A reconceptualised perspective of the six-step financial planning process
- Authors: Kinsman, Estonia Jasmine
- Date: 2023-04
- Subjects: Financial planning industry , Affluent consumers
- Language: English
- Type: Doctoral's theses , text
- Identifier: http://hdl.handle.net/10948/60786 , vital:67404
- Description: The globally applied six-step financial planning process which is used by CFP® professionals to provide financial advice is designed to ensure that the financial advice is suitable, based on the needs of the consumer. However, given the diverse cultures in South Africa, this study argues that the six-step financial planning process (as it is currently applied) may not be suitable, as it requires contextualisation based on the unique needs of South African consumers. The various population groups in South Africa have their own sets of beliefs, values and cultural practices, and thus view aspects such as wealth (the creation, preservation and transference thereof), marriage, death and retirement, differently. Thus, financial planners who are not knowledgeable about different cultures, diverse financial needs, or the provisions of customary law, may not be able to provide suitable advice. The primary objective of the study is thus to reconceptualise the six-step financial planning process to be more inclusive, in order to better serve the financial planning needs of South African consumers. A comprehensive literature review was undertaken to provide the context and framework within which the reconceptualisation of the six-step financial planning process could be approached. An investigation of the financial planning environment and the financial planning process was completed to determine how the six-step financial planning process is currently applied in the South African context. Further, an investigation of culture and the cultural dimensions – power distance, uncertainty avoidance, individualism, masculinity, timeorientation and indulgence – was conducted, as it was clear that these cultural dimensions cannot be generalised to all South African consumers, due to the large degree of diversity within the population. It was also determined that there are various factors that contribute towards the cultural diversity of South African consumers, which may influence their financial needs and the type of financial advice that is required. These factors include race and ethnicity, marital regimes, procreation and family structures. To further illustrate the diversity of financial needs of South African consumers, a discussion of Black households and the application of financial planning legislation and customary law was provided. Black households are considered to be under-serviced, historically financially excluded, have low levels of financial literacy, and are mostly collectivist in nature. It is for these reasons that Black households are the focus of the study. Some of the financial needs that vi are common among Black households include land and property ownership, family wealth, family homesteads, lobola capital and ‘black tax’ expenditure. Given that the literature review established how the six-step financial planning process is currently applied, an interpretivist research philosophy was adopted in order to gain a deeper understanding of how the six-step financial planning process should be applied in a South African context. Further, the research approach in the context of this study is an inductive one, as the six-step financial planning process is an existing theory that was reconceptualised by considering the perceptions and experiences of 16 CFP® professionals and 14 Black South African households. A mono-method qualitative research methodology was used, with a single qualitative method of data collection (semi-structured interviews), and a single qualitative method of data analysis (latent content analysis). The findings of the study were used to provide a reconceptualised perspective of the six-step financial planning process which takes into consideration the fact that the image of a financial planner plays an important role when trying to establish a professional relationship with a client. The findings reveal that Black consumers in particular, generally have a negative image of a financial planner, which is influenced not only by their perceptions of a financial planner, but also by their self-perception of their own financial situation. The reconceptualised perspective of the six-step financial planning process also incorporates the finding that discussions around personal finances are considered impolite and taboo among the Black African community, which influences their ability to talk about these topics, trust a financial planner, and establish a professional relationship with them. The findings also reveal that a racial and gender bias exists among Black consumers – they prefer interacting with a White male financial planner, as they perceive them to be more competent and have more experience with finances and wealth accumulation. It was also found that CFP® professionals believe that having cultural awareness and cultural intelligence can reduce bias in the way that questions are asked, so as not to offend the client. Thus, cultural awareness was also incorporated into the reconceptualised perspective of the six-step financial planning process. It was also noted that it is important to ascertain clients’ level of financial literacy during the information gathering stage. Black consumers opined that in this regard, it is the role of the financial planner to both ascertain and ensure their clients’ financial literacy, and to offer financial education to ensure client understanding. vii Although the premise of the study is that South African consumers have unique financial needs due to the high degree of diversity among the population, it was the opinion of CFP® professionals that Black consumers, in particular, do not have unique financial needs – instead, they define their needs differently, have different exposures to financial resources to address their financial needs, and also prioritise and satisfy their needs differently. The prioritised financial needs of Black households (sub-themes) that emerged from both participant groups include the need to make provision for black tax, estate planning, funerals, and property ownership. Black household participants mentioned (to a greater extent than CFP® professionals did) the need to make provision for lobola and initiation schools, as these form part of several traditional ceremonies. The need to make provision for a family home was mentioned by Black household participants but not by CFP® professionals. It was discovered from Black household participants that stokvels are the most common micro-finance tool used by Black consumers, for various reasons. In fact for some, stokvels are preferred over formal financial products because they perceive that they yield a higher return, and others use them successfully to supplement their current provisions. These findings (among others) were incorporated into the reconceptualised perspective of the six-step financial planning process which is presented in this study. This study