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Investment Indicators - 4 June 2018 |
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"It is never too late to be what you might have been." - George Eliot |
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Distributed to 51,879 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) |
6.970% |
6.820% |
2 |
Clientéle Life (L) |
6.950% |
6.850% |
3 |
Absa (L) |
6.848% |
6.480% |
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Company |
This Week |
Last Week |
1 |
Discovery (G) |
7.124% |
7.014% |
2 |
Clientéle Life (L) |
7.050% |
6.950% |
3 |
1Life (L) |
6.970% |
6.820% |
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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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What is holding millennials back from reaching
financial freedom? |
Results of the 2017/2018 Old Mutual Millennial survey shows that
better educated, tech-savvy and optimistic millennials – South
Africans born between 1982 and 2000 – are more likely to seek
financial independence and personal fulfilment, compared to older
generations. This is according to Elize Botha, Managing Director of
Old Mutual Unit Trusts.
The Old Mutual Millennial survey was commissioned to better
understand the financial behaviour of employed Millennials, versus
older generations surveyed in the 2017 Old Mutual Saving and
Investment Monitor.
It showed that 24% of millennials are currently invested in a unit
trust – versus only 2% among older generations – with 57% of
millennials saying they invested in a unit trust with the purpose of
increasing their net worth (1st) and 47% saying they looked to
invest to reach financial freedom (2nd). However, the survey also
revealed that 35% of millennials – the first generation to reap the
fruits of democracy – were saving money to pay back debt – this
number was 13% for older South Africans.
Speaking at the same event, Mapalo Makhu, Personal Finance Coach and
founder of financial coaching firm Woman & Finance, said that
millennials are facing unique financial challenges that make them
susceptible to debt. “Many first-generation middle-class South
Africans, millennials are playing ‘asset catch up’ - purchasing
appliances and motors vehicles on credit - while caring for
financially dependent relatives (other than their children) which
creates a tension between the expectations of family and dreams
millennials have for their own financial future.”
Research also showed that millennials are more likely to save money
– in order of priority – towards travel (37% versus 10%), their
education (31% versus 4%), a motor car (32% versus 11%) or starting
their own business (23% versus 3%) – than older generations.
“This shift in priorities speaks to the bigger differences in the
way millennials and older generations view money and the unique
challenges they face,” says Botha. “Complete financial freedom – and
the flexibility it offers us to travel, or to be our own boss –
comes when the income from your assets exceeds your expenses. Only
by reducing debt in tandem with investing in investment vehicles
which offer growth assets and returns can millennials hope to reach
this goal.”
Makhu agrees and says that unless millennials address their high
levels of debt, they’ll struggle to reach their goal of financial
freedom and independence. “Whilst not everyone aspires to building
financial wealth, becoming financially free is achievable for most
people by applying simple principles in a disciplined approach.”
Botha explains the four pitfalls millennials face on their journey
to reach financial freedom:
1. HIGH LEVELS OF DEBT
Debt, typically in the form of personal loans, is often used to buy
things that will be consumed – like appliances, clothes, or items
that tend to depreciate over time. The survey revealed that 64% of
millennials – compared to 14% among older generations – had a
personal loan and 35% (versus 13%) of their income was spent on
servicing the interest on debt.
2. SAVING, RATHER THAN INVESTING
According to the research, an alarming 47% of millennials – nearly
half – did not know what a unit trust was. Others, who said that
they could further define the collective scheme investment vehicle,
tended to have difficulty in articulating their understanding of it.
However, almost 61% of millennials in the survey were saving money
in a bank account, suggesting that millennials do not understand the
difference between saving and investing.
3. KEEPING UP WITH THE KARDASHIANS
The third pitfall is overspending – often utilising expensive credit
– to buy the things we absolutely ‘need’ to appear successful. “What
people don’t realise is that the real secret to financial freedom is
to keep your living expenses as low as possible,” says Botha.
4. NOT DEFINING YOUR VALUES
“Without a clear goal most people will find themselves spending
rather than saving,” says Botha. “Every person is unique, and our
relationship with money is often complex. An understanding of your
intrinsic values is also essential to find the resolve to achieve
financial freedom. When we’re working towards something that’s
important to us, we’re often more willing to work harder to reach
our goal.”
