Blue Chip Journal, Issue 77

Blue Chip is a quarterly journal for the financial planning industry and is the official publication of the Financial Planning Institute of Southern Africa NPC (FPI), effective from the January 2020 edition. Blue Chip publishes contributions from FPI and other leading industry figures, covering all aspects of the financial planning industry.

Blue Chip is a quarterly journal for the financial planning industry and is the official publication of the Financial Planning Institute of Southern Africa NPC (FPI), effective from the January 2020 edition. Blue Chip publishes contributions from FPI and other leading industry figures, covering all aspects of the financial planning industry.


Create successful ePaper yourself

Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.

<strong>Issue</strong> <strong>77</strong> • October 2020<br />

www.bluechipdigital.co.za<br />

The Official Publication of the FPI<br />

How to navigate<br />

volatile markets<br />

Florbela Yates, Momentum<br />

Investment Consulting<br />


DEBATE<br />


The value of a<br />

life-centred approach<br />

Financial planning with life planning at its core<br />


FPI Financial Planner of the Year 2020<br />

Johan Swart • Hester van der Merwe • Henri Le Grange

INVEST<br />


With Satrix, investing globally is as easy as investing at home. Our global exchange-traded<br />

funds track the MSCI World Index, MSCI Emerging Markets IMI, MSCI China Index, S&P 500 ®<br />

and the Nasdaq-100 ® . Access the power of these global markets at www.satrix.co.za.<br />

Satrix Managers (RF) (Pty) Ltd (FSP no. 15658) is an authorised financial services provider and a registered and approved manager in terms of the Collective Investment Schemes Control Act. A schedule of fees is available from the Manager.

LOCALLY.<br />



ISSUE<br />

<strong>77</strong><br />

OCTOBER 2020<br />

04<br />

06<br />

08<br />

12<br />

14<br />

16<br />

18<br />

20<br />

22<br />

23<br />

24<br />

26<br />

31<br />


Message from the CEO<br />


By Alexis Knipe<br />


Milestones, news and snippets<br />


The University of the Free State introduces its<br />

innovative financial coaching programme<br />


For a well-established industry, there is a surprising<br />

amount of ongoing changes taking place<br />


<strong>Blue</strong> <strong>Chip</strong> sits down with Zisanda Gila, Lead Portfolio<br />

Manager, Momentum Investments<br />



Andrew Ratcliffe, Private Client Wealth, on how<br />

to manage your finances in the mass economic<br />

devastation that the coronavirus has left in its wake<br />


Nedgroup advises on how to navigate a<br />

smoother retirement<br />


<strong>Blue</strong> <strong>Chip</strong> catches up with Kondi Nkosi, Schroders,<br />

Country Head, South Africa, to find out what is<br />

happening in the offshore investments sphere<br />


Column by Florbela Yates, Head of Momentum<br />

Investment Consulting<br />



Petroleum Agency SA invites the world<br />

to discover our nation’s riches<br />


The great boutique debate<br />


Zama Zulu, Portfolio Executive at RMI IM,<br />

tells <strong>Blue</strong> <strong>Chip</strong> about her role in mentoring<br />

South Africa’s top investment talent<br />

32<br />

34<br />

36<br />

38<br />

40<br />

42<br />

44<br />

46<br />

48<br />

50<br />

52<br />

54<br />

56<br />


Alida de Swardt, CEO of RMI IM, inspires leaders to use<br />

their skills combined with positive energy and a growth<br />

mindset to successfully achieve goals<br />


The balance between financial security and living well<br />


An overview of the Humans Under Management<br />

South Africa 2020 virtual conference<br />


The power of women coming together<br />


Creating value for the female market<br />


Financial planning coach Louis van der Merwe speaks<br />

about benefitting from the shock<br />



Debbie Netto-Jonker, CFP®, Financial Planner of the Year<br />

2001, recalls what winning the award meant to her<br />

10 REASONS<br />

Why you should not miss the<br />

2020 FPI Professionals Convention<br />


FORWARD TO AT THE 2020<br />


The first-ever 100% digital FPI Professionals Convention<br />


Michelle Hoskin inspires all to make<br />

excellence your standard<br />


Kate Holmes on bringing your absolute best self<br />

to your clients<br />


Kim Potgieter reveals the value of a life-centred<br />

approach in financial planning<br />


Satrix deliberates if now is the time to be<br />

investing in China<br />

2 www.bluechipdigital.co.za

100 % SAVINGS<br />

0% TAX<br />


RATHER PAY 0% TAX?<br />



Are you taking advantage of your tax-saving opportunities?<br />

With tax-free investments, you pay no dividends tax, income<br />

tax or capital gains tax on your investments.<br />

With the expertise of SA’s top Fund Managers, you can<br />

maximise your tax-free investments to fund that special goal<br />

you have in mind, or boost your retirement savings. You can<br />

contribute up to R33 000 per year, with a lifetime limit of<br />

R500 000.<br />

Contact our client services team on 0860 123 263 or<br />

clientservices@nedgroupinvestments.co.za<br />

or talk to your financial planner.<br />

www.nedgroupinvestments.com<br />


Nedgroup Collective Investments (RF) Proprietary Limited is the company that is authorised in terms of the Collective Investment Schemes Control Act to administer the<br />

Nedgroup Investments unit trust portfolios. Unit trusts are generally medium to long term investments. The value of your investment may go down as well as up. Past performance<br />

is not necessarily a guide to future performance. Nedgroup Investments does not guarantee the performance of your investment and even if forecasts about the expected future<br />

performance are included you will carry the investment and market risk, which includes the possibility of losing capital. Unit trusts are traded at ruling prices and can engage in<br />

borrowing and scrip lending. Certain unit trust funds may be subject to currency fluctuations due to its international exposure. Nedgroup Investments has the right to close unit<br />

trust funds to new investors in order to manage it more efficiently. A schedule of fees and charges and details of our awards are available on request from Nedgroup Investments.


Lelané Bezuidenhout CFP®, CEO, Financial<br />

Planning Institute of Southern Africa<br />

What’s happening<br />

at the FPI?<br />

Planning for the first-ever FPI Professional Digital<br />

Convention 2020 enters the final phase. And an MOU<br />

with the Actuarial Society of South Africa.<br />

Greetings from a slightly warmer Johannesburg.<br />

I can’t believe it has been three months since<br />

I last wrote to you. 2020 has been unique in many<br />

ways and the full reliance on technology during<br />

lockdown opened so many doors via quite a few digital<br />

platforms, enabling us to stay in contact with our members<br />

and key stakeholders.<br />

We are busier than ever and between planning the<br />

Convention and doing our bit to help our members (and<br />

their clients) navigate the economic wake of the pandemic,<br />

we are focusing on fully embracing the lessons we learned<br />

from these shaping, turbulent few months.<br />

Covid-19 highlights the value of an FPI membership<br />

With the growing national budget deficit and real GDP<br />

expected to plunge, you don’t need me to tell you that<br />

times are tough. Financial planners and advisors may not be<br />

frontline workers in the conventional sense of the world –<br />

but we certainly are at the coalface of the economic struggle<br />

facing many normal South Africans.<br />

The advice we give our clients and the strategies we<br />

implement for them could very well be the difference<br />

between making it through the pandemic unscathed and<br />

being financially devastated by it.<br />

Now, more than ever, your clients need a financial advisor<br />

they can trust; someone who can implement a tailormade<br />

financial planning strategy that will help each family to<br />

weather the Covid-19 storm as effectively as possible.<br />

At times like this, clients need to know that they have<br />

entrusted their wealth and financial wellbeing to the very<br />

best in the business – you, a proud professional member in<br />

good standing with the Financial Planning Institute.<br />

Our first digital FPI Convention is just around the corner<br />

Planning the Professionals Convention is always timeconsuming<br />

– but we don’t usually have to conjure up a<br />

venue out of thin air! Putting together our first digital event<br />

of this magnitude hasn’t been easy, but it has been extremely<br />

educational and it has also been richly rewarding to see how<br />

our team has pulled together to come up with an event that<br />

promises to deliver a very successful 31st convention.<br />

As always, we have a fantastic blend of local talent and<br />

international speakers covering the latest trends in financial<br />

planning including:<br />

• Integrating coaching and financial planning<br />

• How to succeed in the new game of business<br />

• Transition to fee-based practices<br />

• Succession planning<br />

• Embracing Financial Planning technology (FPtech) into<br />

your practices<br />

• Behavioural coaching<br />

• Regulatory updates, and much more<br />

Then, one of the biggest decisions has been choosing<br />

a platform to host the Convention on, and I am happy to<br />

announce that we have partnered with the best of the best.<br />

Asset TV has years of experience in connecting the financial<br />

community digitally and their virtual conferencing platform<br />

will not disappoint. We have recorded previous sessions<br />

with Asset TV and feel very comfortable that the financial<br />

planning event of the year is in very good hands.<br />

The Convention provides 11.5 verifiable CPD hours and<br />

will take place on 27 and 28 October 2020. Don’t miss out!<br />

Register at www.fpicpd.co.za<br />

4 www.bluechipdigital.co.za

The advice we give our clients and the<br />

strategies we implement for them could<br />

very well be the difference between<br />

making it through the pandemic unscathed<br />

and being financially devastated by it.<br />

Take care of your CPD requirements with our Convention package<br />

To assist you in complying with CPD requirements – whether Regulatory and/or FPI<br />

professional member CPD hours, FPI has put together an affordable and extremely<br />

convenient package that will help you to obtain most of your verifiable CPD hours in one<br />

fell swoop. The package to members and non-members includes:<br />


• (Online) FPI Professionals Convention<br />

• Estate and Tax Online Forum<br />

• Retirement and Investment<br />

Online Forum<br />

• Annual Refresher (face-to-face event)<br />

Stronger together: We’ve signed an MOU with ASSA<br />

In giving further effect to our strategy and mandate, FPI recently signed an MOU with<br />

the Actuarial Society of South Africa (ASSA) that will see us work together to improve<br />

the long-term financial wellbeing of all South Africans and their families. For decades,<br />

both organisations have worked hard to give input on regulatory changes, to educate<br />

consumers and generally improve the financial health of all South Africans. But now we<br />

will support each other’s views as it relates to our respective mandates for the greater<br />

good of the consumer. If the last few weeks are anything to go by, I am convinced that<br />

combining our skillsets will be great for all of our members and the South African public.<br />

Onwards and upwards<br />

While the first wave of the pandemic seems to be tailing off, all of us in the financial<br />

planning industry know that the real hard work is yet to come. As financial planners, we<br />

need to band together to help South Africans to not just withstand the economic impact,<br />

but to emerge stronger from it.<br />

Hope to “see” you at the Convention…<br />

Warm regards,<br />

Lelané Bezuidenhout CFP®<br />

CEO, Financial Planning Institute of Southern Africa<br />


• (Online) FPI Professionals Convention<br />

• Estate and Tax Online Forum<br />

OR Retirement and Investment<br />

Online Forum<br />

• Annual Refresher (face-to-face event)<br />

At times like this,<br />

clients need to<br />

know that they<br />

have entrusted<br />

their wealth<br />

and financial<br />

wellbeing to<br />

the very best<br />

in the business<br />

– you, a proud<br />

professional<br />

member in good<br />

standing with<br />

the Financial<br />

Planning Institute.<br />


FPI Professional Digital<br />

Convention 2020<br />

This year our FPI Professionals<br />

Convention will take place entirely<br />

online. Members can log in to the<br />

event on 27-28 October 2020.<br />

Visit fpi.co.za and download the<br />

awards guide for more information.<br />

www.bluechipdigital.co.za<br />



A wealth<br />

of words<br />

It is time, again, for the FPI Professionals Convention and this year the Convention<br />

celebrates its 31st year. Another reason for celebration is that the three final<br />

contenders for FPI Financial Planner of the Year 2020 have been announced. Three<br />

CFP® professionals stood out this year for their expert knowledge and superior clients<br />

service: Hester van der Merwe, Henri le Grange and Johan Swart. Congratulations! The<br />

winner will be announced at the FPI Awards Ceremony on 27 October. <strong>Blue</strong> <strong>Chip</strong> will be<br />

interviewing the winner in our January 2021 issue.<br />

The golden thread that runs through this issue of <strong>Blue</strong> <strong>Chip</strong> is seeing beyond the money<br />

to the human need. Rob Macdonald, Fundhouse, suggests in his article, Are you working in<br />

the messy middle?, that perhaps it is time for financial planners to acknowledge that their<br />

primary role is to help clients achieve a life well-lived. On page 52, Kate Holmes attests<br />

that by moving beyond the numbers, you can show clients the true value of financial (life)<br />

planning. Kim Potgieter, in her article Building a financial planning business, contends that<br />

for life planning to be successful, it must be at the core of everything you do as a business.<br />

It needs to be part of your DNA, your values and your culture. And it has to be authentic.<br />

After entering the financial services industry 13 years ago, Kim Potgieter realised that<br />

it was a male-dominated industry with little support for females. Kim felt strongly that<br />

women in the sector needed a forum to meet, share experiences and learn from each<br />

other, so in 2013 she founded the Women in Finance Network (page 38).<br />

Palesa Dube, Wealth Creed, argues that the finance industry must become deliberate<br />

in creating a value proposition that speaks to the needs of the female market if we are to<br />

make any meaningful strides in attracting this market segment. Research shows that, in<br />

South Africa, only 3.5% of active funds are managed by a female portfolio manager or a<br />

female-only team. Alida de Swardt, CEO of RMI IM, is passionate about the empowerment<br />

of women in financial services. “There’s a lot of research that shows that diverse workforces<br />

achieve so much more,” she says in Tuning in to the beat of her own drum on page 32.<br />

RMI IM forms part of our focus on boutique managers, and James Downie, MitonOptimal<br />

debates whether it is better to invest in a boutique manager or a more established manager<br />

(page 26). Each article in this issue delves deeper, debates, deliberates and delivers a wealth<br />

of insight into the makings of a blue-chip financial planner. Enjoy the read! <br />

Alexis Knipe, Editor<br />

<strong>Blue</strong> <strong>Chip</strong> <strong>Journal</strong> – The official publication of FPI<br />

<strong>Blue</strong> <strong>Chip</strong> is a quarterly journal for the financial planning industry and is the<br />

official publication of the Financial Planning Institute of Southern Africa<br />

NPC (FPI), effective from the January 2020 edition. <strong>Blue</strong> <strong>Chip</strong> publishes<br />

contributions from FPI and other leading industry figures, covering all<br />

aspects of the financial planning industry.<br />

A total of 10 000 copies of the publication are distributed directly to every CERTIFIED FINANCIAL<br />

PLANNER® (CFP®) in the country, while the <strong>Blue</strong> <strong>Chip</strong> Digital e-newsletter reaches the full FPI<br />

membership base. FPI members are able to earn one non-verifiable Continuous Professional<br />

Development (CPD) hour per edition of the print journal (four per year) under the category of<br />

Professional Reading.<br />

Special advertising packages in <strong>Blue</strong> <strong>Chip</strong> are available to FPI Corporate Partners, FPI Recognised<br />

Education Providers and FPI Approved Professional Practices.<br />

blue-chip-journal<br />

ISSUE <strong>77</strong> | OCT 2020<br />

Publisher: Chris Whales<br />

Editor: Alexis Knipe<br />

Online editor: Christoff Scholtz<br />

Designer: Simon Lewis<br />

Production: Lizel Olivier<br />

Ad sales:<br />

Sam Oliver<br />

Gavin van der Merwe<br />

Jeremy Petersen<br />

Bayanda Sikiti<br />

Venesia Fowler<br />

Managing director: Clive During<br />

Administration & accounts:<br />

Charlene Steynberg<br />

Kathy Wootton<br />

Printing: FA Print<br />


Global Africa Network Media (Pty) Ltd<br />

Company Registration No:<br />

2004/004982/07<br />

Directors: Clive During, Chris Whales<br />

Physical address: 28 Main Road,<br />

Rondebosch <strong>77</strong>00<br />

Postal address: PO Box 292,<br />

Newlands <strong>77</strong>01<br />

www.bluechipdigital.co.za<br />

Tel: +27 21 657 6200<br />

Fax: +27 21 674 6943<br />

Email: info@gan.co.za<br />

Website: www.gan.co.za<br />

No portion of this book may be reproduced without written consent of the<br />

copyright owner. The opinions expressed are not necessarily those of <strong>Blue</strong> <strong>Chip</strong>,<br />

nor the publisher, none of whom accept liability of any nature arising out of,<br />

or in connection with, the contents of this book. The publishers would like to<br />

express thanks to those who support this publication by their submission of<br />

articles and with their advertising. All rights reserved.<br />

6 www.bluechipdigital.co.za

You can either<br />

watch it happen<br />

or be a part of it.<br />

Avalon is aiming higher than ever before<br />

and you do not want to miss it.<br />

Launch your practice to a whole new level with Avalon. Visit www.avalon.co.za to sign up for a free<br />

month. Watch as we continuously innovate and improve the system that will change your practice<br />

forever. Inspire your clients to reach their goals with the powerful financial engineering provided by<br />

Avalon.<br />

We have reimagined the financial planning system and changed the game forever.

On the money<br />

Making waves this quarter<br />

Focus on: The technology sector<br />


The technology sector has been one of the major beneficiaries of the current pandemic. Technology,<br />

staples and pharmaceuticals were the only three sectors to record positive earnings growth in the<br />

second quarter of 2020 in the US, while overall US earnings growth was down 33% year on year.<br />

Covid-19 has fast-tracked some of the structural trends that were already playing out, as entire<br />

populations have had to embrace e-tail and working from home for the first time. While some of this<br />

shift will be permanent, there will be parts of tech spend that were merely a pull-forward of demand,<br />

and as such are not sustainable going forward. Careful analysis is required to distinguish and quantify<br />

these shorter-term effects and reflect them in valuations.<br />

As the economic growth starts to recover, we are likely to see a recovery in cyclical and leisure stocks.<br />

This rotation may be funded by tech stocks as they have been the clear winners to date. However,<br />

underlying tech fundamentals remain extremely strong and in fact many structural trends have been<br />

further entrenched.<br />

• By Nicole Agar, Senior Portfolio Manager & Lead Tech Analyst, Truffle Asset Management<br />

“Underlying tech fundamentals remain<br />

extremely strong and in fact many structural<br />

trends have been further entrenched.”<br />

– Nicole Agar<br />

Emigrant retirement 3-year capture<br />

South Africans who have emigrated or plan to permanently leave South<br />

Africa have until 28 February 2021 to effect financial emigration. National<br />

Treasury has laid down the new law: the consequence otherwise is your<br />

retirement money will be locked in for three years, you are not allowed<br />

to touch it, and best apply it to your personal circumstances.<br />

The time is now<br />

South Africans leaving South<br />

Africa have little over four<br />

months to financially emigrate<br />

under the current dispensation,<br />

and thereafter to withdraw their<br />

retirement funds, before it is<br />

locked in for a period of threeyears<br />

minimum.<br />

• Jonty Leon, Legal Manager for<br />

Expatriate Tax Compliance at Tax<br />

Consulting South Africa<br />

8 www.bluechipdigital.co.za<br />

Satrix hosts first virtual JSE listing<br />

It is Satrix’s 20th-anniversary year and we had plenty of celebratory<br />

plans to fill up everyone’s diaries. Then Covid-19 hit, and holding<br />

happy gatherings became a thing of the past. Adapting quickly to<br />

the new normal, the Satrix team changed direction to still make<br />

things happen.<br />

The result was another first for Satrix, introducing the industry<br />

to virtual listing events for ETFs on the JSE. Our first event was<br />

held earlier in May this year when we listed the Satrix SA Bond<br />

ETF. We then took it up a notch in July by listing the Satrix MSCI<br />

China ETF, along with an initial public offering (IPO). This digital<br />

listing event meant that the entire Satrix team, all stakeholders<br />

and partners as well as every single client who had participated<br />

in the IPO on our digital platform, SatrixNOW, could be invited<br />

to attend the event.<br />

In total, we had over 500 attendees who enjoyed a digital<br />

walkthrough of how the trading screens operate by the JSE’s<br />

Martin Koch as well as experiencing the blowing of the iconic<br />

kudu horn. At Satrix, we are constantly innovating for our clients.<br />

We have a few more ETF listings planned for this year. Please look<br />

out for them.

