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Investment Indicators - 12 March 2018 |
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Paul Kruger
Author/Editor |
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A bargain is something you don’t need, at a price you can’t resist
– Franklin Jones |
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Distributed to 51,328 subscribers.
To advertise with us
click here |
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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) |
6.720% |
6.850% |
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2 |
1Life (L) |
6.630% |
6.780% |
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3 |
Assupol (G) |
6.060% |
6.170% |
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Company |
This Week |
Last Week |
| 1 |
Clientéle Life (L) |
6.820% |
6.950% |
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2 |
1Life (L) |
6.630% |
6.780% |
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3 |
Assupol (G) |
6.490% |
6.600% |
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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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Many Property Syndication complaints not yet finalised
by Janine Geldenhuys |
The old saying that the wheels of justice grind slowly is certainly
true when it comes to property syndication complaints addressed to
the FAIS Ombud. With the demise of Sharemax in 2010, disgruntled
investors who believed that their advisers were wrong had three
years to lay a complaint from the day they became aware or ought
reasonably to have become aware of such problems.
The FAIS Ombud is slowly but surely working through a backlog of
property syndication complaints following two appeals which halted
proceedings.
In November 2017,
Business Day reported that there was still a backlog of about
1400 property syndication complaints at the office of the Ombud
after 2000 complaints had to be shelved in 2015 pending a FSB Appeal
Board decision.
The appeal that caused the major backlog related to a determination
by the FAIS Ombud against Sharemax Investments and four of its
former directors. In 2015 they successfully appealed against two
determinations by the FAIS Ombud that held them jointly liable to
repay two investors who had invested in a scheme promoted and
marketed by Sharemax. Based on the appeal, a decision was taken by
the Ombud to stop processing property syndication related complaints
as it meant that the FAIS Ombud could only issue determinations
against a broker or financial adviser and could not place liability
at the door of the directors of the property syndication schemes.
About 40 000 people invested R4.5bn in the various schemes promoted
and marketed by Sharemax alone. The company collapsed in 2010 after
the registrar of banks found that its funding model contravened the
Bank Act. One of the more recent cases where the Ombud ordered the
adviser to repay the investor involved the following:
A complaint arose from a failed investment by a 74 year old retiree
in 2009 when he sought advice from an advisor in respect of
investing R500 000. The complainant, on the respondent’s advice,
invested in Sharemax The Villa Retail Park Holdings Limited (The
Villa Ltd).
The Ombud determined that the risks in the investment were not
disclosed, in violation of Section 7 (1) of the General Code of
Conduct which calls upon providers other than direct marketers to
provide “a reasonable and appropriate general explanation of the
nature and material terms of the relevant contract or transaction to
a client, and generally make full and frank disclosure of any
information that would reasonably be expected to enable the client
to make an informed decision”.
The advisor further violated the Code in terms of section 8 (1) (a)
to (c) and section 2 which relates inter alia to establishing the
client’s needs.
The investment represented a significant portion of the
complainant’s accumulated savings. Furthermore, the complainant was
a 74 year old pensioner who had sustained substantial losses, and
could ill afford any further loss of capital. Whilst the complainant
may have required a higher income and appreciated that he may have
to accept a little more risk than his conservative risk profile
suggested, the recommendation to place the complainant in an
investment as risky as that of Sharemax was blatantly inappropriate,
according to the Ombud.
The advisor further failed to provide the complainant with a
recommendation that was appropriate to his needs and circumstances
and, despite the fact that complainant had sought a higher income,
there is no indication that respondent had adhered to the provisions
of section 8 (4) of the Code.
The representations made to complainant were incorrect and in
violation of section 3 (1) (a) (vii) of the Code. In the view of the
Ombud, there is no doubt that had the complainant been made aware of
the risks involved in these investments, he would not have invested
in the scheme.
The scary aspect of this determination is that the FSP stopped
acting as a FSP in 2011 – 7 years ago. It is highly unlikely that he
would have maintained his PI cover, which means he is on his own in
this matter.
With a further 1 400 complaints still to be determined, there must a
number of concerned advisers out there, including those who may have
left the industry.
You may also want to read an article in Personal Finance on 6 March
titled “Ombud
orders advisers to pay back the money” and the Business Day
article “Massive
backlog of property syndication complaints”.
Janine Geldenhuys is a communication officer at Moonstone
Information Refinery.
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| Your Practice Made Perfect |
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Retirement Annuity as alternative to Trust in Estate Planning |
In response to the
Biznews article we linked last week, we received some interesting
responses.
Debby Badenhorst queried the correctness of a statement that RA funds
are available at death, retirement, disability or retrenchment. “As far
as I am aware, retrenchment has never allowed for access to RA monies –
has this changed? At death and retirement – yes. Also at permanent
disability and official emigration (which weren’t mentioned). But I
would question the access at retrenchment and would appreciate your
feedback.”
Well spotted, Debbie. This does not apply to RAs.
