FPI Member discipline 

29 March 2020, By Kobus Oosthuizen, CFP®

The season’s news is that FPI has changed the Disciplinary Committee name to Conduct and Ethics Committee. This not only fits in with current thinking around professional responsibility but, more so, reflect that FPI does not view ‘disciplining’ of members as a primary task. Directing member ethics towards optimum professional conduct is the focus. 

The 2019 Disciplinary Regulations that were published mid last year (for some this may be new as well) are specifically laid out in such a way as to involve the broader member community, through the regional committees, to investigate disciplinary charges from the perspective of practising members and to propose  rectification measures having regard to the evidence collected before an actual hearing is convened. In so doing we ensure that the disciplinary process becomes one of true assessment by peers. 

It will also no longer be possible to escape such peer judgement. The loophole for transgressors to resign FPI membership and so escape disciplinary findings had been closed. Jurisdiction remains in force for all ethical misdemeanours during the period of actual membership. This is not because of some cynical desire of our professional body to stand in judgement, but mostly to retain the ability to pronounce on behaviour that is objectionable to us. We build a profession and for that reason we need to clearly distinguish between conduct which is acceptable and what is not.    
Yes, the old formalistic disciplinary rules based on a burden of proof resting on the prosecutor are now old, but not so the Code of Ethics and Professional Standard. The entire document and is aspirations remain as topical to our professional members as it ever was.

It is interesting to look at our disciplinary history for the past few years, though, as it follows trends of the time and clearly identifies shortcomings, viz.: 

The figures show that FPI had a pretty average experience with complaints with an uptake during those years when the FAIS Ombud dealt with all the property syndication cases. When the findings started to come into the public domain it exposed that we too had members who were advising on and actively selling those products. Strangely, the figures imply that many such ex-members self-censored by resigning FPI membership in anticipation of the fall-out. Hence, in many cases, we lost jurisdiction to hear those matters under the old rules.  

Thus, we should never believe that our annual renewal requirement of making an ethics declaration and of highlighting our responsibilities under the Code of Ethics and Practise Standards has little effect. We are reminded annually of our high ethical standards and it does play a role in our mindsets when applying those standards.

If the figures quoted above indicate one thing, it is that FPI generally succeeds in retaining a highly respectable membership. With an average annual professional membership of over 4 000 people over the period the number of members who encountered complaints to FPI represents a relatively small percentage. Juxtapose this against the FAIS Ombud who had reached 9323 complaints in 2019, 10 211 in 2018, 10 846 in 2017 and 9 891 in 2016 out of its base of FAIS-licensed representatives.

Our professional members (those with designations) should expect FPI to rely more on them in future to measure, investigate and recommend on the conduct of FPI members. Peer knowledge of products, local circumstances and personalities is essential for a professional body like ours. The practitioners of our profession are best placed to develop the conduct necessary for our public recognition as true professionals. If we do not take this seriously, from founding principles to the aspiration of the financial planning profession, we set ourselves up for failure. 

This is also true for FPI’s identity and the recognition of our trademarks. FPI professional members should jealously guard their designations and prevent charlatans from usurping the recognition we had all worked hard for. The simplest way to put it, if a person is not member-fee contributing, not CPD compliant and does not make the annual ethics declaration that person has no business laying claim to our designations. And, just to remove any doubt, having gained a post graduate diploma in financial planning does not qualify you as CFP®-professional, passing our professional competency examination and remaining in good standing on a year-by-year basis does.

Lastly, we should contemplate our corporate affiliate memberships. These agreements contain a provision to the effect that the corporate member will conduct business activities in accordance with the FPI Code of Ethics and Practice Standards. The purpose hereof is not to prescribe a corporate code of conduct to the member concerned, but to support professionalising its representatives. Accordingly, FPI professional members are fully entitled to expect the corporate affiliate members with which they are aligned to follow FPI thought process in regard to business practices.

Directing individual behaviour is not a simple thing. It gets easier, fortunately, when subscribing to similar principles of conduct. Our FPI Code of Ethics and Practise Standards incorporating the Rules of Professional Conduct is an aspirational set of values that binds us together as a profession. Where-ever these values might take us or however they may develop, we have this as a precious commodity underpinning our profession.  

And it does distinguish us from the rest.

About FPI
The Financial Planning Institute of Southern Africa (FPI), a South African Qualifications Authority (SAQA) recognised professional body for financial planners, which serves the public by ensuring that people who carry the CFP® designation are qualified, experienced and professional. FPI has recently been approved by the South Africa Revenue Service (SARS) as a Recognised Controlling Body (RCB).

The Institute is also recognised internationally and is a founding, and a current affiliate member, of the international Financial Planning Standards Board Ltd (FPSB) based in the USA, along with 25 other affiliate member countries who offer CFP® certification, the highest recognised professional designation worldwide for a financial planning professional. For more, visit www.fpi.co.za or follow @FPISANews.