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As a central knowledge portal to the retirement and related industries, EBnet publishes a range of daily articles submitted by a range of industry organisations, experts and contributors. Readers can also comment on and contribute to articles.

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PFA Threatened with legal action by complainant

Pension Funds Adjudicator Muvhango Lukhaimane has read out the riot act to a pension fund and its administrator for failing to willingly provide a response to a complaint. Ms Lukhaimane has asked the Registrar of Pension Funds to act against the Municipal Employees Pension Fund (first respondent) and Akani Retirement Fund Administrators (second respondent). This follows a stern letter received from the complainant’s attorneys decrying the failure by the Adjudicator to subpoena the first and second respondents owing to their continued failure to file a response. Mr HRA Lubbe who had worked for the Polokwane Local Municipality (third respondent) from 1 December 1998 until 31 January 2017 when

Sanlam’s Smooth Commitment to Transformation

As part of its ongoing commitment to prioritising empowerment as a business goal and national economic necessity, Sanlam’s Employee Benefits (SEB) has partnered with 27four Investment Managers to launch South Africa’s first, black managed, smoothed bonus product. The Progressive Smooth Bonus Fund is managed by 27four Investment Managers and guaranteed by Sanlam. As South Africa’s only smoothed bonus fund managed by black asset managers, the product was created for progressive clients that value the economic empowerment of black asset management firms and seek smoothing and guarantees in investment products. Temba Mvusi, Chief Executive Officer: Sanlam Corporate says the product has been deve

Top compliance tips for a winning 2018

As compliance becomes more onerous, below are eight pointers to keep in mind this year that could help steer you away from compliance risk in your business. 1. Seek professional support It never ceases to amaze me that financial services providers pay good money for lawyers and accountants and then head for the bargain basement for a compliance officer to guide them on regulatory compliance. Compliance is a profession and you should seek out a professional for advice. Most are members of the Compliance Institute of South Africa (www.compliancesa.org) and this should be one of your first ports of call when you are looking for compliance assistance. Additionally, check the FSB website to ensur

Today’s Trustee - Latest Edition available on EBnet

On-line Version CLICK HERE Virtual Magazine Version CLICK HERE FIRST WORD Getting serious on trustee and consumer financial education is the serious institutional money, and measurement, to support it. Now the initiative is mandatory. FINANCIAL SECTOR CODE In the best sense of the term, ‘radical economic transformation’ acquires real and positive meaning. A profound vision translates to practical action. Mainly the SA banks and life offices will lead it. They’re committed. ANNUAL FINANCIALS Far too many pension funds are lethargic in submitting their returns. A toughened approach from the Financial Services Board is indicated. CURRENTS Better disclosure from PIC on unlisted investments

South Africa’s response to the Fourth Industrial Revolution – we need private sector input

This year, the meeting of the World Economic Forum (WEF) in Davos is giving emerging economies a much more visible platform. A question arising is whether the path to achieve economic growth and stimulus today should follow the same trajectory as it did historically for more developed economies. Consider South Africa. Cyril Ramaphosa, will be mounting a very specific campaign at WEF 2018 to rekindle foreign investor confidence in the country. South Africa’s reality is that, politics aside, its future success will be intertwined with the success of its private sector. Addressing issues such as unemployment and economic growth means South African companies must hold their own in a rapidly chan

Davos 2018 – What’s it all about?

Is it relevant, and what does it mean for the South African investor? It’s that time of year again where more than 2500 of the world’s top leaders including heads of state, central bankers and representatives from most of the world’s top companies converge on the little town of Davos in Switzerland to share ideas, promote agendas and generally just network. Last year, the theme was” responsive and responsible leadership” and it was particularly relevant given the apparent threat to globalisation from a rising tide of populism, nationalism, and protectionism. Brexit, the recent election of Donald Trump and impending European elections made the theme particularly relevant at the time. The them

