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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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Momentum speaks out

After initially deciding that it would not be paying the life insurance claim by the family of Nathan Ganas, Momentum announced on 21 November that it had changed its mind and would be paying out the claim. On 21 November, FAnews published a newsletter on Momentums decision to pay out the Ganas case. This generated a lot of interest among our readers and we received a lot of interesting comments. FAnewsreceived the following questions and answers from Momentum. Are you going back on your decision to refute Mr Ganas’s claim? A full disclosure of medical information remains non-negotiable. Our decision is sound in terms of the current insurance practice and contractual obligations. We still do

Cannon Asset Managers partners with EasyEquities to launch new-age investment range

Seeking to offer investors greater ease and simplicity in investing, Cannon Asset Managers has teamed up with digitally-driven investment firm EasyEquities to launch a new range of user-friendly and cost-effective investment bundles. Dr Adrian Saville, Chief Executive of Cannon Asset Managers, says, “One of our cornerstone principles is that investment success is driven by investing in good assets at the right price, and then giving these investments time to work and grow through the powerful force of compounding.” “The range that Cannon Asset Managers has launched is built on the back of these key principles, giving investors access to a diverse collection of high-quality multi-asset portfo

Why Cyber Insurance should be first priority for SMEs

According to the global Cyber Exposure Index, South Africa currently has the sixth highest average exposure to cybercrime, with businesses in the industrial and financial sectors being the most commonly targeted by cybercrime attacks. In fact, a global report by the Ponemon Institute has revealed that around 61% of small businesses experienced a cyber-attack in 2017. Santho Mohapeloa, Digital Distribution Specialist at SHA Specialist Underwriters notes, cybercrime has become the top risk for small and medium-sized enterprises (SMEs). “The SHA Cyber Security survey found that 42.5% of businesses do not have adequate anti-cyber-attack procedures in place. It found that around 60% of SMEs impac

Getting along with PPR

One of the key pieces of legislation that the Financial Sector Conduct Authority (FSCA) announced during 2018 was the impending implementation of a new set of the Policyholder Protection Rules (PPR). The new PPR will have a significant impact on group risk policies. The changes that the revised PPR will bring was discussed at the 2018 Alexander Forbes Hot Topics Seminar where Vickie Lange, Head of Institutional Best Practice at Alexander Forbes Investments, spelled out what insurers can look forward to. Data protection Lange pointed out that in order to communicate meaningfully with policyholders, insurers would require certain information about those policyholders from retirement funds or e

Beneficiary funds – we all share the responsibility

Has the beneficiary fund been able to build enough trust with members so that they may actually trust them to take further care of their assets while they are at a tertiary institution or acquire other employable skills? At Fairheads we are noting a growing rate of “discretionary money”, that is accounts that are not terminated at age 18 through the choice of the member as they know that their money is safe with us – indeed safer and more beneficial than some bank accounts. Corporate governance As a trustee, you should make sure that the benefits promised in terms of the beneficiary fund rules are actually delivered; that the benefits are optimal with minimal risks; and that the process of d

Don’t wing it!

Having and raising children comes with a price tag, a huge financial responsibility that must be seriously prepared for. We often hear that purchasing a home is the biggest expense you’ll take on but raising a couple of children will exceed that for most people. Money plays a vital role in raising a child and the financial responsibility that comes with it must be put into considerations when you prepare to become a parent. Having kids like getting married must be prepared for and apart from the mental readiness to face the struggle that comes with parenting, financial readiness is equally important. There’s no magic number for how much money you need to have before having kids, but the foll

Positive HIV status no longer a barrier to life cover

When the HIV/AIDS epidemic began gaining momentum in the 1980s, a diagnosis was seen as a certain death sentence, with life insurance companies across the board refusing to cover individuals who tested positive for HIV. Over time, however, a better understanding of the disease and rapid medical advances have meant that people with HIV/AIDS are now reaching life expectancies that are “almost normal”, provided the disease is identified early enough and treatment protocols adhered to, along with maintaining a healthy diet and lifestyle. This is according to Jonathan Elcock, founder and CEO of CompariSure, who says that South African life insurance companies have drastically adapted their approa

