Blue Chip Issue 86

Blue Chip Journal 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. Visit Blue Chip Digital: https://bluechipdigital.co.za/

Blue Chip Journal 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. Visit Blue Chip Digital: https://bluechipdigital.co.za/


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Issue 86 • January/February/March 2023


















Bridging the gap


Meet the 2022 Financial

Planner of the Year

What lies

ahead for 2023?


Jeanette Marais, CEO, Momentum Investments




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This document is meant only as information and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser. Discovery Life Investment

Services Pty (Ltd), registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life insurance products are underwritten by

Discovery Life Ltd, registration number: 1966/003901/06,

an authorised financial service provider and registered credit provider, NCA Reg No NCRCP3555.

Product rules, terms and conditions apply. This document does not include the full details of how our investment plans work. The information in this document must be read with the

relevant fact files.


Welcome to

Blue Chip 2023

In A focus on the future of investing, Jeanette Marais, CEO of Momentum Investments,

discusses the complexity and rapid change that shapes the sector (page 26). She

questions whether we understand how to disrupt our own value propositions. The

volatility in today’s world ensures that none of us truly knows what our future has in

store for us, so Marais advises that we disrupt ourselves rather than be disrupted. “With

increasing complexity, we need to focus on our speciality and niche and find the right

partners to journey towards success with,” she says.

Is a discretionary fund manager the right partner for success? Bennie Crous from

Equilibrium says that partnering with a DFM will ensure that an investor’s distinctive

financial needs are met. South Africa has world-class investment managers who are

specialists that rarely speak to an investor’s unique financial requirements (page 48). A

DFM, however, understands the intricacies thereof. Marais concurs: “Partnering with a

DFM frees up your capacity to focus on your value adds.”

In 2022, Discovery Group announced the launch of South Africa’s first “truly global”

DFM with the ambition of significantly enhancing the business of wealth creation in the

country. Speaking at the launch, Discovery CEO Adrian Gore contextualised the rationale

for the new business by describing two trends transforming the global and local investment

industries. Find out more on page 19.

The disruptive ideas and societal changes in our world today create opportunities

alongside them. Eugene Botha from Momentum Investments says, “Technological

innovations, demographic and social trends, urbanisation and environmental challenges

are here to stay, and the importance thereof is continuously being forced into the

spotlight.” These developments converge into larger themes that endure over the longer

term and create investment opportunities that will persist as disruptive ideas and

technological advancements reshape our environment. Uncover the art of identifying

these opportunities, called thematic investing, on page 31. Rob Macdonald speaks about

technology being the lifeblood of the new world of work. He asks that if financial advisors

still have a role to play in people’s lives, what is that role and how will it impact on client

engagement in the context of rising dependence on technology? (Page 50)

Well, turn to page 56 for insights into financial advisors’ relationships with tech from the

Linktank technology survey. According to the survey, financial advisors’ greatest challenges

are “still topped by integration options, the industry remains frustratingly paper-based,

and there’s an unbudging gap in the perception of value vs cost of technology”. Kobus

Kleyn says that as financial professionals in a noble profession, we must change people’s

lives for the better (page 18). And one person who will be changing people’s lives for

the better is Palesa Dube, CFP®, director at Wealth Creed, and the current FPI Financial

Planner of the Year. Dube believes that finances are a very personal matter and with the

inclusion of female professionals in the financial services industry, diversity and inclusion

will help the profession develop products and solutions that truly speak to the needs of

the growing segment of females in the profession in a manner they want to be addressed.

Enjoy this issue!

Alexis Knipe, Editor

Blue Chip Journal – The official publication of FPI

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.

A total of 7 500 copies of the publication are distributed directly to every CERTIFIED FINANCIAL PLANNER® (CFP®)

in the country, while the monthly Blue Chip Digital e-newsletter reaches the full FPI membership base. FPI members

are able to earn one non-verifiable Continuous Professional Development (CPD) hour per

edition of the print journal (four per year) under the category of Professional Reading.

Special advertising packages in Blue Chip are available to FPI Corporate Partners,

FPI Recognised Education Providers and FPI Approved Professional Practices.


ISSUE 86 |




Publisher: Chris Whales

Editor: Alexis Knipe

Online editor: Christoff Scholtz

Digital Manager: Charl Daniels

Designer: Tyra Martin

Production: Yonella Ngaba

Ad sales:

Sam Oliver

Gavin van der Merwe

Bayanda Sikiti

Venesia Fowler

Vanessa Wallace

Managing director: Clive During

Administration & accounts:

Charlene Steynberg

Kathy Wootton

Distribution and circulation manager:

Edward MacDonald

Printing: FA Print


Global Africa Network Media (Pty) Ltd

Company Registration No:


Directors: Clive During, Chris Whales

Physical address: 28 Main Road,

Rondebosch 7700

Postal address: PO Box 292,

Newlands 7701


Tel: +27 21 657 6200

Email: info@gan.co.za

Website: www.gan.co.za

No portion of this book may be reproduced without written consent

of the copyright owner. The opinions expressed are not necessarily

those of Blue Chip, nor the publisher, none of whom accept liability

of any nature arising out of, or in connection with, the contents of

this book. The publishers would like to express thanks to those who

support this publication by their submission of articles and with their

advertising. All rights reserved.


Glacier International: moving towards a

seamless global investment portfolio

By Andrew Brotchie, Managing Director of Glacier International

The case for offshore investing has been increasing over

many years, as local investors look for diversification, an

increased opportunity set, as well as hedging against

political and economic risk.

Exchange control relaxation

The reasons for offshore investing have traditionally been facilitated

by increases in the discretionary allowances. Currently, South African

investors can take out R11-million per year per person. We believe that

regulatory relaxation in the institutional space locally will drive the next

wave of offshore inclusion for South African investors. A big change

announced in February 2022, in the institutional space, is that pension

fund investors can now have up to 45% invested offshore with no

minimum or maximum allocation to Africa. Another point to note is that

there is no longer a 5% to 10% difference (which there was previously)

between what local collective investment schemes (CIS) could invest

offshore versus what was allowed for retirement funds. This has now

been harmonised and is significant for the reasons discussed below.

Significant impact on the wealth advice landscape

1. A management company (or CIS) will, at certain times, use the

full 45% offshore allowance in its retirement funds, which would



then leave it no capacity to offer feeder funds. This will lead to a

gradual decline in the availability of feeder funds in the South

African market, and an additional R400-billion to R600-billion

offshore investment flows from South Africa.

2. Traditionally, local and offshore investment portfolios have

been quite separate. Going forward, we expect clients to start

looking at their investment portfolio holistically. Previously,

an offshore allocation in pension funds of 30% was typically

allocated to global equities. Now that the offshore allocation is

at 45% – almost half of the portfolio – the guidance will be more

nuanced. The emphasis going forward will be on looking at the

local and international portfolios as one whole, to see how they’ll

complement each other. This will, in turn, see the investment

process and portfolio construction process change in future.

Glacier International’s solution set

Investment platforms will also need to adapt to these changes.

Glacier International’s solution set has been steadily evolving and

offers a diverse range of options.

Uncertainty in the markets is expected to prevail for the

foreseeable future. A well-diversified, long-term investment

strategy remains key.

Glacier International is a division of Sanlam Life Insurance Limited, a Licensed Life Insurer, Financial Services, and Registered Credit Provider (NCRCP43).

That’s what a single access point

to the widest range of investment

funds feels like.

Glacier by Sanlam’s investment platform offers you the

widest choice of local and global funds, from different fund

managers, that you can mix and match, all in one place.

With Glacier, you are at the centre of all investment

recommendations. Your adviser will work with you to

customise your selection for the ultimate personalisation

and ease.





Ours is an ocean of limitless possibility.

What could be better than that?

Ask your financial adviser why you’re not with Glacier.

Visit www.glacierinsights.co.za for more information


Glacier Financial Solutions (Pty) Ltd is a licensed financial services provider.








By Alexis Knipe



Message from FPI CEO





Milestones, news and snippets


Advice to combat money laundering


Column by Rob Macdonald, Head of

Strategic Advisory Services, Fundhouse




Column by Florbela Yates, Head of Equilibrium



By Kobus Kleyn, CFP®, Tax and

Fiduciary Practitioner, Kainos Wealth




Discovery Invest says that there is a need for global

investment expertise for the local advice industry




Blue Chip speaks to Palesa Dube, CFP®




By Jeanette Marais, CEO, Momentum

Investments, and Deputy CEO,

Momentum Metropolitan Holdings




By Mike Adsetts, Acting Chief Investment

Officer, Momentum Investments





Almost every financial decision your

clients make has a tax implication




Eugene Botha, Deputy Chief Investment Officer,

Momentum Investments, tells us about the

increasing popularity of thematic investing




Cryptocurrencies are sweeping the world in

terms of news headlines




Kapil Joshi, Head of Momentum Collective

Investments, writes on consumerism and investing




Was 2022 the birth of the next phase of wealth

creation? By Ian Jones, CEO, Fundhouse





By Andy Howard, Schroders

4 www.bluechipdigital.co.za









Preparing for the “Mother” of all market

conduct legislation. By Anton Swanepoel



One thing we can always be sure of is

change, says Visio




By the Petroleum Agency South Africa




How to get servicing your clients right. By

Andies de Jongh, Seed Analytics




And the rationale for using a DFM.

By Dez Tswaile




By Bennie Crous, Senior Portfolio Manager,






Technology is the lifeblood of the new

world of work. By Rob Macdonald




By Roland Cox, Executive Coach, Aspiral

Coaching and Leadership



How adapting the way you

communicate with your clients can improve

long-term outcomes




Insights into financial advisors’ relationships

with tech from the 2022 Linktank Advice

Technology survey. By Jen McKay




The top five CFP® Professional Competency

Examination candidates are alumini at the

University of the Free State




Lessons we’ve learned. By Johannes Landman,

Omega Capital





Babalwa Nonkenge speaks about her podcast,

Epokothweni with Babalwa Nonkenge



How can you identify it and help your

clients deal with it? By Louis van der Merwe



Profile of an FPI Approved Practice:

Integral Wealth Management





By Andrew Ratcliffe, Director, Private

Client Holdings



Awards 2022




The FPI Financial Planner of the Year




Lelané Bezuidenhout, CFP®,

CEO, Financial Planning

Institute of Southern Africa

Time linked with

financial planning,

done right

The CEO of Financial Planning Institute of Southern Africa

shares FPI’s latest news.

Is the earth spinning faster and how can we link this to

financial planning?

The world is moving at a pace unknown to the ’80s, ’90s

and early 2000s. It prompted me to google: “Is time running

faster than before?”

Google’s answer: “It’s part of the nature of life for time

to accelerate as we age.” Did Google just tell me that I am

getting old?

I googled again as I did not like the first answer, and this

time it shot out: “The earth is spinning faster and recently

recorded its shortest day ever. June 29, 2022, was 1.59 milliseconds

less than one average day.” Now that’s less of a

personal disaster for me, but not necessarily for the worldat-large.

This made me think, and appreciate, that the most

valuable commodity we have is time.

Time linked with financial planning, done right

It is well known that the basic elements and economic

principles of investments are reward (return), risk and time.

Far too many consumers leave retirement planning for their

mid-40s to early 50s. This is too late. Investment, as we know,

is not a short-term thing; it is long-term in its nature. The

time-value-of-money should never be underestimated.

But how do we get consumers to realise this? It does not

help that pending legislative changes will make it possible

for consumers to make withdrawals from their retirement

savings before retirement. But in this lies the opportunity

for financial planning and professional financial advice as

it presents an opportunity to help consumers with, not just

retirement planning, but holistic financial planning. More than

eight out of 10 CFP® professionals responding to the Financial

Planning Standard Board’s (FPSB) Future of Financial Planning

Practice survey agree that consumer demand for financial

planning will increase in the next five years.

We also see the demand for FPI professional members

growing as an increasing number of financial institutions,

especially in the banking sector who are starting to employ

only CERTIFIED FINANCIAL PLANNERS® or designated financial

advisors. We encourage financial advisors who are not

professional members of FPI yet to contact us and establish how

close they are to being awarded a professional designation.

Some updates from FPI

I just returned from the FPSB Chief Executive Committee

meetings held in Washington DC. I am humbled to act as chair

of these meetings and confirm that the discussions focused

on the future of financial planning, especially as it relates to

generational financial planning and the ever-changing global

financial landscape. Great discussions were held around crypto

assets and decentralised finance (DeFi) and how they fit into

financial planning. The FPSB also confirmed that the new

financial planning competency framework, which includes the

psychology of financial planning, will come into effect on 1 April

2023. FPI will subsequently align and localise its curriculum and

standards accordingly.

If you have not yet registered for the 2023 Annual Refresher

Workshop, please do so – spots are limited and selling out

fast. This is the masterclass of the year with great insights from

8 www.bluechipdigital.co.za

We encourage financial advisors who are not

professional members of FPI yet to contact

us and establish how close they are to being

awarded a professional designation.

speakers such as Wessel Oosthuizen, CFP®, Errol Meyer, CFP®,

the 2022 FPI Financial Planner of the Year, Palesa Dube, CFP®,

and FPI’s former head of policy and engagement David Kop,

CFP®. I will also be giving an update on Ombudsman cases.

