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Investment Indicators - 19 February 2018 |
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Paul Kruger
Author/Editor |
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Never cut what you can untie – Joseph Joubert |
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Distributed to 50,055 subscribers.
To advertise with us
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What if you could focus on doing what you love - looking after your
clients?
Leading Independent Financial Advisory (IFA) practices are using GTC’s
Strategic Partner solution to:
- increase time with clients
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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 |
| 1 |
Clientéle Life (L) |
6.750% |
7.000% |
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2 |
1Life (L) |
6.680% |
6.900% |
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3 |
Absa (L) |
6.514% |
6.775% |
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Company |
This Week |
Last Week |
| 1 |
Clientéle Life (L) |
6.850% |
7.100% |
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2 |
1Life (L) |
6.680% |
6.900% |
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3 |
Assupol (G) |
6.620% |
6.900% |
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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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Look beyond the price of group disability insurance |
Group disability insurance in South Africa is highly commoditised,
with decisions driven largely by price in many cases. While premiums
for this highly-valued employee benefit have increased over the last
two years, Regard Budler, Managing Executive: Momentum Corporate
Client Solutions, says that to unlock the real value of group
disability benefits, employers and their financial advisers need to
look beyond price.
Over the last few years many claimants are tending to stay on
disability longer, choosing the relative security of a generous
disability benefit over what they perceive as a less secure return
to work in a stagnating economy. More claims of longer duration
inevitably result in higher premiums.
However, Budler believes that in an environment of rising premiums,
the focus should not only be on price but rather on a holistic
approach to disability insurance. The changing nature of
disabilities and the role that prevention, early detection,
rehabilitation and reskilling plays in reducing the direct and
indirect costs of disability, for both employer and employee, should
be key considerations. Ultimately having a more appropriate solution
for your needs has more value than simply looking for a lower price
on something that you do not need.
A report on global disability from the World Health Organisation and
World Bank highlights how non-communicable diseases (or chronic
diseases of lifestyle) are playing an increasingly more significant
role in disability claims. As depicted in the following graph, an
analysis of Momentum’s claims experience over the last five years
reflects this trend. Only 8% of claims were related to a
communicable disease (like HIV/AIDS). In contrast, 43% of disability
claims are still related to cancers.
Given the increasing impact of lifestyle choices on disability,
Budler believes engagement programmes that encourage healthy
lifestyles are an essential ‘preventative’ building block. These
programmes help to prevent the onset of chronic illness, which in
turn reduces the risk of a lifestyle related disability.
Early detection of health risks and timeous management also helps to
reduce the severity and impact of the disability. For example,
health assessments at workplace wellness days or occupational health
clinics can help identify individuals with serious health risks.
Rehabilitation is also key in minimising the negative impact on the
employer’s bottom-line. Insurers and employers need to work together
to aid rehabilitation, reskill if necessary, and facilitate
recovery. This paves the way for a successful return to work and
reduces the employer’s recruitment and skills replacement costs.
Budler says that the positive results of a close employer-insurer
partnership and proactive management are evident in Momentum’s
psychiatric-related claims. The South African insurance industry is
currently witnessing a sharp spike in psychiatric claims, largely
due to the increasing financial stress employees experience in the
current economic climate. However, thanks to early notification and
proactive management, Momentum psychiatric claims have remained
relatively stable, with only a small increase. This approach has a
significant impact on the amount and duration of the claim.
Intensive engagement with disability claimants has given Momentum
valuable insights into employees’ needs through the various stages
of disability. Budler says a holistic approach considers these needs
and focuses on keeping the employee’s financial wellness intact. For
example, many claimants need additional funds during the early
stages of disability to cover shortfalls between actual medical
costs and what their medical scheme covers. Rather than push already
indebted employees towards expensive loans, a cash assistance
benefit should be considered to cover these costs.
A more holistic approach also helps to identify areas of
insufficient provision. This could be the result of over-insurance
for certain benefits, such as disability, and underinsurance for
others, such as death and retirement. Reviewing the selection of
benefits will facilitate a more optimal balance, as funds can be
redirected towards areas of under provision.” Budler believes that
this is where the financial adviser’s role is pivotal. “Financial
advisers delve deep into employers and employees’ needs and use this
information, together with their expertise, to recommend a “best of
advice” solution. If the insurer offers flexibility in the right
areas, the financial adviser is able to bring this ‘’best advice
solution” to life.”
