One of my graduate students on a Wealth Management learner-ship asked me to advise him on what they need to do to become a broker and i decided to write this post.

Brand new people to the industry need to gain time on the job and practical experience before they can even think about becoming an independent broker or FSP(Financial Services Provider) .  The regulator required 2 years experience for some licences and 3 years for others.

It is important to choose a FSP that you believe will give exposure to the type of buisiness you want to focus on as well as resources and mentors to guide you during this developmental and learning phase.

Many of the larger insurance companies encourage their people to become brokers and to franchise to them.  This means that you will often be able to take the client base you have developed with you into the new venture.  Other companies consider the client to belong to them and will not allow you to take these clients with you.

You need to understand that as an independent you

You need to ensure you become fit and proper in terms of the FAIS requirements for a FSP rather than a representative during this learning and development phase.  This would include but not be limited to:

  • Gain an acceptable qualification in terms of Board Notice 44 of 2010 e.g. National Certificate in WM
  • Complete Representatives Regulatory Exam
  • Complete the Key individuals Regulatory Exam
  • Start on CPD (Continuing professional Development)
  • Ensuring compliance with legislation and codes of conduct to maintain ethics requirement
  • Begin acquiring the equipment needed to operate as an independent broker – computers, filing cabinets, software etc.
  • I would also explore membership of a professional body like the FPI as this will help when you want to register with the FSB as an independent broker or FSP.

I would also suggest that a representative wanting to become a independent FSP should become a CFP Certified Financial Planner with the FPI Financial planning Institute.

The independent broker may deal with a number of companies and will need to develop an undersrtanding of a wide range of financial service products and not only those of one company.

The potential FSP will need to ensure they have a compliance officer and I would recommend they investigate some of the companies and associations that provide this service and the systems to ensure they have a compliant FSP.  This does cost but you cannot afford to fall down in this area and you will need guidance and mentoring when setting this business up.

You will then need to find premises and ensure you have the equipment required for a FSP office.

You can then apply for registration with the FSB as a FSP directly, through an association or through your professional body (FPI).