Curriculum: Advanced Postgraduate Diploma in Specialized Fields of Financial Planning 2016

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1 1 Curriculum: Advanced Postgraduate Diploma in Specialized Fields of Financial Planning 2016 The Centre for Financial Planning Law (CFPL) takes every measure to ensure that the information provided in this document is correct and up to date. The CFPL however reserves the right to change information contained herein as prescribed by the University of the Free State or due to unforeseen circumstances.

2 2 Curriculum A candidate can choose one of the following specialised fields: Investment Planning Consists of the modules FBR 806/LFPA5800 Asset types and Investment Planning and FBR 807/LFPF5800 Principles of Portfolio Planning and Management Employee Benefits (Consists of the modules FBR 801/LFPG5800 Fund Governance and Maintenance and FBR 802/LFPD5800 Fund Design and Financing) Estate Planning (Consists of the modules FBR 808/LFPB5800 Estate Planning and your choice between FBR 803/LFPR5800 Personal Financial Risk Management and FBR 806/LFPA5800 Asset types and Investment Planning) Personal Financial Risk Management (Consists of the modules FBR 803/LFPR5800 Personal Financial Risk Management and your choice between FBR 808/LFPB5800 Estate Planning and FBR 806/LFPA5800 Asset types and Investment Planning)

3 3 LFPG5800 (FBR 801) EMPLOYEE BENEFITS: FUND GOVERNANCE AND MAINTENANCE MODULE OUTCOMES: Students will know, understand and apply all concepts relating to registered retirement fund vehicles (and ancillary benefit structures) and fully understand the roles and responsibilities of trustees, service providers and regulatory bodies in the industry. Students will be equipped to provide holistic employee benefits advice with regard to registered and approved retirement funds through thorough knowledge and understanding of both the legal and practical governance and maintenance requirement for all types of funds and schemes. Students will know the authority, administration, rules, registration, approval, board, officers, fund indemnity, investment manager, other service providers, risk benefits and communication of a retirement fund. LEARNING OUTCOMES: By the end of this module learners must be able to: i) Define and analyze the concept of Fund Governance and Maintenance and the Regulatory Landscape with specific reference to Governance provisions for funds and Trustees and governance provisions for service providers. ii) Explain the different types of funds, the legislation that approves and recognises these funds and the classification of funds by the administrator. iii) Discuss all the elements and requirements regarding maintenance and compliance of a retirement fund. iv) Apply the theoretical and practical knowledge obtained to the establishment, maintenance and compliance of Retirements funds and employee benefit schemes governed by legislation other than the Pension Fund Act and certain specialist funds. v) Differentiate between the types of group Schemes vi) Apply knowledge to practical case study regarding employment benefits. : Prescribed Handbook: Marx GL & Hanekom K; The Manual on South African Retirement Funds and other Employee Benefits, Volume Edition, Lexis Nexis [Manual]. Prescribed Reading: 1. FSB Pension Fund Circulars and Practice Notes 2. SARS Retirement Fund Circulars, Practice Notes and General Notes 3. Applicable Legislation, including Regulations, Directives and Board Notices 4. Applicable Pension Funds Adjudicator determinations and case law The prescribed material should not be considered all-encompassing of the field of fund governance and maintenance. However, it will cover the most relevant legislative provisions including Acts of Parliament, Government Notices, regulatory and information circulars. In addition to the prescribed material, students are expected to conduct their own research and to read widely in order to remain abreast of developments in the industry.

4 4 LFPD5800 (FBR 802) EMPLOYEE BENEFITS: FUND DESIGN AND FINANCE MODULE OUTCOMES: Students will have sufficient knowledge to provide advice on the structure of retirement fund arrangements taking into account cost, practicality, efficiency as well as the trustee s fiduciary duties. Students will have in-depth knowledge of the legal and governance aspects of designing and setting up a new fund, revising the structure of an existing fund, and of the relevant factors and how these interrelate and impact on each other. LEARNING OUTCOMES: Explain and apply relevant legislation and the principle of ethics in the Employee Benefits industry To understand and apply all the legislative and industry specific requirements to effectively draft all documentation relevant to the Employee Benefits industry. Demonstrate an advanced understanding of the theoretical framework, key concepts and core legal rules and principles of all areas of the Employee Benefits industry. Apply the theoretical legal knowledge and skills to practical administration processes. Critically analyze a situation and to apply the theoretical knowledge to provide effective solutions. Prescribed textbook The Manual on South African Retirement Funds and other Employee Benefits, George L Marx and Kobus Hanekom; Volume 1 Lexis Nexis. This textbook is available in printed or online form through Lexis Nexis. Volume 2 will be available on the blackboard. Students are also advised to subscribe to a pension legislation service. Students should obtain the textbook as soon as possible in order to successfully complete the first assignment for this course. The online version through Lexis Nexis includes updates during the course of the year and includes a subscription to the Lexis Nexis Pension Legislation Service.