Budler concludes, “A focus on only the price of disability insurance
detracts from the real value it offers employers and employees. The
industry needs sustainable solutions that incorporate appropriate
pricing and a holistic benefit structure that adds value and is
dynamic enough to withstand economic challenges. A more holistic
approach focuses on the employee’s overall financial wellness,
encouraging choices that improve physical and financial health and
reduce the risk of disability.”
Click here to download a PDF version of this article to share
with your clients. |
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Protect your partner with a fixed income retirement plan
If your client takes out a Discovery Fixed Retirement Income Plan with a
joint-life annuity option, and then they die, their partner will
continue to receive the 10% additional income for the first three years
or until the death of the second partner. This is in addition to the
quoted annuity income amount, before tax. For single-life annuities, the
10% additional income will stop after three years or when your client
dies.
Disclaimer
This article is meant only as information and should not be taken as
financial advice. For tailored financial advice, please contact your
financial adviser. Discovery Life Investment Services Pty (Ltd), branded
as Discovery Invest, is an authorised financial services provider.
Registration number 2007/005969/07..
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| Your Practice Made Perfect |
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Matthew Lester on VAT and the budget |
Prof Matthew Lester does not share the general consensus that an
increase in VAT is the least painful way of funding the budget
shortfall.
There seems to be a consensus that SA needs to find an extra R50 billion
if there is to be any hope of containing the national debt trajectory at
around 4% of GDP.
Up to R20 billion will fall on personal income tax, mainly by copping
out on fiscal drag adjustment. That will leave the bulk of the tax
increase on the middle working class of 5 million South Africans earning
less than R500 000 p.a. A bit more will come from the 1 million South
Africans who earn more than R500 000 p.a. and already pay 62% of PIT.
By Wednesday night PIT Collections will exceed 40% of total revenue. The
PIT tax base is now exhausted.
That leaves R30 billion to get. Perhaps R10 billion will come from
Fuel Levy (or VAT on fuel), sin taxes, estate duty and transfer
duty.
So that leaves R20 billion. ‘That’s easy,’ say the rafts full of
economists and commentators,‘ increase the VAT rate by 1%.’
But that makes an absolute farce of Hugh Masekela’s lines “I wanna be
there when they triumph over poverty…” Not that there’s too much wrong
with taxing the alcoholics, perhaps it will even help them too. But
despite our best efforts we cannot drink SA better. Even with Eish.
Click here to read the whole article
Breathe, Cyril, breathe. Please don’t increase VAT. There is another
way on Biznews. |
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Professional Principal Executive Officer Qualification: Last chance to
register
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Registration is still open this week for candidates who want to enrol
for the first intake on 26 February 2018.
Moonstone Business School of Excellence (MBSE) is the only duly
accredited training provider to offer this NQF level 7 qualification
which equates to a bachelor’s degree.
The Professional Principal Executive Officer Qualification is the first
occupational qualification which provides recognition of competence in
learners who wish to formalise their education and experience with a
view to enhancing their career prospects. This includes trustees and a
wide variety of other employee benefits functionaries.
Registration and more information
You are welcome to speak to Frans Petrus Zeelie at 087 702 6429 who will
gladly assist.
To register,
click here,
select The Professional Principal Executive Officer
button.
To find out more about this NQF level 7 qualification, please
click here. |
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Pre-Budget 2018
commentary by Mazars
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TREASURY’S OPTIONS FOR RECOVERY ARE RUNNING OUT
Treasury will need to think outside the box this year if it is to make
any meaningful difference to its current revenue shortfall, estimated to
currently stand at around R50.8 billion. This is according to David
French, Tax Consulting Director at Mazars, who says that, ahead of the
2018 Budget Speech, Treasury’s options to raise revenue are becoming
increasingly limited.
“I believe that the Minister is very constrained this year in terms of
where he is going to find extra revenue. With the national election
looming, it is highly unlikely that Treasury will entertain any notion
of raising the Value Added Tax (VAT) rate. Even though it might still be
one of the most effective ways to substantially increase revenue, it
would certainly be very unpopular with the South African public.”