On the money<br />

Making waves this quarter<br />

Cryptocurrency: The chameleon commodity<br />

Daniel Kibel, co-founder of CM Trading, shares insight on the current<br />

cryptocurrency landscape: “The cryptocurrency market is still relatively<br />

new and it has completely changed the trading landscape. Regulations<br />

are still quite lax in the crypto space and it’s a particularly volatile<br />

commodity. But it rose to widespread popularity almost overnight<br />

and has seen an unprecedented boom during the pandemic.<br />

Global crypto standards<br />

“The South African cryptocurrency exchange is called Luno.<br />

It was established in 2013 and is based in London. Luno was<br />

recently acquired by the New York-based Digital Currency<br />

Group (DCG), who have backed more than 160 blockchain<br />

companies in 35 countries.<br />

Trading in crypto – the upsides<br />

“Buying crypto and holding onto it may be a viable passive investment.<br />

But trading Bitcoin also means you can speculate and potentially profit<br />

regardless of whether the price goes up or down.<br />

“Ultimately, the volatility of cryptocurrencies is what makes it<br />

such an interesting and exciting space to trade in. Quick<br />

price changes can bring increased risk but also potentially<br />

higher returns. If you would like to get involved in the<br />

cryptocurrency space, begin with thorough research on<br />

the current trading environment. And most importantly,<br />

partner with a reputable trading company.”<br />

• www.cmtrading.com<br />

What’s making the rand tick<br />

• Bianca Botes, Executive Director at Peregrine Treasury Solutions<br />

The rand’s nadir in 2020 came unexpectedly just<br />

over a week into South Africa’s extreme lockdown.<br />

The local unit bottomed at R19.08/$ on 6 April<br />

2020. After its rapid decline to that level, it spent<br />

the next six months in a generally strengthening<br />

trend, although experiencing setbacks along the<br />

way. By 18 September, the rand had clawed back<br />

over 15% of its value to reach R16.13/$.<br />

But this was still some way off the R13.99/$<br />

level at which the rand kicked off the year. And<br />

while the timing of the rand’s recovery mirrors<br />

the country’s lockdown, it’s important to realise<br />

that the two are not connected. If local factors<br />

were being taken into consideration, the rand<br />

might have moved in the opposite direction.<br />

As a result of the lockdown, the South<br />

African economy suffered untold damage<br />

with estimates for 2020 growth ranging from<br />

a contraction of 8% to 12%, while the global<br />

lockdown measures and risk factors weigh<br />

heavily on the local currency.<br />

The SA economy needs stimulation<br />

There aretypically two levers to stimulate a<br />

faltering economy: fiscal stimulus and monetary<br />

stimulus. Traditionally, fiscal stimulus is an increase<br />

in government spending combined with a<br />

reduction in taxation, while monetary stimulus is<br />

deployed by the central bank, consisting of interest<br />

rate cuts and the purchasing of government<br />

bonds, also known as quantitative easing (QE).<br />

In effect, these measures leave more money in<br />

the hands of businesses and individuals, which<br />

increases their ability to spend money on goods<br />

and services, thereby boosting the economy. QE<br />

has not been used for stimulus, stating that it is<br />

purchasing bonds in the secondary market to<br />

provide liquidity and is not QE, the essence of it is<br />

the same: purchasing government bonds, albeit<br />

not directly from the government.<br />

Can this save SA's economy?<br />

Two questions arise on the back of the<br />

aggressive stimulus deployed: 1) Is it sufficient to<br />

save South Africa's economy? Most likely… “no”.<br />

The local economy was in a recession before the<br />

pandemic, and the subsequent lockdown will<br />

see economic turmoil for years to come. With<br />

the mass closure of businesses, we saw a rapid<br />

increase in unemployment. This will, in turn,<br />

lead to additional fiscal pressure.2) Where to<br />

from here? One cannot rely purely on stimulus<br />

to save the economy. While it remains a valuable<br />

tool for cyclical downturns, it cannot correct or<br />

counter structural shortcomings. Government<br />

policies will require drastic reform towards progrowth<br />

economic policy that will aim to attract<br />

foreign direct investment (FDI), and support the<br />

business environment.<br />

Where does this leave the local currency?<br />

Stimulus, in the absence of demand shocks such<br />

as those brought on by the lockdown, will lead to<br />

inflation, and the devaluation of currency. In the<br />

absence of demand, stimulus will fail to generate<br />

an uptick in inflation; however, the lockdown<br />

is not infinite, and should too drastic measures<br />

be taken now, such as allowing the SARB to<br />

purchase government bonds directly from<br />

Treasury as a means of funding, the effects could<br />

be catastrophic in terms of severe devaluation of<br />

currency and hyperinflation as seen in Zimbabwe.<br />

What is driving the rand?<br />

Local stimulus pales in comparison with the<br />

US and rand strength has been a reflection of<br />

dollar weakness. The rand will find bursts of<br />

strength from dollar weakness, but the local<br />

unit’s underlying trend points to a weakening<br />

currency in the long term. We would suggest<br />

making use of any rand rally to fill up on foreign<br />

currency requirements.<br />

10 www.bluechipdigital.co.za

VIR I UAL<br />

EVENTS<br />

Conceptulisation, Design, Design, Creation<br />

Registration:<br />

• •• Domain registration.<br />

• •• Registration platform with with invitation mailers, mailers, confirmation<br />

mailers mailers and and general general informative mailers. mailers. Post Post event<br />

event<br />

certificates and and thank thank you you mailers.<br />

mailers.<br />

• •• Registration portal portal compatible with with various various payment<br />

portals portals e.g e.g Paygate.<br />

• •• Full Full registration analytical information.<br />

Event Event Platform:<br />

• •• Security login login - restricted - - / unrestricted // access.<br />

access.<br />

• •• Branding - Scrolling - - banners, logo, logo, sponsorhip area,<br />

area,<br />

exhibition area area and branded lounges.<br />

• •• Networking capabilities - meetings, - - lounges, chats, chats, social<br />

social<br />

feeds.<br />

feeds.<br />

• •• Reception area area - All - - All All featured sessions and and introduction<br />

to to event. to event.<br />

• •• Agenda - Customised - - to to different to time time zones zones by by delegates. by Full Full viewing viewing of of scheduled of sessions, rating rating systems,<br />

downloadable presentations. Recorded / live // live session<br />

session<br />

viewing.<br />

• •• Sponsorship profiles profiles and and exhibitor profiles profiles with with contact<br />

contact<br />

details, details, CTA’s CTA’s (call (call to to action), to action), company information,<br />

videos, videos, banner banner and and logo.<br />

logo.<br />

• •• Video Video interactive meetings and and chats.<br />

chats.<br />

• •• Limitless number of of attendees. of Technical Support, Analytical Feedback<br />

Technical Support:<br />

• •• Pre, Pre, during during and and post post event event support.<br />

• •• Support staff staff allocated to to email to email and and telephone<br />

attendee support.<br />

• •• Troubleshooting during during and and post post event.<br />

event.<br />

• •• Maintenace of of registration of site site and and event event platform.<br />

• •• Branded user user guide guide for for for each each event event with with details details of of all of all all<br />

available functionality.<br />

• •• Speaker briefings, including advice advice of of camera of camera and and mic<br />

mic<br />

positioning.<br />

• •• Working documents, including; action action plan, plan, agenda,<br />

production schedule, contact contact information, system<br />

system<br />

requirements and and checklists.<br />

Analytical Feedback:<br />

• •• Users: Users: Total Total number of of logged of logged in in users, in users, number of of likes of likes and<br />

and<br />

comments on on on event event feed, feed, total total business cards cards dropped,<br />

number of of interactions, of breakdown of of client of client requested<br />

positions, designations, interests and and industries.<br />

• •• Sessions / Agenda: // Total Total viewers viewers per per session session along<br />

along<br />

with with their their sign sign in in and in and out out times, times, total total likes likes per per session,<br />

session,<br />

star star rating rating of of sessions of and and number of of presentation<br />

of downloads per per session.<br />

session.<br />

• •• Sponsors and and Exhibitors: Star Star ratings, ratings, number of of CTA of CTA<br />

link link clicks, clicks, number of of requests of for for for contacts.<br />

• •• Speakers: Star Star ratings, ratings, number of of presentation of downloads<br />

and and views.<br />

views.<br />

info@thecollaborative.co.za | 082 | | 082 568 568 1795 1795 | www.thecollaborative.co.za<br />

| | www.bluechipdigital.co.za<br />



Money taboo<br />

Innovative financial coaching programme<br />

There is no doubt that money plays a significant role in<br />

the everyday lives of individuals worldwide, yet it remains<br />

a subject that many feel great discomfort discussing,<br />

especially with family members.<br />

“Money is seen as the last taboo subject in many Western<br />

cultures, as individuals would rather discuss sex, death and<br />

infidelities than discuss personal financial issues,” explains Dr Liezel<br />

Alsemgeest, Director of the UFS School of Financial Planning Law.<br />

“Even though money is not discussed openly, it plays a major<br />

role in everyone’s life since we not only appreciate it for what it<br />

can buy us; we give it significance and are emotionally charged by<br />

it. Money impacts on how others perceive us, as well as how we<br />

perceive ourselves. In many instances, our self-worth is dependent<br />

on how much money we have or how we manage our money.<br />

anxieties of the past and develop a culture where money has its<br />

rightful place in our lives, but that we can be open about it and<br />

not be as socially, culturally and psychologically dependent on it.”<br />

The taboo of speaking to family about money makes the role<br />

of financial advisors – possibly the only person who a client will<br />

discuss their finances with – more important.<br />

Advisors face concerns every day, for example:<br />

• Not necessarily sure how to effectively guide clients through<br />

transitions in their lives (eg divorce, job changes, death) and<br />

having doubts about what advice to give.<br />

• The need to help clients see how their attitudes towards money and<br />

finance influence their ability to accumulate and preserve wealth,<br />

but not always being able to do this as effectively as possible.<br />

• They are unsure about how to<br />

discourage clients from making<br />

emotional decisions regarding their<br />

finances to make better-informed<br />

financial decisions.<br />

• The need to help clients define their<br />

real-life goals, based on what is<br />

important to them, and guide them to<br />

achieve in financial terms.<br />

The UFS School of Financial Planning<br />

Law is presenting an innovative<br />

financial coaching programme in<br />

collaboration with Hendrik Crafford,<br />

an experienced professional coach and<br />

financial industry expert.<br />

This intensive coaching intervention<br />

will be presented online over 12 weeks<br />

and will leave you equipped to build<br />

your own unique, client-focused<br />

financial coaching and advice practice.<br />

“Personal financial attitudes, behaviours, beliefs and anxieties<br />

are passed down from generation to generation and herein lies<br />

the possible solution to this problem. Financial openness in the<br />

family context could prepare children for the real world, while at<br />

the same time foster trust. Parents, however, should be very careful<br />

about the specific information provided to children, as well as the<br />

financial messages (sometimes non-verbal) that children receive.<br />

“Parents need to ensure that children grow up to have healthy<br />

financial attitudes and beliefs to become financially healthy adults<br />

that would instil the same values in their children. This can only<br />

be done by trying to rectify the mistakes, negative messages and<br />

The programme will enable participants to:<br />

• Engage in a powerful, highly effective approach to coaching,<br />

leading and advising for positive change.<br />

• Learn how to use language to address the concerns of your<br />

clients more effectively and in doing so, build trust, long-term<br />

relationships and increased value.<br />

• Understand moods, how they influence actions, and how to shift<br />

and manage them to get better results.<br />

• Develop a vocabulary to enable you to observe the narratives that<br />

impact on your clients financial and personal wellness.<br />

• Support clients to design and live a life of purpose. <br />

12 www.bluechipdigital.co.za


Asset manager<br />

headwinds<br />

For a well-established<br />

industry, there is<br />

a surprising<br />

amount of ongoing<br />

changes taking place<br />

behind the scenes<br />

We are at an interesting point in the local asset<br />

management industry, with several headwinds<br />

facing asset managers. Where we have the ambition<br />

of looking for high-quality, stable investment<br />

propositions, these are generally quite hard to identify, and<br />

when we do find them, we have a permanent anxiety around<br />

their ability to sustain themselves at this high level. The extent<br />

of organisational, process and people changes within an asset<br />

management business is higher than you would expect.<br />

Being a good fund manager<br />

does not easily translate into<br />

being a good business leader.<br />

Human capital businesses, by their nature, have relatively<br />

low barriers to entry and so we find a fragmented industry,<br />

dominated by relatively few large players. There are over 80<br />

separate, independent asset managers in South Africa [1] . Profit<br />

margins in asset management are attractive which attracts a lot<br />

of competition, but is there room for all of them? Below we list a<br />

few of the headwinds we are observing across the industry, where<br />

we need to objectively evaluate the potential for these issues to<br />

impact our outlook for the funds we cover.<br />

Headwind #1: Access to asset flows. No Money, No Honey.<br />

The ability to build a sizeable client base has proven exceptionally<br />

difficult for smaller managers. In part, this is due to how the<br />

industry has migrated towards fewer “gatekeepers” – platforms,<br />

discretionary fund managers, multi-managers and the like, rather<br />

than establishing close relationships with the end investor.<br />

However, much of this “underachievement” rests with the<br />

managers themselves where the ability to build a good asset<br />

management business, in addition to a good investment process,<br />

is not something we have seen occur frequently.<br />

The resourcing applied to good business management has<br />

been far outweighed by the value placed on investment-related<br />

intellectual capital. The problem is that in many cases, being a<br />

good fund manager does not easily translate into being a good<br />

business leader, and so their success in gaining market traction<br />

has been underwhelming.<br />

A consequence of this is the migration of a number of smaller<br />

asset managers (“boutiques” in the colloquial, but essentially small<br />

asset managers) towards some form of distribution agreement<br />

or partnership whereby a business with a large footprint of fund<br />

buyers acting for the client creates a linked deal with individual<br />

asset managers looking for assets to manage. We count around<br />

80% of the independent fund managers we cover having a form<br />

of “inhouse” distribution to get access to assets to manage. Relying<br />

simply on investors to “buy” funds seems to be a thing of the past.<br />

By design, managers who need access to this asset pool also<br />

have less leverage in a fee negotiation, so they can potentially give<br />

up their “crown jewel” mandates at relatively low fees, creating<br />

longer-term business longevity questions.<br />

Secondly, where smaller managers have partnered with fund<br />

distributors, they are often allocated mandates where they are not<br />

necessarily ready in terms of their capacity to manage the assets.<br />

A balanced fund for example requires the full suite of expertise:<br />

local and offshore equity, fixed income and asset allocation, and<br />

this requires a substantial investment over a long period of time<br />

to establish.<br />

Ultimately the asset managers are becoming dependent on<br />

fund distributors, and this leads to headwind # 2: fees.<br />

14 www.bluechipdigital.co.za


Fee pressure creates an additional business model problem, where<br />

advisor’s business. The advisor has the<br />

ability to consistently and efficiently<br />

small managers implement their generally investment advice have a higher hurdle to make ends meet,<br />

and large<br />

across their<br />

managers<br />

client base by using<br />

typically<br />

a range<br />

have high legacy cost bases to fund.<br />

of portfolios through a Discretionary<br />

Category II licence, either that of the DFM,<br />

or their own.<br />

A fourth benefit of outsourcing to a<br />

Headwind #2: Fee DFM pressure. is one of governance The Big Squeeze. and compliance.<br />

While assets have The increasingly DFM should moved be able from to large ensure scale, that low-cost<br />

institutional pools similar towards clients retail are products, treated we consistently have not seen a<br />

commensurate (and reduction therefore in fees reduce to TCF reflect concerns), this. The that average<br />

investor is still paying the advisor a premium has a documented for investment investment management<br />

fill the demand for offshore assets from investors. In many cases<br />

there are high-quality fund managers coming into South Africa, at<br />

significantly lower fees. Not only does this lower the fee potential<br />

for existing local managers (headwind #2), it also reduces their<br />

potential market share (headwind #1).<br />

despite the cost process, efficiencies and of running that comprehensive larger unit trust due funds. Why<br />

is this so? Common diligence sense is should provided tell on us the that funds many used. competitors<br />

should drive down The high RDR investment discussion fees, paper not led preserve to many them. We<br />

do see signs of this claims changing: that independent financial advisors<br />

• A few of the (IFAs) smaller would fund struggle managers to survive are reducing and thrive costs to try<br />

to entice new once clients. RDR is implemented, and that IFAs<br />

• “Premium” larger would managers need to who either have sell captured their business the lion’s to share<br />

of the market a have corporate had mixed or outsource performance, to a DFM. undermining the<br />

Headwind #5: The value cycle. How Low can you Go?<br />

Value managers gained prominence in South Africa in the postdot-com<br />

era when overpriced new-economy share prices imploded,<br />

allowing the old-economy value managers to outperform. Asset<br />

flows chased performance and many investment products oriented<br />

toward a value style. Post the Global Financial Crisis (GFC) we have<br />

seen a difficult environment for value managers, where for the<br />

premium fees they We charge. do not agree Investors with are that questioning assertion. We whether long-term most business part, expensive partner to shares an advisory have stayed • Global expensive, and local and portfolio cheap construc<br />

this premium believe is worth that paying. the majority of investment IFAs business. value shares have stayed cheap. This long-term capabilities. underperformance<br />

• With clients do increasingly not have to organised make material in collective changes in groups, We believe has had that several the two casualties most important where businesses • The skill have and either relevant closed experience of<br />

negotiating power their business is starting to to comply shift from with the RDR, fund and manager factors that doors, advisors lost significant need to consider flows or when needed to core change investment their investment team.<br />

to the investor. we This do not trend believe is consistent that this should with what be the we see choosing approach a DFM are: to survive.<br />

• The DFMs back-office compatibility w<br />

the UK market, reason and has for resulted using a in DFM. large-scale It is an fee added reductions • Understand With the this unique value value bias being proposition prevalent in the many advisor’s investment current pro- processes.<br />

to investors. benefit but should not be the key driver. of the cesses, DFM structural given how industry different underperformance the • The scale has been of the commonplace,<br />

business.<br />

DFMs’ and offerings has led investors are, and to question how • their The fee fund structures. managers, and<br />

Fee pressure creates In summary, an additional the services business of model a quality problem, various<br />

where small managers DFM can generally benefit a have financial a higher advisor hurdle in the to make this value move proposition to alternatives complements including low-cost the passive funds.<br />

ends meet (small following assets at ways: lower fees), and large managers typically advice process.<br />

have high legacy • cost An bases evidence-based to fund (large assets, investment declining fees). • Make What sure can that we there expect? is a good culture<br />

In our opinion, DFMs do have an impor<br />

role to play in helping advisors<br />

Offshore there has philosophy been a strong and process pattern that of aligns large with managers and philosophy We believe the fit between trends highlighted the advisor above professionalise are relatively entrenched,<br />

and grow their busines<br />

merging to deal with the the business’s lower fees advice expected framework in future.<br />

• A sustainable investment range that is<br />

Headwind #3: Emigration able to cater risk. to All different My Bags client are needs Packed.<br />

and the bar DFM. headwind #5 where conditions today ensure are very consistent much in investment favour outcom<br />

Meeting of these value-based considerations approach. will decrease However, improve the trends communication of increasingly to clients<br />

the probability difficult access of “buyer’s to assets, remorse” pressure from on fees, enable new offshore advisors competitors<br />

to focus on their core<br />

Emigration is nothing • Consistently new, but it comes managed at a time portfolio now when an we advisor and disruption who getting of investment something teams through of giving emigration comprehensive are here financial ad<br />

do see vulnerability, solutions especially across in the client larger base managers. Looking different to from stay. what they expected, and to clients. <br />

back, today’s established • Access to a winners dedicated made team their of investment gains building ensures that We when expect differences to see consolidation of opinion<br />

strong investment specialists propositions in a market where life company emerge, or there attrition is common among ground investment and<br />

asset managers • held Consistent the majority and of assets. cost-effective<br />

Rolling forward respect to businesses. between the The parties industry to simply allow for has a<br />

today, these businesses implementation have reached high across levels different of market share, compromise too many that fund does managers not disadvantage for what<br />

managers have benefitted investment as a platforms result, and so they can start to look the client. has been a relatively slow-growing<br />

outside of our borders • Constant given compliance the success with they the have various had. South Key factors pool of assets. to investigate Going forward, when carrying we are<br />

