The FPI takes a proactive role in addressing industry challenges

Godfrey Nti , CEO, FPI

Jonathan Faurie, FAnews Journalist

Although South Africa suffered little ill effects of the 2009 global financial crisis, when compared to other markets, it did experience some significant challenges as no financial market can operate in isolation. Fast forward to 2012 and it turned out to

Apart from legislation and a general sluggish economic growth rate of 3%, one of the major challenges that South Africa has to face is revitalising the financial services industry. Reports from a number of companies shows that encouraging young talent to join the industry is a world-wide challenge which needs to be resolved before the industry can realistically move forward.

Taking the bull by the horns

In terms of overcoming this challenge, the Financial Planning Institute (FPI) is making significant headway with 100000 representatives giving financial advice to the local market. The portion of these who are Certified Financial Planner professionals growing to 4500 professionals.

FPI CEO Godfrey Nti reports that there needs to be a significant educational drive in the industry and that the FPI is committed to playing a proactive role in achieving this objective.

“We have made significant headway in achieving this objective, but more needs to be done. The consumer is encouraged to ask the following questions: what is financial planning, what is it about and why does one as a consumer need a financial planner? How does financial planning differ from advice? And what questions should one ask his/her financial planner? In order to achieve this, it was decided to establish the certification and standards body as an autonomous body independent from the membership section so it could concentrate more effectively on its new focus. The move has enabled the body to align all activities to the institutes’ strategic objectives.”

Rolling out visible campaigns

To say that consumer education is a major challenge is one thing, addressing that challenge is a different beast altogether. South Africa is a diverse country with a melting pot of cultural groups who are all used to receiving communication in a specific manner. This is further complicated by the vast educational rift in the country where the majority of the population suffers from a severe lack of education.

The challenge for the FPI is to develop a campaign which speaks to the majority of the population. This was successfully achieved by the FPI through the launch of their MYMONEY123 educational program. The program focuses on emphasising three areas of consumer education: personal financial management and budgeting, dealing with debt and understanding debt and investments.

“The main focus of the FPI for the remainder of 2013 will be to effectively continue carrying out the objectives we started at the beginning of the year. The main focus will be face-to-face interactions through workshops and road-shows, shopping mall promotions, as well as focus group interaction. The development and upgrading of the FPI website, by making it consumer and member friendly, all forms part of the consumer awareness programs we are rolling out,” says Nti.

Ending the year off with a bang

At the beginning of 2012, the FPI set out a few strategic goals which it said that it would roll out between 2012 and 2015. So 2013 has been a year of consolidation and building on the objectives set out last year.

The focus areas of the company in 2013 included the development of communication tools and member feedback as well as the development of a dynamic disciplinary process. “It is our hope that we are able to make the disciplinary processes more dynamic. This will be done by bringing in a new set of regulations and considering the composition of the disciplinary panels through the sourcing of appropriate members.”

The FPI will also be conducting a Financial Planning Practice Standards Review which  hopes to provide guidelines on the use of its Financial Planning Practices and with the aim of incorporating all relevant legislation as well as recognised principles of Treating Customers Fairly (TCF).

The second job Analysis Survey will inform stakeholders about priorities concerning financial planning practices. This will influence the FPI’s strategy as well as the design of the future curriculum and the Professional Competency Examination (PCE). Nti points out that as this was previously conducted in conjunction with other international associations, this will be the first survey that the FPI will be undertaking independently. Because the company has now taken over full ownership and administration of the PCE, the company is in the process of restructuring it and introducing global best practices.

Editor’s Thoughts:
The FPI must be commended for taking a proactive role in addressing these challenges. However, before we start assessing the success or failure of the FPI’s initiatives, one needs to bear in mind that this is a long process and issues such as education take a long time to effectively roll out.

It is clear that while the FPI has set ambitious targets, it needs every stakeholder in the industry to buy into the process in order for the program to be a success. What role does the advisor play in consumer education? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughtsjonathan@fanews.co.za.