well attended as it provided presentations was excellent. members with a relevant and informative overview of the markets. The other two events covered the following topics: The committee focused on delivering top-quality continuous professional development to FPI members in the region, and • Key issues impacting members of DC funds. as such four mini-conventions were held that focused on the following topics: • Professionalism and the science of financial planning. • Investment, with an excellent economic overview provided by • Estate planning: An update, recent cases and changes to Prof Brian Kantor. the law. • Practice management and recent influences on financial Like the Central Region we had inadequate committee members. planning, with former Financial Planner of the Year, Alec However, we managed to successfully support the Eastern Cape Riddle, inspiring members with his life story and approach to members in ensuring that they obtain the required CPD points. financial planning. Jackie Palframan CFP®, • Employee benefits and the current state of estate planning in Chairperson South Africa, with the latter topic covered by Judge Dennis Davis. • Recent developments in the health sector and a thought- provoking presentation by Andrew Bradley on the savings culture in South Africa. Members have indicated that the CPD sessions add a lot of value to their practices and careers, as well as providing a useful forum for networking with other members in the region. Esther Venter CFP®, Chairperson 27 FPI Annual Report 2011 | Setting the Standard Our Affiliate OrganisationsMemberships Statements of Support Financial Planning Standards Board A Member of Partners in achieving excellence in financial planning Financial Planning Standards Board (FPSB) and its 24 member organisations, including the FPI, have gained a lot of momentum in our quest to establish financial planning as a distinct, global Ethics Institute of South Africa profession. Interest in CFP certification – the global symbol of excellence for financial planning – continues to be strong, with Building an ethically responsible society the total number of CFP professionals reaching nearly 134,000 worldwide at the end of 2010. In South Africa, the FPI now boasts the seventh-largest population of CFP professionals, with a number standing at more than 3,700. FPSB congratulates the FPI on its leadership in the global financial planning community and for its continued The FPI joined the Ethics Institute support for setting global financial planning standards that place of South Africa (EthicSA) as a the interests of consumers first. corporate member in 2010. Through Focused on the future its membership contribution, the FPI FPSB’s strategic planning efforts for the future of the financial supports EthicSA in fulfilling its vision planning profession kicked off in 2010 with the World Financial of “building an ethically responsible Planning Summit, held in Chinese Taipei. The summit society”. brought together regulators, academics, financial services EthicSA plays a thought leadership firm representatives, members of the consumer media and role in South Africa and the rest representatives from FPSB’s member organisations – including of the African continent. It also provides ethics training and the FPI – to challenge FPSB’s thinking and help shape our consultation services to private and public-sector organisations strategy. and to professional associations. As an organisational member of EthicSA, the FPI has committed itself to: • EthicSA’s mission of building an ethically responsible society. • Operating according to the highest ethical standards. • Creating an ethical work environment. • Encouraging responsible business conduct in the FPI, its sector of the economy and Africa as a whole. Prof GJ (Deon) Rossouw, Chief Executive Officer of the Ethics Institute of South Africa FPI Annual Report 2011 | Setting the Standard 28 Affiliate Organisations Our Memberships Guidance on implementing global standards South Africa’s CFP professional community also played a leading role in developing guidance for implementing FPSB’s global standards. Former FPI director Wessel Oosthuizen, CFP, led five expert panels and working groups to create tools, content, templates and guidance documents to support FPSB member organisations in their implementation of the standards that have been adopted since 2008. Marius Botha, CFP, Nasrat Edoo Sirkissoon, CFP, Shirly Hyland, LL.M, CFP, Esther Venter, CFP, and Jackie Palframan, CFP, participated as members of the working groups and panels. Building for the future As FPSB looks to the future, we have a clear vision of what we need to do to ensure that consumers can identify and access the services of competent, ethical financial planners. We also have a The recommendations made by summit participants helped fuel plan to get there, thanks to the support