Visit www.fpi.co.za to register for this event.

As we enter 2023, I want

to sincerely thank you for

your support during 2022.

Please be on the lookout for a consumer survey, to be run

by +-15 FPSB affiliates globally, that will come out in 2023.

The main purpose of the survey is to establish the value of

financial advice and to gain insights into consumer awareness

of who and what a CFP® professional is.

As we enter 2023, I want to sincerely thank you for your

support during 2022. As alluded to earlier, 2022 flew by in

a wink.

May 2023 be a bit of a slower year, with more time for us to

collectively reach new heights as a profession.

Until next time,

Lelané Bezuidenhout, CFP®, CEO,

Financial Planning Institute of Southern Africa







On the money

Making waves this quarter

Glacier investments and illiquid assets


Investors can now make an investment using foreign currency – and

there’s no need to have an offshore bank account or complete copious

amounts of paperwork. This is made possible by Shyft, a forex payment

app that makes offshore investing so much easier.

Now, investors simply need to transfer their investment in rands

from their South African bank account onto Shyft, convert it to the

required currency (US dollars, Australian dollars, euros or pound

sterling) and make the forex payment into the

offshore investment. Shyft is free to use with no

monthly fees. The app also offers some of the

best and cheapest foreign exchange rates in the

market, with low transaction fees.

Contact your Glacier International representative

for more information.

Glacier International is a division of Sanlam Life Insurance Limited, a Licensed Life Insurer, Financial Services and Registered Credit Provider (NCRCP43).


The Investment Forum is South Africa’s premier gathering of investment

managers, discretionary fund managers, multi-managers and financial

advisors/wealth managers. Now in its 13th year, it continues to focus on

thought leadership content spanning the world of investing. There is no

“product push” at the conference, thus allowing delegates to glean insights

impacting investment themes across the world.

The world continues to be at strife with itself and wherever you look,

uncertainty prevails on all fronts. Navigating this uncertain world, trying

to ensure that investors remain invested throughout this cycle, is virtually

impossible with distractions from all directions.

The brightest minds from the investment management industry

will offer their insights on the global macro-economics at play – where

inflation is public enemy number one, the geopolitical landscape that


is tense and fragile, anticipated company earnings results and where

these are headed across all sectors, as well as insights into where these

investment managers are unlocking valuable investment opportunities

across currencies, geographies and asset classes.

Register for the Investment Forum 2023 where the conference will

unpack “The Butterfly Effect – When nothing is certain, anything is possible!”.

Seats sell out quickly, so go to www.theinvestmentforum.co.za and

register now.

Professional investors and family offices are increasingly turning to illiquid

assets, including private debt, in response to the combination of ongoing

volatility and rising interest rates and inflation, new research shows. The

study from Aeon Investments with family offices, controlling more than

$98.4-billion assets under management, found 90% expect increased

demand from investors for illiquid assets over the next two years. Around

12% predict demand will increase dramatically.

The research found that the key reason is their need to protect from

macro uncertainty with private debt investments often offering strategies

providing a floating rate coupon which has the potential to be a natural

hedge against inflation.

Family offices also highlighted the fact that private debt offers new

investment opportunities and a growing array of assets as well as its role

in the diversification of portfolios and access to ESG benefits in sub-asset

classes in private debt. Aeon’s study found widespread agreement that the

highest quality private debt instruments provide safety. Almost all (99%)

questioned pointed to the combination of attractive yields and structural

protections such as debt covenants and credit enhancement as offering a

high degree of safety.

That is being bolstered by the expectation of improved regulation in

the sector – more than a quarter (26%) expect dramatic improvements in

regulation for private debt over the next two years while 52% expect slight

improvements in regulation. Evgeny van der Geest, managing director,

Aeon Investments says: “Ongoing volatility coupled with rising interest

rates and inflation has highlighted the attraction of illiquid assets including

private debt, and investors expect demand to grow. There is growing

recognition that private debt can deliver attractive yields and high levels

of protection which are very valuable in the current macro conditions.”




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for more information.

OUTvest is an authorised FSP. Ts and Cs apply. OV22/0426/E



On the money

Making waves this quarter

The future of the local DFM sector and a motivational read


South Africa’s Discretionary Fund Managers (DFMs) will play a vital role

to financial advisors and wealth managers as they face a barrage of

complex investment decisions, a new report reveals. The report, created

by The Collaborative Exchange and sponsored by financial technology

provider Bravura, pinpoints the growing prominence of global passive

investments and ESG filters in portfolio construction, combined with

the rise of alternative strategies as a driving force of change across the

market. This leaves a large proportion of financial advisors and wealth

managers now sub-delegating their selection of investment managers

and asset allocation to DFMs, particularly to those who underpin their

offering with technology to aid investment decisions. While this is good

news for DFMs, the report identifies various longer-term challenges for

the sector that has mushroomed over the past two years. These include

potential regulation from industry bodies including the Association

of Savings of South Africa, which could place DFMs under further

scrutiny, and may include more onerous barriers to entry and the

standardisation of investment performance analysis.

However, larger DFMs with access to scale, market-proven

technology and extensive research capabilities will be able to weather

these challenges and are set to increasingly dominate, according to

the research. The report also predicts there may be several corporate

actions and mergers in the pipeline, such as Glacier’s recent acquisition

of Absa, to help with further market consolidation. Kevin Hinton, CEO

of The Collaborative Exchange, said: “While this research paints a mixed

picture, ultimately it highlights the crucial role DFMs play for wealth

managers and financial advisors. DFMs have shown good growth in

assets under management or administration since 2019, although we

expect a combination of regulation and

market saturation to put a dampener on

this in the future.”

Carolyn Erasmus, Country Head South

Africa at Bravura, added: “Across the board,

the current backdrop of a worldwide

downturn and inflation is causing huge

pressure in the sector. With regulation

expected to arrive shortly, we’re seeing elements of this report mirrored

in real life conversations, as DFMs look to cement their position in the

market with industry-leading technology that helps make sense of

complexity and create value right through the industry chain.”

According to The Collaborative Exchange’s data, the larger DFMs have

been growing their ZAR assets by more than 15% Compound Growth

Annual Rate (CGAR) over the past three years ended 31 December

2021. There are, however, several outliers that have underperformed

while exposing investors to higher volatility. Moreover, there has been a

plethora of new entrants, since The Collaborative Exchange’s last report

in 2019.

The research was conducted as part of The Collaborative Exchange’s

South African Discretionary Fund Manager Survey which aims to create

a single reference and guide capturing the breadth of information

regarding DFM service models in South Africa. In total, 26 DFM businesses

were surveyed, including 11 larger DFMs with AUM greater than R2.5-

billion were surveyed in 2021.

The report can be accessed via this link (note subscription required)




MitonOptimal provides advisers with peace of mind by offering

established investment expertise, dedicated support and long-term

partnership in managing their clients’ investment affairs.

George Dell | Executive Director, Discretionary Fund Management | E: george@mitonoptimal.com | T: 021 689 3579 | www.mitonoptimal.co.za

Issued by MitonOptimal Southern Africa Group (MitonOptimal). MitonOptimal South Africa (Pty) Ltd, registration no. 2005/032750/07, an authorised Financial Services Provider (“FSP”) with

license no. 28160. MitonOptimal South Africa (Pty) Ltd complies with all the requirements of the Financial Advisory and Intermediary Services (FAIS) Act (Act 37 of 2002).

South Africa’s Premier Investment

Conference is now open for registration

CAPE TOWN: 8 & 9 MARCH 2023


Access to the latest

investment themes

Local and international


Divergent Investment


Industry networking

CPD hours





On the money

Making waves this quarter

Regulations and a new range of model portfolios


By Webber Wentzel

In 2019, the Financial Action Task Force (FATF) red-flagged South

Africa for high levels of corruption. That means South Africa must

address its partial compliance or non-compliance with 20 of the

FATF’s “40 recommendations” by February 2023.

South Africa has taken various steps to tackle corruption. The

National Prosecuting Authority has enrolled cases, the Asset

Forfeiture Unit has frozen or granted preservation orders, the Special

Investigating Unit has instituted High Court cases and SARS has

launched investigations. South African banking institutions have

sound policies in place to combat terrorist financing. However,

many loopholes remain, and this

makes it urgent to enact the necessary

regulations in place and ensure

institutions have appropriate systems

in place.

Webber Wentzel will be conducting

sessions on the implications of

greylisting by the FATF for South Africa

with our financial and corporate clients

to address these issues.


We are extremely excited to launch our much-awaited ASTUTE range

of model portfolios, containing only absolute return funds and hedge

funds. We saw a gap in the market for these types of investments due to

their ability to limit the downside in market drawdowns, but still benefit

from risk asset exposure. Our range includes:

• MitonOptimal ASTUTE Guarded Model. Focused on capital

preservation while targeting a total return of CPI +4% after all fees. This

model was created with the living annuity market in mind, especially

those clients in the early years of retirement, where “sequence-ofreturns”

risk is at its highest.

• MitonOptimal ASTUTE Bold Model. Focused on

capital appreciation and looking to benefit from the

underlying managers’ best ideas. This model will

target all-out risk and is not for the faint-hearted.

Due to Reg 28 restrictions, these products will only

be available in discretionary products, endowments

and living annuities.

For more information on the range, please contact


MitonOptimal South Africa (Pty) Limited is an Authorised Financial Services Provider License No. 28160 regulated by the Financial Sector Conduct Authority (FSCA). Registration No. 2005/032750/07.

Jacques de Kock,

Quantitative Analyst

and Portfolio Manager,



As a child, an intense interest in property meant that Rael Levitt

was early in the game. A chance encounter as a teenager led

him to his first auction that ignited a fervent passion. By 17, he

regularly attended property auctions and at 20, he had bought

and sold 20 bank-foreclosed houses. While studying law at

UCT, Levitt launched an auction company from the canteen,

which changed the face of auctioneering in South Africa. His

company, Auction Alliance, transformed the industry, bringing

glamourised high-profile sales to the public eye.

In 2004, Levitt was caught in the historic tsunami that claimed so many

lives in Thailand. Seven years later, he faced a different kind of tsunami that

destroyed his reputation. The Quoin Rock Wine Estate auction was the

last time Levitt ascended the auction podium. The wine estate, belonging

to billionaire Dave King, was being bid on by Wendy Applebaum,

the country’s wealthiest woman. The series of mistakes Levitt made

following the auction would herald Auction Alliance’s rapid demise.

Levitt became a subject of “trial by media” in the court of public opinion

– later cleared of wrongdoing by the country’s courts. A decade later,

Levitt reflects on the lessons he has learnt. In the wake of his last-ever

auction, he built a successful new property business, Inospace, which

has become the largest owner and operator of logistics parks in South

Africa, having grown into a R3-billion company.

It takes a tsunami is a riveting read that incorporates the story of one

of the biggest property scandals of recent times into a deep reflection

on failure and fallibility – and what it takes to survive and bounce back.

Available at bookstores nationwide or www.ittakesatsunami.com.





Financial service providers must apply a risk-based approach

to assist in combating money laundering.

The products and services that financial service providers

(FSPs) offer can be abused by criminals for money

laundering, the financing of terrorist activities and

proliferation of weapons of mass destruction activities.

It is important that FSPs implement a risk-based approach to

combating money laundering, terrorist financing and proliferation

financing. Comprehensive guidance on implementing a risk-based

approach is available in Financial Intelligence Centre (FIC) Guidance

Note 7 and FIC public compliance communication 53 (which are

both found on www.fic.gov.za).

In 2019, the Financial Action Task Force (FATF) assessed South

Africa’s capability and capacity for combating money laundering,

terrorist financing and proliferation financing and identified

certain weaknesses, including the inadequate adoption of a riskbased

approach among designated non-financial businesses

and professions. “South Africa should ensure that accountable

institutions adequately implement a risk-based approach, including

through better assessing and understanding their inherent risks

as well as refining and implementing their risk management and

compliance programmes to mitigate their risks,” FATF highlighted

in its assessment report published in October 2021.

Implementing a risk-based approach

As part of the risk-based approach, an FSP must conduct businesslevel

assessments, new product and process-risk assessments as well

as client-level assessments. The controls the FSP implements must

be in proportion to the level of inherent risk identified. Where there

is a heightened risk of money laundering and terrorist financing, the

FSP must have more stringent controls in place such as enhanced

due diligence and monitoring. Various factors may impact the level of

money laundering, terrorist financing and proliferation financing risk

the accountable institution may face. These factors include the client,

product or service type, the delivery channel, the geographic area as

well as any other factor the accountable institution deems relevant.

Practically speaking, different client types pose different levels

of risk; for example, it is widely accepted that foreign prominent

public officials and certain domestic prominent influential persons

pose a heightened risk. See Public Compliance Communication

(PCC) 51 for additional information.

