Levels of analysis
- Macro/political level
- Organizational level
- Micro/individual level
Macro/political level forces
- The regulatory environment, made up of mandatory laws created by the government, and the enforcement of these laws by legislative structures through judgment (rooted in ethics and values)
- Broader societal developments
Different types of actions
- Actions that are good and legal but not a legal obligation
- Actions that are wrong and illegal
- Actions that are legal but bad
- Actions that are good but illegal
Elements that influence RM strategy
- The regulatory environment
- The broader societal developments
- The financial planning practice
The regulatory environment elements
- Ethics
- Legislation
- Financial Sector Conduct Authority
Ethics
The moral obligation that a business’ activities, products, and services will enhance the development of its social and natural environment
African value system
- Collective over the individual good
- Principles of mutual interdependence and coexistence
- Spirit of humanity
- Hierarchical political ideology
- Preference for consensus over dissension
- Mentality of inherent trust and belief in the fairness of human beings
Legislation
FAIS regulates the relationship between financial institutions that provide financial services and their clients
Result of S15 and S16 of the FAIS Act
The FAIS Registrar and an advisory committee created the General Code of Conduct for Authorised Financial Services Providers and Representatives
Objective of the General Code of Conduct
To ensure that clients receiving financial services can make informed decisions and that their financial needs are appropriately and suitably satisfied throughout the lifetime of the professional relationship
How are the objectives of this Code of Conduct met by practices
- Acting honestly and fairly, and with due skill, care and diligence, in the interests of clients and the integrity of the industry
- Having and employing resources, procedures and appropriate technological systems for the proper performance
- Seeking from clients appropriate and available information regarding their financial situation
Section 6 of this Code of Conduct
“When a provider makes contact with a client, he must act honourably, professionally and with due regard to the convenience of the client.”
During any contact, certain information must be provided to the client
Financial Sector Conduct Authority
Empowered to implement various enforcement measures to ensure compliance with FAIS
If a client feels he has been prejudiced while interacting professionally with a financial planner, the client may seek action against the financial planner by approaching the FAIS Ombudsman
FSCA additional roles
- The authority to implement various initiatives to further achieve the objectives of FAIS
- Promote programmes by financial institutions and bodies that represent the financial services industry, to inform and educate users and potential users of financial products and services
Examples of FSCA initiatives
Treating Customers Fairly
Retail Distribution Review
Both related to entrenching the application of FAIS more deeply within financial planning practices
Primary cultural value shift
- Liquid life/déclassé consumption
- Ethics and fair play
- Durable living
- Return to the fold
Liquid life/déclassé consumption
The movement of consumers defining their success not by having things but by their ability to manage their financial affairs prudently
The perception that being frivolous makes you look a little anti-fashion
Liquid life/déclassé consumption examples
House swapping instead of staying in 5-star hotels during holidays
Downsizing of DSTV packages
Liquid life/déclassé consumption business response
Use existing infrastructure to hold teleconferences for meetings and internet-based training for employees
Ethics and fair play
Providing not only value for money but also providing value in the community
Ethics and fair play examples
Swapping services, where you find businessmen swapping their skill and expertise instead of cash
Ethics and fair play business response
Active seeking and identification of how the resources (structural and human capital) within the company can be pulled together to become involved in community initiatives
Durable living
Consumers are demanding a value experience from every purchase that they make, from point of dale to after-sales support
Durable living examples
Holding onto cars longer, meaning that they are willing to purchase a proven, reliable vehicle that can be maintained at a reasonable cost