of organisations like the FPSB 2025, a far-reaching plan for how FPSB can achieve global FPI and its membership. recognition for financial planning as a distinct profession. We look forward to continuing our momentum in 2011 through FPSB 2025 reinforced our commitment to working cooperatively engaged dialogue with FPSB members such as the FPI and with key global stakeholders – including regulators, financial the community of CFP professionals in South Africa, and to services institutions, consumer groups and educators – to reach keeping the needs of consumers front and centre in our strategic our vision. discussions, our certification programmes and our global financial Oversight and regulation planning standards. As a member of FPSB’s Regulation Advisory Panel, FPI Chairperson Gerhardt Meyer joined representatives from FPSB Noel Maye, Chief Executive Officer of the Financial Planning Standards Board member organisations around the world to contribute to FPSB’s global position paper, Regulation and Oversight of the Financial FPSB is a nonprofit organisation that sets global professional standards for financial Planning Profession. The paper articulated those elements of planning. FPSB owns the CFP, Certified Financial Planner® and CFP® logo trademarks financial planning that lend themselves to regulation and oversight outside the United States of America. The FPI is the marks licensing authority for the CFP® marks in South Africa, through an agreement with the FPSB. as an activity separate from other forms of financial services, particularly product-based advice. In the paper, FPSB supported professional bodies working closely with regulators to oversee the financial planning profession. Understanding the profession The FPI was one of 10 FPSB members to conduct a job analysis in 2010, using a template questionnaire based on FPSB’s Financial Planner Competency Profile. The resulting data provided a platform for the FPI to create CFP certification examination specifications for South Africa, and for FPSB to create a global set of examination specifications for CFP certification globally. The job analysis also contributed to a greater understanding of the practice of financial planning in South Africa and around the world. 29 FPI Annual Report 2011 | Setting the Standard From the Regulators Statutory Bodies Statements of Support Financial Services Board FAIS Ombud I was humbled by my appointment as the Ombud on 1 March 2010 and thankful for the confidence shown in me by the Minister of Finance. During my three The FPI has for many years been recognised as an important cog years as Deputy Ombud, I was involved in the role that it plays in the South African financial services in many of the decisions that set the tone industry. and direction of the institution that is already firmly established within the financial services sector. I Its internationally recognised CFP® accreditation and other am thankful for having a formidable team of professionals in our educational initiatives are increasingly been sought by office who are committed to the cause of protecting consumers professionals in the industry which goal gels with one of the main and strengthening the integrity of the financial services industry. objectives of the Financial Advisory and Intermediary Services (FAIS) Act. During November 2010, I was invited to take part in FPI’s Financial Planning Month campaign as a panel member for a The FSB is proud to be associated with the FPI and values not only CNBC Africa special four part television series titled Securing the ongoing interaction with the Institute but also the role played your Financial Future sponsored by the FPI. The show was by the members in striving towards greater investor protection in dedicated to informing consumers about their rights and the a continuously changing environment to the ultimate benefit of recourse available to them. We encourage this and other initiatives the South African financial services consumer. of this nature as we believe that a lot more needs to be done to raise awareness amongst consumers about the services and the Dube Tshidi complaints mechanism available to them. We believe that the Executive Officer Financial Services Board annual increase in the number of complaints lodged at our office is largely due to increased consumer awareness which has developed over time. In the short time that the office has been in existence, it is our view that we have only scratched the surface. Many South Africans are still unaware of the existence of the FAIS Ombud. In so far as setting standards and encouraging compliance with the law, this office will support the FPI initiatives. In this regard we look forward to working with the FPI. Noluntu Bam CFP®, FAIS Ombud FPI Annual Report 2011 | Setting the Standard 30 Statutory Bodies Insurance Sector Education and South African Qualifications