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Investment Indicators - 11 September 2017 |
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Paul Kruger
Author/Editor |
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In the end, we will remember not the words of our enemies, but the silence
of our friends – Martin Luther King Jnr |
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Distributed to 48,630 subscribers.
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11-15 September is National Wills Week
The latest figures released by the Master of the High Court reveal that
more than 70% of the South African working population do not have
wills.
This ‘Wills Week’ 11-15 September, GTC’s Fiduciary Services team
invites you to consider setting up a formal partnership with us in order
to offer your clients contemporary and tax-savvy advice in drawing up
their wills and estate plans, to ensure that their testamentary wishes
are carried out and that their fiduciary responsibilities are honoured.
Through a working relationship with GTC Fiduciary Services, you can
assist your clients with the drafting of wills, estate administration,
setting up of trusts, trust administration and taking on professional
trusteeships, along with dedicated estate planning solutions.
For a one-on-one meeting to discuss a partnership with us, please
contact Jeremy Woods: jwoods@gtc.co.za.
t. +27 (0) 10 597 6858
e. info@gtc.co.za
w.
www.gtc.co.za
An authorised Financial Services Provider FSP no. 731. |
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| Rates Review |
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1. Secured Investment Rates |
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Please note that (G) indicates a Guaranteed and (L) a Linked product. In order to understand the difference between guaranteed and linked rates,
kindly click here for an explanation. |
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Company |
This Week |
Last Week |
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1Life (L) |
6.490% |
6.630% |
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2 |
Absa (L) |
6.111% |
6.202% |
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3 |
Assupol (G) |
5.940% |
6.040% |
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Company |
This Week |
Last Week |
| 1 |
1Life (L) |
6.490% |
6.630% |
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2 |
Assupol (G) |
6.370% |
6.470% |
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3 |
Discovery (G) |
6.175% |
6.310% |
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2. Money Market Funds |
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Please bear in mind that our figures, though based on the actual quotations that you also use, are for information purposes only,
and can never replace the official quotation from the product house. In terms of the guarantees, you are requested
to clarify the exact extent of such guarantees with the product house prior to advising clients. |
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From the Crow's Nest |
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Do you offer financial advice or coaching?
by
Patrick Cairns |
Every financial adviser should be familiar with the statistics: Only
5% or so of South Africans will retire comfortably. In total, South
African consumers owe R1.6 trillion in debt. There are 20 million
active credit users in the country and around 60% of those are
impaired.
The question is: Where does this leave advisers?
If they only offer their services to those who are debt free and
have attractive pots of assets, they are fighting over a very small
pool of potential clients. If they widen the net, however, how do
they effectively deal with the immediate financial realities people
face while also managing their future requirements?
Speaking at a recent Momentum Consult event, CFP® Nigel Willmott
argued that these conflicts have to be recognised in the financial
planning process.
“These clients may be three to four months in arrears on their debt,
but we want to talk about retirement provision and risk cover,” he
noted. “If they can't even get through today they are not going to
be very receptive to what we think they need to do in 30 years’
time.”
Nobody can solve a client's debt problem by selling them a product.
The solution therefore necessitates a different kind of approach.
Particularly in a post-RDR environment, advice practices will have
to engage with clients in new ways.
Willmott suggested that financial coaching will need to play a
bigger role. This is a process that does not just look to solve a
particular problem or meet a specific future need, but focuses on
changing client behaviour over the long term.
“It is relationship-based, one-on-one, and client led,” said
Willmott. “Often we as financial planners tend to tell people what
they need more than actually listen to what they are asking. We lead
the conversation because we think we know what's best for the
client. But with financial coaching you need to let the client do
the talking, and you do the listening.”
A coaching engagement might take place over anything from three to
24 months, but it always starts with the client setting the goals.
Do they want to get rid of debt, take greater control of their
spending, increase their rate of saving? These are not things that
can be achieved overnight, which is why a simple, single meeting
will never be enough. They involve a process through which the
financial coach supports the client towards the desired outcome.
