CORRECTION: In the original translation of this story, Fin24 said some of the FSB’s staff members were involved in forging exam results. This was a typo; it was the FPI's staff who were involved in forging exam results. The original Afrikaans story on Netwerk24 did not contain this error. Fin24 apologises for the error. This story has now been updated.
Major exam fraud uncovered at Financial Planning Institute
Cape Town – Major exam fraud was uncovered at the Financial Planning Institute (FPI) of South Africa which will lead to the prosecution of some of its staff members, reported Netwerk24, a sister publication of Fin24.
The FPI is the only institution in the country that awards the sought-after certified financial planner (CFP) qualification.
The FPI is also accredited with setting the exam that prospective financial advisors need to take in accordance with the Financial Advisory and Intermediary Services (FAIS) Act.
Financial planners need to write the exam in order to comply with requirements to act in the best interests of investors. The exam has been compulsory for all financial planners and brokers since 2009.
The Financial Services Board (FSB) said it was made aware of instances of exam fraud in 2014.
An initial investigation showed that some of the FPI’s staff members were involved in forging exam results and the issuing of forged certificates.
The FPI instituted criminal proceedings against those involved. Subsequently, the FSB started collecting evidence of some 120 individuals who obtained qualifications fraudulently.
Close to half of the individuals have been expelled from the financial services industry, while cases are underway against some 60 people, which could lead to more expulsions.
The FSB said in a statement it had conducted an audit of the FPI’s exam division and made recommendations on how to prevent a repeat of fraudulent incidences.
The FPI already implemented the recommendations.
“The Financial Services Board views the compulsory exams and the reliability of the qualification as crucial for the competency requirements of financial services industry professionals,” said Caroline da Silva, deputy registrar of FAIS at the FSB.
FPI CEO Godfrey Nti said in a statement that the investigation into fraudulent activities started in 2013 and was completed in 2014.
The investigation yielded evidence of collusion and the forging of 120 certificates.
As a result, three FPI employees were dismissed. The cases were referred to the police.Read Fin24's top stories trending on Twitter: Fin24’s top stories