1. Future of Financial Planning Gerhardt Meyer, CFP ® Phil Billingham, CFP ® Wessel Oosthuizen, CFP ®

2. What we will talk about… real quick Stuff I told you last time… Was I right..? New regulatory developments… Around the world and back home…

3. Some of the themes from RDR and FOFA: No more commission on investment business Clients and planners to agree on fees for clearly defined services Clients to be able to stop paying fees if they aren’t happy with service delivery

4. so… … was I right last year…?

5. Indications I might not be wrong… DRAFT Information Letter re Binder Regulations Ongoing TCF developments

6. New stuff coming from down under: Proposed a definition for “financial planner” or “financial advisor” May not provide financial services or have someone do this on your behalf and use “restricted words” Unless: you have a licence to give personal financial advice in respect of certain product categories National Entrance Exam Legislation to govern tax advice and a new regulator in this space Accountants now need a licence to give financial planning advice (from 1 July) BIG NEWS!

7. Canada – consulting public and industry on: should fiduciary standard apply to all? mutual fund fees too high? ban commission? Singapore – various things being considered: raising standards raising CAR India – new regulations for “investment advisors” define investment advice vs sales function CAR now required for investment advisors

8. FPSB RAP met in Washington during April Some key things: – Regulator helps with move from short to long(er) term client relationship – Professional bodies help with move from caveat emptor to trusted advisor – Compensation principles: should not influence product should not influence advice client and planner agree on scope of services and compensation for services which can be reviewed by either party at a later date access to advice for all compensation model should support provision of professional advice

11. The Retail Distribution Review What is all the fuss about? Adviser Charging Paid by the client – a ‘bottom up’ approach Qualifications ‘Level 4’ – roughly degree level Clarity of role Independent or Restricted ‘Do what it says on the Tin’

12. Client Propositions Can you answer the following questions? 1.What are you for? 2.What do you do? 3.Who do you do it for? 4.Where do you do it? The rule is: “If you have never turned away a potential client, you do not have a Client Proposition”

13. From Adviser to Planner to Business The key questions are: Who pays you? Who is the client? The Actual Person or their Money A clue – what are you reviewing and reporting on? Who is the client a client of? The Adviser / Planner or the Business? Do you have a (very good) job or a business? A clue – a business owner gets paid twice

14. Client Focussed - not Adviser Centric This does not mean you are not giving good Advice, or great service, or are not Ethical. It does mean that the systems and processes in place are there to support the Adviser / Planner, who then looks after the client So we need to review: Culture Systems Client ownership

15. We need to increase our Profits This is in two parts: 1.Increase income The 1% world Get paid for everything you do Capture more of the value chain Providers as Partners, not Parents 2.Take out cost Process / industrialisation/ standardisation Take out risk

16. Summary Regulation is on a path of Convergence There is a clear Business Model at the heart of their thinking It is based on existing Best Practice around the world When are you going to transition?

17. THE FUTURE OF THE FINANCIAL PLANNING PROFESSION Wessel Oosthuizen CFP ®, FPSA ®

18. THE EGG PRINCIPLE The value of an egg Dietary value Commercial value Historic value Esthetic value

19. THE EGG PRINCIPLE Current Historical Future What is the financial planner value proposition?

20. Historical Global CFP certification program developed from U.S. model Job analyses leading to “topic lists” Examination syllabus based exclusively on topic lists Job tasks only used for weighting topics on examination

21. Historical – Weaknesses Students: “Why do I have to know that” CFP certificants: “Getting the certification was not a demonstration of my ability to perform financial planning” Employers: “I hire a CFP certificant, who knows a lot, but we still have to teach him how to be a planner” Public: “How do I know exactly what a CFP professional can do for me?” Internationally: “CFP certification in South Africa doesn’t mean the same as CFP certification in China”

22. Client Historical Structure Broker Product Supplier Client

23. Current - Global Standards Define the practice of financial planning Distinction between financial planning professionals and others Focus on competent practice

24. How it All Fits Together FPSB Global Competency Profile Inputs FP Process (Six Steps) Ethical Principles Exam Education Experience Standards of Competence Standards of Practice Standards of Ethical Behaviour Outputs Professional Financial Planning Standards

25. Framework Competency Standards Competency Profile Professional Skills Technical Knowledge

26. Current Structure Adviser Planner Product Supplier Product Supplier Product Supplier Client Adviser Planner Product Supplier Client

27. *Most Effective Certification Ongoing Competency Re-certification Financial PlanExaminationFitnessEducationExperience ASSESSMENT Body of Knowledge EQF Level 6 Minimum 1 Year Supervised -or- 3 Years Un- supervised Equivalent to 6 Hours/ 140 Question Continuing Professional Development

28. Regulator/Professional Body Roles Relationship Short Term Long Term Caveat Emptor Trusted Adviser Old Model Adviser New Model Adviser Professional Adviser & CFP Professional as Adviser CFP Professional

29. Future Structure Adviser Planner Product Supplier Product Supplier Product Supplier Client PROFESSIONAL SKILLS Client Product Supplier

30. THE FUTURE OF FINANCIAL PLANNING WILL BE ABOUT Trust Appropriate judgement Autonomy Initiative Responsibility Listening Thinking Behaviour The interest of the client

31. AT THE END IT’S NOT ABOUT THE EGG BUT THE CONTENT OF THE EGG

32. Questions? @gerhardtmeyer @PhilBillingham Wessel in Bloem