Meanwhile, the National Credit Regulator (NCR) has warned that unsecured credit extension was escalating at worrying levels and is investigating the trend. The regulator says the unsecured credit market ballooned from R21,2 billion in September last year to R26,45 billion in December. Such loans are quite expensive and can attract interest of up to 32%. According to the NCR, 6 000 South Africans apply for debt counselling every month.
Godfrey Nti, CEO of the Financial Planning Institute of SA (FPI), says this unseemly scenario highlights the crucial importance of personal financial planning. "People who battle to escape the debt trap need the best available advice possible. If they're ever to overcome the stress of living with debt they cannot manage, they should use a professional financial planner who will ensure that this problem is solved as part of a bigger financial plan."
South Africa, he says, has a dire shortage of certified financial planner professionals. "There are approximately 100 000 financial advisors, but less than 5% of them are certified financial planner professionals."
In an effort to provide consumers with sound advice and improving professionalism in the industry the FPI will be introducing a professional designation for financial advice that can be attained by financial advisors on completion of a specifically designed FPI board examination. The financial services advisor (FSA) certification effectively enables individual financial advisors to once again differentiate themselves as well as provide trusted expert advice to consumers
The FPI also launched a new consumer advocacy programme, headed by well-known certified financial planner professional, Paul Roelofse. Roelofse will continue to work with the FPI in driving consumer education about their real financial needs and the right to professional financial planning. The new interactive website will provide consumers with information and answer frequently asked questions about financial planning.