Significant changes to RE Exam

We recently came across an article by Dr Des Leatt an Education Consultant, on the revised and updated Fit and Proper Requirements from the Registrar of the FSB with the publication of Board Notice 194 of 2017 on 15 December 2017, with variable implementation dates, which we thought would be interesting to share with you. According to Dr Leatt, this draws to an end a period of nearly three years of public and corporate-wide consultation which our Regulator engaged in. A careful and thorough review “Included in this review and consultative process was a careful and thorough review of the Qualifying Criteria (content requirements) upon which our Regulatory Exams for key Individuals (RE1) and R

Twin Peaks Newsletter Issue 3 - Phasing in of the Twin Peaks Model

This issue of the newsletter focuses on the phasing in of the Twin Peaks regulation model, with the aim of highlighting some of the changes or amendments that the new regulatory system will introduce. It (the newsletter) provides clarity on the regulations of the banking sector under the new Financial Services Conduct Authority (FSCA) and explore issues that may arise as the new Financial Sector Regulation Act, which is seen as the foundation of the Twin Peaks model, is implemented. Moreover, FSCA’s plans to be more proactive in its regulation of the banking sector will further be analysed in this edition. The FSCA, which will replace the Financial Services Board, will address the relevant c

Estate planning is a team effort

By the time an executor is appointed to a deceased estate, they can change very little to an existing will and estate plan to ensure a speedy and cost-effective liquidation of the estate. A smooth transfer of assets from the estate to the heirs requires planning in advance. Financial advisers play a valuable role in the estate planning process, working with fiduciary specialists and sharing information, and can help to ensure a well-considered, timeous and holistic estate plan. What is the process once an estate owner is deceased? The Master of the High Court appoints the executor to take control of the assets in the deceased estate and to transfer these assets (after the payment of any liab

MPC leaves rates unchanged - worried about Moody's downgrade?

Given the SARB Monetary Policy Committee (MPC)’s historical hawkish bias, it was not surprising that they kept interest rates on hold at the January MPC meeting. What did come as a surprise was the fact that five members of the committee supported the decision, and only one voted to cut rates. The SARB clearly remains very concerned about the fiscal outlook. For five MPC members to vote to keep rates on hold in the face of the dramatic improvement in the inflation outlook indicates that they see real risks to the forecast. One conclusion one could draw would be that they are worrying about Moody’s downgrading in February, and would not want to cut ahead of that decision. The Bank is workin

2017 – A year of vindication for risk assets

There is a powerful proverbial saying which goes as follows, “The stone the builders rejected has become the cornerstone”. Rattled by the difficult 2016 experienced by a large number of investors, both locally and globally, the retail investment market experienced a large rotation from risk assets (equity and property) into cash. The political uncertainty and economic weakness experienced on a global and local front over the period 2015 - 2016 was enough to induce many investors to ‘reject’ their initial investment strategies (many with large exposures to equities) for the safety of cash as they entered 2017. However, in context, one could be sympathetic to these investors, especially those

Bitcoin, euphoric sentiment and the return of volatility: Are equities heading for a fall in 2018?

Markets have made a strong start to the year. The S&P 500 has risen more than 4% YTD with the Hong Kong Hang Seng Index up close to 5%. This strong performance comes on the heels of a 6.1% rise in the S&P 500 last quarter. While our overall equity market view is constructive, we are doubtful that the current pace of gains can be sustained in the near-term. Markets are becoming over-heated and beginning to exhibit signs of euphoria. The equity markets risk-reward profile is deteriorating. AAII Investor Sentiment data (as at 03/01/18) showed 59.8% of individual US investors were bullish on markets, on a six-month view – the highest reading since December 2004. Only 15.6% of individual investor

First-day of school jitters

Hold onto your hearts Mom and Dad, the time has come! Back to school fever is in full swing with the 2018 academic year too close for comfort, right? (Especially for first-time-to-school parents!) Is your “little one” starting “big school” this year? Maybe you’ve already felt the tug at your heart when you bought his school uniform? Truth is, this huge milestone is often anticipated with great excitement and joy, but first-day-of-school jitters are real for many kids – and parents. Know this, there might be a few tears involved on this very emotional day – and they may not all belong to your child, but your child may be more ready than you think, and if he’s not, you will get there together.

Are you maximising your tax savings this RA season?

