FANews
FANews
RELATED CATEGORIES
SUB CATEGORIES Q&A |  General | 

The 411 on CPD

31 August 2018 Charmaine Koch, Independent Consultant
Charmaine Koch, Independent Consultant

Charmaine Koch, Independent Consultant

Continuing Professional Development (CPD) is essential to engage, develop and enhance your abilities. As the world moves faster, you need to ensure you are continuously developing and enhancing your knowledge as you progress with your career.

It is however important to understand what the CPD requirements entail. There is increasing confusion growing around CPD and its referenced link between the Financial Advisory and Intermediary Services (FAIS) Fit and Proper requirements and professional bodies. 

CPD activity defined

A new term, FAIS CPD, is birthing itself and this is technically incorrect. The Financial Sector Conduct Authority (FSCA) was very specific to not duplicate requirements and to work with professional bodies in this regard. Hence CPD activity is defined as an activity that is:

(a)      Accredited by a professional body;

(b)      Allocated an hour value or a part thereof by that professional body; and

(c)      Verifiable.

but excludes:

  • An activity performed towards a qualification; and
  • Product specific training. 

Therefore, any activity not approved by a professional body will not be allowed for CPD purposes by the FSCA. Only professional bodies can approve CPD activities that will be accepted by the FSCA. 

The only distinction that can be drawn is that the FSCA definition above has deliberately excluded certain activities from CPD as they have a different place in the Fit and Proper requirements. 

The FSCA also mentions categories of CPD activities relating to:

  • The functions and role of the Financial Service Provider (FSP), key individual and representative;
  • Contributing to the skill, knowledge, expertise and professional and ethical standards of the FSP, key individual and representative; and
  • Addressing any identified needs or gaps in:
    • Technical knowledge of the FSP such as risk updates;
    • Generic knowledge and understanding of the environment in which financial services are rendered, managed and overseen, such as market trends; and
    • Knowledge and understanding of applicable laws, such as legislative and regulatory updates. 

In plain and simple terms, any activity that a person can show is required in contributing to their job function, knowledge and understanding of financial services environment, products and basically doing their job and the purposes of an FSP, can submit this activity for a professional body to approve and rate, and provided that approval is granted, the activity will count for CPD for the FSCA purpose. 

Professional body principle

In principle, this falls in line with the way that professional bodies view CPD activity. Provided an activity aids to your development as indicated by the definitions below: 

Continuous Professional Development (CPD) refers to activities that develop and maintain capabilities to enable members to perform competently within their professional environments,” as defined by the Financial Planning Institute (FPI). 

Continuing Professional Development (CPD) is a means of staying up to date with market activity, changes in legislation and practice, changes in areas of specialization, or simply to study further in fields related to your market or interests,” as defined by the Insurance Institute of South Africa (IISA). 

The CPD Differentiator

The principle, however, needs to be further applied in the context of a profession and the fact that an individual is qualified to some extent. Therefore, workshops like basic communication and basic computer literacy may fall outside of the definition of CPD. However, intermediate computer skills and strategic communication or targeted communication skills may well be suited for CPD as it is developing the person for their profession beyond the level of entry requirements. 

Management development programmes and graduate programmes may also qualify for CPD as it is enhancing a person’s skills beyond the qualification for the professional environment. This would further be proven by the outcome achieved of these programmes and would be evident in the programme details. 

It is also this very principle that provides product suppliers with an opportunity to assist the market with CPD achievements. Whilst product suppliers have a requirement to provide product training, which may not count for CPD purposes, there is an opportunity to tie this in with an update on market trends, risks or claims, and underwriting trends which can then enhance that part of the session to count for CPD purposes. 

Over and above daily activity

Another point that really needs clarification is that CPD is something that you have to do over and above your regular daily activity.

Much of CPD occurs naturally in your daily schedule as you read activities (material), listen in meetings and learn from others in many ways. Whilst formal training can and does form part of this natural learning process, it is only a portion of what you learn as you develop in your career. Naturally occurring means that companies have training facilities (physical or online or both) which provide sessions by experts from within the company on subjects, and a range of activities that individuals can attend or complete. It is also in this process that topics can be proposed in performance appraisal meetings. Whilst this may well be a luxury for many larger companies, there is again an opportunity of making these sessions available to external people for a small participatory fee if needs be, or as a partner value add. 

In short, the fact that the FSCA Fit and Proper requirements now requires CPD, means that many of the naturally occurring training and learning processes need to be formally recognised by professional bodies and recorded by FSPs. 

Start gearing up

As many businesses, key individuals and representatives start gearing up for compulsory CPD planning, it is important to understand what the CPD requirements entail so that you can apply some thought as to what is most relevant to your environment.

Quick Polls

QUESTION

What more can financial planners do to make retirement for clients a reality?

ANSWER

The value of the service or product a client receives will determine if they ultimately will achieve their goals or not
Most South Africans are simply not contributing enough towards their retirement savings
Ensure that investments are well diversified to achieve long-term goals to soften the blow of short-term fluctuations
A E fanews magazine
FAnews June 2019 Get the latest issue of FAnews

This month's headlines

New realities of customer engagement
Success in the new CPD cycle
Shedding light on the reinstatement clause
Resisting the winds of change
Claim statistics tell the story
Growth assets for living annuity investors
Subscribe now