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Module 1 Presentation

This video will take you through Module 1

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Module 1 Presentation

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  1. Regulatory Exams Module 1

  2. Lawyers, accountants and other professionals must pass exams to practiseSo must financial advisers such as insurance professionals, medical scheme advisers and bank advisers.

  3. Lawyers, accountants and other professionals must obtain qualifications before doing regulatory examsSo must insurance professionals

  4. Regulatory exams • How to conduct yourself as a professional in respect of FAIS • What you need to know about as a professional in respect of products

  5. The licensing process and accreditation process are interlinked Licensing Accreditation

  6. Module 1 covers: • The purpose of the Financial Advisory and Intermediary Services Act, 2002 • Advice vs Intermediary services • Financial services and products • Some industry players

  7. Long list of financial services in categories 3

  8. If the advice falls into a category or sub-category on the list, then you need accreditation

  9. FAIS Financial Advisory and Intermediary Services Act, 2002 • How to: • Provide advice • Behave (ethics)

  10. Financial Advisory and Intermediary Services Act, 2002 Protects consumer in the financial services environment And it works!

  11. Financial Advisory and Intermediary Services Act, 2002 Consumer: “I have enough information to decide. I know enough to decide.” Adviser: “I have disclosed what I should and you have disclosed material information from your side.”

  12. FAIS Providers Products Licensing Compliance officer Fit and proper Ethics Advice

  13. FAIS Advice: - Helping the client decide on a financial product Intermediary service: - Acting in a way that is not giving advice, eg. administration of product, giving objective facts about product

  14. FAIS Advice Recommend Guide Propose Financial product For client to Buy Invest Replace Vary Terminate

  15. “Mr Client, this is how you should invest your money.” “Mr Adviser, thank you for your ADVICE.”

  16. “Mr Client, let me explain how your policy works.” “ Thank you.” this is an intermediary service

  17. What is advice? A financial service provider or representative can give advice in three situations: - Comprehensive advice - No analysis is done - Replacing a policy

  18. Comprehensive advice based on: Full needs analysis of client’s circumstances to provide advice

  19. Steps for comprehensive advice • Obtain appropriate information available from client. • Analyse information to provide advice • Base advice on the information • Identify appropriate products for client Financial needs Risk profile

  20. Advice where there is no analysis • The client must understand: • Advice may not be fully appropriate (no analysis) • The client must consider: • Is the advice appropriate bearing in mind needs Objectives Financial situation

  21. Reasons why no analysis • Client chose product not recommended by adviser • Client chose to receive limited advice • Client did not provide all the information requested • Not enough time for a full analysis

  22. Advice on replacements • New financial product replacing an existing product – disclose financial implications and consequences • Notify issuer of product • Motivate advice to replace • Ensure client understands

  23. Disclosure on replacement includes: • New fees and charges • Any benefits that will change • Insurance policy – premium changes • Tax implications • Penalties for terminating replaced product • Liquidity of new and old product

  24. Types of financial products Financial services provider can deal with many products: Securities and instruments; Collective investments; Pension benefits; Long-term insurance; Short-term insurance; Foreign currency investments; Bank deposits; Health service benefits; Foreign products and more.................................

  25. Financial service – doing something for someone relating to their finances Financial product – the ‘thing’ financial advice relates to

  26. Industry role players • Product supplier • Financial services provider – provides advice or intermediary service • Representative – provides financial services on behalf of FSP • Compliance officer • FSP admin staff • Clients

  27. More role players • Life insured • Policy holder • Beneficiary • Successor in title

  28. FSP (products) Product supplier Compliance officer Representative Client

  29. Module 1 reviewed • The purpose of the Financial Advisory and Intermediary Services Act, 2002 • Advice vs Intermediary services • Financial services and products • Some industry players

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