Importantly, not all financial advisers will necessarily be good
financial coaches, but that shouldn't prevent them from offering the
service. Financial coaching is not a regulated activity and could
therefore also be conducted by evaluated and approved life coaches,
psychologists or counsellors.
Right through this process, however, the financial adviser should
always be at hand.
“As the coach works with the client though their life goals, there
will be certain points where they will need a solution,” explained
Willmott. “There will need to be advice. In other words, by going
through a client-led coaching process you will create certain
business opportunities where needs will have to be met with a
practical solution.”
Not only does financial coaching naturally lead to these
opportunities for an adviser, but it also results in better clients.
“The biggest threat to any financial planning is your client's
behaviour,” said Willmott. “And with coaching you find that goals
become more attainable and measurable. Clients gain more confidence
through seeing their financial achievements. Their financial
knowledge improves and they become more engaged. Ultimately they
become better buyers and more sustainable clients with improved
lapse rates because they are more in control of their money.”
I could not help but picture some of the real old-timers in the
industry who are still practicing today. Many of those have delayed
a well-deserved retirement, not due to bad personal financial
planning, but because of the obligation they feel towards their
clients, whom they have coached for many years on so much more than
money matters – editor). |
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| Your Practice Made Perfect |
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Retirement Funds Default Regulations |
The latest ASISA Dispatches comments as follows:
The final regulations were issued by the Minister of Finance on 25 August 2017. The effective date is 1 September 2017 with 18 months being
afforded for existing default arrangements to comply.
Unfortunately, the regulations failed to provide a lead-in period for
existing funds that do not currently have default arrangements. ASISA
raised this with National Treasury and the Financial Services Board
(FSB) and in response the Registrar of Pension Funds issued an exemption
for funds registered before 1 March 2018. These funds need to be
compliant by 1 March 2019.
The regulations also refer to a prescribed standard for living annuity
draw-down rates where living annuities are offered as default options. A
working group established under the ASISA Disclosure and Standards
Standing Committee is in the process of developing an ASISA Default
Living Annuity Standard with a view to presenting it to the regulator as
a basis for the “prescribed standard” for default living annuities.
A second working group, also under the ASISA Disclosure and Standards
Standing Committee, has finalised a draft Retirement Savings Cost
Disclosure Standard to address the cost disclosure requirements of the
regulations. The draft Standard adopted similar principles to the ASISA
Retail Standard on Effective Annual Cost (EAC). ASISA members are
proceeding with consumer testing and are hoping to submit a final
version to the ASISA Board for approval by the end of the year.
The working group has also begun work on an individual employee cost
disclosure standard and is making good progress in this regard. |
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Living Annuity Statistics
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The August ASISA Dispatches provided the following information on Living
Annuities.
The 2016 Living Annuities Survey statistics were finalised in August.
The survey showed that living annuity policyholders withdrew on average
6.62% of their capital as income in 2016, which represents a marginal
increase on the 6.44% living annuity drawdown rate recorded for 2015.
In 2016, South Africans had R333.2 billion of their retirement savings
invested in 380 186 living annuities. In 2015, there were 410 898 living
annuities with assets of R331.6 billion.
Commenting on the 2016 Living Annuities Survey, Taryn Hirsch, senior
policy advisor at ASISA, says the small increase in the drawdown rate
came as a pleasant surprise given the steep rise in the cost of living
in South Africa in recent years.
“While we would have preferred to see the drawdown rate continue the
small yet steady downward trend of the past five years, we have to
accept that many pensioners are finding it increasingly difficult to
maintain their standard of living without adjusting their drawdown rates
upward.
“We need to take into consideration that inflation came in at 6.6% for
2016 and the JSE All Share Index returned only 2.6%. Under those
circumstances the small increase is understandable and pensioners and
their advisers need to be commended for tightening the proverbial belt
rather than increasing their drawdown rates substantially.”
Click here to read the full article on the ASISA website. |
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Interesting Licence Information
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FAIS Newsletter 24 contains interesting information on matters
concerning FSB licences.
