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Professionalism, professional membership and the looming CPD requirement

01 February 2012 Charmaine Koch, The Insurance Institute of South Africa

The Financial Services Board (FSB) introduced the FAIS Fit & Proper requirements to “professionalise” the industry. Their goal was for each licensed individual to have an industry relevant qualification. But there are still some creases that must be ironed out...

The complexity of the financial services environment creates challenges for individuals that are trying to determine whether they have accumulated enough ‘credits’ to meet industry requirements. Why the confusion?

Financial services professionals hoping to assess their Fit & Proper status begin the process by trawling through a list of 840-plus FSB-recognised qualifications. This list, the myriad qualifications entering and exiting the market via the SETA system, and industry concerns over whether these qualifications are truly fit for purpose make it difficult to measure progress against the required standards.

Coordinated effort required

Taking cognisance of the efforts by various industry and professional bodies in setting and achieving professional standards, one cannot help but wonder if the list could be considerably reduced, perhaps by coordinating efforts between these bodies and the FSB. Professional bodies emerged on the domestic financial services landscape in the mid 1960s and have been at the forefront of setting internationally benchmarked standards ever since. These organisations are not supported by any form of legislation and membership remains voluntary, although SAQA will be looking to change this by requiring professional bodies to register their professional designations on the NQF during 2012..

Stakeholders in the industry still turn to the professional bodies for guidance and advice on relevant and ‘fit for purpose’ qualifications. And there are many more individuals that have obtained qualifications acknowledged by these professional bodies than have followed through by applying for membership. In other words there are many individuals engaged with the financial services industry who are not aware that they qualify for professional membership with their existing qualifications!

Some examples of professional memberships granted for qualifications achieved are listed in the table below:



Profession versus qualification

A question that needs to be asked is whether a person should be labelled "professional” on the basis of an approved qualification. By extension, is a qualification and professional designation not the same thing?

The short answer is "no”. One has to distinguish between memberships awarded on the basis of the content covered in a particular qualification achieved and a professional membershipdesignation, where additional requirements may be sought. Such requirements include years of service in the industry and continuous professional development (CPD) among others.

Ongoing development

This leads us to the next contentious point – that of CPD. The FSB has included CPD in the FAIS Fit & Proper requirements. In the draft board notice they allude to licensed individuals completing anything between one and four days of CPD each year. Is this enough to warrant a "professional” tag? A study of local and international best practices reveals a minimum of four days of CPD in most professions, including chartered accountants (20 hours) and healthcare professionals (approximately two weeks).

The draft board notice allows for professional bodies to be recognised as CPD providers for FAIS Fit & Proper purposes, which seems to be a step in the right direction.

Coming full circle

It seems the industry has come full circle as financial services practitioners once again turn to the industry’s professional bodies for the purposes of both qualification and professional development. If you become a member of a professional body and comply with the CPD requirements you should automatically fulfil the FAIS requirement, lessening the burden of compliance in an increasingly complex industry.

Quick Polls

QUESTION

Do you believe the short term industry should be changed to that of an accountable institution?

ANSWER

Yes, it will assist in tracking criminal trends within the insurance industry, thereby assisting regulators in their fight against fraud
No, it will be costly and onerous
Its just another regulatory hurdle the industry will have to tackle
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