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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.


Public healthcare: How much per person?

You can consider yourself one of the lucky few if you have medical aid. According to the latest General Household Survey, only 17 in 100 South Africans have medical insurance, the essential key that opens the door to private healthcare. As many as 45 million, or 82 out of every 100 South Africans, fall outside the medical aid net, and as a result are largely dependent on public healthcare. The lack of medical cover is expressed in the decisions that families make. When asked, seven in every ten households choose to go to a public clinic or public hospital as their first point of access if a household member becomes ill. Only a quarter of households opted to go to a private institution. It’s

If South Africa’s provinces were independent states

Perspective matters. A lot. Recent provincial economic data published by Stats SA take on a fresh light when they’re ranked against other countries. Gauteng is South Africa’s economic powerhouse. The province contributed just over a third to South Africa’s economic output in 2016, according to provincial gross domestic product (GDP) figures.1 In runner-up positions were KwaZulu-Natal and Western Cape, the second and third largest economies. Northern Cape, the least populous province, contributed just 2% to national GDP, making it the smallest provincial economy. How do the provinces square up against other countries? In 2016, Gauteng’s economy was roughly the same size as that of North Afric

Standing out for the right reasons

Old Mutual Multi-Managers. It is ironic that the president of a communist country is now the leading voice in support of free trade and globalisation, but this is the upside-down world we live in now. In a widely anticipated speech, President Xi Jinping of China promised to further open up the world’s second largest economy to participation by foreign firms and to lower tariffs, including US-produced cars. He warned against a “Cold War mentality” and while there was nothing much new in his speech, it did calm investors’ nerves after weeks of talk of trade wars. So far it is still just talk, and world trade is largely unimpeded. The World Trade Organisation (WTO) last week forecast 4.4% growt

It's business unusual for the disability insurance industry

A few years ago we predicted that the disability insurance industry was headed for major change. Last year we saw it borne out by the results of Old Mutual Corporate's Disability Monitor: the frequency and nature of claims are changing. Benefit levels that were designed when disability income was subject to tax have become much more generous after tax on benefits was abolished in 2015. This, coupled with the difficult economic environment of the last two years, have created the perfect storm which led to a very poor disability experience in the insurance market. But there is a silver lining – these changes also present the industry and employers with the opportunity to work even closer toget

Naresh Tulsie appointed the new FAIS Ombudsman

Naresh Suresh Tulsie has been appointed as the new Ombud for Financial Advisory and Intermediary Services (FAIS) effective 1 May 2018. Mr Tulsie will be taking over from Ms Noluntu Bam, who has been with the FAIS Ombud since 2003 and assumed responsibility as Ombud since 2010. Ms Bam’s contract with the Board ends on 30 April 2018. Having completed two terms in office and ready to leave in 2016, Ms Bam remained in office in terms of an agreement with the Board until a suitable successor had been identified. As the FAIS Ombud, Mr Tulsie will be responsible for promoting consumer protection and fostering the integrity of the financial services industry by resolving complaints in a manner that

Ways to invest offshore

Given that we live in South Africa and therefore spend in rand rather than dollars, pounds or any other currency, for many of us it may make sense to have a significant portion of our wealth in rand. However, when spreading our eggs between various baskets, investing in different currencies is an important way to de-risk our wealth. Core wealth is the money that is required to support a lifestyle without having to work. In other words, your core wealth enables you to be financially independent. Any more than that is considered surplus wealth. Wealth managers will suggest that anything from 40% to 65% of your core wealth should be invested outside of South Africa. Even more of your surplus we

Unintended consequences of anti-corruption steamroller

Welcome to dreamland. So pervasive has corruption supposedly become in the retirement-fund industry that Registrar Dube Tshidi has considered it necessary to issue a directive that will prevent it. The directive bears the formidable title “Prohibition on the acceptance of gratification”. So inadequate are existing provisions of the Pension Funds Act (for trustees to avoid conflicts of interests and to act independently) and the general code of conduct for authorised financial- services providers under the Financial Advisory & Intermediary Services Act (which defines the “financial interest” that a provider can legitimately offer) that these acts are defective for implementation. So confident

