The South African Independent Financial Advisors Association (SAIFAA) is a “non-profit company” (CIPC Registration NPC Number 2017/231092/08) that will pursue the following two broad objectives on behalf of its members:
- To promote the value of “independent financial advice” in a modern financial services market, and the critical role of independent advisors in delivering this advice, to the media/regulator/public at large.
- To be recognised as key “voice of the independent financial advisor community”, with a mandate to represent our members with the regulator and the media.
Membership Eligibility Requirements – Any individual financial advisor working for an “Independently Owned” Category One Financial Services Provider (FSP) firm that is “in charge of its own destiny, and who is free to structure its businesses and solutions for the benefit of clients” qualifies for membership of SAIFAA.
Some product provider conflict will be allowed, but the guiding principle should be that the Category One FSP must be the “dominant party in any conflicted relationship and must have full discretion to easily withdraw from a product supplier conflict”.
The following are representative of “examples” of FSP’s who “Will Qualify” for membership:-
- Fully “Independently Owned” Category One FSP’s who own 100% of the equity in their business and who have no enforceable rights from a third party product provider on their Category One FSP.
- The same Category One FSP in the previous bullet, even if the Category One FSP has a Category Two FSP in the same group. The Category Two FSP can operate model portfolios, own a manco or operate a range of white labelled CISCA unit trust funds.
- A Category Two FSP who owns shares in a third party product provider.
Who will not qualify – For further clarity, the following represents FSP’s where representatives will “Not Qualify” for membership especially within the role-out of RDR:-
- Representatives of product providers, likely to be defined as “Product Supplier Agent – PSA” post RDR. For sake of clarity this specifically includes any representatives of product providers who are insurance companies or banks.
- FSP’s who have sold any proportion of the equity in their business to a third party product provider.
Boundaries to activities – SAIFAA will avoid activities that could result in commercial conflicts that negatively affect its ability to deliver on the stated objectives.
Specifically the following areas have been identified as “no-go” areas:
- SAIFAA intends embracing the direction of regulatory change under FAIS and RDR, and will therefore not support viewpoints that intend “protecting questionable business models of the past”. The focus will be on ensuring high quality practical implementation of proposed regulatory objectives.
- SAIFAA will avoid positioning itself as a litigation vehicle through which disgruntled members can channel firm-specific disputes with the regulator or the FAIS Ombud. SAIFAA will however comment on controversial FAIS Ombud rulings or controversial regulatory proposals.
To learn more about SAIFAA’s Guiding Principles and Membership Eligibility you can download this document: SAIFAA Guiding Principles and Membership Elegibility