There are various other client types that may be deemed as high

risk. Where a client’s beneficial owners pose a heightened risk, this

should be considered as part of the client-level risk assessment.

The different delivery channels or way the client is onboarded

presents different risk levels. For example, where a client is

onboarded face-to-face there is less risk of client identification

misrepresentation, whereas non-face-to-face scenarios where a

client is onboarded digitally could present a heightened risk.

FSPs must understand the vulnerabilities of the different

type of products and services that they offer, for example a

product that allows for third-party payments to high-risk

countries would potentially pose a heightened risk. PCC 49

and PCC 54 set out additional guidance on geographic area

risk factors that should be considered.

In addition to the factors highlighted above, the FSP may

take into account any other relevant factors when conducting

the risk assessment. Risk factors must be assessed holistically

to determine an overall risk that the particular business

relationship or single transaction with a client may pose.

Risk management compliance programme

The manner in which the FSP implements a risk-based approach

and the controls implemented in accordance with section 42

of the FIC Act must be set out in the risk management and

compliance programme.

For more compliance information and guidance offered to FSPs,

refer to the FIC website (www.fic.gov.za). For further information

contact the FIC’s compliance contact centre on +27 12 641 6000

or log an online compliance query on the FIC website.






Beware the Twit

Giving voice to the people: your new reality.

Rob Macdonald, Head of

Strategic Advisory Services,


Rob Macdonald has held

several senior positions in

the investment industry.

At Fundhouse, he acts as

a consultant and coach

to financial advisors and

develops and facilitates

training programmes in

behavioural coaching and

practice management. Before

joining the financial services

industry, Macdonald was

MBA director at the UCT

Graduate School of Business.

He is co-author of the book

Rethinking Leadership and has

consulted, written and spoken

widely on a range of topics.

Macdonald has a Master’s

degree in Management

Studies from Oxford University

and is a CFP® Professional.

Early in his tenure at Twitter, self-titled

Chief Twit Elon Musk tweeted, “I’m not

saying we should downplay journalists.

I’m simply saying we should give voice/

elevate the people. Vox populi.” Whatever Musk

does either to build or destroy Twitter, voice has

already been given to the people. Journalists are

no longer the guardians of our news flow.

Cape Talk, the first talk show radio station

in Cape Town, recently celebrated its 25th

birthday. John Maytham hosted the station’s

first show 25 years ago and now hosts the

Afternoon Drive show. Reflecting on the past

25 years, Maytham shared his perspective as a

journalist in a pre-cellphone, pre-social media

world where he would observe the story he was

tasked to report on, write it up and then find a

way to phone that story into the radio station,

either using a public payphone or knocking on

the door of a local household and asking to use

their phone.

When phoning the story in, Maytham

explained that it was communicated unfiltered

through his eyes. Journalists had autonomy over

what to observe, how to interpret whatever they

saw, and then of course total freedom in how

they wrote and reported on the story. In today’s

world of social media and mobile phones, the

journalist is no longer the sole arbiter of news

information. Anyone anywhere can share news

on their platform of choice, whether that news

is true or not.

The implication of this is that journalists

must reinvent themselves to remain relevant.

They cannot simply be a source of information

but must play the role of analysts, helping us

make sense of the news that is out there. Their

role as watchdogs for society is being taken to

a new level through investigative journalism

which, as we have seen in South Africa, is

key to uncovering the ills of society across all

sectors. Journalists are also having to redefine

their economic model. With the surplus of

information in the metaverse, the public is

more discerning about what they will pay for.

And as Musk is discovering with the exodus

of advertisers from Twitter, advertisers have

multiple channels to access “the people”.

The parallel between the worlds of financial

planning and journalism is striking. Only

25 years ago, financial planners were the

guardians of all financial information. Today,

my 92-year-old mother laments the fact that if

radio journalist Bruce Whitfield was hosting The

Money Show when she was earning money, she

and my father would have been so much better

informed about their financial decisions. As my

mother is now blind, listening to the radio is

her main window on the world. My guess is she

would be complaining even more about not

being informed if she could access the swathe

of real-time digital information, available from

literally hundreds of thousands of sources, at

the click of a button.

It’s not ideal for long-term

investors to be accessing

their investment values daily.

Recently I asked several groups of financial

planners about the biggest challenges they

face. Controlling the frequency of clients’

access to information came up repeatedly as

a concern. This is understandable. For example,

it’s not ideal for long-term investors to be

accessing their investment values daily, a

recipe for self-sabotaging investor behaviour.

But in the same way that journalists can no

longer control access to information, nor can

financial planners. Journalists have had to

redefine their value offer and their economic

models; financial planners are now being

challenged to do the same. It is imperative

that financial planners take up this challenge

to ensure that clients don’t fall foul of the

suggestion, that at least one Twit is likely to

make, that in this digital age people have the

power to do it for themselves.

16 www.bluechipdigital.co.za




It’s a Cruel, Crazy, Beautiful World

And it was a cruel, crazy 2022.

Florbela Yates,

Head of Equilibrium

Florbela Yates is the head of

Equilibrium in the Momentum

Metropolitan group.

Equilibrium is an independent

discretionary fund manager

that partners with financial

advisors to help them enable

their advice outcomes.

Equilibrium brings balance to

an advice practice by delivering

services and investment

solutions to help clients achieve

their defined investment goals.

Johnny Clegg was one of my favourite

South African artists, and as I sat down to

write this month’s column, his song “Cruel,

Crazy, Beautiful World” came to mind. The

song depicts how I felt about investment markets

in 2022.

I started the year faced with hope for what

lay ahead, Covid was behind us and the future

seemed bright. South African equities and bonds

were well priced and there seemed to be some

renewed optimism from both investors and asset

managers alike.

On 25 February 2022, it all changed when

Russia invaded Ukraine. More broadly, we started

to see signs of rising global inflation and the

potential for a recession in the US. Suddenly our

beautiful world morphed into a crazy one, filled

with increased volatility, lost hope and pessimism.

Locally, this was exacerbated by Eskom’s issues

and another period of rand weakness.

Uncertainty nearly always results in investors

unable to make any new investment decisions.

For some, it could even lead to disinvesting or

de-risking by moving to perceived risk-free

assets. This time was no different. As volatility

increased, South African investor flows moved

out of balanced funds into fixed income and

money market solutions. This trend continued

for most of 2022. We also saw a decrease in the

demand for offshore investments.

History has taught us that investors wishing

to meet their investment objectives should be

more concerned about “time in the market”

than “timing the market”. By disinvesting when

markets are down, investors lock in those

negative returns. And then they miss out on

the upside when markets once again begin

to perform. In a world where people are living

longer and saving too little, seeing this erosion

of wealth is heartbreaking for financial advisors

and asset managers alike, who are both set on

helping clients to achieve their financial goals.

Despite all the evidence and conversations

pointing to the need to remain invested, many

clients would have ended the year with reduced

investment amounts – ignoring the advice of

their trusted financial advisors and destroying

their personal wealth.

Looking back, it is sad to see clients who chose

to disinvest who are now faced with insufficient

capital for their needs. However, we can help

them by continuing to manage portfolios that

cater for those outcomes. I cannot predict when

the market will turn, but I do know that only

those who stay invested will reap the rewards of

market performance. It is reasonable to say that

the current market offers value, so now might

be the time for clients waiting on the sidelines

to start considering getting back in. For clients

who continue to be cautious, it’s not necessary

to invest everything at once – you could consider

a phasing-in approach.

At Equilibrium, we make it easy for you to

help your clients achieve their goals and stay

invested. We are here to help you get your clients

to their goals with more certainty and less anxiety,

keeping them on their journey to achieving their

investment outcomes. Our purpose is to create

a sustainable investment proposition built with

your clients’ objectives in mind. We know you and

your clients are unique, and investing is personal.

That’s why we offer purposefully built solutions

capable of achieving particular and defined

investment outcomes.

We really do live in a world that is, at times,

crazy or chaotic (2022 is a prime example of this),

it can be cruel (especially to those whose capital

has been eroded or who haven’t saved enough)

but most of the time, it’s beautiful.

At the beginning of a new year, I am filled

with optimism and excitement. Most of all, I am

confident that our partnership with our advisors

will continue to help us get their clients to their

financial goals. I am grateful for the opportunity

to make a difference in people’s journey to

financial freedom and I am blessed to work with a

team of investment professionals who truly care

about making a difference in their clients’ lives.

The best that I can hope for is that logic

prevails, clients stay invested (or start investing if

they haven’t yet) and that together we can build

a better financial future for all.

Equilibrium Investment Management (Pty) Ltd (Equilibrium) (Reg. No. 2007/018275/07) is an authorised financial services provider (FSP32726) and part of Momentum Metropolitan Holdings Limited, rated B-BBEE level 1.






Improving the lives of others.

Kobus Kleyn, CFP®, Tax

and Fiduciary Practitioner,

Kainos Wealth

Kobus Kleyn has published

over 200 articles and authored

three books. He is a multiple

award-winning professional

and holds eight memberships

with professional associations.

His most recent awards were

lifetime achievements awards

from the FPI (Harry Brews), The

Million Dollar Round Table (Top

of the Table Life Membership)

and Liberty Group (Life

Membership) in 2021/22.

As financial professionals in a noble

profession, we must change people’s lives

for the better while we, consequently,

improve our lives too.

In the process, we take care of clients and their

families. Taking care of families through their life

cycles and during life-changing events can be

emotional for us as professionals and our staff.

Financial advisors are, in most cases, significantly

more stressed than their clients. According to a

study by the Financial Planning Association, 63%

of clients experience high or moderate stress, while

71% of advisors admit to being stressed.

Stress levels year on year are increasing, with

28% of advisors having more stress than a year ago

and 44% having more than five years ago. The same

questions indicate lower stress levels for clients. The

pandemic has played a significant role in advisor

stress levels, and there is no doubt that advisors’

health was impacted. Issues like global inflation,

market volatility, the new digital virtual world and

the cost of running a practice are not helpful.

When clients or family members pass away or

have a disability or critical illness, it can bring raw

emotions to the front and we, as advisors, have

to take it all in while staying calm and focused on

ensuring we take care of our fiduciary duties in

support of the family when most needed. In the

last 30 months many of us lost more clients, than

during our whole time in our profession.

A close bond will form if you have been a

custodian of a client’s financial plan and servant

for 20 years. If something were to happen to the

client or family, you cannot avoid being impacted

by the emotions. That conversation during an ugly

divorce, a chat about teenage children involved

with drugs or the loss of a family member or job will

bring emotions and stress to you, your client and

your staff. The question that comes to mind is, while

you take care of your clients, who is taking care of

you? What can you do to ensure self-care? If you do

not take care of yourself, you may not be there long

enough to keep taking care of your clients!

Apart from the emotional part of our profession,

many professionals work very long hours in a most

challenging profession to build a sustainable

practice while achieving minimum qualification

and experience, with the most severe financial

constraints and income restrictions. If the stress

and emotional aspects are not controlled, it can be

a disaster waiting to happen with our health and

practice survival. We have to mitigate these danger

areas by working towards a balanced lifestyle.

Fortunately, the pandemic had some silver

linings as well and the major one to me is that it

pulled the digital virtual world forward by five

to 10 years. It did the same with technology and

allowed us to create hybrid practices. Concepts

like #workingfromhome, #workingfromanywhere

and even #workingfromtravel became the new

buzzwords. It is now in our hands as entrepreneurs

to embrace these concepts where possible to

mitigate stress levels by removing some negative

stress items (office politics and traffic) and replacing

them with positives like a tranquil scenery, more

family time, better working hours and efficiency

to name but a few, while reducing overheads and

financial stress on the practice and family.

Find ways and means to take care of yourself

through ongoing initiatives to allow you to keep

taking care of your clients and our profession. It

is important to identify stress issues, control what

can be controlled and do not stress about matters

outside of your control. Once you have recognised

these stresses, you can manage, plan and organise

around them in your practice. It is critical to work

on the whole person concept and always embrace a

balanced lifestyle with a positive attitude. It is about

mindset, mindfulness and the pursuit of happiness

in your and your family’s lives. “If you don’t make

time for your wellness, you will be forced to make

time for your illness” - anonymous.

18 www.bluechipdigital.co.za

The local need for

truly global advice

The need for truly global investment expertise to support the

local advice industry is more pressing than ever, but why?

In August 2022, Discovery Group announced the launch of

Cogence, South Africa’s first “truly global” discretionary fund

manager (DFM) with the ambition of significantly enhancing

the business of wealth creation in the country. Speaking at the

launch, Discovery CEO Adrian Gore contextualised the rationale for

the new business by describing two trends that are fundamentally

transforming the global and local investment industry.

Firstly, investors need – and have been afforded – greater

global reach. However, the global investment landscape is

becoming even more vast, complex, sophisticated and volatile.

Secondly, the global shift to defined-contribution retirement

schemes means that the investment, as well as behavioural and

longevity risk associated with long-term investing has been

transferred almost entirely to the individual.