Invest in the rights, not just the land

Land restitution remains a burning question in South Africa and remains an emotional, highly charged, divisive matter. Johan Fourie, associate professor in economics at Stellenbosch University, looks are countries that got it right and what we can learn from them. THE GREATER OF TWO RISKS We all know the arguments against expropriation without compensation and its effect on investment. When farmers realise they may lose their land, they are less likely to maintain or expand irrigation, build more storage facilities or buy new tractors or harvesters. When banks realise that their clients may lose their collateral, they are less likely to extend loans. When potential foreign investors risk los

Is cash king?

It has been a good few years for cash. As shown in Graph 1, over the past three years cash (i.e. highly liquid assets, like money market funds and fixed-interest assets, such as Treasury bills) has delivered decent returns, when compared to equities and bonds, with significantly less volatility amid ongoing global uncertainty. This has been particularly pronounced this year, with cash delivering 6% versus -9.38% for the FTSE/JSE All Share Index (ALSI) as at end October 2018. However, when you look at the same graph over a longer period, a different picture emerges. Graph 2, which goes back to 2000, shows that over the long term, cash materially underperforms equities and bonds. Should you ta

Don’t hide behind the TCF shield

One of the biggest debates that has been present in the retirement savings industry for many years is that causal events charges are high and are detrimental to the public who want to move jobs and by default retirement funds. It was once again an issue that the Pension Funds Adjudicator had to deal with during its 2017/18 reporting period. In this case, it was a fund that quoted Treating Customer Fairly (TCF) principles as the reason behind a causal event charge. The basics While the complaint was dismissed, Muvhango Lukhaimane – the PFA – said causal event charges were obscure and mitigated against TCF principles because they could not be translated into value for members. Ms J Du Toit (th

The growing importance of social capital

The 2018 Deloitte Global Human Capital Trends report showcases a profound shift facing business leaders worldwide: The rapid rise of what we call the social enterprise. This shift reflects the growing importance of social capital in shaping an organization’s purpose, guiding its relationships with stakeholders, and influencing its ultimate success or failure. In 2018, we are witnessing seismic changes in the workforce, the workplace, and the technologies used in the world of work. Based on this year’s global survey of more than 11,000 business and HR leaders, as well as interviews with executives from some of today’s leading organizations, we believe that a fundamental change is underway. Or

FSCA statement on the Momentum/Ganas case

The FSCA has noted the recent decision by Momentum to make a payment to the Ganas family in relation to a 2017 life policy claim, after its initial decision was not to pay due to non-disclosure by the deceased of a medical condition. We acknowledge there is often a disconnect between what customers think is fair and what the industry deems fair based on decades of practice and precedent, as the public engagement on this case has highlighted. The outcome of the case reflects the spirit of discussions between the FSCA and Momentum. Notwithstanding Momentum’s decision on how to deal with the case, this has provided an opportunity for further engagement with the life insurance industry as a whol

Ombud urges full disclosure when buying insurance

An insurance claim may be rejected even if the non-disclosed information has no bearing on the occurrence that initiated the claim. The Ombudsman for Long-Term Insurance, Judge Ron McLaren, says there is a common misconception that the non-disclosure of material information by an applicant for life insurance has to be linked to the claim event in order for the insurer to be able to repudiate the policy. “This is not so,” he said, adding the reason why the cause of the claim is irrelevant to the non-disclosed information, has to do with the insurer’s initial decision to grant cover. “When one applies for a policy and is asked questions about his or her health, hobbies etc., the insurer relies

Financial Sector Conduct Authority (FSCA) publishes two discussions papers for public comment by 15