5 5 LFPR5800 (FBR 803) PERSONAL RISK MANAGEMENT MODULE OUTCOMES Students must be able to apply a risk-based approach to distinguish between different levels of risk. They will be able to use a methodology in identifying, evaluating and selecting appropriate risk handling methods to mitigate risks. Students will be proficient in applying the principles and methodology of personal risk management. Students will be able to differentiate between the creation and preservation of wealth. Students will understand the legal and regulatory environment pertaining to risk management. LEARNING OUTCOMES By the end of this module students will be able to: Provide and distinguish practical examples to prove understanding of the theory of risk management, insurance and investment principles Apply elementary financial mathematics to identify risks and to provide adequate solutions; Identify and evaluate personal risks and the methods for the creation and protection of wealth; Apply the fundamentals of all taxes affecting individuals and handling tax risks; Evaluate the private insurance options available; Compare the available savings and investment vehicles; Devise risk control, self-financing and insurance plans for personal risks; Apply the South African common law, legislation and self-regulatory requirements to risk management and planning. Identify all personal risks a client case faces and provide adequate solutions Integrated knowledge: i) South African law and regulatory requirements ii) Understanding the impact of other related legislation on personal risk management iii) Creation and protection of wealth iv) Personal risk management v) Financial mathematics vi) Principles of different types of insurance vii) Handling tax risks,i.e. Income Tax, Estate Duty, Capital Gains Tax, and Donations Tax viii) Legislation and financial planning techniques relevant to wealth creation ix) Application of the South African common law, legislation and self-regulatory requirement to risk planning. Prescribed Handbook: BOTHA M et al., The South African Financial Planning Handbook.South Africa: Lexis Nexis. (Students must obtain the latest updated version, i.e. the 2015 edition. MEYER EG Notes on Estate and Financial Plans Meyer on Case Studies. 3 rd ed (AM Publications Port Elizabeth 2015) (Students must obtain the latest updated version

6 6 LFPA5800 (FBR 806) ASSET TYPES AND INVESTMENT PLANNING MODULE OUTCOMES: The student must be able to identify financial markets and investment instruments relevant in the current economic climates. Students must be able to understand the workings of the stock market and to compare, identify and differentiate between the different investment instruments available. The main objective of this module is to be able to understand the nature of each of the main asset types and the working of the investment instruments through which exposure to these asset types can be obtained. This main objective is to be obtained through the following unit or topic study objectives: LEARNING OUTCOMES: By the end of this module students will be able to: Differentiate between the nature and mechanics of the different financial market as well as the different instruments through which exposure to these markets can be obtained. Calculate and analyze basic financial calculations with relevance to investment instruments. Provide advice, as demonstration of an advanced understanding, to clients regarding various hard assets that could be held as investments. Analyze and interpret the nature and mechanics of the foreign exchange market, exchange rate risk, exchange control regulations as well as the different products through which rand hedging may be achieved. Analyze and apply calculations regarding the foreign exchange market and the different opportunities available as well as a good understanding of collective investments schemes. Apply knowledge of unit trust fund, unit price calculations, recent developments such as linked products, fund of funds, wrap funds, multi manager funds, structured funds and hedge funds. Analyze and interpret of Financial Statements of Companies. Apply the theory to a practical case study regarding assets and investment instruments. Integrated knowledge: i) Financial markets. ii) Basic financial calculations with relevance to investment instruments iii) Calculations regarding the Foreign exchange market and the different opportunities available as well as a good understanding of collective investments schemes iv) Financial instruments. v) Analysis and interpretation of Financial Statements vi) Legal comparative study regarding assets and investment instruments. Prescribed Handbook: Understanding South African financial markets C van Zyl, Ziets Botha, Peter Skerritt, Ingrid Goodspeed 5 th edition Van schaik publishers(available on Kalahari/Takealot)