John Bustin provided a most insightful essay on the matter, including a
historical perspective:
“The debate whether to use an inter-vivos Trust [IVT], a retirement
annuity [RA] or living annuity [LA] for estate planning is interesting
as it challenges some fixed beliefs. I also find it interesting that
there are still so many IVTs being used for estate pegging purposes,
notwithstanding that these days IVTs are, in many cases, no longer fit
for this purpose. Lastly, it is unfortunate that not enough public focus
is placed on the benefits that retirement vehicles can add to estate
planning.”
“Before assessing these vehicles, it is helpful to view them in their
historical context.”
Click here to read the full article which also includes some handy
tips on optimising the benefits available under current legislation. |
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What do advisers rely on when picking unit trusts?
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Past performance is just one of several factors financial advisers in
South Africa say they consider when it comes to choosing which unit
trusts to invest in on behalf of their clients. Along with relative
performance of the unit trust (to its peer group), risk measures, and
the investment style of the manager, these four top attributes account
for only 50% of their overall decision. Responsible investing is at the
bottom of the list.
These were some of the findings of an in-depth research report by
Shaheed Mohamed, product development manager at Allan Gray, who surveyed
more than 400 financial advisers in South Africa to identify attributes
that financial advisers in South Africa consider when selecting unit
trusts for their clients’ portfolios. Mohamed revealed the results
of the report at a media event in Cape Town recently.
Read more … |
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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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Updated Fica Compliance Guidelines now in force
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Legalbrief Today reports:
Communication compliance guidelines issued under the amended Financial
Intelligence Centre Act have been updated and came into effect last
Thursday. They focus on sections 27, 32, 34 and 35 of the Act,
respectively dealing with: accountable institutions, reporting
institutions and persons subject to reporting obligations; reporting
procedures, including dealing with requests for additional information;
Financial Intelligence Centre interventions; and monitoring orders
issued by a judge designated by the Minister of Justice for the purposes
of the 1992 Interception and Monitoring Prohibition Act.
Moonstone Compliance adds:
Updated guidance on the mode of communication regarding sections 27, 32,
34 and 35 of the Financial Intelligence Centre Act (act no. 38 of 2001)
became effective from 8 March 2018.
1.1. The Centre published PCC 38A to assist accountable institutions,
reporting institutions and any other persons who are subject to
reporting obligations to receive and respond to requests for
information, interventions and monitoring orders from the Centre in
terms of sections 27, 32, 34 and 35 of the FIC Act and provides guidance
on:
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How the request will be sent by the Centre;
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How responses must be submitted to the Centre;
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The timelines for responses; and
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Information to be included in the response.
1.2. Sections 27, 32, 34 and 35 of the FIC Act provide the Centre with
mechanisms to request information in relation to clients, transactions,
reports as well as to intervene in certain transactions or proposed
transactions.
Click here to view the
Guidance Notice containing the relative links.
FICA Awareness training
If you are obliged to provide your staff with FICA awareness training,
consider Moonstone’s online courses which are free for Moonstone
Compliance clients and very affordable for the rest. Please contact
Abigail Matthee at
assist@mbse.ac.za for more information. |
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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 News |
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The new Determination of
Fit and Proper Requirements (BN 194 of 2017) come into
effect on 1 April 2018.
Tomorrow, 13 March, is the last
day that one can register to write on 29 March, provided the
venue of your choice still has seats available.
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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.
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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Broker Consultant:
CIA - Commercial & Industrial Acceptances Pty Ltd, Gauteng, East Rand
and Vaal Triangle - We are looking for an excellent communicator to
represent CIA to our brokers.
Read More
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Financial
Advisor/Planner:
KDO Group Johannesburg - The role involves selling of Hollard
MyLifeandMore 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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In Lighter Wyn |
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Feesgroete van Nic de Jager |
Ek het die wonderlike voorreg gehad om verlede week by die Universiteit
Stellenbosch se Woordfees te wees.
Ter afsluiting het ek Nic de Jager se musiekaanbieding van 12.00 to
13.00 bygewoon. Hy het begin met hierdie storie:
Ollie Viljoen en Nico Carstens moet een aand op ‘n baie klein dorpie
optree.
So halfuur voor die vertoning moet begin, hoor hulle nog niks in die
saal nie.
So tien minute later loer hulle deur die gordyn, maar daar is steeds
niemand.
Elke paar minute kyk hulle, maar daar gebeur niks.
Net voor die vertoning moet begin, stap daar een ourige oom in.
Wat nou gemaak?
Jan, hulle klankman sê: “Los dit vir my.”
Hy stap na die oom en sê: “Oom, dit is wonderlik dat jy die enigste
persoon in die dorp is wat ons kom ondersteun. Ons gaan vir jou
vandag die vertoning van jou lewe gee.”
“Dankie,” sê die oom, “maar julle moet net nie laat klaar maak nie,
ek moet nog die plek sluit.”
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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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