Authority Training Authority Supporting world-leading development One of INSETA’s core values is “partner to enable others”. INSETA is very proud of its association with The South African Qualifications Authority (SAQA) understands Financial Planning Institute (FPI) and the NQF as a framework for communication, collaboration and includes supporting the FPI in its role coordination across education, training, development and work of professional development in the that: Financial Services Sector. • Integrates learning and career pathways. A ground breaking project that INSETA is partnering with the FPI on is the Further Education and • Ensures quality. Training (FET) Higher Education and Training (HET) articulation project whereby learners completing the level 5 Wealth • Facilitates access, progression, articulation and redress. Management Diploma will be able to progress to second year • Contributes to a better life for all. B. Comm. at the University of the Western Cape. The Colleges in this project are Western Cape based. The Financial Planning This can only be achieved with the support of all NQF Institute was the initiator of this project and in partnership with stakeholders, partners and role players. INSETA is a nationally replicable model and will contribute greatly to the transformation of the FET environment. I am pleased to say that the FPI has been exemplary in its commitment to SAQA and the NQF through its leadership, The FPI has always been supportive of INSETA and is represented which continues through its present CEO, Godfrey Nti. Not only on INSETA’s advisory Committees. In addition Mr Godfrey Nti, has it ensured that FPI financial planner learning pathways are the Chief Executive Officer of FPI also serves on INSETA’s Audit NQF-aligned and integrated across further and higher education Committee. and training levels, but it has also made a significant contribution to SAQA through its past CEO, John Arnesen, as a SAQA Board We look forward to strengthening our future relationship and to member and now Project Director: NQF Advocacy. make meaningful contribution to the sector that we both serve. The NQF Act, which was introduced in 2008 to further enhance Sandra Dunn, the NQF (which was originally established in terms of the SAQA Chief Executive Officer INSETA Act of 1995), now provides for the recognition of professional bodies and the registration of professional designations within the NQF. The FPI has proactively supported this world-leading development. We look forward to receiving the FPI’s application early in 2012 for its recognition as a professional body and the registration of its professional designations on the NQF. Samuel Isaacs, Chief Executive Officer of the South African Qualifications Authority 31 FPI Annual Report 2011 | Setting the Standard Education Partners Statements of Support Nelson Mandela Metropolitan University Changing perceptions Milpark Business School Commitment and contribution to the upliftment of financial planning standards In the midst of an eventful year for financial planners, it is the people committed to making a difference Milpark Business School is proud to be associated with the FPI as one of its who will become beacons in our industry. Consumers want preferred education partners. financial planners they can trust, who are competent and ethical While most people would not hesitate practitioners. Financial planners want an environment in which to contract experts for everyday tasks their work is valued, respected and rewarded, and they wish for such as fixing geysers or drafting plans financial planning to be recognised as a distinct profession. for building alterations, few people in South Africa realise the importance of The FPI has been instrumental in bringing about a new consulting a financial planner for help environment for financial planning in which both the consumer with managing their financial affairs. and financial planner will benefit. At the Nelson Mandela This situation is the result of some unscrupulous product pushers Metropolitan University (NMMU) we are proud to be associated who operated in the pre-FAIS era, but is also because many with the FPI as strategic partners in delivering undergraduate and people think that they have their financial matters under control if they belong to a pension fund and own a life policy. postgraduate financial planning qualifications that will assist the FPI in developing financial planning into a profession. Financial planning is about so much more. It is about enabling you to reach your goals. Whether those goals entail enjoying a In supporting the growing academic environment and the carefree retirement, providing a good education for your children development of high-level financial planning practitioners, the or saving for a deposit on a new car, they are your life goals and FPI is making a difference to the