“Together, these trends create gaps in the local DFM market,

necessitating a ‘step up’ in the burgeoning advice industry,” says

Gore. To best equip financial advisers and their clients to take

advantage of the immense world of opportunity that comes with

offshore investing, the local savings industry stands to benefit

from truly global asset management expertise.

What’s all this global investment interest, anyway?

While there are numerous reasons why individual investors might

want to gain access to global markets, it ultimately boils down

to diversification. By diversifying a portfolio with an appropriate

mix of assets, it is possible to maximise expected returns for

a given level of risk. Naturally, the wider the choice of assets,

funds, management styles, markets, geographies, sectors and

so forth available to construct a diversified portfolio, the better

the theoretical risk/return balance. With South Africa’s market

representing only 1% of the global equity market, it’s easy to see

that constructing a portfolio of purely local assets bucks the logic

of diversification by limiting choice. In fact, the logic for global

diversification holds true, no matter where in the world you might

call home. Beyond optimising for risk and return, investing globally

further provides investors with access to promising industries and

themes that have little or no representation in the local market.

Think big tech, healthcare or automobiles.

With the offshore limit under Regulation 28 of the Pensions

Fund Act having been relaxed to 45%, local investors are afforded

an unprecedented opportunity to take advantage of all the world

has to offer. Says Gore, “No matter how you look at it, a rational

investor would want exposure to global markets.”

Why the need for a “truly global” DFM?

DFMs assist financial advisers in enhancing the investment

outcomes for their clients. In part, they achieve this by performing,

or advising, on the strategic and tactical asset allocation required

to construct diversified portfolios tailored to the individual risk

tolerance and circumstance of the investor. Gore says that while

the rapidly growing DFM industry offers some investment choice,

control, local advice, reporting and modern technology – there is

a “need for change”. The sheer scale of global markets suggests

that for any local business to keep fully abreast of the fund

and asset choices available abroad would be a daunting, if not

impossible, task. While it is possible for a local firm to monitor local

opportunities – the local partner to Cogence, RisCura, conducts

research on every asset manager in the country to inform its

local manager allocations in the Cogence model portfolios – this

scale explodes by orders of magnitude when looking abroad.

Moreover, global markets are volatile and growing increasingly

complex due to the rise of alternative asset classes such as private

credit and equity and hedge funds.

There are few companies in the world that have the analytic

capabilities and global presence required to carry out the

research to develop a comprehensive understanding of the risks

and opportunities that exist in such a sophisticated investment

universe. While some local DFMs have a global footprint, none

previously have had a full global reach.

It is for this reason that Cogence brought the global model

portfolio asset allocation advice of BlackRock, one of the world’s

leading asset managers, along with its leading investment and

risk management technology platform, Aladdin Wealth, to the

service of local advisers. As a truly global asset manager, BlackRock

in September 2022 counted the expertise of over 2 600 investment

professionals focused on research, portfolio management and

trading from its offices in more than 35 countries to administer

more than USD8.5-trillion in assets. That is over 45 times the assets

under administration of the entire South African unit trust industry.

“Cogence will leverage off the full scale of BlackRock’s

investment research and global expertise, which is essential in

such a complex world,” says Kenny Rabson, Discovery Invest CEO.

“BlackRock is uniquely positioned to help clients navigate this

complex global environment and evolve client portfolios to aim

to maximise the success of future outcomes,” believes Rabson.



FPI | Financial Planner of the Year

Meet the 2022 FPI

Financial Planner of the Year

Blue Chip speaks to Palesa Dube, CFP®, the 2022 winner

of the Financial Planner of the Year Award.

Palesa Dube, CFP®, Director and Wealth Manager, Wealth Creed

FPI | Financial Planner of the Year



The Financial Planner of the Year Award, launched in 2000, is

the most prestigious award in the industry. It recognises South

Africa’s top CERTIFIED FINANCIAL PLANNER® – a first-class

financial planner who demonstrates exceptional service and

impeccable ethics in client service and who brings innovation, flawless

skill as well as all-round excellence to the profession.

Palesa Dube, CFP®, director at Wealth Creed, is a seasoned

professional and practising member of the FPI with 18 years of

industry-related experience. She exudes a passion for wealth

management and has expertise in investment and retirement

planning, estate as well as legacy planning for high-net-worth

individuals and corporate clients.

When Dube looks back to the beginning of her career in the

early 2000s, she realises how limited a horizon her younger eyes

could see. Her ambition was to build something that had value. She

believes that the profession allows her to do just that as it offers the

opportunity to help individuals and families fulfil their financial and

legacy aspirations.

Palesa, well done! After a gruelling competition, you have been

named the FPI Financial Planner of the Year for 2022. What does

winning the award mean to you?

Thank you very much. Stepping out of the corporate environment

to start an independent advisory firm with little to no backing was

a massive leap of faith. And to keep going despite the challenges

the environment posed, especially in the last two to three years,

truly was an ask. This award makes the journey so far entirely worth

it. It is testament firstly that there is a place and need for our clientcentric

approach to wealth management. Secondly, it gives us great

confidence that we are building a formidable practice [Wealth

Creed] that firmly holds its ground in the market and which our

current and prospective clients can be proud to be associated with.

What was your motivation for entering the Financial Planner of

the Year Award?

I saw the competition as an ideal platform to showcase the

experience and expertise that exist in our profession, more

especially of black and female financial planning professionals. The

profession thankfully looks much more diverse now than what it was

when I began my career, but there’s still a long way to go. It was an

opportune time to shine a spotlight on the strides we’ve been able

to achieve so far. My hope is that my journey and success so far will

encourage others to pursue a career in financial planning.

Besides winning the FPI award, what has been the highlight of

your career?

I am especially proud of the business we are building. One of the

pivotal reasons for us starting an independent wealth management

firm was so that we would be in a position to provide holistic

financial planning services of a high standard to a broader base of

the community, where our eye would remain solely on improving

the lives of our clients. It has been truly gratifying to see that vision

take shape and grow in the way that it is.

Our profession affords us the

opportunity to help clients achieve

their highest and most important

financial and life aspirations.

What do you consider to be the most important trait of an

accomplished financial advisor?

You must be able to put the client first in all that you do. Our

profession affords us the opportunity to help clients achieve their

highest and most important financial and life aspirations. In my

experience, clients want the assurance and comfort that their

advisor is attuned to their goals and always has their best interests

at heart. In return they will stay committed to the solutions you

advise, and, in the process, all our interests can be met without

conflict. It is also important that the advisor is a professional

member of FPI. As we know, FPI is the standard setter for financial

planning and professional financial advice in South Africa.

What changes would you like to see in the profession?

I believe that there is an important role that independent financial

advisory firms can play in the market, but they need to be better

supported by the various industry bodies through measures such

as development programmes that cater for the progressive life

stages of these enterprises. Often the need for growing financial

service providers (FSPs) is working capital or funding to assist in

scaling the business. The funding models available need to speak

to this and be flexible.

As a profession, I think we need to take pride in the strides

we have made in the industry over the years. When I started my

career 18 years ago, the conversation was around moving from

a product-led to a client-centric industry with professionals that

adhere to high ethical standards and use their technical skills to

positively impact the lives of the clients we serve.

The CFP® designation as well as the more recent REGISTERED


designations are a clear indication of our commitment to further

professionalising financial planning. The ball is now in our court

as practising members, tied and independent, to increase the

prominence of these designations by proudly associating with

them and living up to the high standards required of us by our

peers and importantly the broader community we serve. It is also

not who you work for (tied or independent) but about adhering

to the professional standard and always putting your clients’

interests, first.

As this year’s FPI ambassador, how will you use this platform to

motivate change?

Part of FPI’s strategic objectives for the coming year include driving

growth in the number of new graduate entrants into the financial

planning profession and seeing them pursuing the three South





FPI | Financial Planner of the Year

African Qualifications Authority (SAQA) registered designations

it offers. They are also focused on encouraging more experienced

members to reinstate their membership.

My efforts therefore will be in support of these objectives

through mentoring and other activities so that the next

generation see financial planning as a profession of choice. We

also need to place emphasis on the challenges that cause more

experienced planners to leave the profession which among

others is an environment that doesn’t adequately support

entrepreneurship in the sector.

You feel strongly about making financial planning more

accessible to a broader spectrum of the community. Please

share your thoughts on this. How should the profession go

about doing this?

Financial inclusion, consumer protection and financial education

are some of the imperatives that the Financial Sector Conduct

Authority and National Treasury are tasked with, which they

address through initiatives such as Money Smart Week SA’s annual

campaigns. Furthermore, the Financial Sector Codes and current

retirement fund legislation also place responsibility on those

22 www.bluechipdigital.co.za

FPI | Financial Planner of the Year



industry players to educate and empower the markets they serve

so that consumers can make more informed financial decisions for

themselves. Being in the advisory space, we know that there is a gap

between consumers understanding the theoretical aspects of finances

and implementing the knowledge in a manner that best serves them.

This gap can be neatly bridged by incorporating an advice process and

will ultimately improve consumer outcomes. I believe our profession

is well positioned to support such initiatives in a manner that ensures

that all interests are appropriately aligned.

More than anything, it has given our practice the

confidence to continue on our growth journey with the

assurance that our value proposition and approach to

financial planning is sound.

As a profession, I think we need to

take pride in the strides we have

made in the industry over the years.

Please speak to us about the importance of representation in the

financial planning profession, particularly that of females and those

of colour.

The importance of diversity and inclusion for the sustainability of any

industry is well established. Companies thrive when they embrace

different races, cultures and backgrounds because this better

positions them to respond to the needs of their clients. Ethically and

morally, it is simply the right thing to do. Finances are a very personal

matter and inclusion of female professionals in the room can help

the financial services industrydevelop products and solutions that

truly speak to the needs of this growing segment in a manner they

want to be addressed.

This award makes the journey

so far entirely worth it.

How should the profession improve clients’ experience of financial

planning and ultimately their financial planning outcomes?

I believe we do well if we consistently try to improve our clients’

experience and remove the proverbial “rubs” when it comes to

managing wealth. Our profession remains fragmented, resulting in

clients typically having to consult a number of professionals in order

to address all aspects of their financial and risk management.

To address this, we need to collaborate with other professionals

in aspects we are not licensed to give advice or if another skill set

is required. I like to use the example of a conductor in an orchestra.

We increase our value in the client’s life if we view ourselves as a

conductor in managing wealth and demonstrate to them how all these

aspects from financial, legal, risk and tax come together in harmony to

solve their most pressing issues.

Please share a message of motivation for those that have considered

competing for the FPI Financial Planner of the Year Award.

I certainly encourage you to enter the competition because if

anything it gives you the opportunity to revisit your financial

planning process and assess it against the benchmark set by FPI.

We have incorporated those learnings in our processes, reporting

and documentation and can attest to how this has further elevated

the standard of our work.


2019 – Present: Director and Wealth Manager | Wealth Creed

2015-2018: Wealth Manager | Absa Wealth

2005-2014: Advisory Partner | Citadel

2004-2005: Graduate Financial Planner | Absa PFS


2022: Advanced Diploma in Trust and Estate Administration

[University of the Free State]


2007: Post Graduate Diploma in Financial Planning [University

of the Free State]

2003: BCom (Investment Management) [University

of Johannesburg]






A focus on the future

of investing

If we had a time machine, we could go back in time and once

again experience what the investment industry was like just

a few years ago to realise how things have changed.

Jeanette Marais, CEO, Momentum Investments and Deputy CEO, Momentum Metropolitan Holdings




In 1995, there were less than 40 unit trusts (collective

investment schemes) in South Africa when we launched

Momentum Wealth, South Africa’s first insurer-owned Linked

Investment Service Provider (LISP). Today, there are over 2 000

unit trusts in South Africa.

The industry is characterised by immense complexity and

rapid change. The number and sophistication of industry players

has increased, we are bombarded by product choice and digital

transformation is shaping how we need to think about the future.

When we speak about investing of the future, words like

“megatrends” and “digital disruption” come to mind. We can

analyse how these trends are disrupting the industry, but do we

understand how to disrupt our own value propositions?

Niels Bohr, the Nobel laureate in Physics and father of the

atomic model, once said: “Prediction is very difficult, especially if

it’s about the future!”

None of us has a crystal ball, making the future a mysterious

but exciting destination. What we can do, is position ourselves

according to what we know and disrupt ourselves, rather than

be disrupted.

In my opinion, the key lies in partnerships. With increasing

complexity, we need to focus on our speciality and niche and find

the right partners to journey towards success with.


A natural place to begin is with the client of the future.

I often quote a study done by Morningstar in 2019, where

researchers gave investors a list of 15 attributes and asked them

to rank them according to what was most important for them in

their financial advisor. They also gave the same list to financial

advisors and asked them to rank the attributes according to what

they thought investors valued.

The first disconnect was with the attribute of “help me reach

my financial goals”. Investors ranked this as their top priority, while

financial advisors thought that “understand me and my unique

needs” would have been their top priority. Investors ranked “help

me maximise my returns” as the fourth-most important, while

financial advisors ranked this only 14th. Clearly, there is some work

to be done to understand the client of the future before we can

position ourselves to meet them.

