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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.


Aiming to preserve 27 000 South African jobs

Aiming to preserve 27 000 South African jobs - 5 Insights into Sanlam’s Investors’ Legacy range Cape Town, 30 July 2020: As South Africa’s unemployment rate rises past 30%, the country is reaching breaking point, and Sanlam Investments is calling on all those who can help to do so, urgently. Last month, Sanlam Investments launched the Investor’s Legacy range with the specific objective of preserving South African jobs. The response from investors across South Africa has been overwhelming. The range consists of three impact funds, which share the common goal of backing companies negatively affected by COVID-19 but have a strong likelihood of producing sustainable cash flows after the pandemic

Why institutional investors are embracing multi-asset strategies – but not all are equal

Q&A with Schroders fund managers about why not all multi-asset strategies are well suited to navigating our current uncertain and volatile environment, and a 60/40 approach may just not cut it anymore While no one can predict the future with any certainty, there are features of today’s investment environment that we see as becoming important drivers of future returns. These are our “inescapable investment truths”; a combination of global economic and disruptive forces that we believe will result in low growth, low inflation, low interest rates and low market returns compared to the last 10 years. The advent of Covid-19 has only served to reinforce these trends, creating a challenging backdro

Five mistakes to avoid if you’re being retrenched

Coming to terms with getting retrenched will never be easy. And as thousands of people are being retrenched this year across companies and industries, it is fast becoming a reality in many households in South Africa. Once you’ve recovered from the initial shock of being informed of the retrenchment, there are some key details that will have profound financial implications and that you cannot afford to overlook as you undergo one of the toughest processes in your working career. These are just some of the most common mistakes made by people facing retrenchment. Mistake #1: You think a severance benefit and retrenchment benefit are the same thing A severance benefit is the amount of money that

Losing your income due to COVID-19 doesn’t mean you can claim disability – here’s why

The labour court has been busy lately with numerous cases being battled out as many employers try to enforce a no-work-no-pay principle during lockdown in an effort to alleviate some cost pressures. Momentum Corporate reported that up to 25% of its employer client base have asked for some form of relief in terms of premiums and retirement contributions. But the insurer is concerned that there could be a looming influx of unfounded disability claims especially where employees designated as “vulnerable” are put off work for long periods with no income. “We saw requests from employers for retirement fund contribution relief peak at about 25% of our employer client base. Of those employers who h

There are dangers to investing ‘at any cost’

The importance of human emotions in investment decision-making is firmly established. As investment professionals, we are witness to its impact on a daily basis when dealing with clients. It is often said that the drivers of stock market returns are fear and greed, and at no time more so than in the current environment. The pandemic has created turmoil, not only by disrupting our own daily routines, but also that of whole economies. After a precipitous initial market plunge, many markets have (on the face of it) staged a subsequent recovery, driven by unprecedented stimulus from governments. Those who look below the surface, have however noted that this recovery has not been broad-based, but

After the storm: Ensuring a safe and compliant post-Covid workspace

Following the 2020 global Coronavirus pandemic, the ability to operate in a safe and clean working environment is one of the primary challenges in operations and maintenance. The post-COVID context is redefining what it means, exactly, to be “safe and clean.” This new normal means organisations and businesses must evolve and adjust to meet increasing regulatory scrutiny and a heightened focus on clean practices. However fluid the current situation and regardless of the existence or lack of official guidance, a successful enterprise should work to stay ahead of the curve, taking steps to prepare for whatever is next. This means embracing a new level of systemised asset management that continu

Dementia: Heartbreaking, sad… and also a major financial problem

Dementia is a major threat to all pensioners. And then we have Covid-19 pandemic, which is a particular threat to the elderly, and all the other health issues that inflict the aged. It is important that this column is read by both parents and their children. The problems of dementia, including Alzheimer’s disease, are: Costs: The treatment of serious illnesses, including dementia, can be long and drawn out, costing a lot of money. Frail care can cost up to R40,000 a month, in addition to the cost of medicine, nappies and medical aid contributions. Frail care and home care are only covered on the top medical aid options, and there are rand limits. Scams: Pensioners are subject to more scams t