African-specific risks regulatory also undermine requirements. the long-term stability of out any your keeping due diligence a keen eye on the on DFM these options issues<br />

management team. We have seen a few departures already include: and and the potential implications for<br />

expect to see more All DFMs soon. are This not does created have the equal potential to hollow • Whether funds the DFM we cover. is independent We hope to see and<br />

out investment teams, Advisors which are clearly do not ordinarily spoilt for choice run with given deep levels how the important strong independence businesses emerge is to the so<br />

of cover. all the DFMs now operating in South Africa. advisor. that we have the luxury of choice<br />

However, because they are still a relatively • The in investment future. philosophy and<br />

Headwind #4: Offshore new concept competition. to many advisors, David vs choosing Goliath. a performance history of the DFM.<br />

With similar trends DFM offshore can be (fee overwhelming. pressure, distribution The right pressure) DFM • we The depth [1] Source: of the RMI DFM’s Boutique global Asset and local<br />

have seen global has managers the potential increasingly to be come a transformative,<br />

into South Africa to research Management capabilities. Study, 2016<br />

Ian Jones, CEO, Fundhouse<br />

15<br />

www.bluechipdigital.co.za<br />

www.bluechipjournal.co.za<br />





<strong>Blue</strong> <strong>Chip</strong> sits down<br />

with Zisanda Gila from<br />

Momentum Investments<br />

Zisanda, you are lead portfolio manager at Momentum<br />

Investments. Please share with our readers your journey that<br />

led you to this point of your career.<br />

I have been in the investment profession in different capacities for<br />

over 15 years and my portfolio of responsibilities gradually evolved<br />

over the years. My journey in the investment arena began when I<br />

joined Metropolitan Asset Managers as a fixed-income dealer, and<br />

I later moved to a money market analyst and co-portfolio manager<br />

role working under supervision. In 2015, I started in my current role<br />

as lead portfolio manager at Momentum Investments, managing<br />

over R40 billion of assets across various money market strategies<br />

within the fixed-income team.<br />

From joining the financial services industry more than a decade<br />

ago, I have found my career to be a fulfilling and meaningful one.<br />

Coming from a family where perfectionism was encouraged, and<br />

given my strong mathematical background, academically my<br />

career was on course. However, the actual journey did not come<br />

without its difficulties. Having someone in your corner and having<br />

the right determination and the drive to succeed boosts your<br />

chances of success in the industry. I have found mentorship to be<br />

very pivotal to my career navigation. It has made me aware of my<br />

strengths and developmental areas and encouraged me to take<br />

opportunities that come my way.<br />

Please tell us about the funds that you manage.<br />

Our money market funds range from low-risk<br />

cash funds to enhanced yield strategies. All<br />

our funds aim to provide liquidity, inflation<br />

protection and enhanced cash returns superior<br />

to banks’ overnight deposit rates. We offer these<br />

solutions in segregated portfolios, collective<br />

investments and pooled funds across our assets<br />

under management.<br />

What is the strategy for these funds?<br />

Our outcome-based investing approach<br />

helps in solving for appropriate investment<br />

outcomes and helps our clients understand<br />

and articulate their needs and return<br />

expectations. We construct our portfolios<br />

to align with regulatory requirements<br />

in the clients’ respective industries of<br />

operation and ensure the clients’ objectives<br />

are achieved by first formulating interest<br />

rates views and aligning investments with<br />

clients’ risk appetite and tolerance. We consider management<br />

of risk to be a fundamental aspect of portfolio management. As<br />

a result, significant emphasis is placed, within our investment<br />

process, on the identification and monitoring of risk.<br />

Fundamental credit research and analysis plays a defining role<br />

in our asset selection and asset allocation decisions. This is key<br />

and supported by our research to seek risk-adjusted returns from<br />

the various curves and assets. Since credit risks can have many<br />

layers, diversification is a continually moving target. I believe<br />

diversification of strategies leads to more consistent returns over<br />

time. We therefore buy a variety of asset classes from various curves<br />

that meet our valuation and risk hurdles. This is the classical theory<br />

of not placing all your eggs in one basket in practice.<br />

Please outline their performance.<br />

The performance of the portfolios is measured against the STeFI<br />

benchmark, with an outperformance objective of up to 1.50%<br />

above the benchmark. We strive to attain the highest possible<br />

return on investment for our clients for a given (usually low)<br />

level of risk, consistently over a long period. A highlight was the<br />

Momentum Enhanced Yield Fund winning the Raging Bull Awards<br />

in 2019 and 2020, as the “Best South African interest-bearing shortterm<br />

fund on a risk-adjusted basis” over five-year periods. This<br />

achievement has motivated and brought the team together in<br />

pursuing a common purpose of delivering superior returns.<br />

How has Covid-19 affected your portfolio of funds?<br />

At the heart of our fixed-income strategies is daily liquidity<br />

management. During the Covid-related sell-off in global financial<br />

markets in March, our portfolios were not spared of the outflows<br />

from underlying investors. There was a brief period in April when<br />

the banks had excess liquidity, and we were able to sell back our<br />

bank paper holdings to raise cash for these liquidity requirements.<br />

There was also notable portfolio de-risking and asset class switches,<br />

which resulted in cash neutral positions.<br />

What is the outlook of the funds?<br />

The funds’ strategy has been to invest in fixed-rate notes as<br />

the interest rates continued to fall and the curve flattened. We<br />

continued to increase duration as the market goes through periods<br />

of risk-off. We remain cautious of credit quality but are finding<br />

more attractively priced opportunities as spreads widen to our<br />

fair value levels. We maintain hurdle rates in the different funds<br />

through a combination of fixed and floating when valuation<br />

supports our investment decision. <br />

Zisanda Gila<br />

“We consider management of risk to be a fundamental<br />

aspect of portfolio management.” – Zisanda Gila

BRAVE/6432/MOM/E<br />

Your clients’ investments<br />

and the world we live in.<br />

Why not grow<br />

both together?<br />

At Momentum Investments, we want investors to do well and do good. We believe investments that consider social and<br />

environmental implications, are the ones that really pay off. So we support environmental, social and governance (ESG)<br />

investing, also known as responsible investing. ESG examines the long-term health and stability of the market as a whole<br />

to help create investments that are good for both your clients and the world we live in. We’re here to help your clients<br />

achieve their goals on their investment journey. Because when it comes to sustainable investment growth, for us it’s personal.<br />

To find out more, visit momentum.co.za<br />

Momentum Investments is part of Momentum Metropolitan Life Limited, an authorised financial services (FSP6406) and registered credit (NCRCP173) provider.


Can South Africans<br />

REBUILD their WEALTH<br />

after LOCKDOWN?<br />

Coronavirus has left mass economic devastation in its wake<br />

Pre-pandemic, many investors had already externalised<br />

funds to mitigate the erosive impact of South Africa’s ailing<br />

economy, but what about those who are only now looking<br />

at investing offshore? Covid has had far-reaching effects so<br />

where do the clever opportunities lie for South Africans to rebuild<br />

their wealth post-lockdown?<br />

According to Andrew Ratcliffe, director at Private Client Holdings,<br />

a smart option for investors to build a diversified offshore portfolio<br />

is with actively managed certificates (AMCs), which have become<br />

increasingly popular for a number of reasons.<br />

“In the past, South Africans invested offshore through options<br />

such as feeder funds and asset swaps, as well as by utilising their<br />

offshore allowances, but there are now new-generation offshore<br />

investment opportunities available – such as AMCs – which offer<br />

a smart way to invest offshore and are a great building block for<br />

those looking for diversification<br />

in their portfolios,” says Ratcliffe.<br />

“AMCs, otherwise known as<br />

‘inward listed notes’, have been<br />

around for some time but have<br />

only recently become popular,<br />

given South Africans’ appetite<br />

to explore alternatives in the<br />

current environment.”<br />

Ratcliffe advises that local<br />

investors can access and benefit<br />

from the performance of the<br />

global investment portfolio with<br />

an AMC (such as the PrivateClient Global Growth Portfolio) rather<br />

than a vanilla index tracking Exchange Traded Fund (ETF). “These<br />

portfolios aim to optimise risk-adjusted returns by diversifying<br />

across a number of asset classes, including equity, alternatives,<br />

listed property and fixed income. Private Client Holdings’ managed<br />

AMC is focused on generating Alpha while outperforming the<br />

indices and delivering a decent risk-adjusted return for our clients<br />

while not following conventional products.<br />

“AMCs give the investor the ability to access offshore companies<br />

and growth strategies without the need to expatriate funds for<br />

foreign investment purposes. This removes any reliance on JSE-<br />

Listed Exchange Traded Funds (ETFs) to gain offshore exposure<br />

through a local segregated investment account. In addition, an<br />

investor’s offshore allowance is not utilised as the AMC is a South<br />

African Rand-denominated inward-listed security, which makes it<br />

a tax-efficient vehicle where portfolio rebalances/reallocations do<br />

not create a taxable event.”<br />

According to Ratcliffe, unlike traditional passive financial<br />

instruments, AMCs are characterised by a discretionary, and<br />

therefore active, management of the underlying assets. The<br />

composition of the underlying assets changes over time based on<br />

decisions made over the life of the certificate by a third party (the<br />

portfolio manager). This does not trigger a capital gains tax event.<br />

“AMCs can also be constructed to be entirely bespoke, taking the<br />

strategy and preferences of the investor into account – perhaps<br />

they wish to focus on biotechnology or renewable energies, for<br />

example – while also being aware of the risks of high concentration<br />

of shares in any one sector.<br />

“New-generation offshore investment opportunities<br />

such as AMCs offer a smart way to invest<br />

offshore and are a great building block for those<br />

looking for diversification.” – Andrew Ratcliffe<br />

18 www.bluechipdigital.co.za


“AMCs combine the flexibility of structured products (favourable<br />

tax structure, low entry level, speed of issuance, and efficient<br />

cost structure) with those of classic investment funds (portfolio<br />

diversification and adaptability to different market conditions).”<br />

This kind of investment is suitable for investors who:<br />

• Own companies, trusts, and living annuities (as well as<br />

for individuals).<br />

• Are looking for exposure to a global growth portfolio but have<br />

either utilised their annual offshore allowance or have SARB<br />

approval issues.<br />

• Would like to replace the use of locally listed offshore passive<br />

ETF strategies with an actively managed equity instrument.<br />

• Can withstand some market and currency volatility in pursuit<br />

of enhanced dollar returns over the medium to long term.<br />

“All investors are taxed on Rand gains, but only when they<br />

sell the AMC in its entirety. There are no situs inheritance tax<br />

issues, so this is still tax effective from that point of view. AMCs<br />

are a great, well-priced investment<br />

vehicle for people who are close<br />

to retirement as they form a solid<br />

building block in one’s living<br />

annuity. They offer an easy bespoke<br />

way to diversify retirement funds,”<br />

says Ratcliffe.<br />

“The AMC has proved to be a sound<br />

strategy in the current Covid-19 bear<br />

market. Many South Africans are look-<br />

ing at alternative options out of<br />

fear for the current climate in South<br />

Africa – political turmoil, economic<br />

crisis, fraud and corruption, new<br />

restrictive regulations and concerns<br />

around prescribed assets have South<br />

Africans running scared. Over the past<br />

100 years, South Africa has had one<br />

Andrew Ratcliffe, director of<br />

of the strongest-performing stock<br />

Private Client Holdings<br />

markets in the world; however, one<br />

needs a crystal ball to tell if it will be<br />

different this time and whether South Africa can survive the next<br />

hundred years.<br />

“Added to this, more South Africans are becoming part of the<br />

global village as they travel abroad more regularly or consider<br />

relocating overseas – AMCs offer a good alternative to get one’s<br />

investments offshore without following the conventional avenues.<br />

“Whatever your reasons, it is short-sighted to not look at<br />

diversifying offshore and AMCs offer an easy, bespoke, affordable<br />

and tax-efficient solution for the overseas diversification of<br />

investment funds,” says Ratcliffe.<br />

“The PrivateClient Global Growth Portfolio AMC has yielded<br />

great results for our clients and for those looking to diversify it<br />

makes absolute sense to consider this AMC.” <br />


Private Client Holdings was founded as a corporate<br />

tax consultancy in Cape Town, South Africa, in 1990.<br />

Since then the company has developed into a fullspectrum<br />

Asset and Wealth Management Company<br />

and multi-Family Office with six specialist divisions:<br />

Wealth Management, Portfolio Management, Financial<br />

Services, Fiduciary Services, Cash Management and<br />

Risk Management.<br />

Private Client Holdings are taking the lead in southern<br />

Africa when it comes to providing high-net-worth<br />

families with an all-inclusive wealth management<br />

solution and recently secured second position overall<br />

in the Top Wealth Manager: Boutiques in the Intellidex<br />

Top Private Banks & Wealth Managers Awards 2019.<br />

They also placed third in the Passive Lump-sum Investor<br />

Award and second in the Successful Entrepreneur<br />

Award. The award they are most proud of is placing<br />

second in the People’s Choice Award – an award based<br />

purely on feedback from a confidential client survey.<br />

Private Client Portfolios, the Portfolio Management arm<br />

of Private Client Holdings, has been awarded the title of<br />

“Best Investment Advisory Team – South Africa 2019” in<br />

the Capital Finance International Award – this London<br />

based CFI.co awards programme identifies individuals<br />

and organisations worldwide that truly add value<br />

through best practice within their industry.<br />

For further advice or information contact Andrew Ratcliffe on<br />

Andrew@privateclient.co.za or Private Client Holdings on (021) 671 1220<br />

or visit www.privateclient.co.za<br />

www.bluechipdigital.co.za<br />



Retirement<br />

planning<br />

in the time<br />

of Covid<br />

How to navigate a smoother retirement<br />

Retirement matters – to everybody. Generally, it is our biggest<br />

asset and one we spend years and years accumulating. It<br />

is no surprise therefore that there are a lot of decisions to<br />

be made with regards to these savings as we draw near to<br />

old age – decisions which have long-lasting impacts.<br />

Making these decisions at the best of times is daunting – but<br />

against the backdrop of Covid-19, it is an even more intimidating<br />

task and, understandably, people feel vulnerable, regardless of the<br />

retirement savings they have accumulated.<br />

tax-free investment. However, remember that your tax-free savings<br />

currently have a lifetime limit – so if you withdraw from this, you<br />

cannot replace it and you would be foregoing the long-term taxfree<br />

savings. The final option is to use your retirement savings, if<br />

they are accessible.<br />

For those who are not yet 55 years old and have a preservation<br />

fund, you are permitted to make one withdrawal. However,<br />

you would not be able to access the money in your Pension or<br />

Provident Fund, if you are still employed.<br />

What should you do if you are preparing for retirement?<br />

For many people it’s time to start looking at retirement differently.<br />

The reality of retirement has changed. The savings one has<br />

accumulated at retirement are no longer guaranteed to last<br />

through your retirement years due to higher costs of living, the<br />

effects of forces like inflation and longer lifespans. Encouragingly,<br />

the engagements that the Nedgroup Investments team has had<br />

with people approaching retirement reveal that many people see<br />

this stage of life as an opportunity to reinvent oneself. While<br />

retirement from formal employment is likely, many people are<br />

open to other avenues of generating income thereafter.<br />

Ensuring a sustainable retirement capital is crucial. Staying<br />

informed with regards to your financial affairs, keeping in touch<br />

with financial experts and practicing responsible spending are still<br />

paramount for people approaching or in retirement.<br />

What if you need money now due to Covid-19?<br />

Many people have been made redundant or have fallen on hard<br />

financial times as a result of the Covid-19 pandemic. No amount of<br />

planning could have prepared people for this kind of event, so it’s<br />

important to remain realistic in terms of financial needs.<br />

Before dipping into retirement savings, the best place to start<br />

is with your general savings. The second option is to use your<br />

The Nedgroup Investments<br />

MyRetirement Solution offers an<br />

in-person and online support<br />

system designed to help people<br />

make better decisions about<br />

their retirement investments.<br />

Tracy Jensen, Senior Investment Analyst, Nedgroup Investments.<br />

If you are in the unfortunate position of having been retrenched,<br />

you have the option of taking a cash portion from your retirement<br />

savings, which will receive favourable tax treatment. The important<br />

consideration to be aware of here is that you are reducing your tax<br />

benefits at retirement.<br />

On the other hand, if you are 55 years or older, you have the<br />

choice to retire from any Preservation Fund or Retirement Annuity<br />

Fund that you may have. If you choose to retire, you will have<br />

to commit to a minimum withdrawal amount. This needs to be<br />

20 www.bluechipdigital.co.za


carefully considered. The important thing to balance is your need<br />

for income now and your long-term need for income.<br />

Can you afford to retire early?<br />

An analysis of the income you plan to take in retirement will give<br />

you a real sense of how achievable this is for you. A survey of<br />

people approaching retirement revealed that, generally, people<br />

overestimated the income they assumed they could draw down<br />

in retirement by about two to three times.<br />

The Nedgroup Investments MyRetirement Solution offers<br />

an in-person and online support system designed to help people<br />

make better decisions about their retirement investments.<br />

Book a free, no-obligation session with our retirement coach<br />

to help you answer the question of what a sustainable income is<br />

for your circumstances.<br />

The cumulative effect of delaying<br />

your retirement by three years<br />

has a six- to nine-year benefit.<br />

What impact does delaying retirement have?<br />

There is also the option to defer retirement. Delaying retirement<br />

by just three years can have a huge impact on your position in<br />

retirement. This is due to you contributing towards your retirement<br />

fund for three extra years and that you will be drawing an income<br />

for three years less. In addition, the power of compounding is<br />

most effective in the final years before retirement. The cumulative<br />

effect of delaying your retirement by three years has a six- to nineyear<br />

benefit. Another good tip is to use the years leading up to<br />

retirement to deleverage your finances to reduce the burden on<br />

you in retirement.<br />

How much money is enough to retire?<br />

Calculating how much money you need to save for your retirement<br />

is a conundrum for most people. Using tools like the Nedgroup<br />

Investments MyRetirement Solution is an advantage.<br />

Some important things to remember when deciding how<br />

much is enough to retire on:<br />

• You should grow your income relative to inflation. Inflation<br />

is the silent killer to retirement savings.<br />

• Consider your medical costs as they generally increase<br />

above inflation.<br />

• Study your expenses and be realistic about what you<br />

absolutely need to live on and what is “nice to have”. This will<br />

give you an idea of what retirement income you will need.<br />

• A rule of thumb is to aim for a retirement income of 60-70%<br />

of your final salary.<br />

What are the options in retirement?<br />

At retirement you typically have two options of how to use your<br />

retirement savings to provide you with an income:<br />

• Life annuity<br />

A life annuity provides a guaranteed income for your<br />

(and your partner’s) life with set increases. However, you<br />

are not able to leave capital as inheritance. You also have<br />

no flexibility to amend your income or change providers<br />

in future.<br />

• Living annuity<br />

A living annuity, on the other hand, allows one to<br />

choose your income each year. It is market-related and<br />

will fluctuate depending on the performance of its<br />

underlying investment portfolio and therefore does not<br />

guarantee that the income will last. With a living annuity,<br />

it is possible to leave money behind as inheritance.<br />

Each annuity has pros and cons, so choosing one annuity<br />

seldom meets all a retiree’s needs.<br />

Another option is to split your savings at retirement and<br />

purchase both a life and living annuity. Currently, the law neither<br />

prohibits nor allows the purchasing of multiple annuities, so it is<br />

worth checking with your provider what they allow.<br />

The best of both worlds: Nedgroup<br />

Nedgroup Investments offers the Living Annuity Plus. Designed<br />

to address the most typical concerns and limitations of traditional<br />

annuities, the Living Annuity Plus<br />

effectively provides longevity<br />

protection while still allowing<br />

retirees the flexibility to select<br />

their income and enabling<br />

provision for an inheritance.<br />

Free retirement<br />

coaching session<br />

The MyRetirement Solution has<br />

a dedicated and experienced<br />

retirement coach available<br />

to help people approaching<br />

retirement develop a plan<br />

for their unique needs and<br />

expectations. The coach is<br />

available to them for life and<br />

can walk pre-retirees through<br />

several scenarios with the tool<br />

so that they can see the impact<br />

of their retirement decisions<br />

before making them. <br />

Liezel Momberg, Head of Legal,<br />

Nedgroup Investments.<br />

For more information, visit https://myretirement.nedgroupinvestments.co.za/en/<br />

www.bluechipdigital.co.za<br />



Leading by action<br />

With a career built on sterling positions within the financial services sector,<br />

