Engagement terms a financial planner puts in writing
What a South African planner's engagement document must set out under the FPI Practice Standards, who signs it, and what the client approves first.
By Achekam · · 5 min read · For Financial services businesses in South Africa
A new client sits down for a first meeting, and within half an hour the planner is asking for policy numbers, payslips and medical aid details. It feels efficient. Yet nothing has been agreed about what the planner will actually do, what it will cost, when the relationship ends or whether the planner may phone the client's pension fund for information.
The Financial Planning Institute of Southern Africa (FPI) Code of Ethics and Practice Standards puts that agreement first. Before the work starts, a member is expected to have the engagement in writing, signed, with the client's authority to gather information and their approval of the costs. This article sets out what that document needs to cover and how to get it signed and filed properly.
Practice Standard 1: scope and an exit, signed by both
FPI Practice Standard 1 requires the scope of an engagement, including a process for terminating it, to be set out in writing in a formal document signed by both the member and the client. Rule 1.7 adds that, before providing any professional services, the member informs the client in writing of the terms of engagement and gives the client a copy.
So the engagement document is not a courtesy letter. It needs, at a minimum:
- What is in scope. A full financial plan, a retirement review, risk cover only, investment management under an ongoing mandate? Name it.
- What is out of scope. If the planner will not advise on short-term insurance or complete tax returns, say so.
- How either side can end it. Notice, how outstanding work is handled, and what happens to fees already charged.
- Both signatures. The member's and the client's.
- A copy for the client. Keep evidence that the client received it.
Authority before you contact anyone else
Planning work depends on information held by others: product providers, employers, retirement funds, medical schemes. FPI Practice Standard 2 requires the client's written authorisation before the member gathers the client's information from third parties.
Many practices build this authority into the engagement document itself, with a schedule listing the kinds of institution the planner may approach. Whichever way you do it, the authorisation should be signed before the first request goes out, and a copy should be available to send to an institution that asks for proof.
A quotation the client approves in writing
Practice Standard 3 requires the member to give the client a written quotation or cost estimate covering the cost of the member's own services and the costs likely to be associated with particular services or products, and to obtain the client's written approval of it.
That second part is easy to overlook. A quotation that covers only the planner's advice fee, without the platform fees, fund charges or initial costs that will follow from implementing the plan, gives the client half the picture. Put both in the estimate and have the client sign it. How fees and commission themselves must be explained is covered in disclosing fees and commission to planning clients.
Ongoing mandates and the annual review
Many engagements do not end when the plan is delivered. Where the planner is retained to monitor investments or cover over time, the FPI Code's guidance on diligence says members with an ongoing mandate proactively, and at least annually, address the changing needs of all their clients.
Write that review into the engagement terms: when it will happen, what it covers, and what the client must tell the planner in between (a new job, a divorce, a birth, a move abroad). That turns a general duty into something both sides can check. It also gives substance to the Code's central requirement that members put clients' interests first, because a mandate that charges every month but never reviews the client's situation is hard to reconcile with that principle.
The FPI's own text, including all of the Practice Standards referred to here, is published as the FPI Code of Ethics and Professional Responsibility.
Getting the documents signed and filed in Achekam
A planning business can send its engagement document, the third-party authorisation and the quotation for electronic signature from Achekam. The documents can be uploaded PDFs, composed from text blocks with merge fields, or built from a saved template, which suits a practice that wants every engagement to start from the same approved wording.
A few details matter for this use:
- Signing order. Signers can sign in order or all at once. For an engagement letter, set the client to sign first and the member second, so the practice signs only once the client has accepted the terms.
- Linked to the client. An envelope with a signer from outside the business must be linked to a client or a CRM lead before it is sent, so every signed engagement sits against the right person rather than in a general inbox.
- Expiry and reminders. The envelope can carry an expiry and reminders, so an unsigned engagement does not drift for weeks while work starts informally.
- Proof of signing. When everyone has signed, Achekam produces the signed PDF with a completion certificate listing each signer's e-mail, the times, IP address and browser, and the document's fingerprint, and files it in the client's "Signed documents" folder.
What a completion certificate records, and how that reads in each country, is set out in what an e-signature certificate records by country. How a stored file can later be shown not to have changed is explained in showing a filed document has not changed.
The signed certificate is also an easy way to meet rule 1.7's copy requirement: send the client the signed PDF and keep a note that you did.
An engagement pack that starts every client the same way
Draft, or update, three templates: the engagement document with scope and termination, the third-party authorisation, and the quotation. Agree the wording with whoever handles compliance in the practice, save them as templates, and use them for every new client from now on. A new client should then reach the information-gathering stage only after all three are signed, and the annual review date should already be in the diary.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
