Navigating CPD

Introduction to Continuous Professional Development (CPD)

Continuous Professional Development (CPD) is integral for maintaining the highest standards of professionalism in various industries, particularly in the financial advice sector. CPD involves lifelong learning activities that help professionals maintain, enhance, and expand their skills, knowledge, and abilities. According to Board Notice 194 of 2017, CPD is not only recommended but required for key individuals, sole proprietors, and representatives in the financial advice industry.

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Regulatory CPD vs. Professional CPD

Understanding the distinction between 'regulatory CPD' and 'professional CPD' is crucial. Regulatory CPD pertains to activities that have been evaluated and approved by professional bodies to meet specific industry standards, and are necessary for compliance with legal and professional requirements. Professional CPD, on the other hand, includes a broader range of learning activities aimed at enhancing personal knowledge and skills, contributing to professional growth.

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CPD Requirements and Guidelines

The specific requirements for CPD are detailed in Chapter 4 of Board Notice 194 of 2017, with additional guidance provided in FSCA Communication 2 of 2019 (FAIS), which includes frequently asked questions. The mandated CPD hours are as follows:

• 6 hours for a single subclass within a business class,

• 12 hours for multiple subclasses within a single class,

• 18 hours for involvement across multiple classes of business.

 

Managing CPD in Your FSP

Effective management of CPD within your Financial Service Provider (FSP) is outlined in Board Notice 194 of 2017 and further explained in FSCA Communication 2 of 2019. This includes creating and maintaining robust policies, procedures, and systems to ensure ongoing compliance with CPD requirements. It is vital to develop these systems carefully to avoid the serious consequences of non-compliance, which can include suspension of business operations and licensing.

 

Consequences of Non-Compliance

Non-compliance with CPD requirements can have severe implications, such as the removal of representatives from the register, which can affect ongoing commissions and the overall business flow. For key individuals or sole proprietors, non-compliance could lead to the suspension of the FSP's license, causing significant disruptions to business and financial stability.

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Removing Representatives

Removing representatives from the register can have significant repercussions, especially if there's no alternative representative available to serve clients. This could lead to product providers ceasing ongoing commissions, affecting the financial stability of the business.

However, the consequences escalate for key individuals or sole proprietors. If an Financial Service Provider (FSP) has only one key individual and they are not compliant, they cannot be removed from their role, as an FSP must have a key individual at all times. Non-compliance by the key individual could result in the Financial Sector Conduct Authority (FSCA) suspending the FSP’s license. Consequently, all representatives and administrative staff would be unable to conduct new business, exacerbating cash flow issues due to halted commission payments.

While appointing another key individual is an option, the process can be time-consuming. For sole proprietor FSPs, the situation is even more dire as they cannot appoint another key individual. Non-compliance in this scenario can only lead to the suspension of the license by the FSCA, posing severe consequences for the business's operations and viability.

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Adjusting CPD Hours for Absences

CPD hour requirements may be adjusted on a pro-rata basis for representatives who are absent from work due to maternity, paternity, adoption leave, long-term illnesses, or family care responsibilities. The formula for adjusting CPD hours accounts for the duration of absence, ensuring fairness and flexibility in maintaining CPD compliance.

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The formula for reducing CPD hours is as follows:

 Z = 12/X ​× (12−Y)

 

Where:

• X represents the number of annual required CPD hours.

• Y indicates the number of months absent from work in a specific CPD cycle.

• Z signifies the required pro rata CPD hours.

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For instance, if a representative is absent from work due to illness for six months, they would only need to complete half of their original CPD requirement.

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Financial Mind CPD Accreditation

Financial Mind is a recognized and authorized CPD (Continuing Professional Development) provider, duly registered with the Financial Planning Institute of Southern Africa (FPI) 19033400. This endorsement allows Financial Mind to offer a range of CPD-accredited courses and workshops, specifically tailored to meet the ongoing educational needs of professionals within the financial planning sector. Through our partnership with FPI, we ensure that all our CPD programs are up-to-date, relevant, and aligned with the latest industry standards and regulations, supporting financial planners in maintaining their professional competency and excellence.