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Investment Indicators - 26 February 2018 |
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Paul Kruger
Author/Editor |
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Knowledge is knowing that a tomato is a fruit. Wisdom is not putting it in a
fruit salad – Miles Kington |
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Distributed to 50,055 subscribers.
To advertise with us
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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) |
6.650% |
6.750% |
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2 |
1Life (L) |
6.570% |
6.680% |
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3 |
Absa (L) |
6.426% |
6.514% |
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Company |
This Week |
Last Week |
| 1 |
Clientéle Life (L) |
6.750% |
6.850% |
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2 |
1Life (L) |
6.570% |
6.680% |
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3 |
Assupol (G) |
6.450% |
6.620% |
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2. Money Market Funds |
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Company |
This Week |
Last Week |
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1 |
Coronation |
7.960% |
7.840% |
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2 |
Cadiz |
7.920% |
7.940% |
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3 |
PSG |
7.890% |
7.410% |
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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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Financial Sector Regulation from Budget Speech |
The scramble to be first with news of the budget reminds me of the old
bull and his aspiring successor who stood on a hill observing the
herd of cows grazing below.
Youngster: “Old bull, let’s run down there and cover a cow each.”
Old bull: “Youngster, let’s saunter down there slowly and cover the
whole herd.”
Most of the reports I read only commented on the possible
implementation of Twin Peaks in April.
Below is an extract from the speech on transformation of the
financial sector.
Financial sector regulation
Transformation of the financial services sector is critical, as the
allocation of capital greatly influences patterns of ownership and
production in the economy. Government has gazetted the Financial
Sector Codes and a R100 billion “Black Business Growth Fund” has
been created through the code. The fund will assist black
entrepreneurs to finance big deals – an intervention that is crucial
to transforming capital allocation in the economy.
The Financial Sector Summit will also take place in April 2018.
All of these efforts serve to extend access to South Africans who
were excluded from the financial system.
Strengthening the regulatory system
The two new Twin Peaks authorities will be established on or soon
after 1 April 2018, and their powers will be phased in to ensure a
smooth transition to the new and tougher regulatory system. Further
steps will be taken to strengthen the system, including introducing
deposit insurance and introducing a new way of resolving banks that
are in financial distress.
Draft legislation will be published shortly.
Work will continue on reforming the legislation for financial
markets and the payment system, to ensure that our infrastructure
remains globally competitive. The Treasury is working with the
Reserve Bank, Financial Services Board and other government entities
towards a regulatory framework for all types of Fintech. The
emergence of cryptocurrencies is a major development to which our
regulatory regime must respond.
New banks
In 2017, the Reserve Bank granted three bank licences – two for
banks with significant digital banking capabilities and one for a
new digitally focused mutual bank. These licences will ensure banks
are able to harness the power of technology and bring competition
and innovation into the sector.
Improving the treatment of retirement fund members
Government’s retirement reform programme will continue in 2018.
Consultations at NEDLAC on annuitisation of provident funds and
preservation are still in progress, and it is my hope that an
initial agreement can be concluded later this year.
Government has also directed the Financial Services Board to proceed
with measures to modernize and improve the governance of all
retirement funds, starting with the requirement that all retirement
funds must now submit audited financial statements annually.
See
Information
Circular PF No. 2 of 2018 in this regard which also
prescribes a compulsory switch to an accrual accounting basis from
1 January 2019.
Other steps include the strengthening of enforcement measures,
lowering costs and consolidating funds, and consulting with NEDLAC
on more efficient measures to find beneficiaries when funds are not
claimed.
Industry reaction
Not all is enamoured by these measures, and particularly Twin Peaks.
In my view, the hesitation in implementing the annuitisation of
provident funds is yet another example of an approach that says
“…all animals are equal, but some are more equal than others.”
Sections of the industry that does its best to comply are subjected
to even more rigorous requirements, while the most vulnerable
members of society will not enjoy the same protection.