perception of the financial are thus important enough to warrant expert advice. A qualified financial planner will conduct a proper needs analysis for you, planning industry, and is assisting the public to recognise the based on your goals. value of good advice. We often read news stories of collapsing pyramid schemes and other fraudulent activities where investors lose their life savings. Jackie Palframan CFP®, Invariably the investor’s response is: “But I trusted my financial Head of Financial Planning Programmes at the Nelson Mandela planner!” The big question for many is where to find a trusted Metropolitan University financial advisor. With its rich history and international affiliations, the FPI provides South Africans looking for financial planning assistance with the peace of mind that comes from dealing with a Certified Financial Planner®. A CFP® professional is competent, has the necessary experience and is held accountable in ways that exceed the minimum legislative requirements. Milpark Business School remains committed to providing quality education to the current and prospective members of the FPI across all levels. We commend the FPI on its exceptional commitment and contribution to the upliftment of financial planning standards in South Africa over the past year. We are proud to be associated with the FPI and pledge our continued support to the institute in its future endeavours. Julian van der Westhuizen, Chief Executive Officer of Milpark Business School FPI Annual Report 2011 | Setting the Standard 32 Education Partners University of Johannesburg University of the Free State Encouraging ethical and professional behaviour Longstanding education relationship The FPI (previously known as the ILPA) has been committed to high standards of skills, abilities and knowledge since its inception in the early 1980s. For the past 30 years, the At the University of Johannesburg FPI has been the only organisation (UJ) we are committed to delivering in the financial services industry in employable students to the corporate Southern Africa that is committed to world. It is vital that students who professional financial planners. The choose financial planning as a career FPI underlined this commitment by becoming a member of the understand the importance of ethical Financial Planning Standards Board (FPSB) in 1999, and it is still behaviour as well as of establishing a member to this day. themselves as individuals worthy of their clients’ trust. FPSB is a global nonprofit association that, through its members, manages, develops and operates certification, education and The FPI’s drive towards instilling financial planning as a related programmes for financial planning organisations. This profession has created an awareness in consumers that they have enables them to benefit and protect the global community by a right to demand professional and ethical behaviour from their establishing, upholding and promoting worldwide professional financial advisors. This will go a long way in ridding the industry standards in financial planning. of some of the unwanted elements that have tarnished its reputation. At UJ, we are proud to be associated with the FPI as a The University of the Free State’s support for the FPI is reflected strategic partner. in its longstanding relationship of 25 years with the institute – first as the quality assurers of the FPI’s Board Examination With the support of the FPI it is easy to develop a culture of (professional examination) for almost 15 years, and then as professionalism among the financial advisors of the future that the first education provider to be accepted and approved to will serve the public. deliver a recognised financial planning qualification that allows Carl Anschutz CFP®, FPI members to assume the most prestigious status as a CFP® Programme Manager of the Honours BCom (Financial Planning) professional. In addition, for five years the university was the only at the University of Johannesburg provider of this qualification. The University of the Free State, through its Centre for Financial Planning Law, certainly values the relationship and association with the FPI as one of the recognised and approved universities delivering financial planning education in terms of FPI and FPSB standards. Wessel Oosthuizen CFP®, Director at the University of the Free State’s Centre for Financial Planning Law 33 FPI Annual Report 2011 | Setting the Standard Education Partners Our Accredited Education Partners University of Stellenbosch University of the Western Cape Further Smoothing the way for professional integration Education and Training Institute Coherent articulation pathways in financial planning qualifications Since the inception of the Postgraduate Diploma in Financial Planning at the University of Stellenbosch (US), the FPI has been instrumental in ensuring a solid base for the programme. The