The Financial Sector Conduct Authority (FSCA) published the following two discussions papers for public comment by 15 January 2019: A. Discussion paper on the implementation of a Short Sale Reporting and Disclosure Framework In response to the finding in the 2014 IMF Financial Sector Assessment Programme that South Africa did not have a reporting framework in place for short sales, the FSCA herewith publishes a discussion paper that sets out proposals to address the shortcoming, comprising: (a) flagging of short sale orders on an exchange trading system and the public disclosure of aggregated short sale transactions across authorised users of the exchange per security (“transaction reporting

Charity gift guide: A festive gift guide with a difference

With the festive season fast approaching, many of us are getting into the gifting spirit. If you’re searching for something special for someone who already seems to have everything or perhaps a loved one who loves to give back, maybe it’s time to do gifts differently. Instead of gifting material things, consider donating to a pertinent cause in a friend or family member’s name. Francois Adriaan, head of the Sanlam Foundation feels passionately that the festive season should be about helping others. “Pick a cause you know they’ll care about and, with a quick click, you’ll have given a meaningful gift – to your loved one and chosen charity!” The Giving Organisation is a great way to give to el

Attributes of a good Healthcare Adviser

Many people do not realise the value that a healthcare adviser can add to their lives when it comes to making the right choices regarding their medical scheme. In the past, the term medical scheme broker was commonly used, but as more alternative healthcare products have become available, the term healthcare adviser has become preferable as the service offered extends beyond pure medical scheme advice - although this remains an important part of any healthcare solution. What should a healthcare adviser be doing for you? Most medical schemes announce their changes for the following calendar year from September onwards. The changes normally come into effect on 1 January and towards the end of

Top 25 savings tips to win at budget bingo

Numerous variations of ‘Bingo’ have been trending on Instagram stories this year, like ‘apartment Bingo’ – with an assortment of must-haves for millennial’s apartments – and indoor plant ‘Bingo’, because all the cool kids want to tick off that illusive pink-striped ficus. Now, there’s Budget Bingo - the Sanlam bingo game that can save you a few pretty pennies this festive season. ‘Tis the season for overindulgence – and overspending – so avoid the pitfalls of debt and credit shortfalls by calling ‘BINGO’ instead. Share the game with your friends and family and start a challenge to see who can tick off all 25 ways to save the fastest. There’s nothing like a little bit of friendly competition

Air Pollution Is The Greatest Human Health Risk

The University of Chicago's Air Quality Life Index was published on Monday and it found that air pollution is the world's top killer. Particulate pollution exceeding WHO guidelines is causing the average person worldwide to lose 1.8 years of life expectancy. Putting that in perspective, it is worse than first-hand cigarette smoke, alcohol, HIV/AIDS and conflict. The researchers state that if the current state of particulate pollution persists, the global population will lose a total of 12.8 billion years of life. Of course, some areas are suffering more than others and in some parts of India, people could lose up to 11 years of life expectancy due to inhaling polluted air. China and India

Momentum: Is It The Right Decision?

Momentum made headlines when it was reported in the media that the company would not be paying out a claim made after the death of Nathan Ganas who died after being shot in a hijacking. There was a significant public outcry from clients and consumers with many accusing Momentum of looking for a reason not to pay out a claim. However, the reality of this case was that there was non-disclosure which was brought before the Life Ombud. Educating the nation From the public outcry, it is clear the clients and consumers do not necessarily understand the ramifications of non-disclosure. And although Momentum made a clear attempt to uphold the rejection and use the opportunity to educate consumers a

Your emotions may be out of control; Indexation never is!

You may be aware that 80.58% of all funds in the General Equity sector of South Africa underperformed the market (J203T: FTSE/JSE All Share Index Total Return) for the five years ending 31 October 2018. In other words, you stood a very high chance of underperforming the market by making the decision to invest in an active equity fund. And this figure does not include funds that have closed down…usually due to a poor track record. Your other option could have been to make use of an indexation product and earn a return close to the market performance. - a much safer investment proposition. Only 20 out of 103 funds were able to outperform the market. This means that investors stood a 19.42% cha

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