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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.


Management of institutional assets – Are we ever going to get to an optimal state?

One would be forgiven to believe that institutional assets, such as life and retirement fund assets, ought to be invested with a long-term mind-set in mind. The bulk of the liabilities are due so far in the future that it stands to reason that the assets should aim to match the long-term nature of the liabilities. Therefore investing in real assets, as well as looking to further develop African stock exchanges by backing private equity companies whose exits can be facilitated by floating on the exchanges, can be a real boon for the South African, and African, economies. The converse, where the long-term institutional assets are invested with a short-termist mind-set, will ensure sub-optimal

Giving up smoking could afford you that dream holiday, or more..

Thanks to years of medical research, the link between smoking and cancer is undeniable. In some countries, like the UK, smoking accounts for approximately one in four cancer deaths, whereas here in South Africa, nearly 10% of all deaths are reportedly caused by smoking. It’s no wonder then that giving up smoking is such a popular New Year’s resolution. However, over and above the proven health benefits that come with kicking a smoking habit, many people fail to take into account the positive impact this resolution can have on their insurance premiums (not to mention their wallets). This is a point raised by Jonathan Elcock, founder and CEO of CompariSure, who explains that smokers typically

Deciphering the price of a unit trust

The price of a product tells you a lot about what you are buying. So what does the price of a unit trust tell you? Allan Gray’s Ray Mhere explains how a unit trust is priced and what it means for you as an investor. Many of us are familiar with unit trusts as an easy and affordable way to access financial markets. Your money is combined with the money of other investors who have similar investment goals. “Investment managers use the pool of money to buy underlying investments to build a portfolio, which is then split into equal portions called units,” asserts Ray Mhere, regional manager at Allan Gray. The number of units investors get depends on the amount of money they invest and the price

Including direct shares in your retirement annuity

Is it possible to structure your RA in such a way that you can invest in direct shares? The answer is yes, but unfortunately most people don’t know this. A Personal Share Portfolio (PSP) allows you to tailor your own bespoke share portfolio as part of your retirement investment strategy. Most RA platforms in South Africa now offer the solution for a portfolio manager to choose a selection of local and international shares, which, as a direct share portfolio, can be included in your retirement annuity investment and be actively managed. This solution offers quite a few advantages, including: Tax advantages No capital gains tax or income tax is payable within a retirement annuity, so you can h

New retirement fund default regulations to improve members’ financial decisions

South African retirement fund members are overwhelmed by countless options – from choosing an investment portfolio during their working years, to when they change jobs and need to preserve their retirement savings, and at the time of retirement when they need to choose an annuity that will sustain them for the rest of their retired life. This is the belief of Katherine Barker, Head of FundsAtWork at Momentum Corporate, who welcomes the implementation of the new retirement fund default regulations set for 1 March 2019, when retirement funds will be required to ensure that members receive benefit counselling to provide information and assist them in making appropriate decisions to enhance thei

Fedgroup driving industry reform in unclaimed benefits sector

Independent South African financial services provider, Fedgroup, was recently awarded a tender issued by ARGEN Actuarial Solutions to administer four liquidated unclaimed funds, totalling R180m. ARGEN is an expert in the liquidation of retirement funds and it went through a selection exercise to select an ideal unclaimed benefit fund to house the benefits of untraced members in four of the retirement funds it recently liquidated. The funds are IF Umbrella Pension and Provident Funds, and Dynam-ique SA Umbrella Pension and Provident Funds. Individuals who were members of those funds are encouraged to contact Fedgroup should they feel benefits may be owed to them. Fedgroup was invited to tende

Sanlam shareholders approve package of B-BBEE transactions to enable growth

Sanlam has welcomed the decision by shareholders to approve the package of strategic empowerment transactions, which was announced on 31 October 2018. Shareholders voted in favour of the resolutions as follows: Special resolution number 1: Specific authority to the Company to issue securities for cash (98.88%); Special resolution number 2: Specific authority to provide financial assistance to a related party for the purpose of subscribing for securities (98.03%); Special resolution number 3: Specific authority to provide financial assistance to a related party for the purpose of, among others, acquiring securities in subsidiaries of the Company (97.43%); and Ordinary resolution number 1: To