The client of the future also wants to be met in a different way.

According to the Millennial Disruption Index (MDI), over 70% of

millennials said they would be more excited about a new offering

in financial services from the likes of Google, Amazon, Apple and

PayPal than from their own bank.

Changing demands of clients, the rise of the self-help investor

and advanced digital capabilities are pointing to a future where

our engagement with our clients will be very different. We need to

give clients what they want, not what we think they want.


Rising complexity means that success in the future will not be a

one-man game. The financial advisor, investment manager and

With increasing complexity, we

need to focus on our speciality and

niche and find the right partners

to journey towards success with.

investment platform of the future must partner with each other

and disrupt their value propositions to meet the needs of our

clients. In my mind, I see this partnership as a triangle between

financial advisors, investment managers and investment platforms,

with the client at the centre.

Financial advisors need to partner with other industry players

to give their clients the best outcomes. One such benefit can be

seen in partnering with a discretionary fund manager (DFM), such

as Equilibrium by Momentum.

According to a study conducted by Rathbones in the United

Kingdom in 2019, advisors who partnered with a DFM experienced

several benefits. For example, more than 70% of advisors saw

an increase in client portfolio performance and 66% quoted

improvements in their clients’ risk/return profile. On top of

this, about 60% saw an increase in revenues from their existing

clients because they could devote their energy to building those

relationships and delivering financial advice. Partnering with a

DFM frees up your capacity to focus on your value adds.

On our own investment platform, Momentum Wealth, we

analysed to determine the internal rate of return (IRR) that advisors

achieved for our joint clients over the last 10 years, ending in

December 2021. Over the period, the average yearly inflation rate

(CPI) was 5.03%. A shocking 14% of financial advisors returned

less than CPI over the period, while 61% returned CPI+2% or less.

The worrying factor is what happens to clients who need to draw

5% of their income from their living annuities, while protecting

their capital. Only 12% of advisors would have had clients who

could achieve this.

Partnering with a DFM such as Equilibrium, which specialises

in bringing balance into an advisor’s practice, can greatly enhance

a client’s outcomes with access to diversified portfolios and

professional investment management, while also serving as a

business partner, so that advisors can spend more time with their

clients and grow their practices.


There is also a strong case to adopt digital. The 2019 US Advisor

Metrics report from Cerulli Associates showed that “heavy

technology” advisory firms spend 34% less time resolving client

service issues and have 24% more time for practice management

activities, highlighting the effectiveness of technology for

increasing advisors’ ability to focus on the most important parts

of growing their business. Heavy technology-using advisory firms

also report an average of double the assets under management

of their “light” technology-using counterparts.

www.bluechipdigital.co.za 27




Do we understand how to disrupt

our own value propositions?

Clients are demanding this digital world. In fact, a report by

McKinsey issued in June 2015 already showed that at the time of the

report, 40-45% of affluent consumers who switched their primary

wealth management firm in the past 24 months moved to a direct,

digitally led firm.

We believe in the value of financial advice and a financial

advisor who digitally transforms their practice and partners with

an investment platform to integrate into their back office not only

frees up their time to spend time with clients, but also provides a

more seamless and superior personal service to clients. With us,

investing is personal and our investment platform (Momentum

Wealth) is embarking on a digital transformation journey so that

we can empower financial advisors with the tools and solutions

to help meet their clients’ financial needs and help them achieve

their goals effectively.

If you ask the question of what the future of investing looks like,

you will likely get many different answers.

What we do know is that clients are changing and digital

transformation is non-negotiable. The way to navigate this

changing world is to partner with specialists in those things

that we are not. Warren Buffet said it perfectly: “Should you

find yourself in a chronically leaking boat, energy devoted to

changing vessels is likely to be more productive than energy

devoted to patching leaks.”

Momentum Wealth (Pty) Ltd (FSP 657) is an authorised financial services provider and part of Momentum Metropolitan Life Limited. Equilibrium Investment Management (Pty) Ltd (Equilibrium) (Reg

no. 2007/018275/07) is an authorised financial services provider (FSP32726) and part of Momentum Metropolitan Holdings Limited, rated B-BBEE level 1. Momentum Investments is part of Momentum

Metropolitan Life Limited, an authorised financial services (FSP 6406) and registered credit (NCRCP173) provider.

28 www.bluechipdigital.co.za

INVESTMENT | Responsible investing



ESG: hype or pathway

to a better future?

There is hardly a conference or investment discussion lately

that does not put environmental, social and governance

(ESG) factors front and centre. There is a myriad of good

reasons why this is the case, although I do sometimes

share the view that the ESG discussion is driven more by the

marketing agenda than from an investment perspective.

As a broad basket of principles, I am totally on board with the

intent of ESG. Environmental issues are real, and we need to address

them or we will gift our children a future of turbulent weather and

a planet that is more uncomfortable to live on than it is today.

Looking at social factors, we cannot have a stable society if there

are glaring inequalities between people.

One of the future challenges will be intergenerational wealth

transfer as the younger generation will have fewer opportunities

compared to their parents in a more competitive and winnertakes-all

environment. Governance and the proper functioning of

business and ultimately markets is a key factor for the accumulation

and growth of wealth.

How should investors think about

ESG and differentiate between the

hype and real-world impacts?

All participants need to get their fair share and bad governance

allows different sets of stakeholders to get a disproportionate share

of economic benefits, either through preference mechanisms or,

in the worst-case scenario, through corruption.

One of the challenges of ESG is that the three different

components sometimes do not align and in other cases pull in

opposite directions. As an example, addressing environmental

concerns can have detrimental effects on the social factor. The

transitioning away from coal can lead to job losses in areas that

are dependent on the business and power stations that rely on

coal as an energy source.

How should investors think about ESG and differentiate between

the hype and real-world impacts? To me, the obvious test is whether

there is evident intent and transparency. A credible approach to

ESG needs to be deliberate with a clear-cut approach and palpable

outcomes. These outcomes and evidence should be shared openly

and transparently. It is also important to recognise that there are

many trade-offs involved and when evaluating whether the ESG

approach undertaken by an investment manager is credible, it

must be apparent that these trade-offs and conflicts need to be

managed carefully.

At Momentum Investments, we follow an integrated approach

and consider how best and practically to apply ESG in different

asset classes and investment vehicles. We have a climate change

policy that incorporates a just transition, which recognises that

action on environmental issues needs to consider the social

impact, as well as incorporate the concept of fair share, meaning

the main contributors to carbon emissions – the developed world

– need to take the brunt of actions to address climate change.

Fair share is not only a philosophical approach but also a practical

one – the developed world has financial resources that are just

not available in the emerging world.

We therefore believe the right approach is a nuanced

approach. We invest in renewable energy projects to address

environmental issues but also recognise that we need to invest

in Eskom bonds (government guaranteed of course), because

energy security is important and currently one of the biggest

threats to economic growth.

Can adoption of ESG drive positive

change and shape our future world? In

my view undoubtedly so, but it needs

to be a considered approach.

At Momentum Investments, we drive

both intentionality and transparency

and openly share the progress

(and pitfalls) that we have made in

integrating ESG. For more information,

visit our Responsible Investing page on


At Momentum Investments, we take

our role of managing clients’ money

very seriously. We continuously assess

what the best approaches and practices

are to prudently manage clients’ capital.

Through sustainable investment

practices we can deliver real results

for clients that ultimately benefit all

stakeholders, because with us, investing

is personal.

Mike Adsetts, Acting

Chief Investment Officer,

Momentum Investments

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






Why optimising tax incentives

is a great way to create wealth

Almost every financial decision your clients make has a tax implication.

Just as fuel efficiency is one of the important aspects to

consider when buying a car, so should tax be an important

consideration for any financial plan and investment strategy.

With the smart use of tax-incentivised investment products,

your clients can create significant wealth with help from the taxman.

Tax can be complicated and confusing and for most people

it is a sensitive and personal subject they choose to avoid. But

with a few smart moves, especially when planning for financial

independence or retirement, they can benefit significantly from

tax incentives and increase the probability of them achieving their

investment goals.

They can use two tax-efficient ways to create wealth over time:

a retirement annuity and a tax-free investment (also known as a

tax-free savings account). If they are already using one or both,

they can invest more into them, within the limits, to make full use

of the available tax opportunities.


Every tax year a person can claim a tax deduction for the money

invested in a retirement fund. The tax deduction is limited to 27.5%

of their taxable income or remuneration before any deductions

are made, whichever is higher, subject to a maximum of R350 000.

They can do this whether they are self-employed or earning

a salary but not contributing the full amount to their employer’s

retirement fund.

If clients have not yet used the full tax deduction available

to them for the tax year, they can make an additional lump sum

payment to their retirement annuity before the tax year ends on

28 February 2023.

In addition to the tax break clients get on the money they invest,

they also enjoy tax-free growth in their retirement annuity – they

don’t pay income tax, dividends tax or capital gains tax while the

money is growing.

But, some people say, when you retire you will pay tax on the

income. This is true, but after the age of 65 clients could pay less

tax because of lower income levels in retirement, higher rebates

and higher deductions for medical expenses.


Although clients don’t get a tax deduction for money they invest

in a tax-free investment, they still enjoy tax-free growth. And they

won’t pay any tax on the proceeds when they decide to take money

out of the investment.

Since the 2021 tax year, clients can invest up to R36 000 every

tax year (R3 000 per month) in a tax-free investment, limited

to R500 000 over their lifetime. Before this, the yearly limit was

R33 000. Government may adjust these limits from time to time.

The illustration (above) shows the significant effect that tax-free

growth, coupled with the wonder of compounding, could have

on an investment over the longer term. Although a tax-free

investment gives clients the opportunity to withdraw money at

any time, the benefit of leaving the money to grow for as long as

possible should outweigh the urge to withdraw money unless it

is for an extreme financial emergency.


Investing is personal and each client’s

circumstances unique. The secret is to make

sure that clients use these tax incentives

optimally according to their specific situation

every year and consistently over time. By

doing this they can reduce the effect of tax

on their investments and increase the growth

potential on their journey to success. Using the

Retirement Annuity Option and the Flexible

Tax-free Option on the Momentum Wealth local

platform can help you implement tax-efficient

investment solutions for your clients so that

they can reap the full benefits of tax incentives

available to all taxpayers every year.

Pierre Jean Marais,

Retail Marketing,

Momentum Investments

Momentum Wealth (Pty) Ltd (FSP 657) is an authorised financial services provider and part of Momentum Metropolitan Life Limited. Momentum Investments is part of Momentum Metropolitan Life

Limited, an authorised financial services (FSP6406) and registered credit (NCRCP173) provider.

INVESTMENT | Thematic investing



The dawn of

thematic investing

We live in an increasingly complex, connected and

ever-changing world, where unprecedented digital

innovations are disrupting entire industries and at a

time when we are facing major human and climate

challenges to build the world of tomorrow for future generations.

It is also changing the way we look at investing. Thematic

investing has become progressively more popular and focuses on

the future investment landscape, targeting economic development

and trends that will shape the future. It is a holistic solution that

will not only focus on a single event or area of development but

will capture a wide variety of themes that may affect the world.

Disruptive innovations, ideas and societal changes are embraced

in today’s world, and this is creating opportunities alongside

it. Technological innovations, demographic and social trends,

urbanisation and environmental challenges are here to stay, and

the importance thereof is continuously being forced into the

spotlight. These developments converge into larger themes that

will endure over the longer term.

All these themes create unique investment opportunities that

will persist as disruptive ideas and technological advancements

are rapidly reshaping the world we live in. However, not all themes

are created equal. Some are structural and long term in nature

and some are short-term anomalies but every change represents

an investment opportunity.

Thematic investing encapsulates the art of identifying these

opportunities, based on personal experiences and aligning

investments with beliefs and ideas. The Momentum Future

Trends Fund is premised on a top-down investment approach

that helps investors gain exposure to trends and ideas through

a portfolio of companies expected to benefit most from such

transformative and structural changes.

Our unique and innovative investment approach favours themes

where the fundamentals are not only about one specific sector.

We believe six mega-trends will shape the future:

• Climate change

• Technological innovation

• Demographic change

• Lifestyle

• Space exploration

• Shifting economic power

Diversification is important, thereby reducing the risk should a

certain trend fail to materialise.

We believe that an active strategy is the way to implement

and manage the Momentum Future Trends Fund. The underlying

themes will be executed through specialist mutual funds or

exchange traded funds (ETFs). This ensures that we have control

over the risk and allocation to themes.

The Momentum Future Trends Fund is suited for investors

with a long-term investment horizon and consenting to a high

level of risk, while seeking to diversify

their portfolios. The fund provides

compelling investment opportunities

for those willing to take a different

perspective and concentrate on the

big picture. In a broader multi-asset

investment portfolio, this fund will

give investors access to future trends

that will shape the future of the world

we live in, giving them access to

higher-yielding growth asset classes

that focus on future innovation.

