In terms of the FAIS Act, all financial services providers (FSPs) must submit their financials within four months of their year-end. Most independent financial advisors (IFAs) have February year-ends and must therefore submit these by the end of June each year. Many FSPs find it challenging to submit their financials within the time frame because there are often practical constraints that make it difficult, e.g.:
- Tax certificates are often received from providers late in May or even towards the end of June. This is beyond the control of the FSP.
- Many FSPs (probably the majority) outsource the completion of their financials and find it challenging to get these finalised through their accountants/auditors within the four-month period. It becomes even more challenging if FSPs, through no fault of their own, can only provide the supporting documentation late in the day.
For these and many other reasons, a number of FSPs apply annually for an extension to the four-month (mostly June) date. In the majority of cases this extension is granted and there has never been a cost to such an application – therefore it was not a big deal.
R550 fee for extension
This year, for the first time there is a R550 fee payable when applying for an extension (published in Government Gazette Notice 38597). We have not seen an explanation or reason for the fee and we question the need for the fee and the quantum.
We have had a number of brokers raise the issue about the fee and the four-month time frame. We share the concerns.
What have we done?
We have formally asked the Financial Services Board (FSB) to consider;
- waiving or reducing the R550 fee, and
- extending the four-month time frame for the submission of financials.
The FSB has formally responded and have undertaken to give it due consideration and respond as soon as possible. We will keep brokers informed.