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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.


The key question for successful investing

Many investors ask, “How much money can I make?” before taking an investment position. But events like the accounting scandal at Steinhoff or business fraud at Theranos – and their subsequent share price collapses – highlight that an investor’s first consideration should rather be “How much money can I lose?” And risk extends well beyond the crass risk of accounting scandals and fraud: it can also take a veiled form, such as the “slow puncture” experience by industrial giant General Electric; it can flow from industrial shifts, seen in the cases of one-time champions Nokia, Xerox and Kodak; and risk can also flow from hubris, where AOL-Time Warner arguably stands out as one of the greatest f

So what cover do you need? And when?

Asisa’s recent South Africa Insurance Gap Report identified a death insurance gap of about R12.9 trillion in SA, and a disability insurance gap is around R16 trillion. These findings highlights that SA income-earners are underinsured for death and disability by R28.9 trillion. The dramatic cover deficit has long-term implications for individuals and the country at large and part of the problem, is a lack of understanding regarding which policies are necessary for adequate risk protection. Moreover, many young people find it extremely daunting to decide what kind of cover is important, especially on a starting-out salary. This leaves them with a burning question: “So, what cover do I need, a

FSCA provisionally suspends the license of Afrikan Financial Services

The Financial Sector Conduct Authority (FSCA) warns the public to act with caution when dealing with Afrikan (Afrikan Financial Services (Pty) Ltd FSP 48238). This followed the Authority’s decision to provisionally suspend the license of Afrikan due to information received indicating possible misuse of a FSP license. The Authority is investigating a number of complaints received, alleging that Afrikan was taking investments from members of the public and promising unrealistic returns ranging from 9% to 50% monthly. It was further alleged that when clients needed to withdraw their funds, Afrikan failed to oblige. The public’s attention is drawn to the fact that Afrikan is not permitted to eng

FSCA, FIC, SARB, SARS and National Treasury Joint statement on consultation paper on crypto assets

The Financial Intelligence Centre (FIC), Financial Sector Conduct Authority (FSCA), National Treasury (NT), South African Revenue Service (SARS) and the South African Reserve Bank (SARB) this week released a consultation paper on crypto assets. Commonly referred to as crypto currencies, crypto assets are digital representations or tokens that are accessed, verified, transacted and traded electronically by a community of users. An initial public statement on crypto assets was issued by South African authorities (see notes below) in 2014. Their statement warned members of the public about the risks associated with the use of crypto assets for the purpose of transacting or investing, and advise

FSCA warns the public against Wig Markets

The Financial Sector Conduct Authority (FSCA) warns the public not to do any financial services business with Wig Markets. Wig Markets is not authorised in terms of the Financial Advisory and Intermediary Services Act, 2002 (“FAIS Act”), to render any financial advice and intermediary services. The FSCA received information that there is a company called Wig Markets which operates through the website wigmarkets.com. Wig Markets falsely claims on their website that they are regulated by the Financial Services Board (the predecessor to the FSCA). Wig Markets is not a registered financial services provider and was not authorised by the Financial Services Board and has not been authorised by the

Spotlight on mental health in the workplace as Davos champions the cause

For the first time, the World Economic Forum’s Annual Meeting had an unprecedented focus on mental health, calling for more support for affected people in the workplace. Speaking on a panel at the meeting of global leaders in Switzerland, Prince William shared his belief that employers have a vital role in promoting mentally healthy societies and workplaces. South African research involving more than 1 000 employed and previously employed workers or managers in the country has proved that depression is not just a ‘bad mood’ - 74% of respondents reported experiencing trouble concentrating, forgetfulness and/or indecisiveness last time they were depressed. According to nearly half of the parti

Seven considerations when investing your retirement savings in shares

Shares make good long-term investments, and this is no different when it comes to retirement savings – perhaps the ultimate form of long-term investment. Knowing how much to save and understanding some basic investment principles will put you in an excellent position to achieve your retirement savings goals. Here are seven pointers to bear in mind when saving for retirement by investing directly in shares. 1. Be clear about your goal When working and saving, the goal of your retirement portfolio should be to earn the highest possible rate of return while not taking so much risk that it scares you into pulling out of the market during a downturn. Once retired, your goal changes. A differen