With us, investing is personal.

With the Momentum Future Trends

Fund, clients not only can grow their

capital over the long term, but it also

gives them the opportunity to help

fund the way the future will shape

and unfold.

For more information go to

momentum.co.za/MCI or speak to

your financial advisor.

Eugene Botha, Deputy Chief

Investment Officer, Momentum


Momentum Collective Investments (RF) (Pty) Ltd (the “Manager”), registration number 1987/004287/07, is authorised in terms of the Collective Investment Schemes Control Act, No 45 of 2002 to administer

Collective Investment Schemes (CIS) in Securities. The Manager is the manager of the Momentum Collective Investments Scheme. Standard Bank of South Africa Limited, registration number 1962/000738/06,

is the trustee of the scheme. CISs are generally medium to long-term investments. The value of participatory interests may go down as well as up and past performance is not necessarily a guide to the

future. The terms and conditions, a schedule of fees, charges and maximum commissions and additional risks are available on the minimum disclosure document (MDD) and quarterly investor report

(QIR) for each portfolio which is available on www.momentum.co.za/mci. All performance figures are net of fees and represents the A class in each portfolio. Momentum Investments is part of Momentum

Metropolitan Life Limited, an authorised financial services (FSP6406) and registered credit (NCRCP173) provider.





INVESTMENT | Cryptocurrency


as an investment

Cryptocurrencies are sweeping the world in terms of news headlines, but the question

remains in terms of the suitability of the asset class other than pure speculation.

There are two key questions that investors face to determine the

suitability of including crypto assets in an investment portfolio:

1. What are the requirements in terms of credit intermediation,

regulation and infrastructure as well as cost?

2. More importantly, what should the role be of crypto assets

within a portfolio?

These questions are addressed by looking at a couple of specific

investment factors, risks and market dynamics.


The investment case can simplistically be broken down into

relevance and risks on the one side and then return expectations

and diversification on the other.

Rates of return are measured by an increase in the asset

price and the interest paid or the dividend stream on a specific

investment. The only source of return for a crypto asset is to

increase in price. Given the nature of the change in price over

time, driven by pure supply and demand and perhaps other

speculative views, crypto assets do have the ability to behave

very differently to traditional asset classes and perhaps provide

a hedge against the volatility of global monetary systems and

therefore a source of diversification.

Although cryptocurrencies are permitted in most of the

world’s major economies, there are still a range of risks, in

addition to volatile market price movements, that should raise

concerns for inclusion in an investment portfolio. These risks

include security risks, valuation risk and uncertainty around the

regulatory future.

Besides these risks, there needs to be an internationally trusted

marketplace for institutional-only cryptocurrency trading.

However, the most interesting development in cryptocurrencies

is in the world of investment fund management. Specialist

cryptocurrency funds have been created which seek to buy and sell

in the same way one might with equities or other securities. The

expectation for this market is to grow quickly as people seek noncorrelated

alternative investments.

There are several possibilities to explore over time as risks

subside and more visibility around regulations transpires:

• Direct investments: these can be risky, however, especially

when investing in larger amounts, given storage and

execution risks.

• Futures: available if one has the expertise to trade them.

• Passive crypto funds: through exchange-traded products, for

example. These offer capacity but are a blunt instrument. They

have concentration risk (because of the dominance, for the

time being, of Bitcoin).

• Active hedge funds: exploitation of the inefficiencies

presented by the market.

• Venture capital funds: these can offer purer forms of Digital

Ledger Technology (DLT) exposure, but often have long lockups.

Cryptocurrency as an investment option would greatly increase

fiduciary risk and liability. Traditional valuation methods for

determining what a stock is worth do not necessarily work when

evaluating crypto assets. Crypto volatility requires investors to be

patient over the long term and during significant up and down

swings, which could result in poor investment outcomes if you

were to exit the sector too quickly.

An improved infrastructure is needed to accommodate

investments and encourage more widespread acceptance of

cryptocurrency. Besides that, potential regulatory and legal

hurdles create market hesitation to use cryptocurrency. Until

a properly regulated and accountable fund exists, based in a

respectable financial territory and with strong custodianship

arrangements in place, we must tread with caution.

At Momentum Investments, we relentlessly pursue and

interrogate ideas and opportunities to best deliver on our

outcome-based investing philosophy. With

us, investing is personal, and we seek those

investment ideas and opportunities that will

allow our portfolios to meet clients’ long-term

expectations and objectives as prudently and

robustly as possible.

While the simple yet profound wisdom

of Warren Buffett – “If you don’t understand

it, don’t invest in it” – provides the answer,

some investors may still feel compelled. It

is important to remember that the crypto

space can be highly volatile. Even though

cryptocurrencies have been declared as a

financial product under the Financial Advisory

and Intermediary Services Act of 2002 there

is still a lot of uncertainty regarding the

regulation of these instruments and therefore

makes investing in them a risky proposition.

Eugene Botha, Deputy

Chief Investment Officer,

Momentum Investments

Momentum Investments is part of Momentum Metropolitan Life Limited, an authorised financial services and registered credit provider (FSP 6406).

INVESTMENT | Collectables



Why do people invest?

Why do they save?

Many people invest to fulfill their wants and desires.

Every single person on the planet, no matter their

background, race or circumstances, has dreams. And

a dream is often molded by the tangible (somewhat

materialistic) items money can buy.

Consumerism is a term that came about in the early 1900s and

today it is defined as the protection or promotion of the interests

of consumers. I would change this definition and rather say, it

is people that buy products and services that are created for

people. And today we live in a world dominated by consumerism.

The largest companies in the world like Apple, Amazon and Tesla

all provide products to consumers like you and me. And if their

size is anything to go by it tells us that the dominant theme is that

people like us are buying items that fulfill our desires. It’s no longer

just an iPhone but a watch and an iPad in one. It’s no longer just a

car but one that drives itself and is focused on the sustainability of

our planet. This is the essence of consumerism today.

The next logical question is: can some companies be perceived

as more desirable than others? The simple answer is, yes. Take the

wonderful world of luxury watches. Recently Swatch partnered with

Omega for a collaboration that celebrated Omega’s Speedmaster.

Swatch has always been recognised as a hip and happening brand.

Through a smart marketing brand-play it had people queuing for

hours trying to get their hands on this piece. On the resale market,

some of them were even going for quadruple the original sales

price. This is a prime example of our world of consumerism.

People save for months and years to buy an IWC or Jaeger-

LeCoultre (both super-luxurious watch brands) and luxury

sportscars like Ferrari or Lamborghini. These individuals have an

acute understanding of how to get there to realise the dream.

The recipe for success begins with having a financial plan and

then finding a place to invest or save. For clients to realise their

dreams, the gap to earning capacity and the price of the item is

often too wide to save the cash under the mattress and hope for

the best. There are two very important contributors to investing.

Firstly, the return earned on a fund and secondly, having these

returns reinvested month after month to build on the money

already invested. This is how investors can make the eighth

wonder of the world – compound growth – work for them.

So how does the magic of compounding work? Using a

simple example: if your client put R100 000 under their mattress

five years ago they would still have the same amount today,

but thanks to inflation that money is

worth less. But if they invested in an

established equity fund five years ago

and this fund delivered a yearly return

of 7% then the client would have R141

477.82 or just over 41% growth based

on quarterly compounding. If you

chose not to reinvest and take your

growth out every year your client would

have received R35 000 – the magic of

compounding allowed the investment

to grow by an extra R6 477.82. Thanks to

compounding, you get an 6.48% growth

on your investment and bringing those

dreams a little closer. With us, investing is

personal. We understand that individuals

are unique and have different needs

(and dreams) and why it is important to

partner with the right people to achieve

your investment goals.

For more information go to


Kapil Joshi, Head of

Momentum Collective


The calculation above is intended only as guideline, always speak to a financial advisor for financial advice. Momentum Collective Investments (RF) (Pty) Ltd (the “Manager”), registration number

1987/004287/07, is authorised in terms of the Collective Investment Schemes Control Act, No 45 of 2002 to administer Collective Investment Schemes (CIS) in Securities. The Manager is the manager

of the Momentum Collective Investments Scheme. Standard Bank of South Africa Limited, registration number 1962/000738/06, is the trustee of the scheme. CISs are generally medium to longterm

investments. The value of participatory interests may go down as well as up and past performance is not necessarily a guide to the future. The terms and conditions, a schedule of fees, charges

and maximum commissions as well as additional risks are available on the minimum disclosure document (MDD) and quarterly investor report (QIR) for each portfolio which is available on www.

momentum.co.za/mci. All performance figures are net of fees and represents the A class in each portfolio.






The Gale of

Creative Destruction

We may look back on the year 2022 as the formative

period for what drives investment returns over the

next decade and longer. While it may feel like a period

of wealth destruction, in fact it may be the birth of the

next phase of wealth creation.

This concept of “creative destruction” is not new. In Hindu

mythology, the three Gods Brahma the Creator, Vishnu the Preserver

and Shiva the Destroyer (below left) work in a perpetual cycle with

the belief that they need to coexist so that balance is maintained

between old and new.

Similarly, Joseph Schumpeter (below centre) spoke about this

concept as a natural process of evolution, where old systems need

to die to be replaced with new ones.

Karl Marx (below right) applied it to finance and investments,

however: “The idea of creative destruction or annihilation implies

not only that capitalism destroys and reconfigures previous

economic orders, but also that it must ceaselessly devalue existing

wealth (whether through war, dereliction, or regular and periodic

economic crises) in order to clear the ground for the creation

of new wealth.” It feels a little like Marx was on the money in

2022. We had all the features of his theory present in war (Russia/

Ukraine), dereliction (cryptocurrencies) and economic crisis

(inflation driving economic recession).

Was wealth really being destroyed? In some cases, yes. The FTX/

cryptocurrency failure destroyed wealth. Arguably an investor

holding global government bonds also lost a substantial portion

of their capital last year.

But we are talking about larger events here. The Global Financial

Crisis in 2008/09 was a period of wealth destruction which gave

birth to a period of wealth creation. But this came with new rules:

higher regulation on banks and the capital they hold; a new era

of support and bailouts by governments; and suppressed interest

rates which would continue for the next 14 years. These actions

and others underpinned a massive period of wealth creation.

The consequences of this phase started to be felt in 2022. Are we

entering the next phase of creative destruction?

34 www.bluechipdigital.co.za




Are we entering the next

phase of creative destruction?

There are numerous examples of this theme playing out in

global markets:

• The rise of sustainable investing, or “ESG” investing driving the

destruction of industries such as fossil fuels and the creation of

industries such as electric-powered transport.

• Chinese regulation on how companies can profit from

the population, while simultaneously creating “common

prosperity” is another example of creative destruction at

work. Many Chinese technology-oriented companies suffered

in 2021/22. What may we see a decade from now? Economic

aspirations and human ingenuity will create a new opportunity

for investors.

• Global political tensions have started to break down the

globalisation trend we have seen for several decades.

“De-globalisation” is real and the destruction of the default

outsourcing to the East approach is creating new investment

opportunities for providers in other countries.

• Higher interest rates (important: they are not yet high! Just

getting back to normal) have wreaked havoc on assets which

have not factored in the potential that financial support from

governments may wane. Does this drive the reallocation of

investment capital away from longer-term, higher-growth

industries with big payoffs, but big uncertainties, towards

industries which are more visible, more tangible and where

investment returns are more likely to be lower but positive?

• What to make of cryptocurrency? The destruction of value in this

asset class we saw in 2022 may well lead to its viability in future.

While it is built on the premise of “DeFi” , the likely regulation

to come – which is what happens when the man on the street

loses their money due to mismanagement or dereliction – may

well underpin a more viable approach to using this technology

in future.

The current period of creative destruction is necessary, for without

this release valve dampening financial excesses the problem may

have become too big to fix.

The GFC was a great example of this, born out of the Tech

Bubble (1999/2000) and left to its own devices until it imploded

in 2008. Recall also that Amazon and Google were born out of

this tech bubble.

As investors, we can’t change the course of history, nor can we

change the mega-trends such as these highlighted above. But

we can consider how to navigate these trends when looking to

preserve and grow wealth.

Rule number one is don’t lose capital permanently. FTX is

a perfect example of what to avoid here, as it fails not only an

investment merit case, but also a financial due diligence case

(the assets were not held in any form of safe custody, and the

business was established outside the ambit of strong oversight,

transparency and regulation). We can mitigate this risk in wealth

management by acting prudently with regard to what investments

may be worth and ensuring that there is good governance in the

underlying assets.

At times avoiding these risks or the pressures to invest

where capital may be lost is harder than it appears. Two

fundamental ways to protect investors are: diversification (ie

spread your investments across assets, regions, sectors and

currencies) and position sizing (the amount of capital invested

in any particular asset).

Rule number two is to be humble. Acknowledge that you don’t

have all the answers, that the world is too complex to forecast and

that more things can happen than what you can consider may

happen. Being humble does not necessarily mean you can’t make

sensible investment decisions; in fact, it can help promote more

sensible decisions as your typical behavioural biases and errors

are less exposed.