Say hello to automation – and financial freedom

It’s hard to develop good money habits. It’s especially hard when those habits include delaying gratification and cutting back on impulse purchases. When it comes to money, too many of us opt to satisfy all today’s wants instead of securing tomorrow’s financial freedom. “Even though we know that small changes can have a big impact over time, we often lack proper motivation – or discipline – to do what’s right today for our future selves, particularly if we have to keep it up for a long time,” says Jikku Joseph, Managing Director at 22seven. This is where our automated financial systems can play a valuable role: the same automation that ensures your debit orders go through on time can help yo

Tax-free saving: the fast facts

With the total tax burden of South Africans on the rise, it’s time to look more closely at those products that give you that much needed tax break. Retirement annuity (RAs) have been around for many years and most investors are familiar with this product, but tax-free savings accounts (TFSAs) were only introduced in 2015, and is fast gaining popularity among retail investors – for obvious reasons. The benefits of a TFSA All the proceeds – dividends, interest and capital gains – are tax-free. After several years of investing in a balanced or equity portfolio, the capital gain payable when ultimately withdrawing the money could be substantial. This tax benefit makes the TFSA very attractive re

Ashburton Investments partners with Fidelity International to enhance offshore multi asset range

Ashburton Investments, the asset management arm of the FirstRand Group, has entered into a strategic partnership with Fidelity International, a global asset manager with US$324bn assets under management. The partnership, which applies to Ashburton Investments’ international multi asset funds* totalling US$850m, combines Ashburton Investments’ longstanding heritage in managing multi asset portfolios with Fidelity International’s highly experienced and research-focused multi asset team. The funds’ investment objectives remain unchanged, with Ashburton Investments maintaining responsibility for global macro views, tactical asset allocation and client distribution. This enhanced offering sees Fi

Opportunity returns to global equity markets - but selectively so

After rising for a record 15 consecutive months to end January 2018, the S&P 500 index has recently pulled back. This is a welcome development for local fund managers looking for global opportunities. For most of 2017, PSG Asset Management expressed concern about the generally elevated levels of global equity markets, based on high valuation ratios (relative to historical levels) and extreme investor complacency. Conversely, PSG has been increasingly positive on domestically focused South African companies. Here, political and economic uncertainty has kept prices low, despite the inherent quality in these businesses. “We were finding fewer high-conviction opportunities across global markets

Find your financial freedom this Freedom month

On 27 April we are celebrating Freedom Day, commemorating the day in 1994 when the first democratic election was held in South Africa. For all South Africans it is an important reminder that "freedom" is a basic human right and should mean emancipation from poverty, unemployment, racism, sexism and other forms of discrimination. As we celebrate Freedom month now would be a great time to have a look at your finances and get a plan in place to become financially free. “Budgeting, saving, clearing debt and consolidating loans are all ways to find this financial freedom,” says Mellony Ramalho, African Bank’s Group Executive: Sales, Branch Network. She adds that whatever financial situation you m

Building a robust estate plan

Investment managers go to great lengths to plan ahead so that investment portfolios will withstand market volatility and unforeseen events. But how do you construct a robust estate plan that will withstand the onslaught of the many legislative changes and punitive taxes introduced in recent years? Inheritance taxes Inheritance tax presents the state with a final opportunity to collect a share of your wealth. And since the heirs to your estate will again pay taxes on the assets they inherit, you may be tempted to try and circumvent estate duty and the associated wealth taxes through complex estate planning. Unfortunately, there are no simple answers when it comes to minimising inheritance tax

New wave of targeted cyber attacks

Corporate companies are by no means immune to cybercrime, with McAfee’s latest report1 indicating that it cost the global economy as much as $600 billion in 2017. According to Christopher Appanah, Claims Team Leader (PI and Liability) at SHA Specialist Underwriters, cybercrime is also evolving rapidly with attacks becoming more elaborate. He says that proof of this is the growing number of attorney firms being targeted by one particular type of sophisticated email scam in recent years. “We have noted a trend in the number of local attorney firms falling prey to this type of fraud. It places the firm in a vulnerable position as these circumstances do not fall within the ambit of a general Pro