University of the Western Cape Further Education and After extensive discussions with the Training Institute (UWC FETI) would like to thank the FPI FPI, collaboration with the Centre of for its unstinting support during 2010. The FPI’s guidance and Law at the University of the Free State, contribution has directly assisted in the FET College provisioning and many hours of planning and preparation, the programme was of financial planning curricula at a higher education level. launched in February 2005. This was celebrated with a welcoming The FPI’s work with the university and UWC FETI has enabled us function that was attended by various stakeholders, including the to develop a coherent articulation pathway in financial planning President of the FPI. qualifications, from NQF Level 5 in FET Colleges through to the Frequent visits and input from the FPI, including visits by its Advanced Diploma in Management Studies at NQF Level 6 at international executive officers, kept the US on the forefront the university’s School of Business and Finance. The credibility of CFP® certification and smoothed the way for graduates to and recognition of the FPI as a professional quality assurance integrate into the professional ranks of the FPI. body for the financial planning industry has been critical to the development of this articulation pathway. Over the past six years, the Department of Business Management, in partnership with the FPI, has continued to offer UWC FETI’s partnership with the FPI has enabled it to students formal postgraduate studies, affording them global CFP contribute to the integration of education and training at a accreditation, and successful US candidates are awarded their national level. Through the piloting of a professional qualification CFP certificates during an annual FPI/US Induction Ceremony. at higher education level, UWC FETI is able to demonstrate The US is very proud of the consistently high pass mark that its that professional workplace training can be integrated with students have achieved in the annual CFP examination. disciplinary knowledge qualifications through the involvement of Department of Higher Education and Training sectoral bodies, The US regards the FPI as the local custodian of the international namely FET Colleges, higher education institutions and the CFP mark and will continue to strive towards maintaining the Insurance Sector Education and Training Authority (INSETA). international standards of quality and verification for the financial planning profession. We look forward to consolidating this partnership with the FPI in 2011 through the development of a nationally replicable model Prof Johann de Villiers, for FET higher education articulation, and we are proud to be Dean of the Faculty of Economic and Management Sciences at associated with the FPI. the University of Stellenbosch Seamus Needham, Department of Research and Planning at the University of the Western Cape Further Education and Training Institute FPI Annual Report 2011 | Setting the Standard 34 From Industry Industry Bodies Statements of Support Leon Campher, Chief Executive Officer of the Association for Savings & Investment SA and Association for Savings & Investment SA At the forefront of continuous professional development Peter Dempsey, Deputy Chief Executive Officer of the Association for Savings & Investment SA Financial Intermediaries Association of Southern Africa Professionalising the financial planning industry The Association for Savings & Investment SA (ASISA) represents the majority of South Africa’s asset managers, collective investment scheme management companies, linked investment service providers, multimanagers and life insurance companies. One of the core strategies of the Financial Intermediaries At the end of December 2010, a total of 160 member companies Association of Southern Africa (FIA) is to support the current managed R3.2 trillion in assets. move in the financial services industry towards greater professionalism. ASISA aims to be an active participant in creating an environment that promotes equal opportunities for its members In order for any industry to claim that its members have a through holistic legislation, while at the same time considering ‘profession’, it is essential to have a governing body or authority the interests of consumers and ensuring the sustainability of the that not only takes responsibility for setting guidelines and industries it represents and the intermediaries who promote standards, but is also involved in equipping its members – in these industries and their products. ASISA will work towards this case, financial planners – with the necessary knowledge and promoting a culture of savings and investment in South Africa information to carry out their careers professionally. by playing a significant role in the development of the social, The FPI has certainly