Kondi Nkosi has found the seat that will forever change his profession: the<br />

seat of Schroders, Country Head, South Africa. <strong>Blue</strong> <strong>Chip</strong> caught up with<br />

him to find out what is happening in the offshore investment sphere.<br />

Kondi, you took over as Schroders’ Country Head, South Africa<br />

in April 2020 – an extremely difficult time to take over the reins<br />

of an offshore investment company. Please tell us about your<br />

last few months.<br />

It was a very challenging time from many perspectives, let alone<br />

from an investment markets’ one. The primary focus for us was<br />

the health and wellbeing of the team on the<br />

ground. Fortunately, in our firm, it is relatively<br />

easy to work from home without any impact on<br />

the ability to do our work, given the investment<br />

in technology we have made over the years.<br />

We spent a lot of time interacting with our<br />

partners and clients, reassuring them that we<br />

were navigating the turbulent times in markets.<br />

There were several investment management businesses that either<br />

succumbed to the economic fallout of the pandemic or had to<br />

reassess how they do business. Schroders was in the fortunate<br />

space of having a strong financial position and a diversified<br />

business model that allowed us to navigate the tough times<br />

without having to seek external assistance or having to reduce<br />

staff on a temporary or permanent basis.<br />

What is your leadership style?<br />

I am a strong believer in leading by actions and bringing people<br />

along with you. “If you want to go quickly, go alone. If you want<br />

to go far, go together.”<br />

Why should investors consider offshore?<br />

Offshore provides diversification to an investor’s portfolio. It is a<br />

prudent approach for investors to diversify their exposures so that<br />

they manage their risk.<br />

Other global markets have significant comparative advantages<br />

that may not be available in South Africa (industries like aerospace,<br />

high-tech biomedical research and others). Opening oneself to<br />

those opportunity sets can potentially help enhance the returns<br />

on an investment portfolio.<br />

It allows investors to get exposure to other economies that<br />

may be experiencing higher degrees of<br />

“If you want to go<br />

quickly, go alone.<br />

If you want to go<br />

far, go together.”<br />

economic growth. For example, investing<br />

in a fund that invests in domestically<br />

listed China A-share companies, that<br />

derive the bulk of their revenues from the<br />

domestic economy, allows for diversified<br />

exposure to the China theme. While there<br />

are South African companies that derive<br />

some revenues from that economy, it would not compare to the<br />

domestically listed Chinese companies.<br />

Last year, the FSCA approved four funds to add to Schroders’<br />

comprehensive range of offshore options. Please give an<br />

overview of these funds.<br />

We have been adding to the menu of funds that are approved<br />

by the FSCA and now have a broad range of 12 funds that have<br />

received approval. Last year, we added four more [see below].<br />

Three more funds were approved by the FSCA in 2020:<br />

Schroder International Selection Fund (ISF) Global Gold (invests<br />

in companies worldwide that are involved in the gold industry),<br />

Schroder ISF Global Equity (another global equity fund that looks<br />

for underpriced shares relative to our expectations for future<br />

growth) and Schroder ISF Global Managed Growth (a flexible asset<br />

allocation, multi-asset offshore fund that aims to outperform a 60%<br />

global equity/40% global bond benchmark).<br />

<br />


<br />

Schroder ISF<br />

Global Sustainable Growth<br />

A high conviction, global equity offering,<br />

managed by our Global Equity team, that<br />

focuses on companies whose growth<br />

prospects we believe the market has<br />

underestimated. These companies aim<br />

to provide positive earnings going<br />

forward. A cornerstone of the process<br />

is also the degree of sustainability<br />

(determined by our inhouse model)<br />

these companies display.<br />

22 www.bluechipdigital.co.za<br />

Schroder ISF<br />

All China Equity<br />

This fund invests in companies<br />

that derive a large portion of<br />

their earnings from China,<br />

irrespective of where they are<br />

listed. Our team believes that<br />

these companies are, or will be,<br />

able to consistently generate<br />

returns on invested capital above<br />

the cost of capital, and thereby<br />

generate returns for investors.<br />

Schroder ISF<br />

Asian Equity Yield<br />

An Asian equity fund managed by<br />

our Asian equity team. We have had<br />

a presence in Asia since the 1970s<br />

and the team has a strong track<br />

record. The fund invests in comp-<br />

anies in the Asia Pacific (excluding<br />

Japan) region that pay dividends<br />

now but also retain enough cash<br />

to reinvest back into the company<br />

to generate future growth.<br />

Schroder ISF<br />

US Dollar Liquidity<br />

A fund that invests in<br />

US$ money market<br />

instruments. It provides<br />

investors access to<br />

wholesale money<br />

market investment<br />

securities and aims to<br />

provide income by invest-<br />

ing in short-term bonds<br />

denominated in USD.

COLUMN<br />


volatile markets<br />

Sound advice by Florbela Yates, Head of Momentum Investment Consulting<br />

What a year 2020 has been so<br />

far! The effect of the Covid-19<br />

pandemic on South African<br />

economic growth has been<br />

severe and markets around the globe<br />

continue to be volatile, not only as a result<br />

of the pandemic but also due to investor<br />

sentiment and political issues.<br />

So how do investors navigate these<br />

times? The starting point should be to<br />

sit down with your client and establish<br />

whether their circumstances have changed<br />

and, if so, whether their existing portfolio<br />

still meets their requirements. Then, it’s<br />

also worth ensuring that the investment<br />

manager appointed to run the portfolio<br />

is actively doing so. The world has been<br />

through severe pandemics, US presidential<br />

elections, recessions and market volatility<br />

before. Markets go through cycles and<br />

we don’t know how long or severe the<br />

current crisis will be. But we do know that<br />

you should highlight the importance of<br />

continuing to save and staying invested<br />

so that clients can still meet their financial<br />

obligations and achieve their long-term<br />

financial goals.<br />

If portfolios delivered disappointing<br />

returns, it’s worthwhile understanding<br />

what has driven these returns. Don’t sell<br />

out just because you see another portfolio<br />

doing better. History has taught us that<br />

selecting funds based on short-term past<br />

performance is dangerous and invariably<br />

leads to poorer outcomes.<br />

Ensure that you are comparing like with<br />

like. What asset classes are the portfolios<br />

invested in? Do they have similar offshore<br />

exposures? How do they compare to the<br />

peer group average over the longer term?<br />

And engage with the portfolio manager to<br />

understand what they are doing to position<br />

the portfolio for the future.<br />

The unit trust statistics continue to<br />

show a trend towards de-risking as<br />

investors continue to lose faith in the more<br />

aggressive funds being able to deliver<br />

on their performance expectations. The<br />

problem with exiting after poor returns is<br />

that you lock in those losses. Investors that<br />

are prepared to wait for a future recovery<br />

may not only make back these losses but<br />

potentially have some gains.<br />

Markets go through cycles and we don’t know<br />

how long or severe the current crisis will be.<br />

You should also consider the other<br />

costs of disinvesting and switching. Your<br />

client may still incur capital gains tax, and<br />

there is the opportunity cost of being out<br />

of the market when the recovery starts.<br />

People wait for confirmation of recovery<br />

before committing. So, investors who exit<br />

portfolios after a market downturn and only<br />

enter again after the recovery is confirmed,<br />

lose out on both sides of the investing<br />

cycle. While those that remain invested<br />

will experience the shorter-term volatility,<br />

our statistics show that they are invariably<br />

compensated for staying in the market.<br />

True diversification requires investments<br />

in several asset classes and there is a<br />

very strong argument for South African<br />

investors to have a portion of their assets<br />

invested in offshore markets. The amount<br />

again depends on your client’s personal<br />

circumstances and risk appetite.<br />

At Momentum Investment Consulting,<br />

we believe it is as important to learn from<br />

our past, as it is to consider the positioning<br />

of our portfolios for the future. We spend<br />

time investigating the current market and<br />

trying to determine which changes are<br />

structural versus those that are cyclical.<br />

In a low-return uncertain environment,<br />

being in a diversified portfolio isn’t<br />

enough. It’s important to look deeper to<br />

gain an understanding of the drivers of<br />

return given the current interest rates and<br />

growth expectations. It’s also important to<br />

understand that real returns don’t come in<br />

a straight line and to be realistic about the<br />

real return expectations. Over the short<br />

term, real returns are unlikely to be as high<br />

as we have seen before, but by having<br />

exposure to quality assets which tend to be<br />

more resilient, we believe there are enough<br />

opportunities out there to deliver on our<br />

clients’ longer-term objectives.<br />

Florbela Yates, Head of Momentum<br />

Investment Consulting<br />

www.bluechipdigital.co.za<br />



Why South<br />

Africa is an<br />

attractive<br />

destination<br />

for investors<br />

Petroleum Agency SA invites the world to “Explore South Africa”, and to discover the robust petroleum<br />

resources that have the potential to drive this economy. CEO Dr Phindile Masangane tells <strong>Blue</strong> <strong>Chip</strong><br />

how investors can benefit from the South African oil and gas upstream sector.<br />

Please tell us about the history of Petroleum Agency SA.<br />

Petroleum Agency SA (PASA) has its roots in the Petroleum<br />

Licensing Unit of the then national oil company, Soekor (the predecessor<br />

of PetroSA). In 1999, following the Norwegian model, it<br />

was decided that regulation of the oil and gas upstream industry<br />

should be separated from the national oil company, and the<br />

Agency was formed through a ministerial directive.<br />

The Agency has successfully attracted major explorers<br />

to South Africa and facilitated the acquisition of many new<br />

large seismic surveys and some exploratory drilling, through a<br />

period affected by legislative issues and a major oil price crash.<br />

The company has grown from an organisation of about 25 to<br />

85 staff today and is held in remarkably high regard by the<br />

local and international oil and gas industry that it serves. Currently,<br />

the agency is actively involved in shaping the new stand-alone<br />

upstream legislation and in guiding government with its decisions<br />

regarding the possible exploration for shale gas.<br />

South Africa has a particularly<br />

good petroleum resource potential,<br />

which remains unexplored.<br />

What is PASA’S core business function?<br />

PASA has three main functions. The first is to attract investment to<br />

South Africa’s oil and gas upstream industry through investment<br />

into exploration and production of oil and gas in South Africa. We<br />

have a team of geologists and geophysicists who interpret data<br />

gathered through past exploration activity to determine prospects<br />

and use this to attract exploration companies.<br />

The second function of PASA is to regulate the upstream<br />

industry in terms of the Mineral and Petroleum Resources<br />

Development Act, its regulations and other applicable legislation.<br />

The Agency has staff responsible for ensuring legal, technical<br />

and environmental compliance as organisations enter contracts<br />

with the state to explore for oil and gas.<br />

The third function is to act as the national archive for all<br />

data and information produced during oil and gas exploration<br />

and production in South Africa, and to curate and maintain this<br />

data for use and distribution. Other functions include advising<br />

the government on any issues pertinent to oil and gas as well as<br />

carrying out any special projects, as directed by the government.<br />

Where is the Agency at in terms of its market position?<br />

The Agency’s competitors are similar organisations in Africa,<br />

and beyond, attempting to attract oil and gas exploration<br />

24 www.bluechipdigital.co.za

investment to their countries. For a long time,<br />

South Africa has not been seen as a destination<br />

for such investment, paling into insignificance<br />

in relation to countries such as Angola and<br />

Nigeria, both rich in oil, and even more recently<br />

Mozambique with its enormous gas discoveries.<br />

Our political stability, relatively advanced<br />

development, independent courts and equitable<br />

terms have always been our strong hand. The<br />

recent world-class Brulpadda discovery and<br />

South Africa’s potential for shale gas are helping<br />

to change perception and the upcoming standalone<br />

oil and gas legislation will further strengthen<br />

our position.<br />

You have recently taken over the position as<br />

CEO of PASA. Please share with us some of your<br />

ideas in terms of plans and strategies growing<br />

and improving PASA?<br />

South Africa has a particularly good petroleum<br />

resource potential, which remains unexplored.<br />

Prior to 1994, we did not have international oil<br />

companies in the country due to the political<br />

sanctions. All the exploration activities for oil and<br />

gas in South Africa were undertaken by Soekor.<br />

Oil and gas exploration is a highly capital<br />

intensive and high-risk business that cannot<br />

be left to a national oil company to do alone. In<br />

the democratic era, we have attracted several<br />

international oil and gas companies, including the<br />

majors like Shell, Total and ExxonMobil and have<br />

seen a few of our blocks being licensed. Significant<br />

exploration activity in terms of 2D and 3D seismic<br />

data collection has taken place since then, mainly<br />

by international oil companies.<br />

Where we are, is that we need to enter the next<br />

phase in terms of exploration – that of significant<br />

drilling activities. We need to move to prove the<br />

resources we have. This will be the game-changer<br />

for South Africa’s upstream oil and gas industry.<br />

The recent discovery by Total and its JV Partners<br />

in Block 11B/12B (Brulpadda) is the first giant step<br />

in that direction.<br />

My role is to work with industry and the<br />

department to fast-track these developments<br />

including finalising the Upstream Resource<br />

Development Bill. As we enter this phase in our<br />

industry development, we want to ensure that it<br />

is an inclusive and diversified industry in terms of<br />

race, gender and participation of SMEs.<br />

What would you consider to be PASA’s main<br />

challenge ahead?<br />

South Africa is playing catch-up in terms of<br />

upstream oil and gas development compared<br />

to other countries in the region. With the<br />

correct policies, fiscus proposition and domestic<br />

industry off-take opportunities we can win. PASA’s<br />

challenge is to ensure that both international and<br />

local energy companies see this value proposition<br />

in South Africa and choose our country. In this low<br />

oil and gas price environment, companies are<br />

inclined to cut back on capital investments,<br />

and we need to partner with them to sustain<br />

the momentum.<br />

What do you predict the company’s<br />

biggest success will be in the future?<br />

A vibrant upstream oil and gas industry<br />

that contributes to the security of our<br />

nation's energy supply and the economy<br />

having a substantially reduced<br />

dependence on imported gas.<br />

Do you think that a woman<br />

leader, in your position in<br />

the energy sector, will make<br />

a different impact on the<br />

company’s business?<br />

Women are naturally long-term<br />

visionaries and PASA is an important<br />

institution in the South<br />

African energy landscape. For the<br />

country to properly regulate the<br />

industry that is about to burst<br />

into the next phase of increased<br />

production, I am looking at the<br />

long-term sustainability of PASA<br />

as well as PASA’s capability to<br />

grow in tandem with the anticipated<br />

growth of the upstream oil and gas<br />

industry in South Africa.<br />

Any blue chip advice for readers?<br />

The next phase of drilling in<br />

the South Coast is starting in<br />

September 2020 and it is in deep<br />

waters, deeper than 1400m, similar<br />

to the depths where the gigantic<br />

Rovuma gas finds in Mozambique<br />

were made. <br />

Follow PASA on Twitter for<br />

more on this exciting economic<br />

development [@sa_petroleum].<br />




Dr Masangane was appointed as the Chief Executive<br />

Officer of the South African upstream oil and gas<br />

regulatory authority, Petroleum Agency South Africa<br />

(PASA), in May 2020.<br />

Before then, Dr Masangane was an executive at<br />

the South African state-owned energy company, CEF<br />

(SOC) Ltd, which is the holding company of PASA.<br />

Dr Masangane was responsible for clean, renewable<br />

and alternative energy projects. In partnership<br />

with private companies, she led the development<br />

of energy projects including the deal structuring,<br />

project economic modelling and financing on behalf<br />

of the CEF Group of Companies.<br />

Her responsibilities also included supporting the<br />

national government in developing energy policy and<br />

regulations for diversifying the country’s energy<br />

mix. In 2019, Dr Masangane was Head of Strategy<br />

for the CEF Group of Companies where she led the<br />

development of the Group’s long-term strategic plan,<br />

Vision 2040+ as well as the Group’s gas strategy.<br />

Between 2010 and 2013, Dr Masangane was<br />

a partner and director at KPMG responsible for<br />

the Energy Advisory Division. In this capacity, she<br />

successfully led the capital raising of $2-billion for<br />

the Zimbabwe power utility, ZESA/ZPC’s hydro and<br />

coal power plants expansion programmes.<br />



Boutiques<br />

are better<br />

– right?<br />

The<br />

great boutique debate<br />

The debate about whether it is<br />

better to invest in a boutique<br />

manager or a more established<br />

manager has been argued for<br />

years. It joins the list of value vs growth,<br />

onshore vs offshore, small cap vs large cap,<br />

flat fee vs performance fee and many other<br />

hotly contested comparisons.<br />

Firstly, one can become bogged down<br />

in definitions about what constitutes a<br />

boutique. Most agree it is a function of<br />

the size of assets under management but<br />

is it the size of, say, the equity portfolio<br />

or balanced portfolio or the size of the<br />

manager’s total assets under management<br />

across all mandates? For example, many<br />

larger, more established managers allow<br />

proven professionals to manage relatively<br />

tiny specialist portfolios within a much<br />

larger house. Conversely, some boutique<br />

portfolios are sizeable.<br />

Secondly, it is not clear what is meant<br />

by “better”. It seems to make sense that<br />

a “better” manager outperforms a not<br />

so good one. However, the argument<br />

becomes more nuanced about before and<br />

after fee performance and the power of<br />

the brand. Many investors are prepared<br />

to sacrifice some (usually, poorly defined)<br />

amount of performance for the peace of<br />

mind of being invested with a manager<br />

with a powerful brand splashed all over<br />

airports and televisions.<br />

Luckily, the South African investment<br />

market is both world-class sophisticated<br />

and quite small so this article will concentrate<br />

on the South African industry<br />

and within that equity only funds or<br />

funds that are listed in the ASISA General<br />

Equity category.<br />

Boutique managers<br />

cover a much wider<br />

range of returns.<br />

The better ones tend<br />

to be dramatically<br />

better. However,<br />

the poorer ones<br />

have been awful.<br />

That category has 75 funds listed<br />

in it; fortunately, many of those can be<br />

ignored for this exercise due to specialist<br />

mandates such as funds that invest in only<br />

technology shares, for example, or Islamic<br />

funds or themes such as value, emerging<br />

markets and others. The final constraint is<br />

to consider only active managers and not<br />

passive or index-tracking managers.<br />

This analysis has highlighted twelve<br />

boutique managers and eight larger or<br />

more established managers.<br />

Before examining the specifics of what<br />

South African boutique managers have<br />

achieved, there are some theoretical<br />

agenda items usually propounded in the<br />

boutique debate:<br />


1. Smaller managers are nimbler and can<br />

buy in and sell out of their positions<br />

more easily.<br />

2. Boutiques managers can take meaningful<br />

stakes in smaller companies without<br />

hitting JSE limits on ownership or<br />

in-house liquidity constraints.<br />

3. Managers with smaller assets tend to<br />

have higher concentration or fewer<br />

shares in their portfolios.<br />

4. There is a tendency for early-stage<br />

managers to be owner-managed rather<br />

than part of a large institution and so<br />

have more “skin in the game”.<br />

26 www.bluechipdigital.co.za



1. Companies seeking capital at the earlier<br />

and, conceivably, more profitable stage<br />

of their developments look to raise that<br />

capital from more established managers.<br />

2. Larger managers carry more clout with<br />

companies if they wish to encourage a<br />

company to change the way it operates.<br />

3. Managers with a brand attract stickier<br />

money and the fund managers do not<br />

have to worry about the profitability<br />

of the organisation as it has already<br />

achieved critical mass.<br />

4. The best talent can gravitate to larger<br />

managers as their budgets allow the<br />

best systems, research, access to company<br />

management and/or career development<br />

opportunities.<br />

management caused by the size of assets<br />

under management.<br />

An extract from their August 2020<br />

analysis is below:<br />

portfolio but doesn’t want to breach a limit<br />

of owning more than 10% of the company’s<br />

free float of shares is limited to 15 shares<br />

on the JSE. A smaller manager managing<br />

The list above is by no means exhaustive<br />

and it would require a much longer article<br />

to debate the pros and cons of each and<br />

several other points without, necessarily,<br />

reaching a clear conclusion.<br />

Kagiso Asset Management publishes a<br />

monthly analysis of the limitations of fund<br />

Source: Kagiso Asset Management<br />

The circled number is interpreted as<br />

follows: A manager that has R200bn invested<br />

in South African equities and wishes to<br />

take a meaningful 5% exposure in its equity<br />

only R10bn of South African equity has a<br />

choice of 89 shares. This means that the<br />

larger managers simply have a smaller<br />

playing field for their high-conviction plays<br />

and anything outside of the list of the 15<br />

largest shares cannot have a larger than


Smaller managers are nimbler<br />

and can buy in and sell out of<br />

their positions more easily.<br />

5% exposure in the portfolio. This, typically, means that the larger<br />

managers have a longer tail of smaller exposures in their portfolios.<br />

So, how have the boutiques stacked up historically against the larger<br />

managers? The charts (right and on page 29) show performances to<br />

30 September 2020 for the year-to-date (YTD), one year, three years<br />

and five years. They have been ranked within their size band with the<br />

boutique managers (BM) on the left and the large managers (LM) on<br />

the right and the sector average in dark grey within each band.<br />

The following charts require some scrutiny.<br />

Over all periods, the boutique managers cover a much wider range<br />

of returns. The better ones tend to be dramatically better. However,<br />

the poorer ones have been awful.<br />

There is, indeed, some consistency across periods with BM1, BM3<br />

and BM9 being the consistent good performers in the boutique space<br />

and BM8, BM10 and BM11 being the laggards.<br />

The consistently good large managers are not as obvious but LM1,<br />

LM3 and LM5 have not done well.<br />

Truffle_<strong>Blue</strong><strong>Chip</strong>_Oct 2020.pdf 5 2020/09/22 16:33<br />