Context is important here. Most often clients are investors with

multi-decade timeframes which

means they will be caught up

in both the excess of creation,

as well as the devastation of

destruction. But importantly, the

trend is upwards. If you can help

clients to hold on, the repeating

cycles of creative destruction

work in your and their favour to

build wealth.

Moods change quickly; just

12 months ago investors were

positive and returns were good.

Where will we be in this creativedestruction

cycle 12 months

from now?

Ian Jones, CEO, Fundhouse






How supporting

workers brings business

and investment benefits

Companies increasingly recognise the importance of

supporting employees through difficult times. Many have

taken a long-term view by investing in their people.

The world had barely begun its recovery from the

devastating human and economic effects of Covid-19

before the conflict in Ukraine triggered a spike in

commodity, fuel and food costs. More than 70-million

people around the world could be pushed back into poverty as a

result, the UN has estimated. Inflation in major economies is at the

highest levels in three decades, which is putting disproportionate

pressure on the poorest in society.

This is reflected in markets, with investors recognising that

governments have little fiscal room to manoeuvre. Against this

backdrop, the pressure on companies to support vulnerable or

lower-paid workers has intensified. At the same time, their financial

flexibility to do so has shrunk. However, companies increasingly

recognise the importance of supporting their key assets –

employees – through these difficult times. Many have chosen to

take a long-term view of their business by investing in their people.

To better understand the challenges facing businesses and

the choices they face, we have recently engaged with leading

organisations in the field, with some of those conversations

preserved through podcasts.

Through those engagements and the weight of academic

research, it’s clear that investing in workers’ wages can bring

material business benefits. Lower staff turnover and more

productive workers both make for more profitable and durable

businesses. Companies must be sensitive to the competitive

pressures of their industries, and blanket demands or

approaches can be counter-productive if they result in

reductions in workforce or increased costs of products, for

example. But we consider the long-run benefits an important

goal all companies should work towards. The investment

benefits of paying a living wage are also clear. The chart on the

right plots the returns of UK-listed companies, separated into

36 www.bluechipdigital.co.za




Andy Howard, Global Head of

Sustainable Investment, Schroders

Source: Refinitiv, Schroder calculations

those that have paid higher wages than the average

of their sector peers over the last five years and those

which have paid less. Higher-paying companies have

outperformed lower-paying competitors by over 3%

annually over the past five years.

More and more companies seem to agree. In the UK,

our analysis shows that more companies have become

accredited Living Wage employers over the last year than

over the previous five years combined.

We have engaged with portfolio companies to

encourage fair wages for many years. Our Engagement

Blueprint, published in 2022 laid out that expectation in

detail. We will continue to use our voice and influence to

encourage companies to continue to invest in their most

important assets.

Important Information

For professional investors and advisors only. The material is not suitable for retail clients. We define “professional investors” as those who have the appropriate expertise and knowledge eg asset managers, distributors and financial

intermediaries. Any reference to sectors/countries/stocks/securities are for illustrative purposes only and not a recommendation to buy or sell any financial instrument/securities or adopt any investment strategy. Reliance should

not be placed on any views or information in the material when taking individual investment and/or strategic decisions. Past performance is not a guide to future performance and may not be repeated. The value of investments

and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of investments to fall as well as rise. The views and opinions

contained herein are those of the individuals to whom they are attributed and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. Information herein is believed to be

reliable but Schroders does not warrant its completeness or accuracy. Issued in November 2022 by Schroders Investment Management Ltd registration number: 01893220 (Incorporated in England and Wales) which is authorised

and regulated in the UK by the Financial Conduct Authority and an authorised financial services provider in South Africa FSP No: 48998.






The impact of


Preparing for the “Mother” of all

market conduct legislation

Anton Swanepoel, Founder, Trusted Advisors




At the time of drafting this article, it is industry’s

understanding that National Treasury is intending to

submit the Conduct of Financial Institutions (COFI) Bill

to Cabinet in the first half of 2023. When promulgated,

COFI will replace the Financial Advisory and Intermediary Services

(FAIS) Act and many other pieces of financial services legislation.

The purpose of this article is firstly to create awareness, so that

financial services providers (FSPs) will know what is coming in

2023, and secondly, to provide some perspective on what the

impact is going to be on FSPs. Lastly, to assist Key Individuals and

representatives to prepare mentally for the transition from FAIS to

COFI, which will happen in various stages over the next few years.

To say that the capacity of financial

services providers has already

been stretched beyond the limit

would be an understatement.

Recognising the frustration

Amid all the challenges and changes that financial advisors

and intermediaries have had to endure over the years since

the implementation of the Financial Intelligence Centre Act

in 2001, the FAIS Act in 2004, Retail Distribution Review (still

ongoing) and the more recent implementation of the Protection

of Personal Information Act, I think it is fair to say that most

advisors and intermediaries are “legislatively exhausted”. If we

add the ripple effects of Covid, the crippling effect on businesses

due to loadshedding, the ongoing political chaos, corruption,

general lawlessness, and how all these factors impact the South

African economy negatively, I for one do not blame advisors and

intermediaries who find it hard to be filled with enthusiasm for

COFI to be introduced.

To say that the capacity of financial services providers

has already been stretched beyond the limit would be an

understatement. I have yet to find an advisor who does not

believe that we are totally over-regulated as it is. In short, the

world of advisors in South Africa is beyond a perfect storm

already. Unfortunately, we have little choice but to brace

ourselves for the next regulatory wave if we want to transition

from FAIS to COFI effectively. I salute those who have been

resilient enough to keep on going but, as if the recent past

has not been challenging enough, your business will need yet

another facelift as COFI is upon us.

with the FSCA for activities as defined in the COFI Act when it

comes into effect. The second observation is that the current

FAIS Act, the fit and proper requirements, the FAIS General Code

of Conduct, and a few Board Notices consist of approximately

160 pages of legislation. COFI must be read with the provisions

of the Financial Sector Regulation (FSR) Act and the Conduct

Standards that will replace the provisions of the FAIS General

Code of Conduct. When COFI comes into effect financial services

providers will have to deal with over 900 pages of market conduct

legislation, excluding FICA and POPIA. Purely from a volume point

of view COFI is going to be like FAIS on serious steroids.

I would not blame you if you wanted to stop reading at this

point and shout, “When is this going to stop? Enough already!”

but it is important that you read on after taking a moment to

regain consciousness...

The importance of perspective

Welcome back! Based on my experience in the industry over a

period of more than three decades, some people will react to the

changes, and some are going to respond. Although thesauruses

use these terms interchangeably, in practice a reaction is usually

quick, without taking time to process or considering all the facts,

and it is full of emotion. A response on the other hand is usually

a reply after taking a breath to get past any emotional reactions,

carefully considering the facts and circumstances, and gaining

insight and perspective. It is of vital importance that you resist

the temptation to (over) react.

The impact of COFI on FSPs

The first thing that FSPs will have to consider is that, subject to

transitional arrangements, all FSPs will have to be re-registered






We are hopeful that the Regulator will indeed take the

principles of proportionality into consideration as highlighted

in COFI and the FSR Act to reduce the impact on smaller FSPs.

An informed response to COFI, after processing all the facts and

gaining perspective, will be far more valuable and constructive

than any quick, emotional reaction. Seek first to understand...

Responding to COFI – calling all Key Individuals!

As we get closer to the implementation of COFI, this is an

important message to all Key Individuals (KIs) – those who

are accountable for managing and overseeing the activities

of everyone in the FSP. Don’t react! Respond. Don’t simply

outsource COFI to your compliance officer(s). If you do, COFI

will become yet another compliance conversation when it is a

serious business consideration.

Although I have a deep and authentic respect for the role

of compliance officers and sincere appreciation for how many

competent compliance officers do their best to assist FSPs, if you

(as the KI) do not take extreme ownership of the essence of COFI,

your business will be compliance driven instead of business driven

in a compliant way. There is a significant difference between

the two approaches. In my journey as a practice management

and compliance consultant over the years I have seen countless

businesses that have been crippled by a compliance-driven

approach and with COFI it has the potential to get even worse

due to the volumes and complexity the legislation. If you want

your FSP to be business driven, rather than compliance driven,

you will have to take the lead in the COFI conversation.

By all means take your compliance officer(s) along on the

journey, but you will have to be the leader who creates order in

the regulatory overload, and even “chaos” for some, by breaking

up the components of your FSP into small pieces and prioritising

them. This is going to be a time for you to make sure that your

business is built on a sound foundation.

If you have a solid foundation, you can build or rebuild

anything on it. If you have a weak foundation, I am afraid you

will find yourself in serious trouble at some point. I believe that

COFI will force everyone back to the proverbial drawing board.

The illustration below will provide a helpful point of reference as

it provides an executive summary of all the key building blocks

of your business that are necessary to be successful – under

any laws.

COFI will force you to take a step back and re-evaluate your

current business philosophy, culture and processes. It is not

simply going to be business as usual. My advice: Prepare to

succeed under COFI.

The fundamentals of practice management for representatives.

Credit: Anton Swanepoel

40 www.bluechipdigital.co.za


“As dealing with change becomes a regular activity, leading it becomes a

skill to hone, an internal capacity to master.” – Arnaud Henneville

INVESTMENT | Multi-asset funds



One thing we can all be certain of is change and

investing is no different. Managing this flux, and

dealing with risk in a portfolio is a differentiating

tactical factor among institutional money managers.

Large, sophisticated, offshore institutional money managers, like

endowment funds, have been using multi-asset or multi-strategy

mandates as the core building blocks in their portfolios to address

these challenges of change.

The three key reasons for this are: firstly, there is better

mandate flexibility across asset classes; secondly, leaving the

asset allocation decisions to professional money managers

operating in the financial markets at the “coalface”; and lastly,

asset allocation switches taking place within a multi-asset fund

also saves clients unnecessary costs which are associated with

their capital being switched from one fund to another when an

asset allocation change is affected.

Adopting this strategy to manage change has seen both

the multi-asset equity and multi-asset income categories grow

to become the largest ASISA product categories in the local

market. These categories are also the most diversified, allowing

a very broad range of instrument exposures, both locally and

offshore. In the multi-asset equity space these include equities,

fixed income, property, commodities, cash and portfolio hedges,

while in multi-asset income it includes a broad range of fixedinterest

instruments with varying interest rate risks.

Visio Fund Management was

founded in 2003 as a multi-asset

fund manager. The team is adept

at handling change and managing

multi-asset funds. Visio’s success

has been recognised by the firm

having been awarded Citywire’s

“Best Mixed-assets Aggressive

Manager” for performance over

the last three years. The team’s

key operating tenets since

inception have been, “Keep it

simple”, “Capital preservation is

key” and “Be good citizens”. These

solid strategies can be applied to

any scenario to bring change.

Speak to us. We love what we do,

and we’d like to do it for you.


Craig French, Product Specialist,

Visio Fund Management




Gas can

stabilise the



Petroleum Agency South

Africa is granting licences

to explore for gas, a fuel

that can assist the transition

to a net-zero economy.

South Africa is a net importer of fuel and the country’s

refining capacity has been reduced in recent years.

To counter this trend, exploration has been on an

upward trajectory. Partly this is explained by growing

certainty in the regulatory environment and by the good work

done by Petroleum Agency South Africa (PASA), the agency which

evaluates, promotes and regulates oil and gas production in the

country. This has seen increased interest in South Africa’s potential

as a destination for investment dollars.

Underpinning PASA’s strategy is the need to ensure that all

prospecting and mining leases are for the long-term economic

benefit of South Africa. This applies to every kind of licence issued

by the agency, be it in old technologies or new.

Can the economy grow by exploiting the country’s natural

resources while at the same time transitioning to a greener future?

PASA CEO Dr Phindile Masangane insists that it’s an economic

imperative for South Africa to do just that.

Dr Masangane points out that with South Africa’s excellent

solar resources it makes sense to localise the solar value chain to

boost manufacturing but the country should not ignore what it

has. “At the same time, we know that the gas value chain is well

established in the country, so let’s also capitalise on that.”

The multiple uses of gas could play a major role in helping

South Africa transition away from fossil fuels while at the same time

boosting economic growth. “We need gas not just in electricity

and transport,” noted Dr Masangane, “but importantly for South

Africa, which is in desperate need of an economic turnaround, is

for us to use this gas for our manufacturing industry.”

Referencing a section on gas in a report on energy in Africa

by the International Energy Agency, Dr Masangane says, “Most

of what Africa produces is actually exported out of the continent.”

The report notes that Africa accounts for less than 3% of the

world’s energy-related carbon dioxide emissions. Says Dr Masangane,

“This report calls for us as Africa to extract the gas and produce it

and use it not just to power the continent but to reindustrialise the

continent and industrialise in the case of nations that are still to go

through that stage.”

Another benefit of the IEA report is that it demystifies some ideas

about gas that are not based on science. Says Masangane, “I think

there is a misconception – sometimes I think it is deliberate – that the

use of oil and gas is not consistent with the decarbonisation strategy.

