The price of professionalism
“The Financial Advisory and Intermediary Services Act has increased tenfold the administration burden on financial advisory businesses,” reports FANews. “In order to offer financial advice in 21st century South Africa, you must have a comprehensive compliance and risk programme in place. Financial intermediaries are also held to higher standards than ever before.”
The “2012 Cost of Financial Advisory Business Compliance SA” was conducted earlier this year to determine the compliance cost associated with providing financial advisory services in South Africa. According to the study, it was revealed that the “regulatory examinations alone could cost the financial services industry in the region of R1.28-billion”. A very conservative calculation puts the average cost of compliance per annum to an independent financial advisory business at R188 658.
“A typical one-year continuous professional development cycle for all representatives and key individuals could cost the financial services industry more than R120-million per year,” Johan Maree of IPM was quoted as saying.
Carel Nolte (Etana Exco), highlights some important facets of the rising costs of professionalism: “Industry often uses the current skills shortages as risk to business and an excuse. The cost of professionalism outlined in the survey should be seen as an investment to promote skills development and reduce the risks associated with skills shortages.
“We cannot shy away from the fact that skills development is hard work and takes time, and it is up to us to get on with it. The opportunity is there to work with the Insurance Institute of South Africa and other industry bodies (like the Etana Academy) and upskill and develop all of our staff. Upping professionalism also means we attract the best of the best because people want to associate with an industry that is professional and that allows for continuous learning and growth.”
Fatima Maharaj, head of the Etana Academy, says, “The Etana Academy is designed to support the continued educational and professional development of not only Etanans, but all our broker partners too.
“We have played a key role in assisting brokers with the regulatory exams and offer an array of accredited academic courses – the most recent being an online NQ5 diploma in short-term insurance. We look forward to further assisting the industry in its quest to become more professional.”