Truffle<br />

Asset Management<br />

Truffle Asset Management is an authorised FSP. Full details and basis of the award are available from the manager.<br />

The value of experience.<br />

For more information about our funds visit<br />



It has not been clear that boutiques have, as a group, outperformed<br />

large managers over any period. As with any investment<br />

decision, investors should embark on considerable due diligence<br />

research before choosing a portfolio or, better still, use the<br />

services of a professional advisor with the correct credentials and<br />

experience to pick the more successful managers. <br />

Managers<br />

with smaller<br />

assets tend to<br />

have higher<br />

concentration or<br />

fewer shares in<br />

their portfolios.<br />

Source: FE Analytics, MitonOptimal<br />

James Downie, Head: Institutional<br />

Asset Consulting & Optimisation,<br />

MitonOptimal South Africa<br />

GETTING 2<br />

KNOW Melanie Stockigt<br />

Head of Fixed Interest, Tantalum Capital<br />

Describe your journey in asset management<br />

I started out in financial markets in 1997 at Standard Bank. Working in<br />

the heart of the Treasury division, I had exposure to many aspects of the<br />

market, but my true passion was working with institutional investors. It<br />

was therefore a natural step when I migrated to the asset management<br />

world. I spent a few years at Coronation before embarking with my<br />

partners on the exciting journey of building Tantalum Capital.<br />

The best part of your workday?<br />

My favourite part of the day is the first hour or so, before our investment<br />

team morning meeting. I digest all the overnight market news, check<br />

market movements and plan for the day ahead. The tempo of the day<br />

can change so quickly in asset management though so often the ‘plan’<br />

for the day takes an unexpected turn! There isn’t a single day that ends<br />

without having gathered more information and knowledge and it’s a<br />

privilege to have a career that’s so rich in intellectual growth.<br />

What has life in lockdown been like for you?<br />

From a personal perspective, it’s been wonderful to have so much<br />

more control over the noise in my day, as we were fortunate to be<br />

able to move seamlessly into the virtual world. The<br />

asset management industry didn’t skip a beat, and<br />

our access to information via conference calls and<br />

virtual meetings has been so much greater than<br />

it was under the constraints dictated by physical<br />

meetings pre-lockdown. Having my work structure<br />

integrated into the rhythm of my family unit has<br />

also been a blessing. <br />







We have worked together<br />

for more than 20 years<br />

We offer skills in all the<br />

asset classes including<br />

global markets<br />

Our funds are managed<br />

with a strong<br />

co-investment mindset<br />

We are active<br />

portfolio managers<br />

We have a long track record<br />

of consistent returns and<br />

investment excellence<br />

Founded in 2005, Tantalum Capital is a boutique asset manager with a strong partnership<br />

culture and a co-investment mindset. We are majority owner-managed, and a proud affiliate<br />

of RMI Investment Managers since 2015. Our portfolios are constructed from a single idea<br />

generation process, and almost 50% of the Tantalum Capital team are women.

Reach financial planners<br />

and associated practitioners<br />

The official publication of the Financial Planning Institute (FPI)<br />

ABC-certified distribution through:<br />

• Major financial planning events<br />

• Financial planning workshops<br />

• Direct distribution to all Certified Financial Planners<br />


Advertising queries: sales@gan.co.za<br />

www.bluechipdigital.co.za<br />

The South African <strong>Journal</strong><br />

for Financial Planners


Identifying, partnering<br />


the next generation of South Africa’s top investment talent<br />

Zama Zulu’s career in the asset management industry started<br />

in 2004 when she joined Coronation Fund Managers as a<br />

junior business development manager. After 10 years at<br />

Coronation, she left to join the debt capital markets team<br />

at RMB, assisting various corporates and state-owned enterprises<br />

(SOEs) looking to raise debt from the asset management market<br />

through auctions or private placements. She was approached by<br />

Rand Merchant Investments (RMI) Investment Managers to join<br />

the team in 2016, where she is now a Portfolio Executive.<br />

For more than two decades, the Group has had high exposures<br />

to insurance businesses, namely Discovery, OUTsurance and<br />

Momentum but were underweight in the asset management sector.<br />

“Asset management has a high cash conversion rate and requires<br />

relatively low capital to start, which made the industry attractive for<br />

RMI Holdings to venture into as a means of diversifying its financial<br />

services income stream” says Zama Zulu.<br />

After listing in 2011, the RMI Holdings board made the decision to<br />

reactivate the investment portfolio and so, in 2014, a new investment<br />

team was appointed to execute this plan. Asset management<br />

industry models operating globally were researched and the multiaffiliate<br />

investment management model piqued the interest of the<br />

investment team. In 2015, the RMI Investment Managers (RMI IM)<br />

affiliate model was launched.<br />

The company has since acquired minority stakes in 12 boutique<br />

asset managers including Balondolozi Investment Services*,<br />

CoreShares Asset Management, Ethos Private Equity*, Granate Asset<br />

Management, Northstar Asset Management, Perpetua Investment<br />

Managers, PolarStar Management, Sentio Capital Management,<br />

Sesfikile Capital*, Tantalum Capital, Truffle Asset Management and<br />

Visio Fund Management*.<br />

RMI IM identifies and partners who they believe are South Africa’s<br />

next generation of investment management talent and provides<br />

patient and permanent capital along with strategic guidance to<br />

ensure their long-term success. “We apply a long-term mindset<br />

to each affiliate’s investment philosophy, and we monitor it over<br />

medium-term periods. Short-term outlooks disappoint. Rewards are<br />

met down the line,” attests Zulu.<br />

“As a supportive but non-interfering shareholder, we provide our<br />

boutique affiliates with strategic business and operational support,<br />

access to insightful research and thought leadership and well as<br />

asset-raising and marketing capabilities” adds Zulu. RMI IM believes<br />

it is the support and guidance in these key areas that affords the<br />

affiliates, which tend to be small- to mid-tier type entities, a better<br />

opportunity for success.<br />

* Equity stakes are held via Royal Investment Managers,<br />

RMI IM’s joint venture with Royal Bafokeng Holdings.<br />

Zulu’s role focuses on asset-raising initiatives, which involves<br />

assisting the affiliate managers to achieve “retail-readiness”. As part<br />

of their shareholder value map, RMI IM offers two areas of support<br />

within the asset-raising portfolio: strategic advisory and coverage<br />

support. “In terms of strategic advisory support, we ensure that the<br />

affiliate managers understand the various trends in the retail industry<br />

and how the industry works” says Zulu.<br />

“We find that most of the affiliates are fairly new to retail due to<br />

a strong historical focus on the institutional market,” she adds. “The<br />

institutional market operates very differently from the retail market,<br />

so we ensure that we provide our affiliates with useful insights on<br />

the various dynamics at play via our research generated in-house on<br />

market share and flows and any relevant client intel we may have.<br />

These insights are considered when developing an affiliate’s retail<br />

distribution strategy.”<br />

“Short-term outlooks<br />

disappoint. Rewards are met<br />

down the line.” – Zama Zulu<br />

In terms of coverage support, Zulu helps the RMI IM affiliates<br />

navigate the various client segments within the retail market;<br />

the discretionary fund managers, the multi-managers, financial<br />

advisors and wealth managers as well as the LISP platforms. RMI<br />

IM’s coverage support for these client segments is centred around a<br />

core fund range that includes capabilities across various asset classes<br />

and investment styles. In ensuring the company’s non-interfering<br />

approach, Zulu’s input and guidance is provided, as<br />

and when requested, into structuring fee policies,<br />

pricing for potential mandates as well as general<br />

preparation for new business pitches.<br />

The RMI IM portfolio represents a world-class<br />

collection of businesses with the potential to<br />

become top-tier investment managers in South<br />

Africa. Retail investors are sorely lacking proper<br />

choice in managers, given the high concentration<br />

of assets in the hands of the larger<br />

managers and so RMI IM’s ambition<br />

to challenge the status quo and<br />

create a more even playing<br />

field, will undoubtedly be<br />

highly beneficial for the industry<br />

as a whole. <br />

Zama Zulu, Portfolio<br />

Executive, RMI IM

Tuning<br />


in<br />

to the beat of<br />

her inner drum<br />

Alida de Swardt is an ambitious and experienced financial<br />

services specialist. She joined RMI Investment Managers<br />

in 2016 as Head of Distribution and Marketing before<br />

assuming the role of CEO in March 2018. While her<br />

career in banking and investment management spans more than<br />

two decades, she has not let the intimidating and male-dominated<br />

industry divert her from her true self; a kind, passionate, engaging<br />

and inspiring leader.<br />

RMI Investment Managers (RMI IM) launched a multi-affiliate<br />

investment management model in 2015, the first of its kind in<br />

South Africa. Its aim is to identify and partner the best boutique<br />

investment talent in South Africa by becoming a supportive, noninterfering<br />

and long-term shareholder in their businesses. As a<br />

100% subsidiary of JSE-listed investment holding company RMI<br />

Holdings, it is well-placed to be a shareholder and partner of choice<br />

for boutique investment managers. RMI IM is independent, has<br />

patient and permanent capital and a solid reputation of backing<br />

entrepreneurs building businesses in financial services.<br />

The RMI Group has done this successfully with Discovery,<br />

OUTsurance and Momentum, all of whom are now formidable<br />

financial services firms in South Africa. To date, RMI IM has<br />

invested in 12 boutique asset managers across various investment<br />

styles and asset classes, including active, passive, traditional and<br />

alternative investments.<br />

Aligning with the entrepreneurial DNA<br />

of the RMI Group is key. RMI IM’s business<br />

model is such that only minority equity<br />

stakes are acquired to ensure their<br />

affiliates retain their independence,<br />

particularly when it comes to<br />

their investment capabilities. By<br />

partnering with RMI IM, affiliates<br />

can concentrate on what they do<br />

best – managing investments<br />

to achieve superior returns<br />

for their clients.<br />

The unique opportunity<br />

Between 1990 and 2013, nearly 40% of investment management<br />

firms started vanishing by means of acquisition, merger or<br />

closure with the average lifetime close to only five years. Reasons<br />

for this failure included lack of steadfast shareholder support,<br />

poor business models, lack of differentiation and poor investment<br />

returns. Post-Covid, it is expected that a similar trend will<br />

once again emerge, leading to consolidation opportunities for<br />

smaller players.<br />

To address these challenges, RMI IM assists its affiliates with<br />

brand credibility through the RMI association, business acumen<br />

and strategic insight from its executive team and board, as well as<br />

asset raising and marketing capabilities, operational robustness<br />

and economies of scale.<br />

Through its partnership with Momentum Metropolitan, a<br />

distribution business that has a long history with the financial<br />

advisor industry, it is able to provide additional distribution<br />

capabilities to complement its affiliates’ own distribution teams.<br />

Insights and relationships from these sources are used to<br />

understand how best to service the changing advisor market.<br />

Distribution: the lifeblood of asset management<br />

While there tends to be a strong institutional support base in<br />

boutique managers, albeit highly concentrated, these businesses<br />

generally aspire to grow their retail following, which is a longterm<br />

endeavour. To achieve this requires building a trusted and<br />

recognised brand supported by a consistent, long-term investment<br />

performance track record. With more than 650 active funds in South<br />

Africa, investors are spoiled for choice, which makes standing out<br />

in the crowd a real challenge.<br />

The RMI IM team remains steadfast and committed to<br />

their affiliates in helping them to overcome these challenges<br />

while recognising that each business is at a different life stage and<br />

therefore endeavours to assist them where most appropriate and<br />

relevant. For RMI IM, it’s about finding a unique engagement model<br />

with each of them, rather than assuming a blanket approach.<br />

We remain confident in our ability to<br />

stay the course and continue backing<br />

management teams that we truly<br />

believe have what it takes to succeed.<br />

Alida de Swardt


The company has a strategic ambition to help build the next<br />

generation of significant asset management businesses and enable<br />

them to reach their full potential. Through doing so, RMI IM hopes<br />

to indirectly play its part in cultivating a savings culture in South<br />

Africa while helping to transform its portfolio companies to better<br />

reflect the society it ultimately serves.<br />

Transforming the industry<br />

Transformation within the asset management industry continues<br />

to come under the spotlight as progress remains stubbornly<br />

slow, particularly regarding female representation in portfolio<br />

management and decision-making roles. According to a recent<br />

industry report, in South Africa only 3.5% of active funds are<br />

managed by a female portfolio manager, or a female-only team.<br />

As a founding member of Athena, RMB’s gender equality<br />

initiative, De Swardt is passionate about the promotion of gender<br />

diversity and the empowerment of women in financial services.<br />

She recognises that as a woman in a male-dominated industry she<br />

naturally brings a different perspective. “There’s a lot of research<br />

that shows that diverse workforces achieve so much more,” she says.<br />

Talent is your biggest asset<br />

“In asset management, your biggest asset is your talent,” says<br />

De Swardt. “It’s a people business. Yet, I’m not always sure that<br />

we prioritise the importance of interpersonal skills coupled<br />

with technical capabilities.” She adds, “In business, people tend<br />

to unconsciously employ individuals like themselves, which can<br />

easily result in groupthink,” says De Swardt. “We should mindfully<br />

be seeking out diverse talent in terms of skills, experience,<br />

backgrounds and personalities to ensure we are constantly<br />

challenging our approach and thinking.”<br />

De Swardt leads by example as her own team at RMI IM, while<br />

small from a headcount perspective, is incredibly diverse. “It’s<br />

about achieving the right balance of gender, racial and cognitive<br />

diversity within a team. As this, I believe, is when true creativity<br />

gets unlocked.”<br />

I find that you get the very<br />

best out of people when you<br />

give them the responsibility<br />

and flexibility to deliver.<br />

Partnering your team<br />

The entrepreneurial heritage of the RMI Group is something that<br />

De Swardt has learned first-hand through her 20-year association<br />

with the Group. She leads with a strong partnership ethos.<br />

“Through our owner-manager culture, we allow individuals to<br />

own a part of the business and to drive it themselves,” says De<br />

Swardt. “I find that you get the very best out of people when you<br />

give them the responsibility and flexibility to deliver results in their<br />

own unique way.”<br />

De Swardt believes in surrounding herself with people that<br />

complement her skills and experience and enabling others to<br />

be the best version of themselves, rather than directing them or<br />

micro-managing.<br />

“Trust and respect are two key values of my leadership style.<br />

Trust is given when work is outcomes-driven and not limited<br />

to KPIs, and trust is built when you provide a safe space for<br />

vulnerability.” She adds, “My team do not fear asking for help, as<br />

trying to cover up weaknesses or vulnerabilities is not productive<br />

or conducive to success.”<br />

Trust and respect<br />

are two key values of<br />

my leadership style.<br />

The driving force of her inner drum<br />

Financial markets can be extremely volatile and so much of what<br />

happens at a macro level is out of one’s control. From a young<br />

age, De Swardt learned that to lead effectively, one needs to be<br />

both resilient and realistic and to not be motivated by fear. She<br />

inspires and motivates others to focus on what is in their control<br />

by using their individual skills and talents in a meaningful way.<br />

Combining this with positive energy and a growth mindset is how,<br />

she believes, to successfully achieve goals and ambitions in both<br />

life and business.<br />

She was just seven when her father, a retail entrepreneur,<br />

introduced her family to Peter Drucker’s management theory.<br />

Her father taught her how to tune into her inner drum, to deeply<br />

connect with its driving force and listen to it regularly as a guide<br />

to know whether she is on the right track. She believes that by<br />

tuning into your inner drum you can find your true purpose and<br />

meaning in life.<br />

Looking ahead<br />

In July 2020, RMI IM began its fifth financial year and although still<br />

in the early years of the business model, De Swardt is confident<br />

that strong foundations have been built for long-term success.<br />

Building enduring investment management businesses is a longterm<br />

endeavour that requires patience, humility and stamina.<br />

Looking ahead, De Swardt believes that RMI IM’s patience and<br />

long-term outlook will stand the team in good stead to navigate<br />

what will likely be another tough few years.<br />

“Our partnership model was truly put to the test this year during<br />

what has been an extremely trying period for everyone, not only in<br />

the market but in our businesses and personal lives too.”<br />

She adds, “So, we are now deeply focused on the ‘partner’ and<br />

‘grow’ phases of our business model and while we don’t expect<br />

the investment backdrop to get any easier in the next few years,<br />

we remain confident in our ability to stay the course and continue<br />

backing management teams that we truly believe have what it<br />

takes to succeed; building critical mass, relevance and a credible<br />

track record.” <br />

www.bluechipdigital.co.za<br />


, a<br />

ist<br />

a<br />

e<br />

tly<br />

nd<br />

ut<br />

at<br />

as<br />

lly<br />

ng<br />

rk<br />

ur<br />

at<br />

ise<br />

ey<br />

es<br />

he<br />

in,<br />

ut.<br />

as<br />

et<br />

w<br />

a<br />

nt.<br />

nt<br />

ve<br />

ed<br />

he<br />

er<br />

is<br />

ial<br />

at<br />

as<br />

?<br />

improved by 40%. Operational costs fell,<br />

FINANCIAL SECURITY with 23% less electricity and 90% less<br />

paper used.<br />

Perpetual Guardian, a New Zealandbased<br />

financial services<br />

Are you working<br />

firm, moved to a<br />

four-day week in late 2018. Productivity<br />

improved 20% over an eight-week period;<br />

an independent survey showed staff stress<br />

The most<br />

in the<br />

levels reduced and work-life balance<br />

MESSY<br />

improved from dramatically.<br />

As you think about innovating to keep sheet dat<br />

up with constant change, don’t get stuck<br />

on technology and forget about your<br />

people. They may just end up working for a<br />

business that has found a real way to make<br />

MIDDLE?<br />

a dent in traffic congestion! <br />

References<br />

David Rock, The Neuroscience of Leadership<br />

– Improving Organisations by Understanding<br />

the Brain, Talk at FPI Convention, 2012<br />

Morgan Housel, The advantage of being a<br />

little underemployed, www.collaborativefund.<br />

com, 17 May 2017<br />

The balance between financial<br />

Ricardo<br />

security,<br />

Semler, The<br />

the<br />

Seven<br />

new-age<br />

Day Weekend,<br />

woo-woo and living well Delivered over<br />

Penguin Publishing, 2004<br />

research 24 hou<br />

Robert Booth, Four-day concepts week: trial such finds as lower meaning, freedom, health, relationships, learning,<br />

what would it be? This is a question I often reflect stress and on, but increased always productivity, hobbies and www. sleep. What he is highlighting is the We manage all<br />

come up with the same answer: security. theguardian.com, It’s boring, I know. 9 February trade-offs 2019we have to make to get the balance<br />

resources<br />

And not very original. But at its essence, McKinley that’s what Corbley, money Microsoft right Japan between Recently financial security and a<br />

means to me. For others, the word may be a Gave little their more Employees exciting a 4-day life well-lived. Week – and An investment banker Incredibly easy<br />

like “opportunity”, or “legacy”, or for Productivity Skyrocketed by 40%, www. will be happy to<br />

some money may even be a “threat”.<br />

tools<br />

goodnewsnetwork.org, “Financial security”<br />

8 November 2019 sacrifice sleep<br />

I discovered how unoriginal my<br />

to make more<br />

LinkedIn Talent Solutions, 2019 Global Talent<br />

Your gateway t<br />

word is when I read Khe Hy’s blog, does not necessarily money. A highschool<br />

teacher<br />

Trends Report, 2019<br />

You’re thinking about “financial<br />

equal<br />

developed with<br />

Samantha “a McLaren, life well-lived”.<br />

How these 4 Companies<br />

security” the wrong way. Khe Hy has<br />

faced with the<br />

are Embracing Flexible work – and Why You<br />

<br />

been dubbed the “Oprah for Millennials”. At the age of 35, he gave demands of a class of teenagers may Automatically u<br />

up a lucrative career on Wall Street, resigning as Should managing Too, www.businesslinkedin.com, director not make a huge 22 amount of money but<br />