We created a consumer friendly
PDF copy
of this article with savings
tips and advice which you can download and share with your clients. |
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Your Practice Made Perfect |
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New Draft Conduct of Business Report |
The Financial Sector Conduct Authority (Authority) intends to replace
the current compliance reports with the proposed Conduct of Business
Report (COBR) that was published for public comment on the official web
site of the FSCA.
The proposed COBR was necessitated by the changing regulatory landscape
and the focus on outcomes based regulation and proactive supervision. It
further seeks to address the inefficiencies created by requiring
providers, regulated in terms of other laws administered by the FSCA, to
submit the same information more than once to the FSCA.
The COBR was first published for comment on 6 December 2016. Due to the
extensive changes made to the first draft of the COBR, the Authority
deemed it necessary to publish the COBR for a second round of public
consultation.
Interested parties are invited to submit written submission on the
proposed COBR to
thiropathy.moodliyar@fsca.co.za by 18 July 2018.
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Click here to download the Invitation to Comment
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Click here to download the new Draft Conduct of Business Report
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Click here to download the Annexures for the report.
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Allan Gray lowers offshore minimums
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In case you have missed it, Alan Gray recently announced that they will
be reducing the barriers to entry for South African investors who want
to invest offshore by significantly reducing the minimum amount required
to invest via their offshore investment platform.
Earl van Zyl, head of Alan Gray’s product development team pointed out
that it is important for investors to maintain a well-diversified
portfolio, which includes offshore exposure above what local South
African funds are generally able to achieve. As a result they have
lowered the minimum lump sum investment of their off shore platform from
US$10 000 to US$1 500.
Click here to view the detail on the Alan Gray website.
Allan Gray will be presenting at the Allan Gray Investment Summit in
Cape Town and Johannesburg on 17 July and 18 July 2018 respectively. To
find out more, visit
www.investmentsummit.co.za. |
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Who should be the parties to a trust?
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Corné Nunns of Millers Inc.explains the legal definition of founder,
trustee and beneficiary of a trust following the example of John that
decides to create a family trust for the benefit of his immediate family
and future generations to come. He is then informed by a friend that she
has heard in the media that the estate owner (being John) cannot be the
founder of the trust if he is also to be appointed as a trustee and he
may also not be named as a capital beneficiary. She then suggests that
she should be the founder of the trust that John wishes to create.
Click here to for a detailed explanation in order to better understand
the different parties to a trust. |
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Regulatory Examinations |
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FSCA RE Study Material update June 2018 |
The May edition of the FSCA FAIS Newsletter contains a summary of
events since the publication of Board Notice 194 of 2017 (the “Fit and
Proper” Board Notice) which came into effect on 1 April 2018 and
impacted on the RE 1 and RE 5 regulatory exams.
The “Fit and Proper” Board Notice contains amended qualifying criteria
for these two exams, resulting in amendments to both the exams as well
as the study and preparation material.
Updated Study Material
There are two sets of material which can be used for preparation
purposes:
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The Preparation Guide for RE1 and RE5 which is available at
https://www.fsca.co.za/Regulated Entities/Pages/LR-FAIS-Amendments.aspx
and
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The legislation itself. The Preparation Guide refers to the relevant
sections in the Act and subordinate legislation that must be studied.
The Preparation Guides are invaluable as they stipulate the content of
the exams, in that they seek to explain what the examination questions
will be testing. All examination questions are based on the content as
set out in these Preparation Guides. In addition to the above, the
Preparation Guides map out exactly where a candidate can find the
relevant information in the legislation. The format that is used to
provide this information is as follows:
TASK |
QUALIFYING CRITERIA |
REFERENCE / MOTIVATION |
The task describes what the candidate must be
able to do in respect of the legislation. |
The qualifying criteria refer to the knowledge
that a person must have to perform the task in
column 1. |
In this column the reference to the actual
legislation is provided – if you read the particular section
of the legislation, then you will have the required
knowledge as referred to in column 2. |
Every question in the question bank for all the regulatory
examinations is based on the “qualifying criteria” (or the
knowledge column) as explained above. The questions MUST be
linked to these knowledge criteria otherwise it may not be
included in the examination as an examination question.
It is important to read the actual legislation. One cannot
expect to be tested on legislation without having read the
legislation. By reading the legislation you will get used to
the definitions, terminology and the manner in which the
legislation is drafted. Please be advised that the same
terminology and approach is used in the examination
questions. The questions must be technically correct in that
the correct legislative terms must be used at all times.
