A reader recently wrote:
I am really battling to put together a Risk Management Plan that makes any sense at all. I am a one man business and don’t even employ a secretary, so most of the questions don’t apply to me. Everything that I do, I am responsible for my actions and I am covered by Professional Indemnity.
I attended one of your presentations by Paull Lawrence some time back and have completed the forms supplied in pencil as I am not sure if what I am putting in it are acceptable.
Can you assist me?
Just how serious a matter this is, was confirmed just last week when the FSB’s Enforcement Committee fined Pretoria-based Martindale Securities and Investments R20 000 for contravening the general code of conduct for financial services providers because it failed to adopt, maintain and implement a conflict of interest management policy and did not have risk management or business continuity plans in place.
We believe that many FSPs, and particularly smaller ones, play a bit of Russian roulette as far as these obligations are concerned. The fact of the matter is that you have to report on this in your annual FAIS report. Regular readers will also recall that the new compliance report no longer makes provision for a “work in progress” loophole. There is now more development area – you either have it, or you do not.
The quick and easy way is to construct something to the best of your ability, and hope for the best. You can submit it to the FSB for approval, although it is not incumbent on them to provide such assistance, to the best of my knowledge.
Alternatively, one-person businesses can join the Moonstone Compliance Protector Service. It is an affordable support service, aimed at assisting small businesses with drawing up the required templates in the right manner, and providing assistance with all FAIS related queries.
For more information, please contact Deon du Toit via e-mail, or phone him on 021 883 8000.