proven itself as an organisation that sets economic and regulatory framework in which its members high standards, both for itself and for its stakeholders in South operate, thereby assisting members to serve their customers Africa. The FPI’s six-step approach to financial planning is yet better. another example of its commitment to raising the bar, thereby ASISA firmly believes that intermediaries who render sound supporting the move towards professionalising the financial and professional advice to consumers are a vital component of planning industry. Perhaps even more important is the fact that a healthy savings culture. We know that the vast majority of our these standards are also aligned with international trends. citizens do not have enough life and disability protection. In It is every financial planner’s goal to obtain CFP® professional addition, less than 10% of our citizens are able to retire and enjoy status, and I am certainly proud of my own. Congratulations to financial security or comfort. These facts reinforce the value of the FPI for assisting so many of its members through its hard sound, professional advice. work and determination. We acknowledge the role that the FPI has played over nearly three decades in helping to professionalise the financial planning Justus van Pletzen CFP®, Chief Operating Officer of the Financial Intermediaries and advice sector within South Africa. The FPI is at the forefront Association of Southern Africa of the continuous professional development of the South African advice profession. 35 FPI Annual Report 2011 | Setting the Standard Industry Bodies South African Savings Institute Instilling a savings culture We are privileged to have had the support of the FPI on a number of our key initiatives over the years, in particular its direct participation in the 2010 Festive Season Campaign. During this campaign we urge consumers to exercise caution and restraint in their spending leading up to the holiday season, reminding them that the new year comes with new and ongoing financial commitments. At the press conference that normally marks the launch of the campaign, we were pleased with the contribution of the FPI by way of an awareness of the benefits of financial planning to consumers. It is common knowledge that the low levels of financial literacy in South Africa contribute directly to our low rate of savings. The two initiatives that we at SASI drive annually are the Teach Children to Save and the Varsity Literacy Campaign, aimed at young schoolchildren and university students respectively. Over the years we have had positive and active participation on both these campaigns from the FPI, and we look forward to its continued support in the years ahead as we attempt to instil a culture of savings in our youngsters. There can be no doubt that savings and financial planning are linked, and we are honoured to have the FPI endorse and support the work we do, particularly as the FPI is the gatekeeper of the profession of financial planning and plays a vital role in the financial services sector. Elizabeth Lwanga Nanziri, Chief Executive Officer of the South African Savings Institute FPI Annual Report 2011 | Setting the Standard 36 2010 Headline News 2010 FIFA World Cup Visitors praised the warm welcome and infectious enthusiasm of all South Africans. The national flag was evident everywhere and the honking of vuvuzelas South Africa was a permanent feature in the streets. Perhaps more important than anything else, the World Cup In May 2004, FIFA president Sepp Blatter uttered two succeeded in changing perceptions of the country and words that will ring in our hearts and minds for years the continent. Africa, and South Africa in particular, to come: “South Africa”. Beating Egypt and Morocco has now proved beyond a shadow of a doubt that in the bidding process, South Africa became the first its people are ready and willing to host international African country to host this prestigious event. events, and that they will give visitors a taste of African hospitality to take home with them. Preparations for the tournament were not without their challenges. Some stadiums had to be revamped or rebuilt, while others were built from scratch. Infrastructure improvements were necessary so that Did you know? spectators could travel the vast distances between • South African winger Siphiwe Tshabalala was the first venues. Foreign visitors were concerned about safety player to score a goal in the 2010 World Cup. and security, and the media abroad was fraught with • Soccer City is the largest stadium in Africa. tales of the certain death awaiting those who would risk coming here. • Bafana Bafana was the lowest-ranked host country team in World Cup history. Then, on 11 June, a warm winter sun shone onto the calabash formation of Soccer City on the opening day • Green Point Stadium has a retractable