Reading the legislation will help you to interpret the
questions correctly.
Training Manuals
The FSCA does not endorse any training manuals as it has
made available the tools needed to assist candidates to
prepare for the examinations. Not all training manuals are
alike as their authors are not legislative experts, or may
have interpreted legislation incorrectly, or might not have
covered all the information that will be covered in the
examination (i.e. not all the qualifying criteria are
covered in the training manual).
Complaints received by the FSCA in respect of the regulatory
examinations include:
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The examination included questions that were not covered
in my training manual;
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The questions in the examination did not resemble the
questions in the mock exams;
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I obtained 100% for every mock examination, but when I
wrote the regulatory examination I failed – there must be
something wrong with the examination;
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I know the training manual off by heart, but I still fail
the regulatory examination.
In each of these examples, the candidate does not question
whether the training manual is complete or accurate, and
whether the mock examination questions were accurate and
reasonably in line with the real/ actual examination
questions. Candidates conclude that the training manual and
all the mock questions are correct, and therefore it is the
regulatory examination that is problematic.
It is therefore very important that all FSPs, key
individuals and representatives satisfy themselves that the
training provider they use has the required skills and
expertise, that the training material that is provided is
100% accurate and complete (in line with the content
provided in the FSCA Preparation Guide) and that the mock
questions are not sub-standard.
Enquiries
Queries related to the exams can be addressed to the two
examination bodies or alternatively to
FAIS.Exams@fsca.co.za.
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RE Deadline 30 June 2018 - check RE registration date deadlines |
The table below
indicates who has to successfully complete the RE 5 by 30 June 2018.
Representatives’ DOFA |
RE 5 Deadline |
30/06/2015 – 31/12/2015 |
30/06/2018 |
01/01/2016 – 29/06/2016 |
30/06/2018 |
30/06/2016 – 31/12/2016 |
30/06/2019 |
DOFA refers to your date of first appointment. For instance,
if you were appointed on 1 September 2015, you actually have
two years and nine months in which to pass the RE 5 for
representatives
Unfortunately, time is now running out for those who are
compelled to pass in less than one month.
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Remember that bookings close about two weeks before the
actual exam, for logistical reasons.
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In order to write before the DOFA deadline (last exam in
June on the 29th), candidates should register by 14 June 2018.
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IMPORTANT: It is the responsibility of the candidate to
make sure that he/she is registered for the correct
examination, date, time and venue.
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2018 Schedules updated |
Please note: Registration cut-off is 11 working days before date of exam.
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In Lighter Wyn |
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Tips on having your eyes tested |
Before you see your optometrist, you will have to wait in the waiting
room surrounded by outdated copies of every magazine imaginable.
This is where you will discover the true meaning of the word
"patient".
Once
you have found the chair, the optometrist will slip a pair of heavy
metal glasses on you that look like they have been knocked together
by the local blacksmith. Whatever your optometrist tells you, these
are not the latest in high fashion.
The eye test itself starts when you are asked what the lowest line
on the eye chart is. Don't waste time by saying "Printed in the UK".
Rather say "What eye chart?" The optometrist will then slide a
number of lenses into your special metal glasses and keep asking you
whether it is better with this one or that one. This is just to wind
you up - they are all exactly the same!
Remember,
the phrase optometrists hate most is "they are much of a muchness".
Say this once too often and they will send you home with a pair of
glasses that make you see round corners, and when you complain they
will tell you that all glasses are "much of a muchness"!
Optometrists also like to ask whether the circles are clearer in the
red box or the green box. This is no time to tell them you are
colour blind! Just make a choice and go with it.
At
some stage the optometrist will want to take a closer
look at your eyes. While he is staring into your eyes, its important
to maintain eye contact, even if you get the unpleasant impression
that your entire skull is empty, and he is thinking "oh my, there is
absolutely nothing in there!"
If your vision needs correction, the optometrist may discuss the
benefits of contact lenses over spectacles. You will find this very
hard to believe as he/she smiles wearing the latest designer frames.
Finally, you will walk out of there with new glasses and
crystal-clear vision, and suddenly see that your job, home and
family are nothing like you imagined!
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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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or the sending of e-mail communications for other than strictly
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The complete disclaimer can be accessed
here. |
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