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The FPI is treading deep waters

18 July 2018 Jonathan Faurie
Ntai Phoofolo, Chairperson of the FPI

Ntai Phoofolo, Chairperson of the FPI

Following investigations into alleged examination fraud and possible maladministration by the Financial Sector Conduct Authority (FSCA), the Financial Planning Institute (FPI) announced on 5 July that it will not be conducting any FAIS examinations until further notice.

The FAnews spoke to Ntai Phoofolo, Chairperson of the FPI, to find out more about this announcement as well as the current mood at the FPI. 

What is the timeline we are talking about in terms of the way forward?

We are not sure what the time line looks like at the moment. However, it is safe to say that relevant engagements with the FSCA will definitely not take place this year. 

There are a few systems and structures that the FPI needs to look at and resolve before it can be comfortable to sit down and engage with the FSCA. The FPI is in less of a rush to complete this process as it is to do it properly. 

The FPI has a set of strategic objectives that it needs to deliver on.  The FPI now needs to take the time and sit down to find out the best way to approach this situation. 

What does the future hold for the CFP designation?

Unfortunately, the allegations surrounding the FPI has had impact on the reputation of the FPI as a regulatory body that administers the Certified Financial Planner (CFP) designation in the country. 

That being said, the CFP designation is globally recognised; therefore, the future of it is that nothing has changed. 

The regulatory examination portion of the FPI is completely different from the regulatory body side of the business. the two sides of the business even have different management staff. Therefore, the CFP designation is protected. 

How are your current engagements with members?

While it is important to point out that the examination portion of the FPI is separate from the regulator portion of the business, it would be remiss of me to say that there has been no effect on its members. We are not taking a head-in-the-sand approach on the matter of reputational damage. 

From early on in the process, the FPI made the decision that it would manage this in a proactive manner. The FPI has been open with its members and have been willing to listen to their concerns regarding the allegations. 

From a management perspective, besides Godfrey Nti (the CEO of the FPI) being put on administrative leave, the management at the FPI remains intact.

Whether Nti comes back is purely dependent on the outcomes of the internal FPI investigations and the FPI cannot comment further on that at the moment.

Are your members a bit concerned at the moment?

The majority of the concerns being brought before the FPI by members is clarifying the reports that have appeared in the media. To our knowledge, Nti was not directly involved in the alleged examination fraud. 

The news had a bit of a negative impact on the reputation of the FPI within the financial planning fraternity. However, once the distinction has been made between the two arms of the business, and confirmation was sent out to members that the CFP designation will not be impacted, FPI members and other financial planners have become more willing to understand the position that the FPI finds itself in. 

What does the future hold?

The morale at the FPI is not where it should be at the moment. The whole organisation was impacted by these allegations and it involves people that the staff work closely with. 

However, when the staff saw that management is ready to tackle these allegations head on, the morale did get a bit of a boost. From very early on, we have decided not to take a head-in-the-sand approach. The staff are not happy about the reputational damage that the FPI has suffered, but we are working on surviving this storm in the best way possible.

Editor’s Thoughts:
Despite Phoofolo’s assurances, one wonders what the true impact of these allegations will be on the FPI. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.

Comments

Added by David Thomson, 23 Jul 2018
To say that amidst all the regulation and pressure on the industry that little has been done to enhance the profession is staggering. Let me tell you that matters would be far worse for your own 'cash cow'- the industry were it not for bodies like FPI & others advocating for the place of financial advisers in SA. Wake up & smell the coffee.
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Added by David Thomson, 23 Jul 2018
The idea of separating 'membership' from the obligation to attend courses indicates the poverty of knowledge of the members' own organization. You cannot be a member if you do not maintain your status with CPD events. That is a global requirement.
Your membership includes many benefits including 10- 12 free webinars every year. Also the member website if full of free & useful information. If the FPI is not performing members must look at THEMSELVES. It is a professional member organization. The fees include a substantial portion that have to be paid the international membership body in Dollars. The FPI SA cannot avoid that. At the end of the day Mr. Nti is simply an employee. He is not the FPI itself. The Chairman must not waste time protecting an individual. The FPI is much bigger than any individual.
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Added by Another old timer, 18 Jul 2018
I also decided this year not to re-new my membership with FPI and to let the CFP designation go!

The reason being that I endorse the comments already posted here. Members have become the "cash cows" for the industry and its regulators.

Little has been done for members over all these years to enhance the profession and to make the general public more aware of the added value offered by CFP members.
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Added by Paul Reed, 18 Jul 2018
As an ex member of the FPI I was certainly supprised at the news of these allegations.
I would mention though that I agree with the 'Old Timers' comment about poor value.
Plus you pay for just about every course/presentation etc that you are invited too,not to mention the subscriptions on top of that.
Their monthly payment plan is expensive as well.
So here is an idea;
Why not separate the FPI into two divisions.
One division is a membership just for CFP holders at a reasonable fee per year.Simply a license to hold the CFP title.
The second division for members that wish to attend courses and all the rest of the benefits the FPI offers for another separate fee.Maybe a discount for being a member of both.
That should define actual value.
I must add that I left the FPI as the benefits offered by them did not seem to justify their offering, most if not all of their presentations and workshops were offered by other companies for free anyway(I am not a CFP holder by the way)but was looking forward to being a member of a great organization.
I do however wish them all the best in sorting out the current problem.
Paul Reed

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Added by old timer, 18 Jul 2018
CFP members have complained for years that FPI membership provides poor value for money.R4000 per year to use their logo? Meantime clients neither know nor care what CFP stands for.
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