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CPD and why it's vital to your career as an FSP

26 February 2020 Graduate Institute of Financial Sciences (GIFS)

Continuous Professional Development is not a tick-box exercise to be taken lightly, rather, it's a regulatory exercise in the upkeep of professionalism and best practices for the greater industry and financial services providers. The Graduate Institute of Financial Sciences (GIFS) explains.

Continuous Professional Development (CPD), also formally known as Continuing Professional Development, was introduced in 2017 under the Board Notice 194 of 2017, which outlined the new competency criteria in the new Fit and Proper Requirements.

These requirements also introduced for the first time a formal definition of competence: "Having the skills, knowledge and expertise needed for the proper discharge of a person's responsibilities in the performance of his or her functions."

In short, the new competence requirements included Class of Business Training (CoBT), Product Specific Training (PST), and, yes, CPD.

What is CPD?

It is the process of tracking and documenting the skills, knowledge and experience you gain, beyond any initial training you may have received.

Does it apply to me?

Yes, in most instances it does. CPD applies to all financial services providers (FSPs), key individuals (KIs) and reps. Exemptions are made for Category 1 FSPs and reps that are authorised to provide financial services in long-term insurance sub-category A and/or Friendly Society Benefits.

CPD tasks must meet the following criteria

* The task must be relevant to your function and role
* It must contribute to your knowledge, skill, expertise, professional and ethical standards
* The task must address any identified gaps in technical knowledge, generic knowledge, the context within which the financial services are rendered and knowledge of the applicable laws
* It must take into consideration changes to internal/external conditions relevant to the financial service and financial products of the particular FSP, key individual and representative.
* Must be accredited by a professional body
* Allocated an hour value or part thereof
* It must be verifiable

The Financial Sector Conduct Authority, formerly the Financial Services Board (FSB), warns that CPD requirements were not intended to be a mere tick-box exercise. Rather, "it is a controlled process where relevant and appropriate pre-determined CPD activities are undertaken to address identified needs and where evidence of the processes that were implemented are documented and recorded as evidence of how the FSP complied with section 32(1) and 32(2)."

Ok, so how do I achieve my CPD hours?

* The first port of call is a registered body like the Insurance Institute of South Africa (IISA)
* The minimum CPD hours per 12-month cycle that FSPs, KIs and reps need to obtain depends how, and for which position, they were appointed.

If an FSP, KI and/or rep is authorised to provide or oversee financial services in:

• More than one class of business, such as short-term and long-term insurance, they must complete a minimum of 18 hours of CPD activities
• More than one sub-class of business within a single class of business, such as motor policy and property policy under short-term Insurance, 12 hours of CPD activities is required
• A single sub-class of business within one class of business, such as motor policy under short-term personal lines, requires 6 hours of CPD activities to be completed

The following exemptions apply

• FSPs, KIs and reps that are authorised, approved or appointed for less than 12 months in a particular CPD cycle, a pro-rated minimum number of CPD hours
• Similar pro-rating will apply where a rep is continuously absent from work (if that absence is due to maternity leave; long-term illness or disability; or the representative’s responsibility to care for an immediate family member who has a long-term illness or disability).

Is this training required annually?

Unlike Class of Business Training and Product Specific Training, CPD occurs annually. All Professional Registration Bodies require their members to complete regular CPD courses to keep their registration.

Compliance online e-learning courses, including the customised programmes by GIFS, are accredited for CPD by the Compliance Institute Southern Africa. Your employees can now benefit from this accreditation by printing their CPD certificate on completion of the GIFS training programmes.

The current CPD cycle ends 31 may 2020.

Quick Polls

QUESTION

Which of the following factors will make the biggest difference to the profitability of a short-term insurance brokerage over the next five years?

ANSWER

Implementing tech-backed distribution platforms
Diversifying into specialist risk management & risk advisory services
Renewing focus on the broker-client relationships
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