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Moonstone Monitor -  1 June 2017
In This Week's Newsletter
 
From the Crow's Nest
FAIS Reality Check from a Client Perspective – Paul shares a personal experience
 
Your Practice Made Perfect
RDR feedback from the UK – Apparently it is not all doom and gloom, depending on your approach
Compliance support for smaller FSPs – help is at hand for one-person practices
Legislation Handbook and Preparation Guide for REs – Now available online
 
Technologically Speaking
Daimler Benz on the disrupted future
 
Regulatory Examinations
Schedule for 2017
Self-Help Guidelines and Frequently asked questions
 
Careers Platform
Are you hiring? Advertise your position on Moonstone’s Career Platform
Featured Positions
 
In Lighter Wyn
Plans for today? And she thought she had it covered...
Paul Kruger 2016-10-31
Paul Kruger Author/Editor
 
 
 
 

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The only way most people recognize their limits is by trespassing on them
– Tom Morris
 
Please connect with us: www.moonstone.co.za
pkruger@moonstoneinfo.com or 021 883 8000
 
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From the Crow's Nest
From the Crow's Nest
 
FAIS Reality Check from a Client Perspective
In April I reached that age where the company rules determine that the time has come for me to follow Paul Simon’s advice:

“Slow down, you move too fast, you’ve got to make the morning last…”

Turning 65 was quite a mind changing event for me. The penny finally dropped that I am, after all, mortal, despite my firm conviction to the opposite, just one day before.

On the very day of my birthday, a parcel which I ordered from the USA arrived, via customs. For the privilege of having to wait nearly three months while the officials deliberated on the value of a tee- and sweat shirt, I was required to pay more in customs duties than I did, at the exorbitant exchange rate, for the items in dollars.

The shirts both conveyed the same message: “It is better to burn out, than fade away”. The fact that Neil Young wore it in the advert I saw on Facebook actually made me buy two.

“Old man take a look at my life, I’m a lot like you…”

This was also the age where I no longer qualified to be part of the employer’s group scheme. Fortunately, I could convert it to permanent life cover without the need for medicals and proof of health. The most difficult question for me to answer truthfully was always the one about my drinking habits.

Apparently, “What do you have?” is not the correct answer to the question: “Do you drink?

Inevitably, my response to the “How much” question is misinterpreted as being the weekly intake, instead of my daily consumption which I divulged.

All went well, apart from the fact that my premium increased obscenely by 475%, compared to what I paid on the company group scheme for the same amount of cover.

Getting back to my new philosophy to life - I really started taking my Vitality challenges seriously. In fact, I bought a little apparatus, cleverly disguised as a watch, which would beep if I had the audacity to sit on my backside for more than 50 minutes. In addition, it would measure all activities to ensure that I stayed busy long enough every day.

About two weeks after applying for permanent life cover, the documentation arrived. There was a little blue slip in my post box, requesting that I pick the parcel up at the counter, as it was too big for my post box. This should have alerted me already.

The big envelope contained two documents.

The thin one contained the policy schedule, comprising 19 pages.

The heavy number, consisting of 179 pages, contained the information that would help me “…understand the finer details…” of my life plan.

This information is shared, no doubt, to ensure compliance with legal obligations, but at what cost to the planet? How many trees are sacrificed every year to comply with legal requirements which really serve no practical purpose?

A few questions arose:
  1. How many clients who receive these documents will actually read it?

  2. How many of the few who do, will understand it? Correctly?

  3. How many of the conditions contained in this document may in the not too distant future turn out to be material to a claim that may arise? And if my adviser had not disclosed this to me, he could he be held responsible for any losses my beneficiaries may incur.

  4. How much of my adviser’s time would be taken up covering the details contained in the 180 (minus 1) pages? And how would this impact on his productivity?

  5. How many clients actually file the documentation, knowing that they can address any questions to their advisers. In fact, trusting their advisers to look after their interests because, in the case of a death claim, the life insured plays a very small part, other than just ensuring that he/she remains deceased.

  6. Despite being required to be all of the above, the adviser’s commission is seen as the single biggest source of miss-selling, and constantly the focus of legislative scrutiny.


All insurance and assurance contracts have over the ages been based on mutual trust. This does not appear to satisfy the legislators and regulators any more.

Perhaps hitting 65 does have more merits than I initially assumed.

Then I remembered the lyrics of another Paul Simon song:

Can you imagine us years from today
Sharing a park bench quietly
How terribly strange to be seventy.


I shudder to think what documentation will look like then.
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Specialist protection is essential to guard against cyber crime

South Africa ranks as one of the most vulnerable countries in the world for cyber attacks, yet local businesses are largely discounting this risk and not protecting themselves adequately in this regard.

