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A VALUE PROPOSITION BUILT ON SOUND FUNDAMENTALS

A VALUE PROPOSITION BUILT ON SOUND FUNDAMENTALS. LETS FAIS IT.

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A VALUE PROPOSITION BUILT ON SOUND FUNDAMENTALS

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  1. A VALUE PROPOSITION BUILT ON SOUND FUNDAMENTALS

  2. LETS FAIS IT

  3. Q: What's the difference between a merchant bank and Pamela Anderson? A: Both are institutions whose reputation is built on assets that, on closer inspection, turn out to be entirely artificial, vastly over-inflated and in danger of going through the floor at any moment. But at least Pamela Anderson is still worth something.

  4. Key Individuals

  5. Sole Proprietors

  6. REPRESENTATIVES

  7. Fit and Proper The new regulations, as well as the following Board Notices, are available on the FSB website www.fsb.co.za BN 103 of 2008 re FAIS: Determination of Continuous Professional Development requirements, 2008 BN 104 of 2008 re Fit and Proper: Exemption in respect of Services under Supervision in terms of Requirements and Conditions, 2008 BN 105 of 2008 re FAIS: Determination of qualifying criteria and qualifications for financial services providers, 2008

  8. The new regulations come into effect on 01 January 2010. In addition, the industry now has until 31 December 2009 to achieve the current column 4 requirements after which no further extensions will be granted. ( No Quarter will be given. Do not leave this to the last minute. You will lose your license) • The new regulations taking effect from 01 January 2010 will require the following: • A relevant and recognized full qualification • Relevant experience • Compliance with the FSB ethics standards • Completion of Regulatory Exam 1 • Completion of Regulatory Exam 2 • Obtaining Continuous Professional Development points (CPD 15 – 60)

  9. FEES & DISCLOSURES BN Notice 43 Financial Advisory and Intermediary Services Act 37/2002): Financial Services Board: Amendment: General Code of Conduct for Authorized Financial Services Providers and representatives, 2008.

  10. Summary of Disclosures • separate disclosure of any charges and fees to be levied against the product, including the amount and frequency thereof and, where the specific structure of the product entails other underlying financial products, in such a manner as to enable the client to determine the net investment amount ultimately invested for the benefit of the client; and ( SUBSTITUTION ) • separate disclosure (and not mere disclosure of an all inclusive • fee or charge) of any charges and fees to be levied against the • product, including- • (A) the amount and frequency thereof; • (B) the identity of the recipient; • (C) the services of other purpose for which each fee or • charge is levied; • (D) where any charges of fees are to be levied in respect of • investment performance, details of the frequency, • performance measurement period (including any part of • the period prior to the client's particular investment) and • performance benchmarks or other criteria applicable to • such charges or fees; and • (E) where the specific structure of the product entails other • underlying financial products, disclosure must be made in • such a manner as to be enable the client to determine the • net investment amount ultimately invested for the benefit • of the client; and"; 1.

  11. on request, information concerning the past investment performance of the product over periods and at intervals which are reasonable with regard to the type of= product involved including a warning that past performances are not necessarily indicative of future performances;( ADDITION) • (dd) any rebate arrangementsand thereafter on a regular basis (but • not less frequently than annually); Provided that where the • rebate arrangements is initially disclosed in percentage terms, • an example using actual monetary amounts must given and • disclosure in specific monetary terms must be made at the • the earliest reasonable opportunity thereafter: Provider further that • for the purposes of this subparagraph, "rebate" means a • discount on the administration, management or any other fee • that is passed through to the client , whether by reduced fees • the purchase of additional investments or direct payment, and • that the term "rebate" must be used in the disclosure • concerned, to describe any arrangement complying with this • definition, and the disclosure must include an explanation of • the arrangement in the line with this definition; • (ee) any platform fee arrangements, which may be disclosed by • informing the client that a platform fee of up to a stated • percentage may be paid by the product supplier to the • administrative financial services provider concerned, rather • than disclosing the actual monetary amount: Provided that the • the purpose of this sub-paragraph, "platform fee" means a • Service provider of the administration and/or distribution • And / or marketing cost savings represented by the distribution • Opportunity presented by the administrative platform, and may • be structured as a stipulated monetary amount or a volume • based percentage of assets held on the platform, and that the • term "platform fee" must be used in the disclosure concerned, • to describe any arrangements complying with this definition, and • the disclosure must include an explanation of the arrangements • in line with this definition.";