7 7 LFPF5800 (FBR 807) PRINCIPLES OF PORTFOLIO PLANNING AND MANAGEMENT MODULE OUTCOMES The student must be able to differentiate between the two main objectives that distinguish investment portfolios income generation and capital growth. Students must be able to develop an investment strategy that will incorporate the investment objective with personal circumstances. Student must be able to identify investment solutions that will minimize risk and maximize return. The main objective of this module is to give the student an understanding of the philosophy underlying modern theory regarding construction and management of a balanced investment portfolio in order for him to formulate an approach based on sound principles and with which he or she feels comfortable. LEARNING OUTCOMES By the end of this module learners must be able to: Understand the synergy between investment management and the economy. Discuss the structure of Investment portfolios. Do a comparative study regarding different fund management approaches. Explain and discuss what a portfolio of investment is and risk and return principles of investments. Explain the different asset classes available to investors and the concept of international diversification. Determine and interpret the standard deviation of an investment and the expected return on a portfolio. Discuss the various sectors of the economy and their influence on the financial markets as well as the inflation and its link with the financial markets. Define and explain the economic fundamentals and their influence on investment markets. Illustrate the reports that an investor should receive from a portfolio manager. Discuss the controls and procedures that should be instituted internally by a portfolio manager to mitigate investment risks. Apply the fundamentals of the investment strategies to a portfolio and certain techniques used in a fund management environment

8 8 Integrated knowledge: i) Investment management and the economy. ii) Comparative study regarding fund management. iii) Explain and discuss what a portfolio of investment is and risk and return principles of investments. iv) Explain the different asset classes available to investors and the concept of international diversification. v) Discuss the various sectors of the economy and their influence on the financial markets as well as the inflation and its link with the financial markets. vi) Define and explain the economic fundamentals and their influence on investment markets. vii) Illustrate the reports that an investor should receive from a portfolio manager. viii) Discuss the controls and procedures that should be instituted internally by a portfolio manager to mitigate investment risks. ix) Apply the fundamentals of the investment strategies to a portfolio and certain techniques used in a fund management environment. Prescribed Handbook: Investment Management by Johan Marx, Raphael Mpofu and Gerhard van de Venter (LATEST EDITION), published by Van Schaik Publishers; and Understanding South African Financial Markets by Cecilia van Zyl, Ziets Botha, Peter Skerrit and Ingrid Goodspeed (LATEST EDITION), published by Van Schaik Publishers Obtainable from most academic book shops, or

9 9 FLPB5800 (FBR 808) ESTATE PLANNING MODULE OUTCOMES The student must be able to apply legal and tax solutions in the areas of succession and estate planning. Students will be able to explain, understand and apply the objectives of estate planning and the estate planning process. Students will understand that estate planning is a holistic study with many varying but interlinking components and that all of these components must be considered and addressed to produce an effective and practical estate plan. LEARING OUTCOMES By the end of this module students will be able to: Critically analyse and interpret information by using all applicable calculations and applying relevant legislation to address estate-planning problems and to produce evidence-based solutions. Evaluate the needs of a client in terms of the accumulation, conservation, and ultimate distribution of assets forming part of the estate. Design the appropriate structure(s) to facilitate the needs that will be identified. Demonstrate a clear understanding of the application and the principles of The Matrimonial Property Act by performing all relevant calculations. Interpret all the elements of the Wills Act and apply this to the process of analyzing and drafting the different clauses of a will. Apply the different Business Entities and their relevance for Estate Planning. Discuss and apply different taxation and investment principles with regard to estate planning Discuss and apply elements of the law and the taxation of trusts and apply this by way of theorydriven arguments to the estate planning process. Integrated knowledge: i) Relevant legislation e.g. Estate Duty Act, Income Tax Act, Wills Act. ii) Estate Planning Calculations. iii) Matrimonial property regimes. iv) Law and Taxation of trust. v) Administration of Estates. vi) Business Entities. vii) Taxation principles with regards to estate planning. viii) Investment principles with regards to state planning. ix) Comparative study regarding Estate Planning. Prescribed Handbooks: Estate Planning, Davis, Beneke, and Jooste, LexisNexis Butterworths, Durban. Service Issue 40 March 2014 (Primary textbook). Wills and Trusts, Pace and Van der Westhuizen, LexisNexis Butterworths, Durban October 2013 Service Issue 17. Study only the sections referred to. Comprehensive Guide to Capital Gains Tax SARS website Issue 4 - Latest Copy Available ( CGT Guide ). Study only the sections referred to in the study guide.