May 2019<br />

<br />

of BlackRock’s Hedge Fund of Funds division to figure out how is unlikely to survive without sleep. Both Full of excellen<br />

to live “a more fulfilled life”. Hy suggests<br />

are striving for a life data, fact shee<br />

that we all seek financial security in some<br />

well-lived.<br />

form or other. A spin-off from Mazlow’s<br />

Financial planners may see The their output opt<br />

hierarchy of needs. We all want at the very<br />

primary role as helping clients achieve<br />

presentations<br />

least to have enough money to survive.<br />

financial security. As we can see, each<br />

But Hy makes the point that “financial<br />

person’s interpretation of this is Fully unique. supported<br />

security” does not necessarily equal “a life<br />

well-lived”. It prompts the question, “How<br />

much money is enough?”<br />

To answer this question, Hy suggests<br />

R20k, and that the process usually involved<br />

four meetings. The potential client had<br />

experienced so much value in just one<br />

aspect of the first meeting that they were<br />

moved to ask if this was R20k per meeting<br />

– not because they didn’t want to pay the<br />

fee but because they thought given the<br />

value they had already experienced, this<br />

was a possibility.<br />

If you could capture in one word what money means to you,<br />

The value in people<br />

In a knowledge-based economy, when you<br />

are providing a professional service based<br />

on knowledge, experience, thinking and<br />

interpersonal skills, to quantify anything<br />

in terms of time – be it your employees’<br />

working hours or the time spent with a<br />

client – is a disservice to the value that<br />

financial planners and their staff potentially<br />

can add to their clients’ lives.<br />

So the opportunity is ripe for the picking<br />

to innovate with respect to how you get<br />

and keep people and make them more<br />

productive. LinkedIn’s 2019 Global Talent<br />

Trends Report indicates that over 30% of<br />

job-seekers will turn down a job if there are<br />

not flexible work arrangements. Computer<br />

giant Dell implemented flexible work<br />

practices in 2009. US healthcare company<br />

Humana did the same in 2016, using<br />

technology to enable call-centre workers<br />

to work that from we have home. to grapple with the “messy<br />

More middle”, recently which sits Microsoft between in financial Japan<br />

experimented security (“enough”) with a and four-day a life well-lived. week for For<br />

their Hy, employees. the “messy middle” Without consists an adjustment of what he<br />

Rob Macdonald, Head of Strategic Advisory<br />

in remuneration. refers to as a lot The of the result? “new-age Productivity woo-woo”,<br />

Services at Fundhouse<br />

Money is simply a means to an end. So<br />

perhaps it is time for financial planners<br />

to acknowledge that their primary role<br />

is to help clients achieve a life well-lived.<br />

If this is the case, then much of the work<br />

that a financial planner ideally needs<br />

to do sits in the “messy middle” of their<br />

clients’ lives. Given that this is full of<br />

“new-age woo-woo”, many planners may<br />

l.co.za<br />

34 www.bluechipdigital.co.za


not be that excited at the prospect. Particularly<br />

given that financial planners’ training is primarily<br />

technical and focuses on helping people achieve<br />

financial security.<br />

Most financial planners are happy to ask their<br />

clients: “Tell me how much is enough, and I’ll work<br />

out how much you need.” They are also willing to<br />

offer: “I’ll put a plan together so that you can end<br />

up with enough, dead or alive.” Because the middle is<br />

messy, the average client will say: “I don’t know how much is<br />

enough.” Now what? This is where a financial planner can choose<br />

to help a client grapple with the “messy middle”. Or not. It is easier<br />

not to get involved in this part of a client’s life. As Brené Brown<br />

points out, “It’s much easier to talk about what we want and need<br />

than it is to talk about fears, feelings and scarcity (the belief that<br />

there’s not enough).” And after all, money is time. The first question<br />

a financial planner is likely to ask is: “How long will this working<br />

in the ‘messy middle’ take?” The answer of course is, “It depends.”<br />

In the latter part of the 20th century, it was okay for financial<br />

planners to avoid the “messy middle”. For the Baby Boomer<br />

generation, conditioned by parents who had endured the Great<br />

Depression and the Second World War, financial security effectively<br />

equals a life well-lived. It is no coincidence that money means<br />

security to me. Both my parents lived through these periods when<br />

there was very little financial, physical or emotional security. My<br />

mother’s father went to war when she was nine years old. He<br />

returned when she was 15. He did not even recognise her at<br />

the train station on his return home. An emotional desert had<br />

developed between them.<br />

For those born more recently, the story is different. The<br />

developed world has so much more to offer than simply survival.<br />

There is the opportunity to engage with the “new-age woo-woo”<br />

stuff because there is more security in the world. Stephen Pinker,<br />

among others, has written about how, despite the daily diet of<br />

Perhaps it is time for financial<br />

planners to acknowledge that<br />

their primary role is to help<br />

clients achieve a life well-lived.<br />

indigestible news about what is going wrong in every sector of<br />

society, the world is safer than it has ever been. And this applies<br />

despite the Covid-19 pandemic. For perspective, the Spanish Flu<br />

of 1918-20 is estimated to have killed up to 50-million people, or<br />

2.7% of the global population at the time. At the time of writing,<br />

there are 966 000 Covid-19 deaths or 0.012% of a global population<br />

of about 7.8-billion people.<br />

Not only is the world safer, but it is evolving fast. When it comes<br />

to financial advice, I can get a Robo Advisor to work out how much<br />

I need to have enough money for financial security. I have worked<br />

with one named Eva. (They even have names.) And “she” was<br />

extremely helpful. The process was seamless and cheap. But if<br />

financial security doesn’t mean a life well-lived, then I need more<br />

help than what I can get from Eva.<br />

I need someone to help me navigate the “messy middle”. To<br />

grapple with what I want from my<br />

life. To help me make decisions on an<br />

ongoing basis. To act as a sounding<br />

board as I face transitions, big and<br />

small. But I want that person to be<br />

skilled in dealing with the “new-age<br />

woo-woo” stuff. Because if they aren’t,<br />

it is cheaper and easier for me to use<br />

Eva, and maybe see a psychologist on<br />

the side, when desperate.<br />

So, as a financial planner, the<br />

question to ponder is: are you working<br />

in the messy middle? If not, beware<br />

that Eva can’t wait to replace you, at a<br />

fraction of your fee. <br />

References:<br />

Khe Hy, “You’re thinking about financial<br />

security in the wrong way”, RadReads.co.<br />

Heather Long , “Meet Khe Hy, the Oprah<br />

for Millenials”, money.cnn.com,<br />

31 December 2016<br />

SOURCE: You’re thinking about “financial security” the wrong way - by Khe Hy, Radreads.co<br />

www.bluechipdigital.co.za<br />


EVENT<br />

Managing humans<br />

not assets<br />

Humans Under Management South Africa 2020<br />

H<br />

ello, I’m Carrie Bendall. I’m one of the organisers of<br />

HUMSA along with Rob Macdonald of Fundhouse, Pierre<br />

Taljaard of Simple Wealth<br />

Financial Planning and HUM<br />

founder, practising UK Financial Advisor<br />

and Financial Advisor Coach, Andy Hart.<br />

The HUM event is all about turning a<br />

money business into a people business,<br />

helping clients behave their way to wealth, keeping them<br />

disciplined, staying the course and making their dreams a reality.<br />

It’s about managing humans, not assets.<br />

“It’s about managing<br />

humans, not assets.”<br />

Held as a virtual event for the first time on Tuesday 8 September<br />

2020, the agenda was full of short punchy talks delivered by a mix<br />

of practising financial advisors and experts.<br />

Here are some nuggets from the talks by<br />

practising advisors.<br />

Doing less to achieve wildly more<br />

Andy Hart opened to reveal “The Hidden<br />

Magic” of the behavioural financial advisor. Essentially this is<br />

“doing less to achieve wildly more”. Investing becomes an exercise<br />

of removing the unimportant – research, ratings, predictions,<br />

36 www.bluechipdigital.co.za

EVENT<br />

forecasts, annual performance, seeking top-performing funds.<br />

Important becomes investing in things which have always worked<br />

– a passive global equities fund, and then a long-term perspective<br />

replacing headlines with history, nudging up your contributions<br />

through all weathers, an informed definition of the real risks, not<br />

outliving your money and continually updating your financial plan.<br />

Important includes relieving clients from the stress of watching<br />

the N-E-W-S day in day out. An acronym that stands for “negative<br />

events world service”. Andy finished on the note, “The financial<br />

dark forces peddle the unimportant, we remove it.”<br />

Life planning and its business benefits<br />

Kim Potgieter told the story of how her firm, Chartered Wealth<br />

Solutions, built its Financial Planning business around life planning<br />

by making it central to their process. Kim emphasised that their<br />

role was to help clients get the most life from their money and that<br />

Chartered Wealth Solutions did this by having different kinds of<br />

conversations with clients.<br />

The first thing they do with every single client is a personality<br />

profile to give the advisor an understanding of how clients see the<br />

world and then they explore:<br />

• Where they have come from (history)<br />

• How they have got here today (values)<br />

• What they are going through (transitions)<br />

• Where they are going to (goals and dreams)<br />

• Relationship with money (what could be stopping them)<br />

Focus on the person, not the problem<br />

Recognising that great client conversations don’t always come<br />

naturally to even the best financial advisor, practitioner Warren<br />

Ingram, Galileo Capital, was interviewed by Rob Macdonald to<br />

explore how developing a coaching way of being is essential for<br />

opening up deeper, more fluid conversations with clients.<br />

Warren talked about the importance of listening even when<br />

it becomes uncomfortable to keep quiet. He also<br />

suggested how easy it can be to start asking<br />

different questions; to keep it simple without it<br />

seeming like a major shift in style.<br />

IQ + EQ = Real financial planning<br />

Practitioner Scott Frank from Stone Steps Financial<br />

in California talked about how he went about<br />

creating a simple equation where IQ is the enormous<br />

technical knowledge needed to be a financial<br />

advisor and EQ is the emotional intelligence needed<br />

to bring inspiration and energy to clients to inform<br />

their why rather than their what. Scott shared how<br />

he uses the Kinder Institute EVOKE process and<br />

when in this process he can use Kinder’s three great<br />

questions to achieve a deeper understanding of<br />

clients, their lives and their dreams.<br />

Andy Hart, Founder,<br />

Humans Under Management<br />

Building a black-owned financial planning business<br />

Kagisho Mahura shared the story and evolution of his awardwinning<br />

firm, Gradidge-Mahura Investments, founded in 2008.<br />

It's a powerful and moving story of two friends who shared<br />

a dream to create a leading private wealth management firm<br />

serving the needs of an emerging market of black professionals.<br />

Challenges became opportunities and thinking “outside the<br />

box” was crucial to achieving the funding they needed.<br />

IQ is the enormous technical<br />

knowledge needed to be a<br />

financial advisor and EQ is the<br />

emotional intelligence needed<br />

to bring inspiration and energy<br />

to clients to inform their why<br />

rather than their what.<br />

Putting tech in its place<br />

Tech enthusiast Louis van der Merwe demonstrated how putting<br />

tech in its place can be a key driver of a creating and implementing<br />

a client’s financial plan. He uses the tool Asset Map collaboratively<br />

at a first planning meeting to help bring a client on board faster.<br />

It’s a way of demonstrating immediate value as a guide that helps<br />

the client build their full financial picture in a simple format. It also<br />

leads to clients wanting to keep on adding to their picture as their<br />

circumstances change.<br />

All were great inspirational talks<br />

about how to see beyond the money<br />

to the human need. The event was<br />

supported by six sponsors who<br />

support the independent ethos of the<br />

conference as “by advisors, for advisors”.<br />

The sponsors were: Allan Gray, Old<br />

Mutual Wealth, Prudential Investment<br />

Managers, Coreshares, Coronation and<br />

Ninety One. <br />

If you couldn’t attend the event live<br />

and would like to purchase access<br />

to a recording of all the conference<br />

presentations, please send an email to<br />

andy@humansundermanagement.com<br />

www.bluechipdigital.co.za<br />



Women<br />

in<br />

finance<br />

The power of women<br />

coming together<br />

38 www.bluechipdigital.co.za


After entering the financial services<br />

industry 13 years ago, Kim<br />

Potgieter, founder of the Women<br />

in Finance Network, quickly<br />

realised that it was a male-dominated<br />

industry and that there was little support<br />

for females. Kim felt strongly that women<br />

in the sector needed their own forum to<br />

meet, share experiences, support, mentor<br />

and learn from each other, so in 2013 she<br />

founded the Women in Finance Network.<br />

The philosophy behind the network<br />

is that if women in the industry work<br />

together and inspire each other, they can<br />

significantly increase their value adds to<br />

their clients. Women have inherent skills<br />

such as empathy that enable them to form<br />

meaningful relationships with their clients,<br />

and in the process, change the industry for<br />

the better. Inspired by WiFN’s vision, Old<br />

Mutual, Allan Gray and Chartered Wealth<br />

partnered with them, sponsoring the<br />

events. The FPI also strongly believed in the<br />

philosophy behind the network, and they<br />

too came onboard, sponsoring students<br />

and graduates from the ASISA Academy to<br />

attend the events.<br />

Women who join WiFN receive<br />

invitations to all the events and have<br />

access to an online community of women<br />

who are always ready to help and support<br />

each other. Traditionally events were held<br />

quarterly in Johannesburg, Cape Town,<br />

Port Elizabeth and Durban. These events<br />

provide the perfect opportunity for women<br />

in the industry to have fun, connect and<br />

learn from each other. They are a great place<br />

to brainstorm ideas and much mentoring<br />

takes place as a result of the connections<br />

made. Covid has changed the format of<br />

these events, and since lockdown, they<br />

have managed to host four online events,<br />

with each guest speaker carefully chosen<br />

to support their members during these<br />

uncertain times.<br />

At one online event, Kim spoke to<br />

the ladies around Brené Brown’s Dare to<br />

Lead work, at another Colleen Joy Page<br />

guided them through their Enneagram<br />

types. As lockdown got harder, the WiFN<br />

team noticed that many of the members<br />

were struggling emotionally and that they<br />

needed to draw on their inner strength, so<br />

they invited Gabi Louw and Pippa Shaper,<br />

from the Resilience Factory, to be guest<br />

speakers. During this moving session,<br />

they shared their journeys around what<br />

resilience means, and the tools required<br />

to be a resilient person. At their last event,<br />

long-standing WiFN member Lisa Linfield<br />

shared her journey around her inspiration<br />

for her recently published book, Deep<br />

Grooves. Their final online event for 2020<br />

is a talk by entrepreneur, author and<br />

philanthropist, Dr Judy Dlamini.<br />

All proceeds from the events have gone<br />

to the Reaboka Foundation. The Reaboka<br />

Foundation is an NPC giving women the<br />

self-confidence to take their lives into<br />

their own hands and to acquire an identity,<br />

respect and status within their community.<br />

This year many of these ladies have been<br />

unable to work, so money donated by WiFN<br />

has been used for food parcels.<br />

The Women in Finance Network is<br />

looking forward to next year when life<br />

returns to some sort of normality, and<br />

the members of WiFN can once again,<br />

meet, connect and support each other<br />

face-to-face.<br />

To join this network of dynamic women,<br />

email Holly@wifn.co.za<br />

Follow them online on Instagram,<br />

@Womeninfinancenetworksa<br />

Follow them on Facebook,<br />

@Women in Finance Network<br />

Visit www.wifn.co.za <br />

www.bluechipdigital.co.za<br />



Women as financial<br />


Creating value for the female market<br />

McKinsey & Company has in a recent article [1] made a<br />

compelling case for why, as financial planners and<br />

wealth management firms, it is “a critical growth<br />

imperative” that we are deliberate in creating a value<br />

proposition that speaks to the needs of the female market, if<br />

we are to make any meaningful strides in attracting and retaining<br />

this market segment.<br />


In what is commonly referred to as the great wealth<br />

transfer, it is expected that in the next three to five<br />

years, American female baby-boomers will, in essence,<br />

control financial assets estimated at $30-trillion. This as<br />

they inherit, and thus gain, more control on a further<br />

$10-trillion, which currently is jointly owned but has<br />

the husband as the primary financial decision-maker.<br />

Women tend to be less involved in the management of<br />

these assets while their husbands are alive.<br />

Another factor expected to spur an<br />

increase in the size of the female market are<br />

the younger affluent women who are likely<br />

to be more educated, have higher personal<br />

earning potential and thus tend to be more<br />

involved in household financial decisionmaking.<br />

The indicators are no different<br />

in South Africa. Recent research released<br />

by the Department of Higher Education<br />

indicates that there has been a marked<br />

increase in female doctoral graduates over<br />

the years, where it is reported that females<br />

make up 53% of all doctoral graduates. [2]<br />

A more intriguing number comes from the results of<br />

a survey conducted by 1Life on 7 000 females aged<br />

between 24 and 44 years where it found that 69%<br />

of the respondents are the main breadwinners in<br />

their households. [3]<br />

McKinsey’s research also shows that seven in 10<br />

affluent women, particularly widows, seek an alternative<br />

wealth management relationship within a year of taking<br />

reign on financial assets. Other crises such as a recession,<br />

a divorce or the more recent Covid-19 pandemic also<br />

cause clients to re-evaluate their service providers and assess if<br />

their needs are adequately being met.<br />


These factors should cause us to pause and reflect on whether our<br />

offering and businesses are well-poised to participate meaningfully<br />

in this new playing field. While our industry has taken notable steps<br />

in preparing for this market, such as targeted marketing campaigns<br />

and products, increased emphasis on financial literacy as well as<br />

policies and efforts to change the demographic of staff members<br />

across both the gender and racial lines, more is required from the<br />

industry. McKinsey advises that “firms will need<br />

to commit to a much more systematic approach<br />

– transforming their business and client-service<br />

models in ways that will acquire, retain and serve<br />

women as long-term investors”. This starts with<br />

a recognition of the growth and the potential of<br />

the female market, coupled with a willingness to<br />

truly understand the factors that drive women.<br />

Equipped with this knowledge, an appropriate<br />

strategy becomes easier to formulate.<br />

The research highlights the<br />

following six key differentiators [1] :<br />

1. Greater demand for advice<br />

Affluent female decision-makers<br />

are more likely to seek an advisor.<br />

Furthermore, they place more value or<br />

preference on face-to-face interaction,<br />

rather than a digital service offering.<br />

2. Lower financial self-confidence<br />

Many of the women included in the<br />

survey “self-report lower confidence<br />

in their financial decision-making<br />

and investment acumen”. This speaks<br />

to historic and socially ingrained norms<br />

rather than intellectual acumen. It<br />

further emphasises the need for broader<br />

financial literacy interventions aimed at<br />

women and conducted in a manner that<br />

is empowering and offers the space for<br />

them to pose questions without the fear<br />

of being patronised.<br />

3. Less risk tolerant<br />

The women surveyed tend to prioritise capital preservation rather<br />

than assume more risk in return for potential growth.<br />

40 www.bluechipdigital.co.za


4. Greater focus on real-life goals<br />

The study revealed that women placed greater importance on life goals such as saving for<br />

retirement and not outliving their assets in retirement, providing sufficiently for healthcare and<br />

lifestyle maintenance. They are also more concerned about poor market performance compared<br />

to their male counterparts. This makes women ideal candidates for bespoke financial life planning<br />

with a like-minded financial planner.<br />

5. Desire for personal fit with an investment advisor<br />

The women surveyed placed high value on the connection they establish with an advisor. It is<br />

important to them that they trust the advisor and have a good personality fit. Where they do not<br />

feel these, they are more likely than men to switch the relationship as a result.<br />