has made a contribution to the financial planning body of knowledge by presenting a reconceptualised perspective of the six-step financial planning process, and providing new knowledge on each of the associated six steps and their suitability in a South African context. This study also provides justification and evidence for the inclusion of aspects within the sixstep financial planning process that enhance the understanding of cultural diversity and needs of Black households in particular. Justification has also been provided for the inclusion of cultural aspects and diverse needs of Black consumers the in the academic curriculum of FPI and FSCA recognised qualifications, as well as the facilitation and learning outcomes of business and product-specific training that FSPs are required to provide to their representatives. The study findings also have implications for the development of the academic curriculum and assessment materials for CFP® professionals by recognised education providers, the FSCA regulatory examination, and the FPI professional competency examination. In addition, the study has provided evidence for the need to develop financial products, or customise existing financial products, that address the viii needs of Black households – especially culture-specific financial needs such as black tax, lobola and funding for initiation schools. Key words: Black households; CFP® professionals; culture; diverse needs; reconceptualisation; six-step financial planning process. , Thesis (MSc) -- Faculty of Science, School of Environmental Sciences, 2022
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- Date Issued: 2023-04
Credit risk management impact on loan performance in development finance institutions in South Africa
- Authors: Lekhelebana, Letlatsa George
- Date: 2022-04
- Subjects: Development finance institutions , Credit -- Management -- South Africa
- Language: English
- Type: Doctoral's theses , text
- Identifier: http://hdl.handle.net/10948/57698 , vital:58217
- Description: Development Finance Institutions ( play an important role in being a catalyst for economic development and growth where they operate. TUHF Group operates as a niche commercial property D FI funding entrepreneurs that seek to bring to market properties that deliver multi let housing units. This also deals with the pro blem of the lack of housing that South Africa has. For DFIs to operate optimally and be financially sustainable , they need to source funding from either shareholders or the financial markets. Financial markets require that the DFIs operate in a profitable manner to qualify for funding and this is also driven by the way the DFI manages the loan book’s integrity. This study examines the relationship between credit risk management policy, processes and procedures in practice and the TUHF Group and their impa ct on the performance of the loan book. In order that the research aim and objectives are fulfilled, and the research question answered, the study undertook an extensive review of existing literature on DFIs, the impact on economic development and growt h, the impact of badly performing loan books on the performance of companies and how this is impacted on by credit management structures, policies and procedures. An empirical study was conducted through the collection of primary data from the internal doc uments at TUHF Group and among some of the staff members at TUHF through a structured interviews based on open ended questions. The research revealed that there is indeed a link between the credit risk management processes and procedures at TUHF and the performance of the loan book, the findings indicated that the current policy and procedures is not sufficient for a well performing loan book and the pr imary data showed worsening performance of the loan book over time. These findings further indicate a requirement for TUHF to improve the credit policies and architecture for a sustainable financial performance in future. , Thesis (MA) -- Faculty of Business and Economic science, 2022
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- Date Issued: 2022-04
Human capital of financial planners and value creation in South African financial planning businesses
- Authors: Palframan, Jaqueline birgitta
- Date: 2022-04
- Subjects: Human capital -- South Africa , Corporations--Finance
- Language: English
- Type: Doctoral's theses , text
- Identifier: http://hdl.handle.net/10948/58123 , vital:58582
- Description: Improved healthcare enables people to live longer and thus spend more time in retirement than ever before. In addition, South Africans have a low propensity to save and invest, resulting in the danger of them living longer than their finances permit. The financial planning industry is also experiencing the technological automation of many transactional services, which could make the “traditional” role of financial planners redundant. Furthermore, financial planning businesses are prone to failure, especially during the start-up phase. As such, appropriate business management strategies, especially those relating to human capital, are critical to facilitate the effective development of financial planning businesses and which will enable financial planners to better engage with existing and new clients, resulting in creating more value creation for their financial planning businesses and benefitting the South African economy at large. It is a well-known fact that people who engage with a financial planner report better outcomes in terms of financial and general well-being than those who approach financial planning with a “do-it-yourself” mindset, which further emphasises why the longevity of financial planning businesses in South Africa is important. To date, however, limited academic research has been conducted on the influence of financial planners’ human capital on value creation in their financial planning businesses. Furthermore, although research in the financial planning field is growing, previous research has mostly focused on areas pertaining to financial advice, the financial planning process and products used in financial planning, rather than on the creation of profitable businesses or on how to create value within these businesses. Against this background, the primary objective of this study is to investigate the influence of selected Human capitals of financial planners on value creation in South African financial planning businesses. More specifically, the study investigates the influence of the independent variables of Social capital (measured individually in terms of its sub-categories, Relational social capital, Network social capital and Cognitive social capital), Entrepreneurial capital and Psychological capital on the dependent variables (Perceived financial value creation and Perceived non-financial value creation). v Based on the primary objective and research questions of the study, as well as the assumptions of the researcher, this study was positioned in the positivistic research paradigm and a deductive approach to theory development was adopted. The purpose of the study was explanatory, and a mono-method, quantitative methodological approach was selected. A survey