Beware of get-rich-quick schemes in tough economic times

If it sounds too good to be true, you can safely assume that it probably is, says Leon Campher, CEO of the Association for Savings and Investment South Africa (ASISA). Campher says while there will always be fraudsters devising schemes to trick unsuspecting members of the public out of their hard-earned cash, plying their trade becomes easier during tough economic times. “Never before have so many South Africans faced financial hardship on such a widespread scale and desperation makes people more willing to take a chance on something that would normally set off alarm bells.” Campher cautions consumers to expect to be confronted by people trying to talk them into joining pyramids schemes, Pon

SMMEs, more than ever, need a hand-up

There’s a lot big clients can do to help their small suppliers to survive, and thrive. A tough economy – like we have now – impacts every business from large to small. As the economy gets tougher, the consumer is pinched, and that’s when particularly small businesses take the knock. SMMEs are fragile. We’ve seen this. They simply don't have the depth of capital or flow of income that larger businesses have, so any event that affects the economy will have an impact on them first. Some will have the resilience to pull through; others won't. Even prior to Covid-19, that’s exactly the situation South Africa’s SMMEs were in. Recovery will therefore be difficult, and it’s not going to happen by

Aligning your savings plan to your life stage

In the middle of a crisis it can be difficult to quiet the storm. However, it is important to keep sight of your long-term goals and ensure that your financial plan will continue to meet your needs appropriately as you move through life. The life stage investment model: is it just for retirement savings? Life stage investment models are usually referenced within the context of planning for retirement savings, looking at the stages that you go through as a build-up to your retirement. Although this is useful and important, it is also imperative to think about your life stages as a continuum that flows past the point of retirement. Remember the basics in every life stage First and foremost, cr

South Africa faces wealth deterioration crisis - How understanding the real value of good financial

The Centre for Applied Research (CAR) reported that the global financial services industry is facing a ‘crisis of faith’, as clients increasingly question the cost of advice that they believe they could have gotten on the Internet for free. Nevertheless, statistics still show that people who use financial advisers tend to be better off, as they work according to a plan devised for them by a qualified person who, by law, must meet specific minimum requirements. This is according to Ray Mhere, Head of Momentum Investments Distribution, who says that while the industry may indeed be facing a crisis of faith, the country is facing its own crisis – one of wealth deterioration. He refers to the la

What a nutritionist, a fund manager and a balanced meal have in common

Ebeth van Heerden, Head of Intermediary at Schroders South Africa explains multi-asset investing and how can it be used by investors in volatile times. I recently saw multi-asset funds described as a “balanced investment ready-meal”. I thought it such an apt description. A balanced meal has a variety of food groups represented, each providing different nutritional benefits. You’ll have some protein, some carbohydrates, some healthy fats and some vegetables. The combination keeps you healthy and in the right proportions can help reduce your chances of getting sick. A multi-asset fund is made up of multiple asset classes, usually with the aim of producing returns at a relatively lower level of

Why you should take leave during lockdown

With no clear indication on when Covid-19 lockdown restrictions will end, mental illness, exhaustion and burnout should be a concern for companies. For this reason, they should encourage employees to use their leave days even when self-isolating. With many people having had to cancel holiday plans during the March/April religious holidays and June school holidays, disappointment levels as well as the risk of burnout are at an all-time high. Many employees save the bulk of their leave for December, but it has never been more important to highlight the benefit of regular, intermittent time off than now. While social distancing means limiting interaction with friends and family, making the pros