Roy Wright, Head: Risk Solutions at leading financial advisory group GTC believes small, medium and micro enterprises (SMEs) are especially exposed to the dangers of cyber crime.

“Many companies mistakenly believe that their general insurance will protect their business against the risks of cyber crime,” says Wright.

In light of this, GTC urges companies to pay careful attention to their specific cover and policy wording.


Contact Roy Wright, or click here to read more.
Your Practice Made Perfect
Your Practice
RDR feedback from the UK
On Tuesday, David Ferguson, founder and chief executive of Nucleus Financial Group in the UK, speaking at the Sanlam i3 Summit, said RDR and all the associated legislation introduced in the UK in 2012 have really been about driving value for money.

RiskSA reports on this as follows:


“The winners have been those who cared about clients intensely,” Ferguson pointed out. In fact, the biggest winners have been those businesses who moved to client centricity for commercial reasons even before RDR. “The biggest loser of RDR has been anything that’s commission-led.”

Asset managers also made the mistake of expecting RDR to be toothless for them, but when the rest of the value chain becomes incredibly transparent, the same pressure is applied to fund managers too. Current trends in the UK include the outsourcing of technical aspects, for example portfolio construction to third-party discretionary fund managers, and for planners to emphasise the client relationship and tracking the clients’ progress against their goals.

Moneyweb also published a very interesting article by Inge Lamprecht titled: RDR in the UK: The winners and losers.

“It was all about value for money really and anyone who didn’t get that or couldn’t bring themselves into that world was lost.”

The winners have been those stakeholders that built or rebuilt their businesses around the customer. This was easy for start-ups, but sometimes difficult for established groups. The regulatory change essentially meant that the game was up for anyone who didn’t have the customer’s interest at heart – whether it was platforms taking dirty margins, advisor networks funded by soft commissions from providers or product providers concealing charges in complex charging structures, he said.

“If it doesn’t work for the customer, it simply doesn’t work at all.”

But while much doom and gloom were predicted for the advisor market in the years leading up to RDR in the UK, the independent financial advisors and restricted advisors who have made it through this trip have also been “extraordinary winners”.

Other winners included open platforms that were not driven by kickbacks or commission from fund groups and passive funds.

Anyone who is concerned about the future of investment advice would be well advised to read the Moneyweb article.
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Compliance support for smaller FSPs
The Moonstone Protector Service (Protector) was specifically developed for FSPs that, although not legally obliged to appoint a Compliance Officer, realise the need for external support and expertise to ensure compliance with FAIS and FICA legislation.

Protector offers the following benefits:
  • Access to the Protector Online Self-Assessment Tool (POST) to self-assess the level of compliance in your business on an ongoing, structured basis

  • Access to actionable reports to enable you to easily identify areas of non-compliance within your business

  • Access to Moonstone’s online Procedures Guide

  • Telephonic support on compliance related matters

  • Online FICA awareness training for all personnel

  • Access to professionally compiled compliance documents and templates

  • Subscription to Moonstone’s electronic newsletters

  • Ongoing SMS and e-mail communications and reminders of important deadlines

  • Preferential membership benefits for Moonstone seminars and workshops


The tax deductible monthly fee for the Protector Service is R395 (VAT Included).

To apply for Protector membership, kindly contact Deon du Toit on Tel: 021-883 8000 or via email.
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Legislation Handbook and Preparation Guide for REs
The Legislation Handbook for Level 1 Regulatory Exams provides the legislation specified as relevant to the regulatory exams RE 1 and 5.

The Preparation guide includes the qualifying criteria provided by the FSB for these exams.

The qualifying criteria are cross-referenced in the Preparation Guide to the relevant sections to be studied in the Legislation Handbook.

Shaded tabs enable the user to easily identify the four sections of the work and the information is then grouped by subject matter area in order to assist you to find the relevant items quickly and easily.

The 4th edition reflects the law as at 15 April 2015.

Click here to order these LexisNexis books from our Advisor Store.
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Technologically Speaking
Daimler Benz on the disrupted future
In a recent interview the MD of Daimler Benz (Mercedes Benz) said their competitors are no longer other car companies but Tesla (obvious), Google, Apple, Amazon 'et al'.

Software will disrupt most traditional industries in the next 5-10 years.

Uber is just a software tool, they don't own any cars, and are now the biggest taxi company in the world.

Airbnb is now the biggest hotel company in the world, although they don't own any properties.

Artificial Intelligence: Computers become exponentially better in understanding the world. This year, a computer beat the best Go player in the world, 10 years earlier than expected.