French also indicates that personal and corporate taxes may have already
been stretched as far as they can possibly go. “I believe that income
taxes in South Africa are close to the point where raising them may
actually become detrimental to Treasury’s revenue collection efforts. It
is probable that the Minister will once again take advantage of ‘bracket
creep’ – keeping income tax brackets at the same level and taking
advantage of the fact that most taxpayers fall into higher tax brackets
when they receive their yearly wage increases. I cannot see how Treasury
can reasonably do much more than this as far as personal income is
concerned”.
Click here to read the
full article. |
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Regulatory Examinations |
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2018 Schedules updated |
Please note: Registration cut-off is 11 working days before date of exam.
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Regulatory Exam: Take note of
changes that will impact you |
Change is always inevitable. Not only will there be a change in
questions as a result of the new Determination of Fit and Proper
Requirements (BN 194 of 2017), but also an increase in fees as
recently announced by the FSB. It is therefore important to take
note of the implementation dates and to be prepared for it.
New requirements entail new questions:
The new Determination of Fit and Proper Requirements (BN 194 of
2017) come into effect on 1 April 2018.
The new Fit and Proper requirements will form part of the
regulatory exam question data bank from 1 April 2018.
This means that those who register to write after 29 March 2018
will have to study the new Determination of Fit and Proper
requirements as it appears at this stage that the updated study
material may not be available by 1 April 2018.
New fees:
The new fee of R1226.00 VAT Inclusive per examination apply to
all examinations registered for exam date 10 March 2018
and onwards – if the booking date is before 10 March 2018 and
the exam date is on or after 10 March 2018, the invoice will
reflect the new fee.
IMPORTANT: The standard cancelation clause will apply to
all registrations for the regulatory examinations. Candidates
who wish to re-schedule their examinations should take careful
cognisance of the FSB’s
cancelation clause.
We have limited stock of the current
LexisNexis preparation material available which will be made
available on a first come first served basis.
Contact details
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 20 000 visits and approximately 39 000 page views per month. |
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Moonstone boasts an exclusive newsletter mailing list of over 49000
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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Short Term Insurance
Representative:
JFA Shortterm Insurance Brokers, Milnerton, Cape Town - If you have
at least 3 years of experience and preferably live in the vicinity of
the brokerage then
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Client Service
Administrator:
Southwood Financial Planning, Tokai, Western Cape - An FPI approved,
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Experienced Short Term
Underwriter:
The Insurance Center, Westville, KZN - Vacancy for an experienced
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Jnr Compliance
Administrator:
Saxo Capital Markets (Pty) Ltd, Sandton - Seeking Jnr Compliance
Administrator to assist internal Head of Legal & Compliance in
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Compliance Research &
Developer:
Moonstone Compliance, Stellenbosch - The successful applicant will
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Senior Regulatory
Compliance Manager:
Clientèle Limited Group, Johannesburg - The successful incumbent
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Commercial
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HIC Underwriting Managers, Bedfordview - Join our dynamic team if
you are Fais compliant with 120 credits and 5 years of experience.
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In Lighter Wyn |
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The wages of sins and taxes |
"It would be nice if we could all pay our taxes with a smile, but
normally cash is required." – Anonymous
"Taxes: One of life's two certainties, the only one for which you
can get an automatic extension." – Anonymous
"People who complain about taxes can be divided into two classes:
men and women."
– Anonymous
"Tax day is the day that ordinary Americans send their money to
Washington, D.C., and wealthy Americans send their money to the
Cayman Islands." – Jimmy Kimmel
"65% of people said that cheating on your income tax is worse than
cheating on your spouse. The other 35% were women." – Jay Leno
"There's nothing wrong with the younger generation that becoming
taxpayers won't cure."
– Dan Bennett
"The income tax has made more liars out of the American people than
golf has. Even when you make a tax form out on the level, you don't
know when it's through if you are a crook or a martyr." – Will
Rogers.
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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
Disclaimer:
Services and products advertised by external product suppliers in
this newsletter are paid for by the respective suppliers. Moonstone
does not endorse any opinions, conclusions, data, products, services
or other information contained in this e-mail which is unrelated to
the official business of Moonstone and furthermore accepts no
liability in respect of the unauthorised use of its e-mail facility
or the sending of e-mail communications for other than strictly
business purposes.
The complete disclaimer can be accessed
here. |
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©2015 Moonstone. All rights reserved. |
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