Regulatory Environment

Question 1

Financial planning

Answer 1

the process of developing strategies to assist clients in managing their financial affairs and to meet life and financial goals

Question 2

BENEFITS OF FINANCIAL PLANNING

Answer 2

1. Maintaining a balance between capital and income
2. Protection against financial risk via long- and short-term insurance
3. Maintaining the value and purchasing power of capital
4. Legitimately minimizing taxation
5. Achieving an acceptable level of investment return
6. Achieving financial independence at retirement
7. Managing liabilities and debt reduction
8. Providing financial security for the family
9. Balancing the timing of cash outflows and inflows
10. Balancing current lifestyle with future lifestyle

Question 3

Step 1: Establish and define the relationship with the client

Answer 3

1. Inform the client about what services you can offer
2. Establish whether you can you meet the needs of the client
3. Define the scope of engagement – Includes details of both parties, services offered, duration of engagement, existing conflicts of interest Usually done in writing (contract)

Question 4

Step 2: Collect the client’s information

Answer 4

1. Identify personal and financial objectives, needs and priorities of client
2. Collect quantitative (numerical) information and documents
   (salary, cash flow, budget, etc)
3. Collect qualitative (non-numerical) information (attitude, history with money, etc)

Question 5

Step 3: Analyse and assess the client’s financial status (Two stages

Answer 5

1. Analysing the client’s current situation
2. Assess the client’s objectives, needs and priorities

Question 6

financial planning components that need to be assessed

Answer 6

Debt management
Emergency fund available
Tax situation
Health benefits
Capital needs in case of death or critical illness
Educational needs
Retirement Planning
Estate Planning
Investment Planning
Short-term Insurance needs
Business insurance needs

Question 7

Step 4: Develop the financial planning recommendations and presentation

Answer 7

1. Once information analysed, offer recommendations addressing financial needs and objectives of client by presenting a copy of the financial plan (consists of client details, client needs & objectives, assets & liabilities, recommendations & review date)
2. Possibility of resistance to proposed recommendations

Question 8

Step 5: Implementation of financial planning recommendations

Answer 8

1. Agreement from client to recommendations
2. Identify and present financial products for implementation (while adhering to FAIS General Code of Conduct)

Question 9

Step 6: Review the client’s situation

Answer 9

Annually (minimum)
Marriage
Death in the family
New dependent
Changes in legislation
New products / services
Increase in salary

Question 10

TCF Outcomes

Answer 10

1. Fair treatment of customers is central to corporate culture
2. Products and services meet the needs of identified customer groups
3. Customers provided with clear information of financial products
4. Advice is suitable
5. Financial products perform as expected
6. No unreasonable post-sale barriers to changing products

Question 11

Conditions of the POPI act

Answer 11

Condition 1: Accountability
Condition 2: Processing limitation
Condition 3: Purpose specification
Condition 4: Further processing limitation
Condition 5: Information quality
Condition 6: Openness
Condition 7: Security safeguards
Condition 8: Data subject participation