In the US, young lawyers already don't get jobs. Because of IBM Watson, you can get legal advice (so far for more or less basic stuff) within seconds, with 90% accuracy compared with 70% accuracy when done by humans.

So if you study law, stop immediately. There will be 90% less lawyers in the future, only specialists will remain.

Watson already helps nurses diagnosing cancer, 4 times more accurate than human nurses.

Facebook now has pattern recognition software that can recognize faces better than humans. In 2030, computers will become more intelligent than humans.

The list goes on and on. Click here to see more ways in which you may be affected.
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Regulatory Examinations
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RE Schedule updated
Our venues are filling up fast as we approach 30 June 2017. Candidates who are obliged to write and pass by the end of June must please register in time.
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RE Self-Help Guidelines and Frequently Asked Questions
Self-Help Guidelines

Candidates who wrote with Moonstone can now view their results, make a new booking or update their information on our website: www.faisexam.co.za

Here is what you do:
  1. Click on the Moonstone FAIS Exam website (www.faisexam.co.za)

  2. Click on the second heading: “Update Your Booking/Personal Details/Get results”.

  3. Key in your ID or Passport Number used to register for the exam: click on Send password.

  4. The system will send a password to the e-mail address you provided at registration.

  5. Use this password to log in on the same address as above:
    Type in the password – do not copy and paste.

  6. Click login.

  7. You will then be able to make a booking, download your certificate or view results.


Frequently Asked RE Questions

You can click on this link to see the answers to the most common questions we receive.


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
Are you hiring? Advertise your position on Moonstone’s Career Platform
Careers Platform Packages

•   The Moonstone website - www.moonstone.co.za - enjoys an average of 15 000 visits and approximately 39 000 page views per month.
Moonstone boasts an exclusive newsletter mailing list of over 46000 dedicated financial decision makers who receive 2 newsletters per week.
Our audience is relevant and industry specific: individual and corporate advisors and brokers in the following financial sectors: Investment, Risk, Healthcare, Banking, Retirement, and Insurance.


Advertise


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Featured Positions
  • Financial Planners: Risk Free Solutions, Port Elizabeth & Kimberley - We are looking for established, well balanced Financial Planners striving for financial freedom. If you have matric, your own transport, driver’s licence and RE qualificaton, then Read More

  • Short Term Insurance Underwriter: The Insurance Centre, Westville - We requires a commercial and personal lines short term insurance underwriter / administrator. Read More

  • Short Term Commercial Representatives: I AM SURE Financial Services, Pretoria - We require a qualified and experienced Commercial Short-term Insurance Representative/Senior Marketer to maintain and grow our existing book. Read More

  • Branch Manager Short Term Commercial & Hospitality Insurance: HIC Underwriting Managers, Port Elizabeth - We require a young dynamic leader with a minimum of 10 years commercial insurance experience. Read More

  • Financial Administrator: Sapcor Brokers, Pretoria East - We need a person to compile bordereaux’s for Insurers, commission statements to 3rd parties and other general financial duties. Read More

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In Lighter Wyn
In Lighter Wyn
Plans for today? And she thought she had it covered...
Thanks to Roché Cowley

A woman went shopping. At the cash counter, she opened her purse to pay.
The cashier noticed a TV remote in her purse.
He could not control his curiosity and asked, "Do you always carry your TV remote with you?"
She replied " No, not always, but my husband refused to accompany me shopping today because of football match, so I took the remote."
Moral: Accompany and support your wife in her hobbies.....

The story continues....
The cashier laughed and then returned all the items that lady had purchased.
Shocked at this act, she asked the cashier what he was doing.
He said, "your husband blocked your credit card.........."
Moral: Always respect the hobbies of your husband.

Story continues....
Wife took out her husband's credit card from purse and swiped it. Unfortunately he didn't block his own card.
Moral: Don't underestimate the power and wisdom of your WIFE..

Story continues...
After swiping, the machine indicated, 'ENTER THE PIN SENT TO YOUR MOBILE PHONE'.......
Moral: When a man tends to lose, the machine is smart enough to save him!

Story continues....
She smiled to herself and reached out for the mobile which rang in her purse.
It was her husband's phone showing the forwarded SMS.
She had taken it with the remote control so he doesn't call her during her shopping.
She bought her items and returned home happily.
Moral: Don't underestimate a desperate woman!

Story continues....
On getting home, his car was gone.
A note was pasted on the door:
"Couldn't find the remote. Gone out with the boys to watch the premiership match. Will be home late. Call me on my phone if you need something".
Damn... He left with the house key too.
 
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