  12. A provider must, where applicable, at the request of a client, provide the client with a statement of account in connection with any financial service rendered to the client. ( ADDITION) • (4) A provider who has provided advice to a client or is rendering • ongoing financial services to the client in respect of one or more • financial products, must on a regular basis ( but not less frequently • than annually ) provide the client with a written statement indentifying • such products where they are still in existence, and providing brief • current details (where applicable), of- • (a) any ongoing monetary obligations of the client in respect of • such products; • (b) the main benefit provided by the products; • (c) where any product was marketed or positioned as an • investment or as having an investment component, • of the investment and the amount of such value which is • accessible to the client; and • (d) any ongoing incentives, consideration, commission, fee or • brokerage payable to the provider in respect of such products: • Provided that such a statement need not be provided where the client • is aware, or ought reasonably to be aware, that the provider • concerned does not render or has ceased rendering ongoing financial • services in respect of the client or the products concerned.''.

  13. Remuneration and record of advice • 6. The provider’s remuneration[1] • The provider’s initial advisory fee amounts to: __________% of the initial investment amount[2] or R ______________________________________________ (plus VAT)[3] • The provider’s ongoing advisory and management fee amounts to: R ____________ or _____________________________ % of capital under management (plus VAT)[4] • Frequency of Fee.[5]…………………………………………………………………… • Identity of recipient: [6] • Services for each fee:[7] • Investment performance fees:[8] • Frequency • Performance measurement( including any part of the period prior to the clients particular investment)……………………………………………………………… • Performance benchmark/s………………………………………………………….. • Other criteria applicable to charges and/or fee structure……………………………………………………………………………. • Rebate Arrangements:[9] • Platform Fees[10] • 9.Ongoing Fees [1]See sections 7(1)(c)(v) and (vi) of the General Code of Conduct. [2]See sections 7(1)(c)(v) and (vi) of the General Code of Conduct. [3]See sections 7(1)(c)(v) and (vi) of the General Code of Conduct. [4]See sections 7(1)(c)(v) and (vi) of the General Code of Conduct. [5] See sections 7(1)(c)(iii)(bb) and (vi)of the General Code of Conduct [6]See sections 7(1)(c) (iii) (bb) and (vi) of the General Code of Conduct [7]See section 7(1)(c)(iii)(bb) and (vi) of the General Code of Conduct [8]See section 7(1)(c)(iii)(bb) and (vi) of the general Code of Conduct [9]See section 7(1)(c)(iii)(dd) and (vi) of the General Code of Conduct [10]See section 7(1)(c)(iii)( ee) and (vi) of the General Codes of Conduct

  14. FICA Considerations Register with FIC ( When up and Running ) Client profiling procedures for high risk clients Client acceptance policies and procedures: 1. background 2. Country of Origin 3. public or high profile 4.linked accounts and business activities FIC Risk management Frame work 1.Procedures , process and policy is ensures consistency is maintained in client ID and dealing with High Risk Clients

  15. Identification of clients: • 1.Advise clients at first meeting of obligation to FIC • 2.Obtain particulars of Client and complete an ID Form • Verification: • Check info • Obtain Documents • Mitigation of Risk • Certification of docs presented • Additional Docs required to complement those required for face to face customers • Independent contact with customer by FSP • 3rd party introductions. • Reference checks • Scan recognized databases • Sanction lists. • E.g. :residential address ( not older than 3 months)

  16. A presentation By Financially Planned Mortgages: Malcolm Lobban CA(SA) See Links on Website

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