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Investment Indicators - 27 November 2017 |
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Paul Kruger
Author/Editor |
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An economist is a surgeon with an excellent scalpel and a rough-edged
lancet, who operates beautifully on the dead and tortures the living
– Nicholas Chamfort |
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Distributed to 49,014 subscribers.
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Rates Review |
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1. Secured Investment Rates |
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 |
1 |
1Life (L) |
7.550% |
7.490% |
2 |
Absa (L) |
7.457% |
7.398% |
3 |
Discovery (G) |
7.040% |
6.640% |
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Company |
This Week |
Last Week |
1 |
Discovery (G) |
7.582% |
7.190% |
2 |
1Life (L) |
7.550% |
7.490% |
3 |
Absa (L) |
7.457% |
7.398% |
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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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FAIS Ombud 2016/2017 Annual Report |
How do the numbers contained in the Ombud’s latest report reflect on
its mandate?
Complaints received for the period 1 April 2016 to 31 March 2017
came to 10 846, compared to 9 891 for the previous year.
• 3 794 (35%) complaints were dismissed.
• 4 639 (43%) complaints were referred to alternative forums.
• 592 (5.5%) were settled, a decrease from the 753 of the 2015/2016
The actual number of complaints handled by the Ombud came to
11 025. The graph below reflects how it was dealt with:
In other words, out of 11 025 complaints handled by the Ombud, only
1 073 (9.7%) were resolved in favour of the public. 47% were
dismissed and 43% were referred elsewhere for resolution.
It is also interesting to note where those complaints that did not
fall under the jurisdiction of the Ombud landed up.
In respect of the above, the Ombud notes:
“Lest our efforts are misinterpreted as inadequate because of the
increased number of dismissals and referrals to other fora, we
should look at the process that underpinned the 3 794 dismissed
complaints and the 4 639 referred elsewhere.”
“The 3 794 complaints were dismissed after applying the legal rigour
that the circumstances of each case warranted. To minimise the
chance of dismissing a complaint in error, decisions to dismiss must
be approved by senior managers and must be accompanied by submission
of extensive supporting documentation. Similarly, if complainants
are not satisfied with the decision to dismiss their complaint, they
have the right to lodge an informal appeal for a review by a more
senior person, who is likely to be an Assistant Ombud or Team
Resolution Manager.”
“Dismissals and referrals to other fora are never done out of hand.
Very often, we receive a complaint of one or two paragraphs that
does not permit us to make a decision. In order to arrive at a
position where we can make a decision about the complaint, we have
to probe. Right from the first day of receiving the complaint at the
case management division, we build an activity journal. An activity
journal records personal details of complainants, their financial
circumstances at the time of advice, the questions used to probe,
and information given about the financial product. Once the case
manager has built the story, the next stage involves an elucidation
of the issues followed by application of the law. Only after
completion of all these stages is a decision taken.”
“With regard to the 4 639 complaints that were referred to other fora, the decision to refer follows strict legal scrutiny and the
decision of the case manager is subject to confirmation by a senior
person. Where a decision is made to refer the complainant to court
as provided for in the Rules on Proceedings of the FAIS Ombud
(Rules), that decision is not appealable.”
The Annual report notes the following on the Ombud’s mandate under
the heading “Legislative Mandates”:
a) FAIS Act
The main objective of the FAIS Ombud is to investigate and resolve
complaints in terms of the FAIS Act and the Rules promulgated
thereunder.
b) FSOS Act
A further function of the FAIS Ombud is to resolve complaints in
terms of the Financial Services Ombud Schemes Act, (Act No. 37 of
2004) (FSOS Act), which is not covered by any of the other voluntary
Ombud schemes or where there is uncertainty over jurisdiction.
Whilst it is admirable that the office of the Ombud goes to such
lengths to ensure fairness, one has to ask whether an office, funded
by levies from the industry, should spend the majority of its time
and resources on complaints that should be handled by other forums.
Surely a central complaints facility for the financial services
industry to refer complaints to the right forum would lead to a
substantial increase in the efficient handling of the 5 630 justiciable complaints received by the Ombud. This would also
contribute to the Ombud’s stated intent of handling complaints in a
“…procedurally fair, informal, economical and expeditious” manner. |
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Your Practice Made Perfect |
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FSB RDR Update November 2017 |
At the end of last year’s Insurance update from the FSB, Jonathan Dixon
said: “We had better fasten our safety belts – this is going to be rough
year”, or words to that effect.
Having read all eleven presentations for this year’s road show this
weekend, it might be advisable to strap on a parachute as well.
I found the points on RDR of particular interest, and will be reporting
back after tomorrow’s session in Cape Town.
The following are just some of the thoughts for discussion:
Adviser categorization: A consultation paper is to be published soon to
confirm the previously communicated two-tier model and requesting input
on several interesting aspects, including:
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The feasibility of allowing a product supplier agent (PSA) to act as
the PSA of more than one product supplier in different, non-competing
lines of business, and related controls.
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Standards for allowing PSAs to refer customers to another product
supplier in light of removal of “gap filling”
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Whether “gap filling” should be permitted for fixed interest
annuities. The current thinking is that this is not necessary as it can
also be managed through referrals.
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Conditions for being able to describe advice as being “independent”
and
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Product supplier responsibility for different forms of advice.
Non-advice sales execution
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New FAIS fit & proper competency requirements define the activity of
“execution of sales” and set competency requirements for scripted sales
models
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A change to the FAIS definition of “intermediary services” which will
close the previous gap whereby direct sales execution by product
suppliers potentially fell outside the scope of FAIS.
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FAIS Cat I and II licences
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We are aware that there is fair amount of concern in the industry about
where the regulator is heading in this regard. The following are some of
the points for discussion at the FSB Insurance Conduct of Business
seminar In Cape Town tomorrow:
Informal consultation is underway with the investment industry on:
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Defining “investment management” as a specific licensed activity
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The extent to which investment managers (as defined) should be
licensed/regulated differently from “model portfolio providers” and
other types of discretionary mandate holders
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Clarifying the contractual and business relationships between all
entities in the investment value chain to mitigate risks of conflicted
advice and conflicted discretion
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Third party outsourcing / “white label” models. We no longer propose
to completely prohibit white labels being held by entities providing
advice, provided conflict risks can be adequately mitigated
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The implications of the two-tier adviser categorisation in the
investments space. In particular: When should an investment adviser be
classified as a product supplier agent (i.e. is there a role for “tied”
advice in the investments sector?)
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The extent to which intervention in remuneration arrangements, over
and above the prohibition of product supplier commissions, is
appropriate to address risks.
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A public discussion document on these investment related proposals
will follow in early 2018.
We will report back on this next week. There will be transitional
arrangements, so please do not jump the gun until you are sure which way
the wind blows. |
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Regulatory Examinations |
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In Lighter Wyn |
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