Biznews recently published an article by Dr Gerrit Sandrock, a
Director of several short-term insurance related enterprises, on
other possible unforeseen outcomes of this legislation on the
insurance industry.
“The South African insurance industry is an Oligopoly. That
is, a market structure similar to a monopoly, but in which a small
number of companies has the majority of market share.”
“This is not the creation of faceless ‘white monopoly capital’”. It
is an entirely predictable response to the intrusive and extensive
overreach of muddled Government agencies in their quest for control
of the industry. Through its regulatory exuberance, the State has
curtailed industry growth, and thus capital and job creation.”
“If the industry is to grow at all in the future, it needs to
welcome and enable new entrants in radically new ways.”
“Contrary to the popular political view, the apparent lack of
industry transformation is therefore not due to intransigence on the
part of the owners of existing insurance companies or the lack of
entrepreneurial drive from previously disadvantaged persons to set
up new insurance enterprises more reflective of our demographics.
Instead, the current regulatory and legislative environment (as set
out in more recent and pending insurance legislation and the
inscrutable Twin Peaks idea) favours large-scale consolidation of
existing insurers, making transformation and future inclusive growth
highly unlikely. It creates and nurtures a monolithic mindset where
everything must be rigidly controlled and where innovation and
flexibility is severely subjugated to the power of authoritarian
bureaucrats.”
Rather an old bullish view? Methinks not.
Click here to read the full article in Biznews. |
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Discovery Fixed Retirement Income Plan offers 10% additional income
If your clients invest in a Discovery Fixed Retirement Income Plan
today, they can receive an additional 10% income for the first three
years. The 10% is an addition to the annuity income amount, after
allowing for annual escalations and before deducting tax. After three
years, the client’s annuity income will return to the quoted income
annuity amount before deducting tax. For single-life annuities, the 10%
additional income will stop after three years or when your client dies.
For joint-life annuities, the 10% additional income will only be applied
to the current amount in payment and will stop after three years or when
both annuitants have died.
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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Proposals on loyalty benefits or bonuses |
Cashback incentives are very often the topic of enquiries from readers
who feel that they are at a disadvantage to mostly direct marketing
companies who offer partial premium refunds to secure business.
The latest proposals regarding changes to the General Code of Conduct
contains the following guidelines for providers who want to continue
offering such services.
Loyalty benefits or bonuses
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(a) |
An advertisement that references a loyalty benefit (including
so-called cash- or premium back bonuses in relation to insurance
policies) or no-claim bonus must not create the impression that such
benefit or bonus is free and must adequately - |
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(i) |
indicate if the loyalty benefit or no-claim bonus is optional or
not; and |
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(ii) |
regardless of whether or not the loyalty benefit or no-claim bonus
is optional, express the cost of the benefit or bonus including, where
applicable, the impact that such cost has on the premium or investment
amount, unless the impact is negligible; and |
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(iii) |
identify the granter of the benefit or bonus. |
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(b) |
For purposes of subsection (13)(a)- |
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(i) |
the impact is deemed to be negligible if the cost of the loyalty
benefit or no-claim bonus comprises less than 10% of the total premium
or investment amount payable under a financial product. |
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(ii) |
where the impact of a loyalty benefit or no-claim bonus is not
negligible and where the advertisement refers to the actual premium or
investment amount payable - |
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(aa) |
the cost of the benefit or bonus must be shown as a percentage of
that premium or investment amount; and |
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(bb) |
the provider must be able to demonstrate that the premium or
investment amount and benefit cost used in the advertisement presents a
true reflection of the cost impact for the average targeted client; and |
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(iii) |
where the impact of a loyalty benefit or no-claim bonus is not
negligible and where the advertisement does not refer to the actual
premium or investment amount payable, the average cost of the benefit or
bonus as a percentage of premium or investment amount must be provided. |
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(c) |
Where an advertisement highlights a loyalty benefit or no-claims
bonus as a significant feature of a financial product or financial
service and makes reference to a projected loyalty benefit value or
no-claim bonus value that is payable on the expiry of a period in the
future, it must also express the value of the projected benefit or bonus
in present value terms, using reasonable assumptions about inflation. |
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(d) |
An advertisement must clearly state whether the availability or
extent of a loyalty benefit or no-claims bonus is contingent on future
actions of the client or any factors not within the client's control. |
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(e) |
An advertisement may not create the impression that the bonus or
benefit is guaranteed or more likely to materialise than the provider or
product supplier reasonably expects for the average targeted client. |
Will this level the playing field? Time will tell. It is not so much the
rules, as the application thereof, which determines the final outcome. |
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The Nine Classes of Business
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We received a substantial number of enquiries about this topic in
response to articles published last week. It is not only important to
those who are required to do Class of Business (CoB) and Product
Specific training - those required to perform CPD activities also need
it to ascertain their obligations in this regard.
