South Africa’s Financial Services Conduct Authority (FSCA) announced it will conduct an investigation into the FPI to “establish the full extent of the allegations”.
“Where wrongdoing is established, the appropriate regulatory action will be taken,” the FSCA said.
It was alerted to the alleged irregularities by an unnamed third-party.
As a result, all current and future exams will be delivered by another exam body, Moonstone, until further notice.
“Nobody who has written the exam in the past will be affected by this development, except for those who are implicated in the alleged irregularities,” the FSCA said.
“There will be no disruptions to the dates or the venues of the examinations.”
Woeful pass rate
Allegations of wrongdoing might come as a surprise to those who can recall that only 17% of South Africa’s financial planning students managed to pass the FPI’s professional competency examination in February 2018.
The initial figure reported was a paltry 9%, although this was later revised.
When compared with the previous year, when 60.5% of students passed the exams, it may come as little surprise to many that questions were asked.
Further regulatory action
This is not the first time that South Africa’s regulator has taken action against the FPI.
In July 2017, the FSCA’s predecessor, the Financial Services Board (FSB), clamped down on a large number of individuals who cheated or facilitated cheating on exams.
The fraud was uncovered by the institute and involved bribing employees to falsify their exams and/or results and issue fake certificates.
The recent action suggests that the issues were more deeply embedded in the FPI that previously thought.
