The clock is ticking...

Any FSP which fails to meet the mandates of the FAIS Act, which stipulates a certain level of compliance by as early as the end of 2011, will lose its licence and face censure in the financial services community.

Financial services providers (FSPs) are feeling the burden of financial training and compliance more heavily than ever before, as their representatives scramble to meet increasingly rigorous experience and formal education standards under the Financial Advisory and Intermediary Services Act (FAIS).

The heat is on…

By 31 December 2011, an estimated 140 000 individuals offering financial advice in South Africa are required to pass the level 1 FAIS ‘Fit and Proper’ regulatory exam. Following that they have to pass further regulatory exams and undergo continuous professional development (CPD) in order to provide any form of financial advice to clients – from funeral policies to life cover, short-term policies and investments. 

This has created a pressing demand for financial advisory training, in addition to the compliance issues currently faced, among thousands of financial advisors. “For an FSP, the prospect of rolling out immediate and continuous financial advisory training to all of your key individuals and representatives offering financial advice can seem very daunting. The cost of hiring professional trainers can be prohibitive, and, in addition, there is a shortage of qualified financial trainers to meet industry demand,” comments Craig Reid, founder of EquityOnline, who recently launched an online compliance training portal.

Online solutions

According to Reid, online financial training platforms are far more convenient and cost-effective than hiring in-house trainers, particularly for financial institutions that are required to manage large representative teams across a number of different product lines.

Making the right choice

But not all online training solutions are created equal, and Reid suggests that FSPs use the following questions to help them narrow down their options and select the best solution:

• Does the platform deliver regularly updated, comprehensive content for the ‘Fit and Proper’ regulatory exams?
• Does it offer individual users the freedom to go through the content at their own pace?
• Does the platform allow users to test their understanding and identify areas of difficulty, to ensure retention and subsequent exam success?
• Does it provide verifiable CPD content and record training hours?
• Does the platform monitor and report on usage in real time for FAIS compliance and audit purposes?
• Can the training solution be tailored to deliver any other training required by an individual company, from sales and marketing to staff orientation?
• Does the portal support users through a call centre, which operates beyond working hours?

End-to-end solutions

“The right online training solution will take the hassle out of reporting, which is a necessary evil in the light of strict new corporate governance standards in South Africa,” says Reid. “In addition to providing the mandatory FAIS and CPD training for your staff, the platform should also ensure that many of your compliance officer’s responsibilities are taken care of.”