By The Financial Planning Institute of Southern Africa
A group of 13 financial planners met in 1969 in Chicago and started what is now known as the CFP Board in the United States. Over the years this profession, and the related designation of Certified Financial Planner® professional, has gained international recognition.
In South Africa the first formal qualifications in the field of financial planning were only developed from the early 2000s. Since then, the profession has been steadily growing across all levels of education and experience. However, there is still a long way to go to create awareness on financial planning as a career path with the younger generations.
Many scholars have never heard of financial planning or advice during their school years. Financial literacy in South Africa is not receiving enough attention, despite the best efforts of many industry bodies. Financial literacy goes hand in hand with the value of proper financial advice, and the difference financial planning can make in customers’ lives. Awareness needs to be created at school level, and I am dreaming of a day when financial literacy will be covered comprehensively in the Grade 1 to 12 school curriculums.
How the South African education landscape affects pipeline for professions
It is also important to note how the South African education landscape is affecting the pipeline for professions.
In 2021, around 537 700 learners passed matric. Less than 30% of these learners had mathematics as a subject, of which only 50% passed the subject. Only 13% of learners passed the subject with 60% or more to gain access to certain educational streams. This equates to around 20 000 learners to fill the positions where these subjects are required.
Further to that, the South African school system is deeply unequal. According to a 2020 Amnesty International report, children in the top 200 South African schools achieve more distinctions in mathematics than children in the next ranking 6 600 schools combined, with the latter group being prevalent in rural areas. Three quarters of children in Grade 4 cannot read for meaning in South Africa, with this rate at 91% in the Limpopo province and 85% in the Eastern Cape province, as opposed to lower rates in the more predominantly urban provinces.
Solutions to the challenges
However, there are some solutions to this problem. There needs to be an investment in education and training in the right skills in the industry. Structured mentorship programmes and internships together with funding for obtaining qualifications can help to address the shortfall. Recognition of prior learning should be a focus for industry players in the case of career changers and where a qualification may be lacking but experience, skills and abilities can be proven.
The Financial Planning Institute of Southern Africa has invested resources in developing consumer education programmes, mentorship programmes, opportunities for internships and other mechanisms to address these issues.