Where Are People Concerned About Online Privacy

Executives from tech’s biggest companies have had to come before Congress to answer questions about their business model and steps they are taking to secure user data. Facebook, Twitter, and Google have all stepped into the hot seat, with Google going before Congress yesterday in the latest round of hearings. According to polling conducted by IPSOS and CIGI, internet users across all regions of the world are increasingly concerned about their online privacy. In the United States, 83 percent of internet users are increasingly concerned about their online privacy. France had similar results with 78 percent of respondents concerned about their online privacy, while in Germany 67 percent of i

The real costs of summer fun in the sun

With South Africa’s sizzling summer season already making (heat) waves, now’s the time to invest in factor 50+ sunscreen and cover up! SA’s skin cancer incidence rate for melanomas ranks alongside Australia’s, with a startling lifetime risk of 1 in 50. Dr Marion Morkel, Chief Medical Officer at Sanlam, says, “It’s not surprising that we have one of the highest skin cancer rates in the world, considering we have one of the highest UV exposure indexes and an active lifestyle that inevitably involves prolonged sun contact. This translates to us ranking third (Australia and New Zealand take top spots) in longevity studies for high mortality experiences due to skin cancer.” Although cancer is the

Top seven money-saving tips for financial success in 2019

With the excesses of festive season spending behind you, the New Year represents the perfect opportunity to whip your finances back into shape, beginning by implementing these seven simple money-saving tips from Citadel Advisory Partner Daryl Coker. 1. SET YOUR FINANCIAL GOALS “As humans it’s common to want to wipe the slate clean in January, and look for ways to do better than we did the year before – especially with a debt hangover from December spending still lingering,” notes Coker. January is thus the perfect time to reflect on your accomplishments during 2018, and set new financial goals for the year ahead. These may include paying off debts, saving towards a deposit on a home, or even

Load shedding risks calls for vigilance

Following the recent countrywide implementation of stage 2 load shedding by state power utility, Eskom, South Africans are cautioned to protect themselves, their property and their valued belongings. There are grave potential financial repercussions of not only the load shedding process, but also the dangerous power surges that can ensue as a result of electricity outages. This is according to Christelle Colman, Executive for High-Net-Worth Solutions at Old Mutual Insure – who says that in her experience, the two most common risks associated with load shedding in South Africa include the potential damage to household appliances and the safety threat of security system malfunctions. “As we ap

Who's been swimming naked?

The past year has dished up its fair share of turbulence. There have been patches of smooth sailing, but headwinds have generally outnumbered tailwinds with the net result that, of the major equity markets at the start of December, only the United States (US) is in positive territory for the year, with the S&P500 up a paltry 1% year-to-date. By comparison, the German DAX is down 13% year-to-date and London’s FTSE is down 10% for the year. Even so-called safe haven assets have been battered in 2018, with the US government bond index down 1% for the year to December. South Africa set off the year on a stronger political footing. But, as can be inferred from the sea of red in foreign markets, t

Stocking fillers: Gift your child a tax-free investment this festive season

As a parent you may be looking for special ways to treat yourself and your loved ones this festive season, but rather than spending your hard-earned money on soon-to-be forgotten toys or designer clothing, now is the perfect time to invest towards your child’s future with a Tax-Free Savings Account, says Silindile Ngubo, Fund Accountant at Cannon Asset Managers. “Having recently become a mom, I have quickly come to know that as parents we want our children to have all the best things in life, and one of the key things that I would like to gift my child is a good financial future,” says Ngubo. “From the very first sight of my son, I made a commitment to provide him with everything that I myse