Preserving wealth across generations

People hate losing money. In fact, this aversion to the loss of money is so significant it has become the subject of a substantial number of studies. The “pain” that is felt when people lose money is stronger than the “joy” of a gain. And it is even more pronounced when a person has worked hard to build their capital base, often through diligent behaviour and determination, over many years – possibly even a lifetime. However, it is in families, where a parent has built a legacy for his or her children that the potential for loss particularly comes to the fore – many wealthy families seldom see the transition of their wealth beyond the second and third generations. As a result, the successful

Fairheads Benefit Services wins IRFA Best Practice Award for guardian roadshows

Fairheads Benefit Services has been awarded the IRFA Best Practice award for its groundbreaking grassroots communication initiative, the Guardian Roadshow. The Guardian Roadshow is an annual member outreach which Fairheads, as Southern Africa’s leading independent service provider of beneficiary funds, has successfully executed over the past nine years. The Guardian Roadshow takes the form of a series of workshops conducted in central venues in locations across South Africa, Lesotho, Swaziland and Mozambique. The workshops provide a platform for clients to be educated about how beneficiary funds work, the various role players involved, the policies and procedures of the fund and the service

Institute of Retirement Funds Africa announces best of the best at its annual awards ceremony

The Institute of Retirement Funds Africa (IRFA) industry awards and recognition programme has evolved considerably since its initial inception as a “Communication Challenge” some 31 years ago, into a robust and respected programme which seeks to identify and promote best practices and standards in retirement fund governance, transformation, investment practices, stakeholder engagement, trustee development and financial management and reporting. Awards were handed out at a well-attended gala banquet held at the Wanderers Club in Johannesburg on the 23rd January. Those winners acknowledged for excellence of standards and practice are: The Gold Standard Transport Sector Retirement Fund Natal Jo

What you need to know about retirement saving

Retirement funds offer tax-free growth and tax-deductible contributions, making them the most efficient way to save for retirement and ensure you can retire financially secure. These include pension funds, provident funds and retirement annuities (RAs). Government has been trying to standardise the treatment of all retirement funds over the past few years, and as a result the differences have gradually been eroded. Retirement annuities vs pension and provident funds – what’s in a name? A pension or provident fund is offered by an employer to help its employees save for retirement. Many employers make it compulsory to join its retirement fund, but employees can usually decide what percentage

Making it count in an important year

In September 2018, Alexander Forbes made headlines when it announced that it had fired its CEO Andrew Darfoor. A few weeks after Dafoor’s dismissal, Naidene Ford-Hoon, Alexander Forbes CFO, handed in her resignation. Ford-Hoon’s resignation was followed by the resignation of Leon Greyling (CEO of Alexander Forbes Investments), Vishnu Naicker (Alexander Forbes Group Chief Risk Officer), and Christian Schaub (Alexander Forbes Chief Human Resources Officer) who all resigned in December 2018. This was the unprecedented departure of almost all of the company’s executive staff members. Darfoor was replaced by Dawie de Villiers who joined the company from Sanlam EB where he played a similar role. W

Checklist: How to retire with enough

Six steps to reaching 6% status To be part of the 6% of South Africans able to retire comfortably, you need to actively plan for a better retirement. Apart from starting as early as possible, Jac de Wet, National Head of Sales at PSG Wealth says there are six steps you can follow to maximise your retirement savings, giving you a better chance of ending up on the right side of the statistics. 1. Save more Cutting back on expenses by making small adjustments to your standard of living could allow you to add more to your retirement each month. “Increase your retirement annuity by R1 000 per month by means of a debit order to make it easier,” de Wet says. “An extra R1 000 into your retirement an