dome to of the tournament. The sound of 90,000 vuvuzelas filled protect spectators from nasty weather. the air, and the green-and-gold Bafana Bafana players made their way onto the field. At that moment the • The tournament had a total attendance of 3.18 million world knew that it would experience a World Cup like people. no other. • The match ball for the tournament generated Bafana Bafana left the tournament during the group controversy as some players argued that the new stages after valiant efforts against Mexico, Uruguay and design made the ball unpredictable. France, but we all then rallied behind Ghana to lift high the African flag, until they lost against Uruguay in the • French player Patrice Evra blamed vuvuzelas for quarter-finals. The final between the Netherlands and France’s poor performance in the tournament. Brazil saw the latter winning its first World Cup title ever, • Magaliesburg decorated the entire town in but the true victory was for South Africa. Portuguese style as a sign of welcome to the Portuguese team. 37 FPI Annual Report 2011 | Setting the Standard 2010 Headline From Industry News Local Headlines From BRIC to BRICS In December, South Africa was invited to join the BRIC group, whose members are Brazil, Russia, India and Increase in electricity tariff China. These four countries have in common large In February, the National Energy Regulator granted emerging economies, and it is estimated that they will Eskom a 24.8% tariff increase for the 2010/11 financial account for 61% of global growth in 2014. The group year, as well as similar increases for the following two is now officially known as BRICS, with the ‘S’ denoting years. The anticipated consequences of the price hike South Africa’s membership. Membership of BRICS offers include the loss of an estimated 250,000 jobs and severe South Africa a unique opportunity to influence African financial implications for energy-intensive industries economic growth and investment. such as mining, the automotive sector and agriculture. However, there can be no doubt that additional power- Better Matric results generation capacity and more stable supply are key to The year 2010 saw a 7.2% increase in the Matric pass economic development. rate to 67.8%, with the increase being evident in all nine provinces. This marks only the third time since 1994 Soweto paints itself blue that so large an increase has been achieved, and this In May, Blue Bull supporters made their way to the despite a longer winter holiday to accommodate the Super 14 final in their droves. But instead of going to World Cup, as well as a nationwide teachers’ strike just Loftus Versveld, the home of the Blue Bulls, they went to weeks before the final exams.ate, Soweto style. Orlando Stadium in Soweto. An all-South-African final between the Blue Bulls and the Stormers would have Rhinos top of mind been memorable enough, but the traditional soccer- Last year saw a total of 333 rhinos killed by poachers obsessed city changed its colours from the black and – nearly three times the number killed in 2009. The yellow of the Orlando Pirates and Kaizer Chiefs to the increase in the number of poaching incidents is primarily Blue Bulls blue. Complete with vuvuzelas and shouts of the result of rising interest in rhino horns from Asia, “Soweto loves the Bulls”, South African rugby spectators where the horns are used as an ingredient in traditional were shown how to celebrate, Soweto style. medicine. On the bright side, however, approximately 162 poaching-related arrests were made in 2010, and Box office hit the cause of the rhino is now top of mind for many South The year 2010 saw the release of the science fiction Africans. thriller District 9. Directed by Johannesburg-born Neill Blomkamp and shot in Chiawelo in Soweto, District 9 International headlines took South African film making to new levels, following On 12 January, a 7.0 magnitude earthquake hit about on the heels of acclaimed films such as Tsotsi and 25 kilometres from Port-au-Prince, the capital of Haiti. Yesterday. District 9 was nominated for four Academy The earthquake is one of the deadliest on record and Awards and earned $37 million in its opening weekend. over 230,000 people lost their lives. 