Investment lessons learnt in 2018

As an eventful year winds to a close, it’s a good time to reflect on the investment principles that turbulent markets in 2018 have once again reminded us of. When stocks trade at high multiples, there is little room for disappointment The list of FTSE/JSE All Share Index stocks trading at more than 50% below their five-year highs runs into the 50s. Of these, seven are trading at more than 80% less. That is hard to come back from if you bought in at the top. While not true for all of them, some of these shares traded at high multiples (well over 20 times – in some cases over 40 times!) before the decline. This implies that expectations for them were also high. Shares can trade at high price/e

Eight essential tips to make estate planning easier

Estate planning doesn’t need to be overly complicated, yet there are common mistakes we see people make that can have devastating outcomes for those left behind. Here’s what you need to be aware of. 1) Watch your wording A misunderstanding with wording in your will can result in the opposite of what was intended. If the executor of the estate and heirs to the estate have conflicting views about a will’s provisions (which can often happen), they will look to the Master of the High Court of South Africa (who must confirm the validity of the will) for a decisive interpretation of any contentious clauses. Common wording blunders include; “I bequeath my farm to my son and the cash in my ban

Carbon Dioxide Emissions Hit All-Time High

The Global Carbon Project has released new data showing that carbon dioxide emissions will hit an all-time high in 2018. That is directly due to human activity with a booming global car market and rising coal use in China among the main contributory factors. Scientists were hopeful when emissions plateaued between 2014 and 2016 but those hopes were unfounded. Emissions grew 1.7 percent in 2017 and are expected to rise 2.7 percent this year. In total, 37.1 gigatons of CO2 are forecast to be emitted this year and China is the world's worst offender, accounting for more than a quarter of global emissions. The Chinese government has attempted to rejuvenate the economy in recent years and as a

FSCA warns the public against Nhlanhla Business Development (Pty) Ltd

The Financial Sector Conduct Authority (FSCA) warns the public to act with caution when dealing with Nhlanhla Business Development (Pty) Ltd. Nhlanhla Business Development (Pty) Ltd is not authorised in terms of the Financial Advisory and Intermediary Services Act, 2002 (“FAIS Act”), to render any financial advisory and intermediary services. Nhlanhla Business Development (Pty) Ltd is fraudulently using FSP number 44720 which belongs to Aprix Life (Pty) Ltd. Aprix Life (Pty) Ltd has confirmed that no relationship exists between them and Nhlanhla Development (Pty) Ltd. The FSCA received information that there is a company named Nhlanhla Business Development (Pty) Ltd which purports to be a fi

Report by the FSCA on status of various investigations

The Financial Sector Conduct Authority’s (FSCA) held a meeting on 30 November 2018 to decide on various market abuse investigations. The FSCA is mandated to investigate, and in appropriate instances, take enforcement action in cases of market abuse on the financial markets. Three kinds of market abuse are prohibited in South Africa, namely insider trading, market manipulation (prohibited trading practices) and false reporting relating to the affairs of a public company. Our investigation procedures include interviews under oath, acquiring documentary evidence and obtaining assistance from foreign Regulators. In matters of insider trading the FSCA may order that the alleged offender pay an am

The case for listed property in an index-tracking vehicle

More than just a diversifier; the appeal is in the attractive yield. Listed property has often suffered from an existential identity crisis. Is it an asset class all on its own, or is it a distinctive sub-sector within equity? Or could it even be seen as a high duration bond? Most seasoned investment professionals consider listed property as a stand-alone asset class given its unique character where the return drivers are linked to both equities AND bonds. As an example, a share in a listed property company produces returns through the change in its share price which is linked to earnings/rental growth prospects (equity return driver), but also offers a regular income in the form of dividend

Sanlam reports significant strategic progress in 10-month operational update

Sanlam announced that it made significant strategic progress in the 10 months to 31 October 2018, while at the same time achieving a satisfactory operational performance. This demonstrates the Group’s ability to deliver shareholder value under challenging conditions while executing future growth strategies. The cluster businesses continued to execute their operational strategies and delivered an overall resilient operational performance for the 10 months ended 31 October 2018. This was despite weak economic conditions in a number of territories where the Group operates, including South Africa, and significant volatility in global investment and currency markets. The Group attributed its oper




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