The end of one year and the start of another is a natural reminder to take stock, reflect on accomplishments and shortfalls, and commit to doing things differently in the year ahead to achieve better outcomes. Retirement annuities (RAs) are tax-efficient products, and the looming tax year-end in February means you should act soon if you still want to maximise your tax savings for this year. Below we have gathered five common investor questions on RAs to steer you in the right direction. 1. What are the key tax benefits of saving in an RA? Your RA contributions reduce your taxable income, up to certain limits. This means that you pay less income tax, up to the specified limit (up to 27.5%

Investing lessons from 2017

Say no to the narrative, not the opportunity It’s easy to get caught up in market narratives. When news flow is good and sentiment positive, investors tend to buy popular securities at any price, paying little attention to valuation and risk. When news is bad and share prices fall, fear of loss makes investors retreat – from real risks, but also those that may be unfounded or overstated. While it is important to avoid getting swept up in prevailing hype or gloom, it is equally important not to ignore the narrative altogether. Some of the best investment opportunities can arise from strong negative narratives; in fact, they are a necessary pre-condition to finding quality companies at cheap v

Five resolutions for investing in 2018 – Winning strategies in an uncertain world

It seems 2017 flew by at a blinding speed. At the end of last year, we were wondering what a Trump presidency would look like. Now, the first year of Trump’s term in office is nearly behind us. Unexpected election outcomes left us reeling in 2016, and 2017 has certainly proven no less turbulent. With both the global and local environments remaining uncertain, it is even more important to create as much stability as possible in areas you can control. Below are some resolutions to keep in mind for another successful year of investing in 2018. 1. I will understand that financial solutions need to be part of a holistic plan We are often tempted to believe that finding that one silver bullet will

Save thousands in tax by diversifying your retirement savings

10 January 2018: With increased tax rates on the cards for 2018, you may be looking to make the most of tax benefits for increasing your retirement savings. But numbers show how maximising your tax efficiency and achieving the best possible income in your golden years could instead mean finding a balance between your discretionary and retirement savings. Danie Venter, a Certified Financial Planner and Advisory Partner at Citadel Investment Services, notes that making sure that you are saving enough for a financially secure retirement is absolutely crucial, but warns that many investors fall prey to the common financial mistake of over-contributing towards their retirement funds. The South A

Businesses bleed jobs for third consecutive quarter

New figures from the QES showed that South Africa’s formal non-agricultural sector shed 31 000 jobs in the third quarter of 2017. With losses of 41 000 in March 2017 and 31 000 in June 2017, this marks the third straight quarter of job losses across South Africa. The job market has experienced notable pressure in the last year, with 83 000 formal jobs lost from September 2016 to September 2017. The greatest losses were reported in the community and personal services industry, down 10 000 for the quarter and 106 000 for the year. This is the fourth consecutive quarter where the industry has shed jobs. These losses, to a large extent, were driven by the government sector. Other losses were see

African Statistics Day 2017: 4 facts about our economy you may have missed

“Better lives with better economic statistics.” This was the theme for African Statistics Day 2017, that took place on 18 November. In celebration of this prestigious day, Stats SA explores the archives to find four facts on the South African economy that you might have missed. African Statistics Day was initiated by the United Nations to raise awareness about the critical role that statistics play in social and economic development on the continent. The theme for 2017 focuses on “the critical role economic statistics plays in underpinning economic governance that leads to durable growth”.1 These four facts cover aspects of the South African economy that have an influence on issues around em

FSB Statement on Leaf Capital (Pty) Ltd

The FSB conducted an investigation on an investment made by three Pension funds, through a debenture instrument, in terms whereof the Pension funds became beneficiaries of the Leaf Property Fund Trust managed by Leaf Capital (Pty) Ltd. The FSB reviewed the initial structure of the investment scheme, a subsequent restructuring thereof, and the fees charged to the investors. The FSB raised concerns about the fees incurred by the funds. Following the intervention of the FSB, Leaf Capital agreed to refund a portion of the fees to the affected Pension funds. Leaf Capital has also agreed to reimburse the FSB’s costs. The FSB will not take any regulatory action against Leaf Capital. The Registrar e

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