Policy uncertainty, slower growth may present investors with opportunity

As global politicians, businessmen and academics gather in Davos for this year’s World Economic Forum (WEF), our expectation is that the current uncertainty with respect to global growth will be a hotly debated topic. Globalisation is the key theme for this year’s event and so as investors we find it appropriate to examine the possible effects of globalisation in a decelerating growth environment in the context of equity markets. It is widely accepted that globalisation offers many advantages and is especially beneficial to emerging markets as an increasingly integrated world encourages trade, better technology and innovation and improves access to global capital markets. However, in the cur

An Introduction to Retirement Benefit Counselling and what it means for your pension

Statistics indicate that only about 6% of South Africans are able to meet their retirement income objectives and retire comfortably. Compounding this issue is that 97% of South Africans elect to withdraw their retirement fund savings in cash when they resign or are retrenched. According to Happy Ngale, Operations Manager for Financial Well-Being at Alexander Forbes Retail, a big reason for poor decision making when it comes to retirement funds is that members don’t have access to financial advice, where the implications of each option and decision will have on their future retirement income, are fully explained. The Pensions Fund Act (PFA) has been amended to include Retirement Benefit Couns

A generation of unwilling pensioners

A somewhat grey and gloomy reality faces most of us as future-retirees in South Africa. High fees, declining returns, and insufficient contribution and saving rates are frequent topics of discussion. As a generation of baby boomers reaches retirement, there’s another important question that’s been getting more attention globally: What is the right age to retire? Should SA’s aging workforce be working – and contributing – for longer? Retirement reforms in some countries have seen the retirement age increase, at times sparking the ire of would-be pensioners. Brazilian authorities faced widespread public opposition, as did the Italians. This cohort of 50-something workers wants to retire at 55

Indexation: It’s Not Only About Fees…

The majority of fund managers consistently underperform the market. Some returns are so poor that it can take years for investors to recover. Investors will happily share successful bets that they’ve made, but they are reluctant to report those that resulted in a disastrous outcome. The equity market is the best performing asset class over the long term and investors that utilize indexation-based equity funds tend to perform better than their peers only making use of active funds. Investors have much to benefit by allocating a meaningful portion of their equity exposure to an indexation-based strategy. The graph below illustrates how the market (black line) persistently outperforms the avera

The benefits of maximising your ra contributions before tax year end

As the afterglow of the festive season fades, we turn our attention to planning for the next 12 months and beyond. This is a great time to reassess where we are in our journey to financial well-being. One of the key components to this is when we take our steps into eventual retirement and what will that look like for us. Will we be able to maintain our current standard of living or will we need to make some adjustments to how we live. Here is where a trusted financial planner will be able to assist you. They will be able to look at your current retirement preservations and what you need to do going forward to reach your retirement goals. One of the ways in which you can enhance your provisio

Davos to start against growing resistance to globalisation

It’s that time of year again where more than 3000 of the world’s top leaders including heads of state, central bankers and representatives from many of the world’s top companies converge on the little town of Davos, Switzerland for the annual World Economic Forum (WEF). The aim of the gathering is to attract people of influence to seek ways to improve the state of the world. The common thread has for years now been one of promoting globalisation: the interaction and integration of people, governments and companies worldwide. This year’s theme is “Globalisation 4.0: Shaping a global architecture in the age of the fourth Industrial Revolution”. However these lofty ambitions may be challenged b

FSCA warns of TCFs importance

Over the past two years, the Financial Services Conduct Authority (FSCA) has increased its efforts to ensure that insurers and financial advisers adhere to the six outcomes that are stipulated by Treating Customers Fairly (TCF). While many insurers and financial advisers have been studiously adhering to these outcomes, there is some concern that there are areas of ambiguity when it comes to TCF implementation within the retirement industry. As part of its efforts to improve its communication with the insurers and financial advisers, the FSCA discussed this topic in its latest FSCA Bulletin. The implications on the industry are extensive, so we have highlighted a few key points. Meeting speci




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