Thursday morning I penned a newsletter titled The Anti-Regulatory Exam Movement Gains Impetus. I wrote the article to raise awareness about a section of the financial advisor community that is unhappy with the way in which the Financial Services Board (FS
Although their debate is slightly after the fact – because the RE exams were widely discussed pre-implementation – some of the flaws they have identified are certainly serious enough to prompt a post-implementation rethink. I’m talking here about the English-only language issue and the appropriateness of a “one size fits all” RE I exam among others. But the way they’re getting their message across leaves much to be desired.
Using any trick to get on the soap box
Last week NAIFA leapt at the opportunity to disseminate information about an apparent “spat” between the FSB and the Insurance Sector Training and Education Authority (INSETA). “Look,” they ranted, “INSETA is withdrawing its study material because the FSB has found fault with it!". This was more ammunition in support of their call to halt an industry-wide process aimed at improving financial services sector knowledge and the level of service to local consumers. To be honest I wasn’t keen to distribute Thursday’s newsletter because I thought the guys at the new broker representative body were latching on to a non-event to further their cause. “The INSETA study material recall debacle appears to be little more than a “storm in a teacup”, I said – an opinion subsequently confirmed. INSETA CEO Sandra Dunn advises “We will continue to make the material available to industry free of charge to assist industry to meet the regulatory examinations deadlines. INSETA has, since the inception of FAIS, supported industry in meeting FAIS requirements through discretionary grant funding. INSETA regularly consults with industry associations like IISA and FIA in order to keep abreast with the skills needs and priorities of the insurance industry. Feedback received nationally, is that the FAIS RE material is of a good quality and many people have made use of the material in their preparations and have passed the examinations” – and based on numerous FAnews Online readers accounts the material is useful in obtaining a passing RE I grade.
But NAIFA didn’t draw the line there. Imagine my horror when I read Thursday evening’s Fin24.co.za article titled Exams Threaten Financial Sector Jobs... This article wasn’t journalism. It wasn’t even an opinion piece… It was pure and simple scare mongering orchestrated by a broker body on a mission. I cannot believe that the editor of Fin24 published such garbage! “An estimated 300 000 people in the financial service sector may lose their jobs before the end of the year because of regulatory exams, according to an industry organization,” wrote Helena Wasserman. Her source for this ridiculous allegation was none other than Chris van der Walt of NAIFA. The broker organisation launched a ridiculous public sympathy campaign using the online media as their puppet in an attempt to further their “scrap RE” call. Effectively they used the Internet news service to show disrespect to both the FSB and the industry as a whole.
Rumours abound that big business is wavering too…
There’s another rumour bubbling as I write this piece. It seems some of the large financial services providers are getting cold feet where RE is concerned. The same companies who welcome every compliance requirement foisted on the independent distribution force are suddenly not sure these exams should apply to their largely “tied” sales force. They want to shelve the move to a more professional financial services industry because they’ve suddenly realised their employees are not up to the task of “passing” a simple multiple choice exam on the industry legislation. Instead of questioning their hiring policies they’re now rumbling about the appropriateness of knowledge of the Act for certain categories of employee.
According to Wasserman: “Phillip Matlakala, chief executive of Metropolitan Retail, weighed in on the matter this week, saying it would have a negative impact on life assurers like Metropolitan operating in the low- and middle-income market, and on the industry’s ability to create jobs.” I’ve heard there are a number of other companies thinking along similar lines.
Time to get together and thrash this “thing” out
My advice to big business, the regulator and broker bodies such as NAIFA is simple. Fix it like civilised people. If RE doesn’t work in its current shape and form then sit around a table and negotiate a sensible way forward. The regulator – as keen as they are to push RE through by their “cast in iron” deadlines – will see the light if the pass rate is as low as the claimed 25%.
I think “halting” the exam process is the worst possible solution. The best answer will be to extend the deadline and allow people to continue sitting the exam. This will give all stakeholders the opportunity to thrash out the remaining issues without the pressure of solving everything by Christmas 2011!
FSB listens
The FSB are willing to listen. On Friday afternoon they alerted the media with regards to the language issue: “ As far as the vexed question of the language is concerned, the FSB, in collaboration with the FIA, decided that candidates who wish to enroll for the examination in Afrikaans, should be afforded the opportunity to do so. Cost implications arising from this decision are being investigated and may prove to be substantial.
"The FSB will, as soon as practicable, announce a registration process for those persons that wish to take the examination in Afrikaans in order also to determine the scope of the preparation required to set and roll out the examinations in Afrikaans. A deadline for candidates to indicate their desire in this regard will be decided upon. Thereafter the deadline for the writing of the Afrikaans RE will be determined and publicised.” Well there you have it – Afrikaans will now be made available but that opens a whole new can of worms – should the exam not be then made available in all the official languages...
Editor’s thoughts: I think this is my first ever financial services industry diatribe – and I apologise if my opinion has offended anyone. I believe that without debating the correctness of the arguments offered by the RE detractors I have offered a simple solution which should put a lid on all this “back and forth” in the media… The lesson here is that the industry stakeholders can get around discussion tables like civilised people and the rest of us can get on with the work of servicing our customers. I’d love to hear your views and comments on NAIFA’s decision to use public platforms to “engage” the regulator. Add your comment below, or send it to gareth@fanews.co.za
Comments
Added by BBee, 06 May 2011