15 minutes to the airport On 20 April, the drill rig Deepwater Horizon exploded In June 2010, the first phase of the Gautrain network – off the Louisiana coast in America, resulting in a three- from Sandton to OR Tambo International Airport – was month oil spill. An estimated 4.9 million barrels of oil were completed. Instead of an hour on the roads, a short released into the ocean, causing extensive damage to 15-minute train drive will get you from the underground marine and wildlife habitats. station beneath Rivonia Road right up to the Central Terminal at the airport. Once the Gautrain network is On 25 July, Wikileaks makes public over 90,000 classified complete, it is estimated that 100,000 people will use the documents on the war in Afghanistan, following with a train each day, minimising traffic on the N1 by 20%. leak of documents related to the war in Iraq in October. Leading South Africa On 5 August, a cave-in at a copper-gold mine in August 2010 saw the launch of LeadSA, an initiative Chile leads to 33 miners being trapped underground. started by Primedia Broadcasting and supported by After 69 days and the assistance of local and foreign Independent Newspapers. By encouraging ordinary governments, all miners were brought to the surface in people to commit to ‘doing the right thing’, LeadSA an event that is estimated to have been watched by 1 aims to make South Africa a better country for all who billion people worldwide. live in it. From placing pointspeople on busy intersections through to fixing potholes, arranging crime summits and exposing corruption, LeadSA shows how even the smallest gestures by everyday people can go a long way towards improving South Africa. The FPI Team CEO’s Office Technical Services Godfrey Nti (CEO) and Sandra Taylor (PA) From the left: Almo Lubowski and Carla Letchman Certification and Membership Services Marketing and Business Development Back, from the left: Zanele Xaba, Phillip Kruger, From the left: Mersey Booysen, Tsholofelo Dihutso and Anthony Campher, Vusi Xaba and Joan Sallie Adel Victor Front, from the left: Marlyn Veldman, Hannah Brill and Francine Creighton Examination Body Department Finance and Management Services Back, from the left: Eugene Vermeulen, Anna Fick and Back, from the left: Carol Hardie, Yolanda Grobler, Andre Rossouw Ohna Norval, Cathryn Stevens, Tinyiko Khoza, Rosie Front, from the left: Lucille Wessels, Renny Mmusi and Lekhelebane Toni Santana Front, from the left: Nomaxabiso Tyhutyhani, Batwa Mzamane and Mpho Nkuna 39 FPI Annual Report 2011 | Setting the Standard The global symbol The global symbol The global symbol of excellence The global symbol of excellence of achievement of achievement in ﬁnancial planning in ﬁnancial planning Palms Office Court, Block A, Ground Floor, West Wing, Kudu Avenue, Allens Gauteng, South Africa Palms Office Court, Block A, Ground Floor, West Wing, Kudu Avenue, Allens Nek,Nek, Gauteng, South Africa CFP certiﬁcation CFP certiﬁcation isis the only globally recognised mark of professionalism for ﬁnancial planners. When seeking CFP certification the only globally recognised mark of professionalism for financial planners. When seeking ﬁnancial Palms Office Court, Block A, Ground Floor, West Wing, Kudu Avenue, Allens Nek, Gauteng, South Africa objective, expert and trusted ﬁnancial planning advice you should always look for the CFP mark. objective, expert and trusted financial planning advice you should always look for the CFP mark. objective, expert and trusted ﬁnancial planning advice you should always look for the CFP mark. To achieve the best ﬁnancial planning results, call CFP professional. To achieve the best ﬁnancial planning results, call aa CFP professional. To achieve the best financial planning results, call a CFP professional. 086 FPI (374) +2711 475 www.fpi.co.za email@example.com 086 10001000 FPI (374) +2711 475 11581158 www.fpi.co.za firstname.lastname@example.org For more information on ﬁnding aaCFP professional near ontocall 1800 999 999.call 0861000 FPI (374). For more information on ﬁnding CFP professional near you call 1800 999 or For more information on finding a CFP professional, log you www.fpi.co.za 999. 086 1000 FPI (374) +27 11 475 1158 www.fpi.co.za email@example.com Longtitude: -26.13031965446835, Latitude: 27.910165786743164 Longtitude: -26.13031965446835, Latitude: 27.910165786743164 Longtitude: -26.13031965446835, Latitude: 27.910165786743164 CFP® Certiﬁcation Global excellence in ﬁnancial planning CFP® Certiﬁcation Global excellence in ﬁnancial planning CFP FINANCIAL PLANNER and CFP® , CERTIFIED FINANCIALPLANNER ® and ® are certiﬁcation marks owned outside the U.S. by Financial Planning ® TM CFP ®,, CERTIFIED FINANCIAL PLANNERTM and ® are certification marks owned outside the by Financial Planning ® are certiﬁcation marks owned outside the U.S. U.S. by Financial Standards Board Board Ltd. Planning Planning Institute of South Africa is the marks licensing authority the CFP Planning StandardsLtd. Financial Planning Association of Australia Limited is the marks licensing authority for the CFP Standards Board Ltd. Financial Financial Association of Australia Limited is the marks licensing authority forfor the Marks inin in Souththrough agreement with FPSB. Marks Australia, through agreement with FPSB. CFP Marks Australia,Africa, through agreement with FPSB. The CFP professional designation is registered for the FPI SA by SAQA on the National Qualifications Framework (NQF), ID number 59235.
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