Insurance and Investment Sales Persons are regulated under the Financial Advisory and Intermediary Services (FAIS) Act. In terms of this law, such persons must be authorised as Representatives and must meet legal requirements.
The most relevant of these requirements for a person wanting to become an Insurance or Investment Sales Person, or for someone already employed in such a position, is the Academic Requirements.
The academic requirements are:
• Matric (NQF Level 4)
A Matric certificate is the minimum academic requirement to be appointed as a Representative under supervision. Without a Matric qualification, a person cannot legally be appointed as a Representative and therefore cannot sell or service financial products on behalf of a Financial Services Provider (FSP).
• Product-Specific Training
Product-specific training provides you with the knowledge required to understand the products you will be selling or servicing. The training ensures that you are familiar with the features, benefits, risks, limitations, and appropriate use of the products offered by your employer.
• Class of Business Training
Class of Business training focuses on the broader category of financial products rather than individual products. It provides an understanding of the market, legislation, product structures, risks, and industry principles applicable to the class of business in which you operate.
• Regulatory Examination (RE5)
The RE5 examination tests your knowledge and understanding of the FAIS Act and other legislation that governs the financial services industry. It assesses whether you have the regulatory knowledge required to perform your duties as a Representative and provide services in a compliant manner.
• Recognised Qualification
Representatives are required to obtain a recognised qualification relevant to their role within the prescribed regulatory timeframes. The qualification provides the technical and theoretical knowledge necessary to support long-term competence in the financial services industry.
What Does Working Under Supervision Mean?
The FAIS Act allows individuals who have not yet met all the academic requirements to work as Representatives under supervision.
Working under supervision means that you may perform the duties of a Representative while being monitored and guided by a qualified supervisor appointed by the FSP. The supervisor is responsible for ensuring that your work complies with legal and regulatory requirements and that you receive the support needed to develop the required competence.
This arrangement allows new Representatives to gain practical industry experience while completing outstanding requirements such as the RE5 examination and recognised qualification.
Why Is the RE5 Examination So Important?
The RE5 examination is one of the most important requirements for Representatives because it demonstrates regulatory competence.
For individuals already employed in the industry, passing the RE5 examination is often essential to remain in their position and continue progressing in their careers. Failure to meet the RE5 requirement within the prescribed timeframe may affect a person’s ability to continue acting as a Representative.
For those seeking employment in the financial services industry, having already passed the RE5 examination can significantly improve employability. Many employers prefer candidates who have completed the examination because it reduces training requirements and demonstrates commitment to the profession.
The RE5 examination also equips Representatives with the regulatory knowledge needed to understand their responsibilities, comply with legislation, and provide better service to buyers. A sound understanding of the FAIS Act and related legislation helps Representatives avoid compliance breaches and build a successful career in the financial services industry.