Addressing challenges

When South Africa entered into a democracy in 1994, government aimed to address the issue of inequality. In 2012, the country released its National Development Plan (NDP) which outlined goals that the country hoped to achieve by 2030 to resolve this issue.

One of the goals that the NDP hopes to achieve is a greater participation in the financial services sector. At the moment, this is currently being impeded by a very low literacy rate.

The Financial Planning Institute of Southern Africa (FPI) hopes to address this and has launched a number of advocacy campaigns to change financial literacy levels in South Africa. The FAnews spoke with David Kop CFP, Head of Public Policy and Consumer Affairs at FPI, and Tsholofelo Dihutso, Communications and PR Manager at FPI, to find out more about the Financial Planning Challenge (FPC). 

What is the FPC?

Dihutso points out that the FPC is a competition designed exclusively for students studying any financial planning or finance-inclined undergraduate degree programme that is registered in South Africa. 

She adds that the competition was developed with an aim to promote the financial planning profession as a vibrant community and viable career choice.  It also supports the next generation of financial planners by:

• serving as a recruiting opportunity for potential students who are or may want to take up a career in financial planning;
• helping promote the FPI and the value of the CFP certification;
• encouraging students to learn and network;
• engaging students in a holistic financial planning learning experience; and
• help in promoting the value of financial education to tertiary education students. 

In this challenge, teams compete to advance through three stages:

-           a written financial planning case study (30% weighting);

-           a financial planning case study presentation (50% weighting); and

-           an off the cuff challenge (20% weighting). 

“The weighting was determined with an emphasis on the oral presentation as it indicates the importance of both the client relationship and the value of financial planning,” says Dihutso. 

Key rollout

Kop points out that the competition was rolled out across 16 higher education institutions in South Africa. However, the FPI’s focus was to ensure that all FPI Recognised Providers participate in first 2017 competition. 

“Each university could enter a maximum of two teams. Each team consisted of three students and an academic or faculty advisors (mentor),” says Kop. 

In the first stage of the competition all teams were given profiles for two hypothetical clients and had to prepare a comprehensive financial plan. After the first stage was judged, the top three teams then advanced to the next stages of the competition.

“All teams were required to orally present (stage 2) their case studies to a panel of judges and participated in the off the cuff Challenge (stage 3). The top three teams were awarded a monetary scholarship for their higher education institutions,” says Kop. 

Challenging times

From a financial planning perspective, CFPs face a number of challenges when they engage with clients. In an effort to illustrate these challenges through the FPC, Kop points out that these challenges were built into the competition. 

“In 2017, we identified that the slow progress in empowerment and transformation in the financial planning space. Coupled with South Africa being stuck in a low savings trap, this is hindering the South African economy from achieving elevated and sustained growth that translates into social inclusion and development,” says Kop. 

He adds that by aligning the competition with the Financial Planning Competency Framework and Standards, and following the six-step financial planning process, the FPI believes that the competition provides a platform for the younger generation to understand financial education by creating awareness around the value of financial planning and the CFP certification. The 2018 competition will be no different and will include current challenges. 

Supporting framework

In order to achieve the goals set out by the NDP, key industry role players have to play a facilitating role. Education is the best way to achieve this as it draws attention to what is needed to improve the country. 

“The Financial Planning Challenge supports the NDP by allowing students the opportunity to develop and present a real life financial plan to a panel consisting of practicing financial planners and academics. Through the process they will get the ability to use their academic knowledge and learn the skill of drafting and presenting a financial plan to clients. The challenge also allows students to have a deeper understanding as to what a career in financial planning is about. Further, it opens their eyes to employment opportunities in the financial services industry,” says Kop. 

Editor’s Thoughts:
After 1994, government made it very clear that education would be the way that the country addresses the poverty/income inequality issue. Unfortunately, this has proved to be a 24 year stumbling block. There needs to be more programmes like this in the industry as it not only educates the youth about financial planning, but it can be used as an effective recruitment tool that the industry can use in the future. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected]

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