Fact File: Financial Planning Institute

The Financial Planning Institute

THE Financial Planning Institute of Southern Africa (FPI) has been offering the Certified Financial Planner (CFP) accreditation to South African financial planners for over 20 years. A nonprofit body, it is a founding and affiliate member of the Financial Planning Standards Board (FPSB), a global network of organisations in 27 countries and owner of the CFP mark outside the US. According to the FPSB’s website, there are more than 181 000 CFP professionals worldwide.

There are about 4 700 CFP professionals in South Africa, of which 3 800 are practising. Of the practising CFPs, about half are employed by the large product providers and the remainder are independent.

FPI members must uphold the institute’s values and, importantly, adhere to its Code of Ethics and Practice Standards. The FPSB’s sixpoint planning process:

A CFP professional should:

1. Establish and define his or her professional relationship with you

This involves, among other things, establishing what the planner is qualified and licensed to advise you about and sell you, and what and how you will pay for the service provided.

2. Collect your information

The more comprehensive the details of your finances and personal history you provide, the more detailed and relevant the resulting advice will be. This step also involves you defining your needs, concerns and goals.

3. Analyse the information

It’s now up to the planner to analyse what you have provided and do the necessary numbercrunching.

4. Prepare and present the plan, with recommendations

The planner prepares a plan for you, with proposed ways for you to reach your goals.

5. Implement the plan

This is the active part of the process, which is usually ongoing. You may decide to carry out the planner’s recommendations by yourself.

6. Monitor and revise the plan

The planner should ensure you are on track and be on hand to make necessary changes or revisions if there are changes in your personal circumstances.

ETHICAL CODE

FPI members must ask themselves the following eight questions as related to the principles underlying their Code of Ethics and Practice Standards:

1. Clients first: Did I act in the best interest of the client?

2. Integrity: Am I prepared to read about my actions in tomorrow’s newspaper?

3. Objectivity: Am I convinced that I did not allow any emotions to cloud my judgment?

4. Fairness: Have I done what any reasonable person would have done under the same circumstances, or if I had the power of hindsight at some point in the future, would I have given the same advice?

5. Competence: Do I have the collective and sufficiently updated knowledge and skills to render the best advice and service?

6. Confidentiality: Am I sure that I have made all efforts to protect confidential information?

7. Diligence: Have I applied all my skill and motivation to act in the best interest of the client in a timely manner?

8. Professionalism: Have I inspired trust in myself as a professional and in the profession as a whole through dignity and respect in all my actions?