6. Pivotal life moments as a driver<br />

Consumers are more likely to seek a wealth relationship after a major life experience, such as a<br />

marriage, promotion, divorce, or the loss of a loved one. For women, divorce is a particular<br />

differentiator. Women often experience greater financial impacts from divorce or separation than<br />

men and are twice as likely as men to cite divorce as the reason for opening a new investment<br />

account. The dissolution of a marriage is an even more powerful driver of switching financial advisors<br />

than the loss of a loved one.<br />

Palesa Dube CFP®, Wealth Manager,<br />

Wealth Creed<br />


A clear take-away from this research is that it is critical for wealth management firms to revisit their<br />

offering, if it is to make a meaningful effort in attracting and retaining female clients. The suggested<br />

set of questions (Exhibit 1) is one such way for firms to delve deeper into the area. The advent of this<br />

new market is not only lucrative but presents the wealth management industry with an opportunity<br />

to make a meaningful contribution to society, in rewriting a past that side lined and excluded women<br />

as an inferior class. The real opportunity is for the industry to respond appropriately to women’s<br />

financial planning needs with a deep desire to uplift and do good. If we respond in this way, we will<br />

be demonstrating stewardship and the least our noble profession demands. <br />


• Where are we in the journey<br />

to win with women? If we are<br />

honest with ourselves, have we<br />

had the impact we aspired to?<br />

• Do we have a go-forward<br />

playbook we are methodically<br />

executing, module by module?<br />

• Are we tracking our results in<br />

a systematic way across the<br />

measures that matter?<br />

• Have we piloted new compensation<br />

and incentive structures<br />

to attract and retain more<br />

diverse field talent?<br />

• How are we seeking to build<br />

capabilities among advisors<br />

and the rest of the firm?<br />

• Have we piloted new<br />

service and product<br />

offerings and corresponding<br />

pricing models for<br />

segment-specific client<br />

acquisition (eg “white<br />

glove” subscription models<br />

for high net-worth women)?<br />

• Do we have a segmented view<br />

of our client base by gender and<br />

household composition, with a<br />

dedicated strategy to win with<br />

each segment (eg joint babyboomer<br />

households, millennial<br />

women)?<br />

• When we lose an account or<br />

see a large transfer of assets<br />

following a key life event (eg<br />

loss of a loved one, divorce),<br />

do we systematically capture<br />

the feedback to inform our<br />

go-forward strategy?<br />

Source: McKinsey<br />

https://www.mckinsey.com/industries/financial-services/our-insights/women-as-the-next-wave-of-growth-in-us-wealth-management<br />

Sources:<br />

[1] Article: Women as the next wave of growth in US wealth management by Pooneh Baghai, Olivia Howard, Lakshmi Prakash and Jill Zucker,<br />

July 29, 2020<br />

[2] https://www.dailymaverick.co.za/article/2020-07-22-time-for-black-women-to-lead-in-higher-education/<br />

[3] SA women embrace who they are: https://www.McKinsey1life.co.za/blog/honey-listen


Weathering the storm<br />

of Covid-19<br />

Benefitting from the shock<br />

The impact of Covid-19 has been felt by every client and<br />

financial planner. Fortunately, for the planners that<br />

embrace change and technology, this impact has turned<br />

out to be surprisingly positive. The concept of Antifragile<br />

comes to mind which was first coined by Nassim Taleb in 2012<br />

as “something that benefits from shock”. I believe that this shock<br />

has helped many businesses to become more resilient through<br />

embracing technology and a new way of delivering advice.<br />

No longer are our clients limited to<br />

working with a financial planner that is<br />

situated in the same town or physically<br />

close to them<br />

No longer do we need to build a team<br />

that sits in the same building to work<br />

together. A distributed and diverse team<br />

that communicates virtually can move<br />

to a better client experience at reduced<br />

Availability has become<br />

key to ensure that<br />

we are holding the<br />

hands of our clients<br />

during difficult times.<br />

costs for the employer. You can now sit anywhere in the world<br />

and service a client on the other side of the globe.<br />

We’ve seen this play out in developed markets over the last<br />

decade but now our clients have the tools necessary to accept<br />

the delivery of digital advice. Just like software developers lead<br />

with a mobile-first approach, so too can we lead with a digitalfirst<br />

delivery of advice. Keeping the face-to-face interactions to<br />

building the relationship and screen-to-screen interactions to<br />

delivering and implementing advice.<br />

As our clients have more autonomy<br />

over their time through working from<br />

home, this also creates a space to<br />

engage with their financial planners.<br />

Availability has become key to ensure<br />

that we are holding the hands of our<br />

clients during difficult times – be it<br />

difficult times weathering the markets<br />

or difficult times in their personal lives.<br />

42 www.bluechipdigital.co.za


No longer are our thoughts shaped by local thought leaders<br />

and a global community of financial planners has emerged<br />

During a time when it is just as easy to connect to someone in<br />

another country as it is to connect with your neighbour, we’ve seen<br />

the rise of a global community of<br />

financial planners who are willing<br />

to share and uplift those around<br />

them. Platforms like XY Adviser<br />

and LinkedIn have proven to be<br />

extremely valuable to learn and<br />

share a better way of delivering advice but<br />

avoiding common pitfalls and becoming<br />

aware of our blind spots.<br />

We have to deal with both the human<br />

side as well as the technical side of financial<br />

planning and we can learn a lot from other<br />

markets. We can also be equally proud of<br />

the South African financial planning landscape<br />

which is on par with the leading<br />

developed markets.<br />

No longer are our clients expected to face<br />

their fears on their own<br />

During the lockdown, we had an interaction<br />

with a new client who recently lost a loved<br />

one and was due to inherit a lump sum of<br />

money. The client opted not to switch on the<br />

video during our virtual calls and this allowed<br />

her to interact with a financial planner in a<br />

safe and low-stress environment. Planning a<br />

You can now sit anywhere in<br />

the world and service a client<br />

on the other side of the globe.<br />

Louis van der Merwe, Certified<br />

Financial Planner® and Coach<br />

visit to a planner can be stressful for many clients as they might<br />

not know what to expect and are sometimes pressed to share<br />

information that might be very personal. Imagine sharing your<br />

income, expenses and life goals with a stranger.<br />

The value of financial planning<br />

has increased overnight<br />

as clients become aware of the<br />

shortcomings in their planning.<br />

In a recent survey, 28% of people<br />

trust themselves as the main<br />

source of financial planning, while only 24%<br />

worked with a financial planner. It is near<br />

impossible to become aware of our blind spots<br />

and biases and working with a planner helps<br />

to highlight the things you might be missing.<br />

Mental health has become a mainstream<br />

discussion point as people feel that it’s more<br />

acceptable to discuss the impact of financial<br />

stress. Our role as advisors is primed to help<br />

our clients towards holistic wellness that<br />

is underpinned by their finances, alongside<br />

their eating, sleeping and movement habits.<br />

We are extremely lucky to be in an industry<br />

that is constantly increasing the value we<br />

deliver to our clients. The discussion has<br />

evolved to include a combination of product<br />

information, financial planning and coaching.<br />

One thing is for sure, the new way of delivering<br />

advice and connecting on a human basis is<br />

here to stay. <br />

www.bluechipdigital.co.za<br />



Financial<br />

The very first<br />

Planner Year<br />

of the<br />

Debbie Netto-Jonker, CFP®, Financial Planner of the Year 2001


I<br />

received the inaugural Financial Planner of the Year award<br />

back in 2001. This was a time when negative stories of people<br />

suffering the consequences of inappropriate financial advice<br />

filled the media. Up to this point, the sector generally only<br />

recognised the best salesmen for their selling accomplishments<br />

– not necessarily for giving the most appropriate financial advice,<br />

which led to a negative perception of the industry.<br />


With the introduction of the Financial Planner of Year award, clients<br />

and prospective clients were exposed to fact that it was possible to<br />

engage with quality advisors who used a sound advice process as<br />

the capabilities and skills of the top 10 finalists were written about,<br />

and they were invited to speak at financial planning events that<br />

were open to the public.<br />

Determining a winner of the award was based on client<br />

testimonials, the assessment of technical advice, compliance, and<br />

practice management. The focus is on the quality of the advice<br />

given and the processes and procedures backing it up – not the<br />

number of products sold. Bruce Cameron of Personal Finance,<br />

Professor Colin Firer of UCT Graduate School of Business and the<br />

panel nominated by the Financial Planning Institute lent the award<br />

a combination of credibility and legitimacy.<br />

After being recognised with this award I found that clients<br />

became more comfortable with the value of advice and that<br />

their confidence in its process increased. Clients now wanted to<br />

learn from us, ask questions and be empowered to make good<br />

decisions. And because clients knew that we were working in their<br />

best interests, the level of cooperation we received from them also<br />

improved. Now that people out there knew there were a few goodquality<br />

advisors, all they had to do was find them. This is where<br />

the media played such a crucial role in transforming the industry.<br />

The Financial Planner of the Year<br />

award was one of the first initiatives<br />

that accentuated the importance<br />

of professionalism in the industry.<br />


Selling risk and investment products had been the mainstay of<br />

the financial advice arena. Now, with the focus shifting to serving<br />

the best interests of the client, fee-based advice was highlighted<br />

as the alternative to the typical, commission-based form of<br />

compensation. In fact, we were referred to as “brokers” back then.<br />

A term that persists to this day and that does not do us any favours!<br />

The Financial Planner of the Year award was one of the first<br />

initiatives that accentuated the importance of professionalism<br />

in the industry – this was before FAIS was enacted in 2002. And<br />

it encouraged others to embark on a journey to enhance client<br />

service and experience. The media gave extensive coverage to all<br />

the finalists, profiling all of us in detail. This coverage also explained<br />

what financial planning was and raised the profile of the financial<br />

advisor’s professional standing.<br />

I must make special mention of Bruce Cameron and Laura<br />

du Preez of Personal Finance, Andrew Bradley of iPac and the FPI<br />

who sponsored the award in 2001. Their sponsorship at the very<br />

beginning demonstrated a foresight into the need to focus on the<br />

client that has largely changed how the industry operates today.<br />


Anyone who has ever received this award will tell you that they did<br />

not win it alone! Professional financial planning is a team event.<br />

I could not have achieved this accolade without the expertise of<br />

Ian Beere and my team. As a result of the award, the whole team<br />

was infused with a new sense of purpose and rediscovered pride<br />

in their work. Something that continues to this day. With increased<br />

credibility, we became more desirable as an employer and more<br />

attractive to prospective clients and our professional network was<br />

even more confident in referring clients to us.<br />


1. I felt that the value of my input became further recognised in<br />

the financial planning community.<br />

2. All the hard work I had put into building a practice management<br />

system was vindicated.<br />

3. Receiving the award reassured our clients that their financial<br />

plans were soundly designed. <br />

Debbie Netto-Jonker, CFP®, founder, Netto Capital & Netto Invest<br />

www.bluechipdigital.co.za<br />


FPI<br />

0REASONS<br />

why you should not miss the<br />

FPI Professional Digital Convention 2020<br />

1. Gain the tools to future proof yourself and your business<br />

We decided on the theme for this year’s Convention – Future<br />

Proof – long before Covid-19 was a thing. Now our theme is<br />

more relevant than ever. Our incredible line-up of local and<br />

international speakers brings decades of problem-solving<br />

experience to the table and they are positively bursting<br />

with ideas. Covid-19 may have blindsided your business – but<br />

remember that your clients will now need you more than ever!<br />

1<br />

2. Learn much more about behavioural finance and integrating<br />

coaching into planning<br />

As the field of neuropsychology grows, it is becoming increasingly<br />

clear that giving good financial advice is as much about<br />

understanding the maths behind financial calculations as<br />

it is about appreciating the intricacies of the human psyche.<br />

We are thrilled to have nabbed some real thought leaders in<br />

this genre, most notably Greg Davies, Frank Magwegwe, Rob<br />

Macdonald and Mary Fourie.<br />

2<br />

3. Stay connected with your peers and discuss your mutual<br />

challenges and opportunities<br />

One of the most devastating impacts of Covid-19 is the way it has<br />

sabotaged communities. Technology has gone some way towards<br />

filling this void, but it is hard to underestimate the importance<br />

of those conversations you have at the photocopier or in<br />

the queue at OR Tambo. The FPI conference is being hosted<br />

3<br />

by Asset TV, world leaders in digital conferencing. They<br />

know better than any of us that the “gold truly is in the hallways”<br />

and they will ensure that there is plenty of space for authentic,<br />

off-the-cuff interaction.<br />

4. Make “Excellence your Standard” as you transition to a feebased<br />

practice<br />

The talk by Michelle Hoskin – aka Little Miss WOWW! – promises<br />

to be one of the highlights of the event. Michelle will talk about<br />

The Operations Management System (TOMS) that she has<br />

spent the last 20 years perfecting with her clients in the UK.<br />

TOMS provides a framework that will liberate you from the<br />

day-to-day of running a business while maximising profit and<br />

productivity. Building on her presentation, Almo Lubowski will talk<br />

about how to make the transition to a fees-based practice.<br />

5. Get a global perspective with a live update from FPSB<br />

CEO Noel Maye<br />

Who needs Bloomberg News when you’ve got a direct line<br />

to global decision-makers? The CEO of the FPSB, Noel Maye,<br />

will be joining us to share his insights into the year that’s passed<br />

and the way ahead for our profession.<br />

6. Keep up to date with the many developments in Financial<br />

Planning Technology<br />

As Greg Davies puts it, taking your practice to the next level<br />

is all about “using tech to be better at the stuff that only<br />

humans can do”. Take the opportunity to learn about all the<br />

4<br />

5<br />

6<br />

46<br />

The “gold truly is in the hallways” and they will ensure that<br />

there is plenty of space for authentic, off-the-cuff interaction.

Staying abreast of the latest regulatory developments is an<br />

absolute must in today’s constantly shifting financial landscape.<br />

latest offerings by visiting our incredible exhibitors’ stands. And<br />

be sure to catch Greg’s talk and the technology panel discussion<br />

where we will hear from several of the biggest players in this space.<br />

7. Earn 11.5 verifiable CPD hours (and enjoy getting them)<br />

Attending the Convention earns you 5.5 General hours, 4.5 Ethics<br />

hours and 1.5 Technical hours. The fantastic digital platform<br />

provided by Asset TV and the stellar line-up of speakers will<br />

make them the easiest CPD hours you ever earn.<br />

7<br />

8. Keep abreast of all the latest regulatory developments<br />

It may not be sexy, but staying abreast of the latest regulatory<br />

developments is an absolute must in today’s constantly<br />

shifting financial landscape. Caroline da Silva, of the FSCA,<br />

will be giving us the lowdown.<br />

8<br />

9. Discover how to make succession planning and transformation<br />

a positive experience<br />

You cannot go anywhere without hearing someone grumble<br />

about transformation and succession planning. But this is the<br />

wrong way of thinking about both processes, say Warren<br />

Ingram, Katlego Mei and Alex Cook. Their talks will show<br />

how embracing transformation and succession planning as<br />

positive experiences will change your life.<br />

9<br />

10. Get incredible value for money with our state-of-the-art<br />

digital experience<br />

Despite the truly stellar speakers’ roster, tickets for this year’s digital<br />

conference are almost half their usual price. Add this to the<br />

fact that you won’t have to book flights or accommodation<br />

(or pay for lunch or lattes) and attending the Convention<br />

is an absolute no-brainer. International visitors will love the<br />

exchange rate ($180 for a two-day conference!) while locals can<br />

take advantage of the great, value-for-money CPD package we’ve<br />

put together.<br />

10<br />

11<br />


Now that we’ve shown you 10 ways in which attending<br />

the Convention will benefit you and your business, let’s<br />

talk about Reason #11. Your presence at the Convention<br />

will provide an invaluable contribution to building industry<br />

knowledge and cohesion. Progress is a two-way conversation and<br />

we need you just as much as you need us. Hope to see you there.<br />

BOOK<br />

YOUR<br />

SPOT<br />

• The conference will be held on<br />

27th and 28th of October 2020<br />

and is 100% digital.<br />

Tickets are R2 500 for FPI members and R3 000 for<br />

non-members. Get yours at www.fpi.co .za<br />

• Or take care of your annual CPD requirements with a discounted<br />

package which includes access to the Convention,<br />

the Estate & Tax online seminar, the Retirement & Investment<br />

online forum and the FPI’s annual refresher. Members pay only<br />

R5 200 and non-members R5 920. Book at www.fpi.co.za<br />

Michelle Hoskin (aka Little Miss WOWW!) shares her<br />

incredible secrets for transitioning to a fee-based practice.<br />


FPI<br />

Five “Aha! Moments”<br />

to look forward to at the<br />

FPI Professional Digital Convention<br />

The first-ever 100% digital FPI Professional Digital Convention on 27th and 28th of<br />

October 2020 has an irrepressible line-up of speakers from around the globe<br />