What really goes into calculating your insurance premium

(Although primarily aimed at personal insurance, the principles in this article also apply to any form of insurance, be it short-term, life & disability and group benefits insurance - Chris Brits, Editor EBnet) When the time comes to renew a client’s insurance policies, insurers are likely to alter monthly premiums based on a range of factors such as changes in the details of the insurance policy, anticipated claims inflation on the assets being insured, and changes in cover sums. Grant Smith, Actuarial Specialist at MUA Insurance Acceptance, notes that insurers annually increase premiums according to these factors to ensure that their clients continue to pay a fair premium for the cover tha

Collective Insights - Latest edition available on EBnet: The cost of your financial decisions

The theme of this edition is: The Cost of Your Financial Decisions This edition’s editor is Di Turpin, an independent director and retirement fund trustee who sits on the boards of the Financial Services Board, Nedgroup Collective Investments and the Shine Literacy Trust. She is chair of Old Mutual Wealth and Fairbairn Capital Retirement Funds and a trustee on Nedgroup Investments Retirement Funds. She introduces the topic with her article “ Picking apart the many-sided matter of costs” Other articles in this edition include: p. 21 Navigating the investment landscape as a beginner - Lerato Mahlangu, founder of Powermani, p.22 Banks are indispensable, but beware the charges - Shivesh Maharaj,

Welcome To The Real World! It Sucks; You're Going To Love It!

You’re now an adult and need to start contributing to society and become a self-sustaining responsible citizen. Stop bothering your parents and start paying your own rent, buy your own food and managing your expenses. Soon there’ll be a new character in your life, Mr. Debit Order. You’re going to love him or hate him. Your relationship with Mr. Debit Order will be largely influenced by your financial management skills. The need for financial management literacy has become a burning issue among young adults today. Owing to their desired lavish lifestyle and the ever-increasing cost of living, concepts like financial management and investing have gained a stronger foothold in the economy. Fina

The Carbon Age: 150 Years of CO2 Emissions

Carbon and carbon dioxide aren’t dangerous compounds, they’re found everywhere in our natural environment. The problem is that ever since the onset of the industrial revolution in the 19th century mankind has steadily increased the amount of carbon dioxide in the earth’s atmosphere. Because carbon dioxide, or CO2, is one the most prominent greenhouse gases climate change is happening. Most scientists easily agree that it’s not a “Chinese hoax”. According to the now defunct Carbon Dioxide Information Analysis Center CDIAC more than 400 billion metric tonnes of carbon have been released into the atmosphere from the consumption of fossil fuels and cement production since 1751- half of which

The Occupations Growing The Fastest Since The Recession

A Careerbuilder report has revealed the jobs that are thriving since the end of the recession. Home health aides have seen the fastest growth rates of any occupation nationally from 2007 to 2017 with nearly 300,000 jobs added, a 46 percent increase on ten years ago. Web developers are also seeing increasing demand for their services with 38 percent growth in jobs between 2007 and 2017. Veterinary technologist and technicians are the third-fastest growing job, with numbers up 32 percent since 2007. The U.S. had its most recent recession between December 2007 and June 2009. Even 10 years since it began, the country's job market is still feeling its impact. Some states have recovered well from

What should trustees look for when it comes to choosing a retirement solution?

As the obligations for trustees to select the most appropriate retirement solution for their members grows more onerous, it is crucial to weigh up the long-term impact for total fees along with other important features to assess a good retirement solution. This is according to Quaniet Richards, Head of Institutional at Nedgroup Investments who is passionate about addressing the confusion around retirement fund fees and educating investors about the long-term impact of certain retirement fund decisions. Richards describes the three important elements to consider when selecting a retirement solution: 1. Fees “The most important thing to be aware of is the overall impact of all fees related to




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