Board Notice 194 of 2017 contains a list of the nine classes as well as
the various sub-classes under each class of business.
We suggest that you revisit you FSB licence to ascertain which classes
and sub-classes of business you are registered for. If there are ones
which you merely listed for convenience sake, but have never done
business in, or do not intend becoming involved in in future, you should
consider removing them from your licence.
Click here to
download the relevant annexure from the Board Notice 194 of 2017. |
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Look beyond the price of group disability insurance
Decisions about group disability insurance in South Africa are often
driven by price. To unlock the real value of group disability benefits,
financial advisers and their clients need to look beyond price and adopt
a holistic and integrated approach. This approach focuses on the
employee’s overall financial wellness. It facilitates early detection,
reduces the risk of disability, and includes rehabilitation and
reskilling. |
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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 Preparation Material |
The new Determination of Fit and Proper Requirements (BN 194
of 2017) come into effect on 1 April 2018.
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The new Fit and Proper requirements will form part of the
regulatory exam question data bank from 1 April 2018.
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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.
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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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Financial
Advisor/Planner:
KDO Group Johannesburg - The role involves selling of Hollard
My Life and More products to mainly government employees and private
clients.
Read More
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Senior Client Liaison
Officer:
Vunani Fund Managers (Pty)LTD - We are a fund management company
looking for a suitably qualified EE candidate.
Read More
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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
Read More
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Experienced Short Term
Underwriter:
The Insurance Center, Westville, KZN - Vacancy for an experienced
short term commercial and domestic underwriter.
Read More
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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
conjunction with external Compliance Officer.
Read More
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In Lighter Wyn |
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High Aspirations |
A young woman brought her fiancé home to meet her parents. After
dinner, her mother told her father to find out about the young man.
The father invited the fiancé to his study for a talk.
"So, what are your plans?" the father asked the young man.
"I am a biblical scholar," he replied.
"A biblical scholar, hmmm?" the father said. "Admirable, but what
will you do to provide a nice house for my daughter to live in?"
"I will study," the young man replied, "and God will provide for
us."
"And how will you buy her a beautiful engagement ring, such as she
deserves?" asked the father.
"I will concentrate on my studies," the young man replied, "God will
provide for us."
"And children?" asked the father. "How will you support children?"
"Don't worry, sir, God will provide," replied the fiancé.
The conversation proceeded like this...and each time the father
questioned, the young idealist insisted that God would provide.
Later, the mother asked, "How did your talk go, honey?"
The father answered, "He has no job, he has no plans, and he thinks
I'm God."
Come again?
A golfer is cupping his hand to scoop water from a Highland burn at St
Andrew’s golf course.
A Groundskeeper shouts: “Dinnae drink tha waater! Et’s foo ae coo’s
Shite and Pish!"
The golfer responds: ”My good fellow. I’m from England. Could you
repeat that for me in English?"
The Keeper replies: “I said use two hands - you’ll spill less that
way."
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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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