While there’s no replacement for face-to-face<br />

interaction, this year’s convention proves – yet<br />

again – that every cloud does indeed have a silver<br />

lining. Not having to worry about geographic<br />

considerations has meant the FPI can call on some exceptionally<br />

high-calibre speakers from across the country and the globe.<br />

This year’s convention promises to have “Aha!<br />

Moments” aplenty. But don’t take it from us – take<br />

it from the speakers themselves.<br />

AHA! MOMENT #1:<br />


My talk, The Upside of Down, will show you<br />

how vitally important it is to have a growth<br />

mindset in a deeply complex environment<br />

which paralyses many of us into inaction<br />

through fear and indecision. In post-Covid South<br />

Africa, facts matter more than ever. You cannot make<br />

good long-term decisions if you are overwhelmed by fear.<br />

My deeply empowering, fact-rich, multi-layered talk will challenge<br />

your in-built biases and encourages you to confront widespread,<br />

but often inaccurate beliefs.<br />

• Bruce Whitfield, South Africa’s leading financial journalist and<br />

radio personality<br />


I have been in the profession for over 20 years and<br />

I am passionate about showing how to achieve excellence as your<br />

standard. I will show you how Together Everyone<br />

Achieves More (TEAM) and I will leave you in no<br />

doubt that it’s impossible to be awesome on<br />

your own. Building on these concepts, The<br />

Operations Management System (TOMS)<br />

developed by my team and I will show<br />

you how to free yourself from the dayto-day<br />

workings of your office while your<br />

team delivers consistently high levels of<br />

client service.<br />

• Michelle Hoskin, aka Little Miss WOWW! of<br />

Standards International in the UK<br />

48<br />

www.bluechipdigital.co.za<br />



I will show you that on our own, humans are<br />

fallible and prone to bias and inconsistency,<br />

particularly in complex areas such as financial<br />

advice. Luckily data and technology can provide<br />

humans with decision prosthetics that reduce bias and<br />

noise and ensure that human beings can be the best version<br />

of themselves more consistently. In a nutshell, technology enables<br />

humans to be better at the stuff only humans can do.<br />

• Greg Davies, of Oxford Risk, has a PhD in Behavioural<br />

Finance from Cambridge University<br />



As human beings, we are pretty good at many<br />

things, but managing change is not always one<br />

of them. We may be creatures of habit, but – as<br />

we have seen this year – the business world is<br />

constantly changing. I will show you how to futureproof<br />

your personal and professional goals by coming<br />

less resistant to change. Because resistance to change is<br />

often rooted in unexamined personal beliefs, change requires<br />

a shift in mindset, not just behaviour. This shift requires<br />

a process of identifying and adjusting these beliefs.<br />

• Frank Magwegwe, PhD, CFP®, is an award-winning<br />

speaker and author of From Homeless to CEO<br />




Transformation and succession planning are such big<br />

issues within the financial planning industry. There<br />

are very few great examples of how this can be done<br />

in a way that works in South Africa. I will give you insights<br />

into how transformation can be a positive experience for<br />

your company, your staff and for clients. There is so much good<br />

that can be created from transformation that you should never<br />

allow fear to stop you from taking this important step.<br />

• Warren Ingram is an Executive Director of Galileo Capital, author<br />

and radio personality

FPI<br />

The power of<br />


Excellence as the standard<br />

50 www.bluechipdigital.co.za

I<br />

f<br />

Having a business and a team whose sole focus is<br />

striving for and achieving excellence is, was and<br />

has always been the best line of defence.<br />

you’re motivated by the fear of past events, you’ll behave<br />

a certain way – but being motivated by the future and by<br />

what you can achieve, changes the game. According to the<br />

dictionary, “excellence” can be defined as the fact or state of<br />

excelling, superiority, eminence. I don’t know about you, but this<br />

definition inspires and excites me to do an amazing job in our<br />

business and for our clients.<br />

In these unprecedented times of what I can only personally<br />

describe as chaos, it is certainly going to take more than simply<br />

“doing a good job” to get us through the coming turbulent weeks<br />

and months. With all the changes being made across businesses<br />

and within teams, we have already seen that the acts of innovation,<br />

creativity and, ultimately, excellence that make the difference.<br />

We are seeing that it is the communities, teams, groups, family<br />

units and friendship circles all coming together, going above and<br />

beyond and applying the much-needed discretionary effort, that<br />

are critical to making these differences.<br />

Now anyone as passionate about the power of excellence as<br />

I am will understand. And they will likely have been banging the<br />

drum about the benefits of streamlined systems, processes and<br />

controls that are well thought through and strategically planned<br />

– the very things which are now proving to be the most essential<br />

tools for businesses.<br />

However, this is not an article on the value and importance of<br />

business continuation and disaster recovery; this is an article about<br />

why having a business and a team whose sole focus is striving for<br />

and achieving excellence is, was and has always been the best<br />

line of defence.<br />

Like you, I own a business which has its day-to-day challenges<br />

that we have to face and deal with and distractions that are<br />

constantly pushing us to work in the business rather than on<br />

the business.<br />

So, how do you achieve excellence? There are many ways, but<br />

nothing as complicated as you would expect!<br />


1) Your strategic leadership team must have the necessary<br />

skills, abilities, qualities and attributes to add value in their<br />

roles, to the team and the business as a whole<br />

2) Your business must have in place, and maintain, objectives,<br />

plans and processes for continual improvement. Ensure<br />

that your commitment to quality and excellence is<br />

maintained at all times<br />

3) The needs and expectations of all interested parties are<br />

considered fundamental to operational goals<br />

4) All your team members have all the capabilities to ensure<br />

that clients (internal and external) receive the best<br />

possible service and that they demonstrate a high level of<br />

competence at all times<br />

5) Your services and systems are designed, engineered<br />

and managed to meet your clients’ requirements by the<br />

simplest and most cost-effective means possible<br />

Once in place, your commitment to excellence should<br />

be understood by – and communicated to – all the staff within<br />

your business. <br />

With all the changes<br />

being made across<br />

businesses and within<br />

teams, we have already seen<br />

that the acts of innovation,<br />

creativity and, ultimately,<br />

excellence that make<br />

the difference.<br />

Michelle Hoskin, Coach, Standards International<br />

www.bluechipdigital.co.za<br />



Be the example<br />

… or change the example<br />

Imagine walking into a gym, wanting to get<br />

in shape. You’re unsure where to start, so you<br />

hire a trainer. The trainer shows up and has<br />

all the knowledge in the world. The trainer<br />

shows you the right movements, makes sure<br />

you’ve got good posture and tells you which<br />

muscle groups you’re working. But it quickly<br />

becomes clear, the trainer has never gone<br />

through the transition that you’re hoping to go<br />

through. Worse yet, the trainer is not even in<br />

very good shape.<br />

Kate Holmes, CFP®,<br />

Chief Innovation<br />

Office, Innovating<br />

Advice<br />

The trainer is going to walk you<br />

through some major changes, and<br />

while they have the technical expertise<br />

to do so, they haven’t done the tough<br />

work themselves.<br />

Are you that trainer in your client’s<br />

lives? If so, you are not alone.<br />

During a university commencement<br />

speech, the comedian Jim Carrey said,<br />

“Many people choose their path out of<br />

fear, disguised as practicality.”<br />

52 www.bluechipdigital.co.za


Financial planners will recognise this, especially if you work with<br />

clients heading into retirement. So often clients have taken the<br />

practical path and worked to check all of life’s boxes. Go to school,<br />

get a steady job, get married, have kids, save money, then retire.<br />

Veering from this path can bring fear, either internally or through<br />

the reactions from others.<br />

There are people out there that<br />

are ready and waiting for you.<br />

And because we’re all human, most financial planners also take<br />

that well-travelled practical path. It has been a way of life for so<br />

long. But times have changed.<br />

Many people and businesses (especially in financial services)<br />

are operating in an outdated mindset. Even with the myriad<br />

challenges in the world today, there’s never been a more exciting<br />

time to be alive. We have the world at our fingertips and the<br />

opportunities are endless.<br />

For example, in 2013 I left a traditional investment advisory<br />

business where I was a principal to launch one of the first<br />

completely virtual, fee-only, monthly retainer financial planning<br />

businesses. I then ended a long-term relationship and left the city<br />

I was living in. As an open person, I shared all of this with my clients<br />

who averaged in their 50s and included some high net-worth<br />

people. This ended up completely changing the conversations we<br />

had and clients started saying to me, as we worked through what<br />

their short- and long-term goals really were, “You are the example<br />

of acknowledging what you really want and making it happen.”<br />

Now, I’m not encouraging anyone to quit your job, end your<br />

relationship and move away (unless that’s what’s best for you).<br />

What I am encouraging is that you take a deep and honest look at<br />

your life and see where changes would be beneficial. Even small<br />

changes can make a big difference.<br />

Look at each area of your life: work, friends, family, relationships,<br />

health and wellbeing – and ask yourself what you’d like more of,<br />

less of and what has a time limit. It could be more time on health<br />

and wellbeing, less of a toxic relationship and one more year in<br />

your job.<br />

Whatever changes are right for you, when you’re bringing your<br />

absolute best self to your clients and you’ve gone on a path that<br />

they might be going on, you’ll start to see different things. You’ll<br />

pick up on different signals. You’ll know that you’ve done that hard<br />

work of realising what is and isn’t working in your life and you<br />

made the necessary changes so that you can be the example to<br />

them of what’s possible in this one amazing life we each get.<br />

It changes the conversation, builds stickier and more rewarding<br />

client relationships and allows you to create fee and service models<br />

to serve a broader range of clients. By moving beyond the numbers<br />

and being the example, you can show clients the true value of<br />

financial (life) planning and can more easily niche down to the<br />

clients that are right for you.<br />

There are people out there that are ready and waiting for<br />

you. Technology allows clients to search for the planner that’s<br />

the best fit, not just the one that’s closest. They want to work<br />

with a financial planner they can relate to, that makes it easy and<br />

enjoyable to work together and that has fee and service models<br />

that suit them.<br />

With the right mindset shift, all of this is possible in financial<br />

planning businesses big and small. And while change can be<br />

scary, sometimes the idea of things staying the same can be even<br />

scarier. As concerns swirl about economic instability, regulatory<br />

changes and the commoditisation of financial advice, know that<br />

those that are innovating, personally and professionally, are the<br />

ones that will come out on top and will be the most satisfied in<br />

business and life.<br />

I hope you’ll be one of those examples, leading the way, inspiring<br />

others and highlighting the true value of financial planning. <br />

While change can be scary, sometimes the idea of<br />

things staying the same can be even scarier.<br />

www.bluechipdigital.co.za<br />


B<br />


uilding<br />

a financial<br />

planning<br />

business<br />

Ihave always believed that financial planning must follow a<br />

life-centred approach and have spoken at many conferences<br />

about the value of life planning. My message was not always<br />

well received; in part, because it’s difficult to measure the return<br />

on investment, and because it takes time and skills that planners<br />

don’t necessarily have.<br />

Including life planning in our process at Chartered has been<br />

a hugely beneficial and rewarding experience. It gives us the<br />

opportunity to dream with our clients, we celebrate their successes<br />

with them and most of all, our clients feel valued, supported and<br />

safe. They become part of the Chartered Family and clients for life.<br />

Our value proposition is not just about the return on investment –<br />

it’s about giving our clients a return on life. Every interaction with<br />

clients has one purpose: to help them get the most meaning from<br />

their money, where money enables the life they dream of living.<br />

For life planning to be successful, it must be at the core of<br />

everything you do as a business. It needs to be part of your DNA,<br />

your values and your culture. It’s about building trust, relationships<br />

and changing the dialogue with clients. And it has to be authentic.<br />

It’s not a process that is rushed so that financial discussions can<br />

begin. It is critical that planners embrace and believe in life<br />

planning and have the skills to guide clients<br />

to plan a roadmap for their lives; help them<br />

prioritise according to their values; and<br />

base their financial strategies and decisions<br />

on the clients’ priorities.<br />

At Chartered, our business is based on<br />

life planning. It’s the reason why clients<br />

come to us. In fact, we do not talk to clients<br />

about their money if they do not agree to<br />

It’s about building<br />

trust, relationships and<br />

changing the dialogue<br />

with clients. And it<br />

has to be authentic.<br />

Kim Potgieter, Director and Head of Life<br />

Planning, Chartered Wealth Solutions<br />

with life planning<br />

at its core<br />

life planning. We have implemented five steps to integrate life<br />

planning into our business model.<br />

1) Firstly, know your Why<br />

If you are considering incorporating this process into your business,<br />

you need to be clear on why you are doing it. The process is not<br />

a quick fix or about adding a once-off additional meeting to the<br />

financial planning process. It is also not something that you can<br />

charge extra for. Life planning becomes a way of doing, a way of<br />

being with clients, and is the centre point around which all your<br />

business processes are aligned. So, first of all, be clear on your<br />

rationale, the value that you are adding and what you want to<br />

achieve for your clients.<br />

2) Design and implement a life planning process that suits<br />

your business<br />

You may not need or want to follow the same process we do. This<br />

is simply our way of doing. At Chartered, we start our process with<br />

a personality profile. This is not only a valuable tool for gaining<br />

insight into our client’s world view and values, but it helps them<br />

understand their core personality and why they feel, think and<br />

behave in certain ways.<br />

We follow this assessment with a<br />

conversation about the past: the client’s<br />

history; where they’ve come from; and the<br />

contributing factors that have shaped their<br />

lives up to this point. This includes talking<br />

about their earliest, most significant money<br />

memories. Many clients are not aware how<br />

the money messages they hear as children<br />

54 www.bluechipdigital.co.za


impact their behaviour with money as adults. We also use this time<br />

to guide clients to let go of the money beliefs and habits that no<br />

longer serve them. As planners, it is so important to understand<br />

a client’s relationship with money. It helps knowing what money<br />

beliefs could trigger emotional and irrational responses, and how<br />

their habits can potentially sabotage a solid plan.<br />

The next part of our process is to guide clients to define<br />

their values and life principles. We know that our core values<br />

drive everything we do as humans, so this provides invaluable<br />

information on what the client holds most dear. When we talk<br />

about transitions that clients are undergoing, or may still be<br />

going through, knowing what they value above all else directs<br />

the planning process.<br />

Finally, we encourage our clients to dream and ask them to<br />

visualise a life that they are excited to live. The dreaming exercise<br />

steers the goals and objectives of the life plan, and the financial<br />

plan is then structured to enable this. The process takes time. We<br />

often schedule at least two meetings with clients before we even<br />

start talking about money. But every meeting is another step to<br />

creating trust, respect and rapport.<br />

Our clients receive a copy of the life plan once its finalised and<br />

our planners and support staff keep it on record. They will always<br />

refer to the life plan for every subsequent meeting with the client.<br />

3) A life planning culture<br />

To be authentic, your company values must align with life planning,<br />

and pull through every experience, every department and every<br />

individual in the company. From the security at the gate, to the<br />

receptionist who greets the client, to the planner, administrator,<br />

associates and articled planners, the philosophy must filter<br />

through the entire culture.<br />

4) Training – enhancing your client conversations<br />

Planners need to be equipped with new skills so that they are<br />

comfortable having brave conversations and building lifelong<br />

relationships with clients. Planners start taking on the<br />

role of coach and mentor – and this role involves authenticity,<br />

vulnerability, empathy, non-judgemental listening skills and the<br />

ability to inspire.<br />

It starts with self-awareness and the commitment to invest<br />

time and energy into self-development. We cannot ask clients<br />

questions that we ourselves are not comfortable answering, and<br />

I encourage planners to practise on each other. Learn how to ask<br />

probing questions, how to read body language, how to respond<br />

with empathy and how to cultivate real connection. Listening is<br />

one of the most important skills. If you listen, your client tells you<br />

what they want and need. It makes them feel valued and you can<br />

build the financial plan according to their wishes.<br />

We have found great value in the work of Dr Brené Brown<br />

and use her teachings to be comfortable with emotional<br />

responses such as vulnerability and shame that often stems from<br />

money conversations.<br />

5) Marketing life planning as a value-add<br />

Your staff become your most important marketers, and your<br />

clients, your most valuable ambassadors. It’s about walking your<br />

talk and placing your life planning philosophy centre stage.<br />

Our Chartered website showcases our philosophy, and our<br />

additional Retire Successfully site is a platform where clients and<br />

retire mentors share tips and stories on how they are living their<br />

best lives in this phase.<br />

We communicate regularly with our clients, through<br />

newsletters, social media channels and a variety of lifestyle<br />

events, always reminding clients that we are here to support<br />

them throughout their journey.<br />

A WOW client experience<br />

Clients deserve to feel supported and valued and we express our<br />

gratitude and care through thoughtful gestures and creating a<br />

relaxing and enjoyable experience. Many of our clients pop in for<br />

a slice of cake and cappuccino well before their review meetings.<br />

Client advisory<br />

Feedback is important. We schedule lunch meetings with small<br />

groups of clients, and for the duration of the lunch, they become<br />

the directors of our company. It’s invaluable to hear what’s<br />

working, what should change and what their recommendations for<br />

improvement are. Everything we do is about building relationships.<br />

It’s not a transactional process – it’s helping clients to own their<br />

power and feel confident that they can take the driving seat in the<br />

design of a truly meaningful and fulfilling life.<br />

We encourage our clients to dream<br />

and ask them to visualise a life<br />

that they are excited to live.<br />

Benefits for Chartered<br />

It’s a mutually-beneficial relationship – as much as our clients<br />

enjoy spending time at our offices, connecting, learning, enjoying<br />

delicious meals at our events, and meeting with their planners, our<br />

staff feel that they are truly making a difference. We love what we do!<br />

If you invest time and energy in getting to know your clients,<br />

and continuously work on building solid relationships, they will<br />

be your most loyal ambassadors and trust you to invest 100% of<br />

their money. Life planning offers a unique value proposition with<br />

the client at the core of your service. It may be a time-consuming<br />

process, but in the long run, a win-win for both your client and the<br />

profitability of your company. <br />

www.bluechipdigital.co.za<br />


HY ?<br />

CHINA<br />

Why now…<br />


Is now the time to be investing in China?<br />

China has been shrouded in mystery and subterfuge<br />

for decades. Most savvy investors know that good<br />

investment opportunities exist on the mainland, but<br />

many barriers to entry have kept all but the boldest out.<br />

Now as fears of a protracted and persistent trade war, a slowing<br />

global economy and political protests in Hong Kong grow, we raise<br />

the question again – is now the time to be an investor in China?<br />

China is the second-largest global economy. It is the world’s<br />

largest emerging market and has the second-largest bond and<br />

stock market globally. Despite the size of the market, it is underowned<br />

by foreign investors.<br />

As China moves from an export-driven economy to one of<br />

domestic consumption, the sheer size of its populations makes it an<br />

attractive investment, especially in industries such as technology,<br />

healthcare and luxury goods. As the trade war between China<br />

and the US ebbs and flows, Chinese companies, especially those<br />

which focus on the mainland, are less likely to be affected and<br />

more inclined to grow.<br />

China is the second-largest recipient of foreign direct investment<br />

capital (FDI) in the world. FDI follows investor confidence in a<br />

region and is used for manufacturing and service capabilities. In<br />

2019, China received $137bn in FDI.<br />

Investor regulations have been revised over the last decade or<br />

more, making it easier and more appealing for foreigners to invest.<br />

This has seen the inclusion of China A-shares in MSCI emerging<br />

market indices, giving them greater visibility. As the Chinese<br />

middle class continues to grow, citizen-friendly fiscal and consumer<br />

reforms should be forthcoming, which could support mainland<br />

demand and ultimately a wide variety of listed corporates.<br />

China has demonstrated its ability to drive<br />

economic growth. Into the future, this will be further<br />

supported by increased infrastructure; policy reform;<br />

global competitiveness; a large and increasingly<br />

educated workforce; and export-friendly policies.<br />

Overlay this with ever-increasing consumer<br />

demand and it may be an investment opportunity<br />

you don’t want to ignore.<br />

What are the risks?<br />

Investing in China is, however, not without risks.<br />

China is a communist country. It has been criticised<br />

for selective disclosure on various issues as well as regulatory<br />

differences with the west. It has been accused of turning a blind<br />

eye to insider trading and Chinese companies adhere to their own<br />

accounting policies, which differ from GAAP.<br />

Smart investors always weigh up risks before investing. Many<br />

of China’s blue-chip companies are listed on foreign stock<br />

exchanges too, which would hold them to their regulatory<br />

standards. One way of accessing the Chinese market with relative<br />

peace of mind is through a well-diversified ETF.<br />

Accessing China from South Africa<br />

The Satrix MSCI China ETF listed on the JSE is one way of getting<br />

this exposure. It tracks the MSCI China Index which includes large<br />

and mid-cap shares across China A-shares, H-shares, B-shares,<br />

Red chips, P chips and foreign listings (for example, ADRs). With<br />

just over 700 constituents, the index covers about 85% of this<br />

China equity universe.<br />

The MSCI China Index is dominated<br />

by companies in the consumer<br />

discretionary, communication services<br />

and financial sectors. Familiar names<br />

like Alibaba Group and Tencent<br />

Holdings are the two largest constituents<br />

of the MSCI China index. <br />

Helena Conradie, CEO Satrix<br />

56 www.bluechipdigital.co.za

The most up-to-date fund performance and fact<br />

sheet data in South Africa<br />

<br />

Fund Research<br />

<br />

Portfolio Modelling<br />

<br />

Comparison & Analysis<br />

<br />

Presentation & Reports<br />

<br />

<br />

<br />

<br />

<br />

<br />

<br />

<br />

Delivered over the Internet, which means you can access your account and all your<br />

research 24 hours a day, and from any location<br />

We manage all installation, maintenance and updates relieving pressure on your IT<br />

resources<br />

Incredibly easy to navigate, despite the depth of data and the range of sophisticated<br />

tools<br />

Your gateway to a vast array of valuable data in a product that is continually being<br />

developed with your needs in mind<br />

Automatically updated daily – web based application<br />

Full of excellent, intuitive features – line graphs, scatter charts, performance tables,<br />

ratio data, fact sheets, list builders and universe filters, and portfolio modelling<br />

The output options give you the flexibility to generate professional reports and<br />

presentations<br />

Fully supported by a professional, knowledgeable and friendly help desk<br />

For further information, please contact Tracey Wise on<br />

011-728-5510 / 079-522-8953 or email: tracey@profile.co.za<br />


Hooray! Your file is uploaded and ready to be published.

Saved successfully!

Ooh no, something went wrong!