strategy using a cross-sectional approach was undertaken and a measuring instrument in the form of an online questionnaire was developed to gather the data required. After undertaking a pilot study, the electronic link to the covering letter and online questionnaire was sent to potential respondents identified through the convenience and snowball sampling techniques. The data collection yielded 360 usable responses from South African financial planners on which to undertake the statistical analysis. Data analysis ensued to investigate the hypothesised relationships between the independent and dependent variables. A confirmatory factor analysis (CFA) was performed on each of the factors that made up the measurement models. These CFAs were compared to the various goodness-of-fit indices and then validity and reliability assessments of the factors were conducted to confirm the suitability of the measuring instrument. Thereafter, Cronbach’s alpha coefficients, average variance extracted (AVE) estimates and squared correlations between the constructs were reported. The hypothesised model was confirmed based on these analyses. Descriptive statistics and correlation results on the dependent and independent variables were then reported. Structural equation modelling (SEM) was used as the statistical technique to test the significance of the hypothesised direct and moderating relationships. The results confirmed a direct, significant relationship between all the independent variables, namely, Social capital (measured individually in terms of its sub-categories, Relational social capital, Network social capital and Cognitive social capital), Entrepreneurial capital and Psychological capital, and the dependent variables (Perceived financial value creation and Perceived non-financial value creation). Regarding the hypothesised moderating influence of Social capital on the relationships between the independent variables Entrepreneurial capital and Psychological capital, and the dependent variables, it was found that only Relational social capital and Network social capital moderated the relationship between Psychological capital and Perceived financial value creation. vi This study has contributed to the body of knowledge of financial planning in general, as well as how the human capital of financial planners influences both financial and non-financial value creation in financial planning businesses. Practical recommendations were made that could enhance financial planners’ value creation in financial planning businesses, which, in turn, would influence the sustainability of these important businesses. , Thesis (PhD) -- Faculty of Business and Economic science, 2022
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- Date Issued: 2022-04
Re-industrialisation of the Nelson Mandela Metropole regional economy
- Authors: Sipuka, Msingathi
- Date: 2022-04
- Subjects: Economic growth , Economic development -- Nelson Mandela
- Language: English
- Type: Doctoral's theses , text
- Identifier: http://hdl.handle.net/10948/58190 , vital:58675
- Description: The main assumption underlying this study is that structural change brings about growth and in turn translates to poverty reduction through the expansion of labour absorbing economic sectors and employment in higher productivity non-primary sectors. Since labour productivity in non-primary sectors is higher, the large-scale migration of labour out of primary activity should raise labour incomes and result in poverty reducing growth. Economic growth driven by structural change in income and employment should therefore aid and promote poverty reduction. Notwithstanding the important role of the national sphere of government in setting the industrial policy framework in the country, this research places emphasis on the role and contribution of regional economies in translating active industrial policy into implementation and development results. In South Africa the rise in poverty can be partially attributed to an economy that is not growing at the required rates needed to, among others, create the necessary employment opportunities at scale. The ability to adequately respond to these national development challenges depends on key economic regions in the country unlocking growth in several economic sectors, in particular the manufacturing sector which is described as labour-intensive and with a high multiplier effect on the economy. To this end, the capacity of regional governments working with regional stakeholders to plan, coordinate, implement and provide oversight over integrated regional industrialisation strategies and implementation plans becomes pivotal. Equally, the Nelson Mandela Metropole, which is the geographic area of focus for this study, has identified and prioritised the growth of the manufacturing sector as one of its economic priorities, reflecting its ambition of driving a programme of re-industrialisation and positioning the region as one of the country’s industrial centres. The main proposition of this study is that the Nelson Mandela Metropole, like other regional economies in the country, is not able to drive the programme of re-industrialisation. The reason for this inability is that it does not have a coherent framework of levers that are at the disposal of regional governments and regional stakeholders to design and implement a programme of re-industrialisation within the ii context of a globalised economy but that takes into consideration national peculiarities of the manufacturing sector. The fact that the regions do not have an integrated regional implementation plan for reviving the manufacturing sector creates an eco-system where there is limited coordination of the actions of different role players, in turn limiting collaboration within the region. The research has identified a gap in the literature between the two areas that impact on this study, namely, industrial development and regional economic development. The study navigates the literature across these two areas to emerge with a synthesised framework of strategic enablers for industrialisation at a regional level. These strategic enablers can be used by regional governments to develop an integrated regional framework to drive the industrialisation programme at this level. With specific reference to the Nelson Mandela Metropole, the study used a mixed methods research approach to assess regional actors’ views on the strategic enablers identified through the literature. A survey was employed to extract data from manufacturing enterprises in the region on the perceived constraints to the growth of the manufacturing sector. The quantitative data were complemented by qualitative data collected through semi-structured interviews with key regional informants. The results of the study reveal some of the general weaknesses that confront the region as it pursues regional industrialisation. Importantly, the study uses the identified regional strategic enablers to develop a framework that can be used by regional actors to design an implementation plan. , Thesis (PhD) -- Faculty of Business and Economic science, 2022
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- Date Issued: 2022-04