Why investing sustainably can get you better income and better outcomes

For those that remain sceptical, we show that an integrated ESG approach can improve income stability. Not only is it possible to combine income investing and sustainable investing, we believe you can actually make your income more resilient, smooth and reliable by investing sustainably. Many things have changed for investors in a post Covid-19 world, but the needs of income investors haven’t. They still want their income to be high, stable and not at risk of being impaired by dividend cuts or persistently low yields. We think income should be sustainable in both senses of the word: in terms of time horizon (because, by definition, it doesn’t just happen once), and from an environment, socia

There are pensioners who beat both the Covid-19 pandemic and the Zuma regime kleptocracy

Many pensioners were not seriously affected by the Covid-19 pandemic and the corruption that undermined the South African economy – the reason was the value of the rand. Pensioners who beat both Covid-19 and the Zuma-era kleptocracy generally had one thing in common: they had the benefit of a financial adviser to make sure they had a sound and well-considered plan upfront. Many pensioners who invested the bulk of their invested linked living annuities (living annuities) offshore have found themselves in a stronger position, even when foreign investment markets and the rand were at their worst. The rand dropped by more than foreign investment markets. This meant that both foreign equity and b

Six Steps to prepare for retirement as an entrepreneur

The importance of entrepreneurship and the people who drive it can never be overemphasised. The main reason could be that entrepreneurs create new products and services, thereby stimulating the micro- and macro-economy. Maybe it is because entrepreneurs create and disrupt the normal into a new normal by challenging the status quo. Whatever the reasons are, most people acknowledge that entrepreneurs create jobs and wealth, influence the community and community development, and in general improve products, services and the lives of people. For many entrepreneurs the current climate of lockdown, limited movement and a ban on certain products are a horror story on its own. Add to this the usual

Ten questions to help you retire into a better world

2020 – the year that forced history to sit up and reckon with itself. For those entering the world of work, the word “pension” or “retirement” may sound far off. Given that you have until 2060 (at the very least) to reflect upon its importance, is it really a debate for “today”? If we are living twice as long, it is fair to assume that healthcare costs increase. If population growth increases faster than death rates, it is safe to assume that a greater societal and environmental burden exists. For thousands of years, economic progress was largely linear and linked to population growth. Without machines or technological innovations, one person could only produce so much with their time and re

Is Covid-19 our chance to fast-track renewable energy in SA?

Many are calling on South Africa’s government to use its coronavirus economic-stimulus package to boost renewable-energy rollout in South Africa. However, leading energy experts say that in order to accelerate its renewable-energy targets, the country needs political will and policy to boost private-sector confidence and investment. Ten years from now, Eskom will have to begin retiring most of its ageing coal-fired power stations. South Africa’s Department of Energy’s 2019 Integrated Resource Plan (IRP-2019), the blueprint for how the government will develop the national grid, has a target of replacing them with an initial 26.5% of installed wind and solar power by 2030. International mo

Data dependent SARB cuts repo rate by 25 basis points to 3.5% - Momentum Investments

The South African Reserve Bank (Sarb) Monetary Policy Committee (MPC) reduced interest rates by 25 basis points to 3.5% at the scheduled July 2020 interest rate-setting meeting on benign inflation and fragile growth. This matched the view of 13 out of the 28 analysts surveyed by Reuters (including Momentum Investments’ view) and was similar to the view expressed by the forward-rate agreement (FRA) market. Please see below highlights from the document prepared by the Momentum Investments Macro research desk. To download the full document in PDF, click here. Highlights _________________________________________________________________________________ The South African Reserve Bank (Sarb) Moneta

What can we learn from the Spanish flu?

Another month has passed, and it is time for us to step back and get some perspective Covid Things are starting to get real on this front. The negatives As the disease has progressed, many of our friends and family getting ill and, in some instances, dying. I was really rattled by some deaths that were close to home this month. We have rocketed up the Covid infection table and now have the 5th highest number of Covid infections in the world Alcohol has been banned again The positives Based on what has happened in the rest of the world, New Covid infections follow a pattern. It will get better! I have taken the bold step of booking a end of year holiday The progress towards finding a vaccin




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