Worrying Facts

A number of people, cleverer than I, had a lot to say about the latest statistics released by the FSB. I battled to get the sums to tally, not having been exposed to the New Maths.

The number of representatives indicated as “…must write by 30 June”, is given as 81 606. The number indicated as “Persons (who) attempted exam”, is 73 151. If I deduct the latter, my calculator says the difference is 8 455. The circular states the number of people who did not attempt to write as 6 398. This seems to indicate that 2 051 reps are missing in action.

It appears more likely that this group comprises new entrants who are not obliged to the write the exam before the latest deadline, administrative staff who wrote (good for you!), and people who are planning to enter the industry.

There are two other facts that concern me more.

Firstly: is it possible that there are only 2 492 sole proprietors in the whole industry? Somehow, in my mind, I had the perception that they represented a far greater portion of the industry than 15%. This is the first time that I have seen stats on the number of sole props, and now I wonder whether it is possible to establish what this number was, say five years ago?

There is little doubt that this group was worst hit by the FAIS tsunami, particularly in terms of cost and impact on productivity. Very often, these “lone rangers” provide a valuable all-round service to clients, particularly in the platteland. The industry, and the public, will be so much the poorer if these figures should decline further.

Secondly: the pass mark for key individuals (32%) and representatives (35%) in the Afrikaans REs is a huge concern. In case someone suspects a conspiracy, let me assure you that the Afrikaans questions are translations of English questions, followed by the exact same testing to ensure fairness, as the English ones did.

I have a theory, which seems to be borne out by these figures: one who has to use a “text book” (the applicable legislation) in a language in which he is less comfortable than his mother tongue, must be at a disadvantage when attempting to prove his knowledge and understanding in his home language. This not only applies to Afrikaans candidates, but users of the other official languages too.

About six months after the first REs in November 2010, we conducted a crude test, using a sample of Afrikaans surnames, and comparing their results with the average for the whole group. While not entirely empirical, it did in fact show a higher pass mark for the Afrikaans candidates. It appears therefore that it is not a matter of intelligence, but rather the mother tongue issue that plays a role.

We welcome the free workshops to assist candidates with exam techniques. Please note that these workshops will not cover the content of the questions, but rather how to approach it. Given the time frames involved, candidates need to very aware of the final deadline of 31 March 2013, and the three public holidays in March next year – on the 21st, 22nd and 29th.

No news is not always good news.

I was eagerly scanning the circular for news on the level 2 regulatory exams, but there was nothing. Enquiries from readers about this event have dried up altogether. The momentum that was built up while the level 1 exams were in full swing, is lost, and new enthusiasm will have to be drummed up, unfortunately.

A reader shares my concern:

“Extensions to the first deadline, and further extensions to the extensions, may very well lead to candidates not really taking future deadlines seriously.

In the first general notice published about the REs, the following details are given regarding the two levels of exams:

The purpose of the regulatory examination level 1 is to ensure that all key individuals and representatives fully understand their regulatory role, and the accountability and responsibility they have in terms of this role.

The regulatory level 2 examinations are product specific. A person’s experience in dealing with the relevant financial product may assist him/her in successfully completing these examinations.

Delaying finalisation of the process is detrimental to the consumers of financial products. The first phase should have been completed almost a year ago.. By not implementing the second phase, as originally planned, this precautionary measure, aimed at protecting consumers, will also be extended way beyond the original scheduled deadline of 31 December 2014.

Harsh as this may sound, this provides a protracted shelf life to people who should not be in the industry.”

What are your thoughts on this?

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