Findings of the ‘Pathway to the Profession’ study by the Financial Planning Standards Board revealed at 29th FPI Professionals Convention

Survey highlights the importance of setting competency requirements at the correct levels and eliminating barriers to entry in the financial planning industry.

In a panel discussion facilitated by Kaya FM business journalist Gugulethu Cele, at the 29th Financial Planning Institute Professionals Convention, currently underway at the Century City Convention Centre, the barriers to entry in the financial planning industry were unpacked, as well as policy implications that financial advisors must be aware of.

The panel comprised Joe Samuels, CEO of the South African Qualification Authority (SAQA) and Godfrey Nti, CEO of the Financial Planning Institute (FPI), while the findings of the ‘Pathway to the Profession’ study by Financial Planning Standards Board (FPSB) were shared by Lelané Bezuidenhout.

The study found that individuals who went on to become certified financial planners did indeed follow the learning pathway as outlined by the FPI, largely as a result of regulations. This highlights the importance of the regulator setting competency requirements at the correct levels and introduces policy implications for industry bodies.

Some of these policy implications impact the FPI, making it important for its certification standards to be reviewed to see whether there are possible barriers to entry into the profession. SAQA, in turn, should review its policies to take Recognition of Prior Learning into consideration, based on the findings of the study.

Bezuidenhout underlined that firstly, recognised qualifications should speak to job functions, and secondly, that the level of qualification should match the complexity of the financial product (i.e. the regulator should lift the NQF level for more complex products).

She concluded by saying that policy changes are required to ensure inclusion of a diverse quota of individuals in the profession.

Speaking on diversity, Nti confirmed that “an area that needs progress is that of black financial planners, who make up only 16% of the profession locally”. Samuels added: “When we looked at the numbers with regard to diversity, we noticed that there is a 65/35 gender split [both professionals and affiliates], which means the trajectory is the same when it comes to race and women. There must be
a focus on women and young black women to bring them into the industry.”

Nti elaborated on the opportunities for official bodies like the FPI to collaborate with universities: “We have been in discussion with educational institutions to see how we can offer courses and open financial planning to the masses. However, for millions, the issues they face are not about which policies work for them – rather, their challenge is how to live from one paycheck to another. No product we have today can fix that. We need more financial planners to walk with these clients.
It’s about the relationship.”

Samuels noted that “it takes a partnership between industry and academia to grow the industry and bring in the next generation. Mentorships and internships are how the industry can get involved and help them [new financial planners] get prepared for things we had to figure out on our own.”

The risk of a diminishing industry was also discussed. Currently, the FPI has three times more members over 60, than under 30. However, there are some of the FPI initiatives that increase awareness of the profession and they include My Money 123, a financial literacy initiative to educate South Africans about the value of financial planning, and the It Starts With Me programme, which recognises the CFP® professional who contributes, supports and promotes the CFP® mark.

In closing, Samuels thanked the FPI for taking the initiative to conduct this research. “The findings are a good foundation for the policies we [at SAQA] implement and they provide information that will help us improve.”