Lapsing of a licence
Section 11 of the FAIS Act states that:
(1) A licence lapses –
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where the licensee, being a natural person –
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becomes permanently incapable of carrying on any
business due to physical or mental disease or serious
injury;
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is finally sequestrated; or
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dies; |
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where the licensee, being any other person, is finally
liquidated or dissolved; |
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where the business of the licensee has become dormant;
and |
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in any other case, where the licensee voluntarily and
finally surrenders the licence to the Registrar. |
In the case of (d) above, where a FSP wishes to cease doing
business, the FSB has to be informed before 31 August to
avoid being liable for levies for the full year.
In instances where a natural person who is authorised as a FSP is
unable to continue with the business of the FSP, dies or is finally
sequestrated, then the FSP’s licence lapses. The FSP is required to
have procedures in place to notify the Registrar’s office of the
situation. The FSP must also have procedures in place to notify all
clients with unfinished business, and to notify all product
suppliers. The notification to the Registrar must be sent to
faispfc@fsb.co.za.
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Regulatory Examinations |
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Self-Help Guidelines to make a
booking, download your certificate or view results |
Candidates who wrote with Moonstone can now view their results,
make a new booking or update their information on our website:
www.faisexam.co.za
Here is what you do:
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Click on the
Moonstone FAIS Exam website (www.faisexam.co.za)
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Click on the
second heading: “Update Your Booking/Personal Details/Get
results”.
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Key in your ID or
Passport Number used to register for the exam: click on Send
password.
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The system will
send a password to the e-mail address you provided at
registration.
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Use this password
to log in on the same address as above:
Type in the password – do not copy and paste.
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Click login.
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You will then be able to make a booking, download your
certificate or view results.
Frequently Asked RE Questions
Email enquiries should be addressed to
faisexam@moonstoneinfo.co.za. You can phone us on
021 883 8000 - select option 2 to speak to one of our
consultants. |
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Careers Platform
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Are you hiring? Advertise your position on Moonstone’s Career Platform
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The Moonstone website -
www.moonstone.co.za
- enjoys an average of 15 000 visits and approximately 39 000 page views per month. |
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Moonstone boasts an exclusive newsletter mailing list of over 48000
dedicated financial decision makers who receive 2 newsletters per week. |
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Our audience is relevant and industry specific: individual and corporate advisors and brokers in the following financial sectors:
iInvestment, Risk, Healthcare, Banking, Retirement, and Insurance. |
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Featured Positions |
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In Lighter Wyn |
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The Lord Mayor of Swinburne |
I received this via email from a friend. It was posted in a blog
called Vrystaat Confessions, written by “Bewilderbeast”.
Abe Sparks was the "Lord Mayor of Swinburne". Ever since he went to
Texas he wore a Stetson, cowboy boots and a string tie with a
polished stone clasp. He drove an old Rolls Royce which he'd
converted into a pickup truck. It looked something like this:
He and Lulu would throw big parties and the story goes -
yes, the story goes - that one night they decided to cook the
mushrooms they had gathered in the veld that day. To be safe they
fed some to the dog and asked the kitchen staff to keep an eye on it
for the next hour or so. They continued partying up a storm with the
grog flowing and ate supper and carried on until one of the staff
came in to say "Meneer, die hond hy’s dood." (Sir the dog has died).
Panic ensued as they all bundled into cars and rushed off to the
Harrismith Hospital twelve miles away, had their stomachs pumped out
and returned much later to the farm looking wan and sober.
Next morning, they asked to see the dog and were shown where it lay,
dead and mangled.
It had been run over by a passing car.
Drank verdra nie onreg nie.
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Tel: +27 21 883 8000 | Fax: +27 21 883 8005
info@moonstoneinfo.com
www.moonstone.co.za
P.O. Box 12662, Die Boord, Stellenbosch, 7613, Republic of South Africa
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business purposes.
The complete disclaimer can be accessed
here. |
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