The report unpacks that.”

Many of the 600-million African citizens who are without

electricity use distinctly environmentally-unfriendly methods to

cook. Masangane notes, “If they were to use gas, whether it is LPG

or natural gas or another form of gas for cooking, that in itself is

decarbonisation because then you arrest the negative impact of

deforestation.” She describes as a “false

narrative” the idea that the use of oil and

gas cannot be part of a decarbonisation

strategy and is pleased that the IEA report

puts that argument to rest.

National government’s policy is

to diversify the country’s energy mix

which is currently coal-dominated to

a lower-carbon future by introducing

proportionately higher renewable-energy

resources such as wind and solar, into

the energy mix as well as gas-to-power.

Gas burns with less than half the CO2

emissions from coal and additionally has

no SOx emissions.



PASA CEO Dr Phindile Masangane




Gas is therefore a suitable transition fuel towards a lower-carbon

economy for South Africa especially since gas-to-power technologies

are flexible and would therefore complement the intermittent

renewable energy being added to the national grid.

Exploration in South Africa

In 2022 TotalEnergies and its partners submitted a production plan to

PASA for their recent discoveries off the coast of Mossel Bay, an event

which coincided with the beginning of commercial operations of

Tetra4’s natural gas project in the north-eastern Free State. These two

events prove that investors can see that the South African resources

equation adds up to an investable proposition.

Both of these projects came about through the licensing authority

of Petroleum Agency South Africa (PASA), reporting to the Minister of

Mineral Resources and Energy (DMRE). PASA regulates and monitors

exploration and production activities and is the custodian of the

national exploration and production database for petroleum. Its role

was statutorily endorsed in June 2004 in terms of the Mineral and

Petroleum Resources Development Act of 2002.

In terms of strategy, the agency actively seeks out technically

competent and financially sound clients to whom it markets

acreage, while ensuring that all prospecting and mining leases are

for the long-term economic benefit of South Africa. As custodian,

PASA ensures that companies applying for gas rights are vetted to

make sure they are financially qualified and technically capable,

as well having a good track record in terms of environmental

responsibility. Oil and gas exploration requires enormous capital

outlay and can represent a risk to workers, communities and

the environment. Applicants are therefore required to prove

their capabilities and safety record and must carry insurance for

environmental rehabilitation.

Environmental issues are increasingly playing a big part

in discussions about how best to utilise South Africa’s natural

resources. As part of an attempt to engage in a broader

discussion on policy issues, a joint colloquium was held in

2022 on the subject of how to balance South Africa’s energy

needs with the country’s climate change commitments. The

colloquium, and several online events which prepared for and

anticipated the main event, was jointly hosted by the DMRE, the

Department of Forestry, Fisheries and the Environment (DFFE)

and PASA.

As part of a drive to create certainty for investors, a new bill

has been introduced to replace old legislation. The Upstream

Petroleum Resources Development (UPRD) Bill provides for

greater certainty in terms of security of tenure by combining the

rights for the exploration, development and production phase

under one permit.

The draft bill was first published in June 2021 and discussions

with industry stakeholders are ongoing. Organisations such

as the South African Oil and Gas Alliance (SAOGA) will be

coordinating responses to present to parliament. Objectives of

the bill include:

• expanding black participation

• promoting local employment and skills development

• creating an enabling environment to accelerate exploration

and production of South Africa’s petroleum resources.

Revised draft regulations related to hydraulic fracking in

the gas-rich Karoo region were published by the DFFE in July

2022 for public comment. Fracking is a drilling technique that is

widely used in other jurisdictions such as the United States, but

environmental concerns have been raised. Dr Masangane told

Bloomberg in an interview that groundwater and geological

studies are being conducted in the biodiversity-rich areas of the

Karoo and that once regulations have been finalised, seismic

activity will be undertaken to establish which blocks to license.

petroleumagencysa.com Petroleum Agency SA @sa_petroleum Petroleum Agency of South Africa @petroleumagency




Lower-income clients

and why your practice needs them

The risks and opportunity cost of not equally servicing clients across income levels – and how to get it right.

Advisors need many clients to reach their growth and

income goals. But the greater the number of clients

added to your investment book, the harder it is to treat

all clients equally and fairly – and the harder it is to

nurture what may turn into longer-term relationships with smaller

clients whose wealth could grow in future.

The risks of service inequality

For most advisors there simply isn’t enough time and motivation to

treat a low-income client the same way as a high-net-worth client.

And this service imbalance comes at a cost to your business.

If clients are not treated fairly, they may simply up and leave for

another advisory, or worse, take their grievance to the Financial

Advisory and Intermediary Services (FAIS) Act Ombudsman,

appointed by the Financial Sector Conduct Authority (FSCA).

Lodging a complaint with the FAIS Ombudsman is a fast and

simple process for an unhappy client. After attempting to resolve

the complaint directly with the advisor, if the client is still unhappy,

they need only fill out and submit an online form and their

complaint will be lodged for assessment by the FAIS Ombudsman.

If a matter is determined to be valid, an advisor could face

substantial fines or risk their operating licence being revoked.

Even if the case is unsuccessful, there could be significant

brand damage done as claims are posted on the Ombudsman

website and sometimes even picked up by media publications

with a broad reach, further damaging the advisor’s brand and

company image.

In addition to client complaints, service and reporting

requirements are increasingly becoming a regulated aspect

of business with the entrenching of Treating Customers Fairly

protocols as well as the long-awaited Retail Distribution Review

(RDR). These current and incoming compliance hurdles will increase

the amount of productive time spent on fulfilling regulatory

requirements in your practice.

Lastly, there is an opportunity cost of not seeking out lowincome

new business or adequately servicing existing lowerincome

clients. Due to time and capacity constraints, advisors

tend to provide better levels of service to higher-income clients.

As most of these wealthier clients are closer to or past retirement,

this concentration creates longevity risk for an advisor’s book.

Leveraging technology

Making use of third-party systems that enable all clients to receive

the same level of service has an up-scaling effect for advisory

practices. Reporting is a critical client servicing touchpoint for

wealth management practices, and a vast amount of time is

spent collating and creating bespoke reports for clients on a

quarterly or monthly basis. The quality, depth and frequency of

these reports very often differ for lower-income clients and their

wealthier counterparts.

Wealth management analytics provider, Seed Analytics,

significantly reduces your time spent on regular client reporting

and communication, which opens capacity for more business. The

system seamlessly aggregates investment data across more than

60 platforms to create monthly or quarterly investment reports for

all your clients on your book – regardless of their level of wealth.

The aggregated information generated in the report is taken

through various validation checks, including fidelity and integrity

checks, which ensures better quality and accuracy. Reports can

be white labelled for your advisory practice to ensure that your

brand is top of mind.

In addition to bridging the gap in terms of the depth or

frequency of reporting across a broad spectrum of clients,

smart tech, such as Seed Analytics, also provides much-needed

business intelligence. Using data to provide a holistic view of your

client base, the technology allows you to identify key risk and

opportunities within the book –

and gives you the power to make

informed decisions around these.

Reaching a larger audience

Big institutions can write large

amounts of business through

extensive, linked brokerages

and advisors. They do this by

using standard systems to reach

their large audience. With the

proper selection of technology,

this is a world any advisor can

build for themselves.


Andries de Jongh, Sales and Key

Account Manager, Seed Analytics

44 www.bluechipdigital.co.za




How we approach


And the rationale for using a DFM.

Maslow’s hierarchy of needs is a theory of psychology

explaining human motivation based on the pursuit

of different levels of needs. The theory states that

human beings are motivated to fulfil their needs in

a hierarchical order. This order begins with the most basic needs

before moving on to more advanced ones. What this theory omits,

in my personal view, is that each of these physiological needs can

only be satisfied through financial means.

For “wealthy” people, the financial means are readily available

and sustainable (ie wealthy people are not required to perform any

income-generating activity, such as trading their skill, time or both

to have continuous access to financial means beyond productive

years). But for others, in the majority, these financial means are not

available, or where they are, they are not sustainable.

Paying for a sustainable supply of food, rather than taking

the trouble to build the necessary skills and take on the risk of

producing these food items, has its appeal. In the same way,

access to sustainable financial means that would outlive you

without the need to perform any income-generating activity also

has appeal. Investors are required to save and invest to achieve

this ideal.

The point here being that without the financial means, we

cannot pay for these basic needs to be satisfied. For those that

have found a way to generate enough money to pay for these

needs, the solution is often not sustainable.

And in the absence of the required sustainability, investors

should consider efficient solutions to build the required financial

means to be sustainable.

Some have addressed these challenges by getting others to

resolve them on their behalf for a fee. It is this backdrop that

influenced me about being such a person that people would wish

to delegate their problem to, for a fee.






When it comes to investing, it is my passion not only to

understand the technical analysis of data and the applied process

of forecasting, but also the odds of positive outcomes or returns

from investing. This led me to broaden my skillset beyond the

classroom setting and to apply it to real live portfolios.

Calculating probability ratios is therefore a skill that I have come

to appreciate and am able to apply. But helping people to identify

the problem of diminishing marginal returns, risk required versus

risk appetite in pursuit of building an asset base (financial means)

that will be used to replace their current efforts of generating

income is the real driver behind my career choice.

My investment philosophy is taking a disciplined methodology

approach across a range of different styles and objectives. As an

advisor, I believe that my role is not to avoid risk, but rather to

understand the relationship between risk and reward and to manage

risk(s) appropriately, relative to the objectives of the portfolio.

I used to personally select investment collective schemes (eg

unit trusts) and construct individual portfolios for each client

with an emphasis on identifying and controlling risk. I avoided

speculation. My investment process involves understanding the

specific objectives and risk aversions of each individual client

(investor risk appetite) and ensures that my client portfolios are

appropriately diversified. Before the use of discretionary fund

managers (DFMs), tailored portfolios of funds were constructed to

meet specific client objectives and then managed on an ongoing

basis. The overall investment and fund selection process was a

top-down approach using tactical asset allocation.

The overriding premise behind this approach was that asset

allocation is of crucial importance if the investment objectives

are to be achieved and that these asset allocation decisions

were determined by the current macro-economic environment

(domestically or offshore). The second-tier fund selection process

focuses on investing in the best-performing qualified funds that

meet the objectives of the asset allocation process. Determining

the best investment selection is based on both qualitative and

quantitative analysis.

All this made implementing my financial advice particularly

onerous, and the requirement to stay abreast of these fund

management options took a lot of my time away from my main

role as an advisor: to provide good, independent financial planning

advice to clients. To solve this problem, we have engaged with a

DFM to assist us in advising on our clients’ investments.

Our DFM is an established industry expert in the field of

fund research and investments and offers a customised service

which allowed us to implement our advice in the most efficient

way possible. This benefits our clients directly and provides an

additional level of comfort with respect

to the quality and suitability of our

investment options.

To this end, together with our DFM,

we have developed a customised

range of “model portfolios” that

represent the best investment view

and the most appropriate way to

implement our financial planning

advice. These portfolios target a range

of client outcomes and are reviewed

and managed on an ongoing basis

by the DFM and us at Emphasis

Wealth Advisory. The portfolios consist

of a range of leading funds which

collectively deliver our investment

solutions. This is based on the DFM’s

extensive and independent research

process and portfolio construction

expertise, which is matched with our

investment philosophy and compatible

with our investment processes.

Dez Tswaile, Founder and

Managing Director, Emphasis

Wealth Advisory






What does the crystal

ball show for 2023?

At the start of every year, many clients want to know what the future of investing is, where they

should invest, what the best investment opportunities are, and if their capital will be protected.

The first question is easy to answer. The basic definition

of investing is where one party is providing capital

to another in exchange for some sort of return on the

capital provided. Based on this definition, the essence of

investing will be no different in the future than in the past.

However, it would be naive to assume that investment

opportunities and market dynamics will remain the same in

the future. In the last decade, for example, we had growth in

technology shares, growth in infrastructure investing and the

emergence of cryptocurrencies. Certain investment opportunities

may also fall out of favour. A recent example is mortgage-backed

securities, which all but disappeared after the 2008 global

financial crisis. Market conditions will definitely not stay the same

and we can already see the shift from the last decade’s ultraaccommodating

monetary policies toward a normalisation of

global interest rates.

The way we invest will most likely also change. The shift

from the open outcry system on trading floors to electronic

trading to online trading over the last 30 years has not only

drastically impacted the way we invest, but also who can

invest. Today almost anybody can trade from anywhere in

the world, which has drastically changed the demographics

of market participants.

As we move to the more difficult question of where to

invest, we first need to look to the past for some lessons. Going

only a year back and assuming we have no knowledge about

2022, we were all sitting with a Covid hangover, but we were

mostly optimistic about the future given that most lockdowns

were lifted, and global economic activity was almost back at

full capacity. We were told the structural reforms in China were

necessary and most of it was priced in the market. Inflation was

starting to rise, but we were also told not to fear since it should

48 www.bluechipdigital.co.za




be temporary given that supply chain disruptions and pent-up

demand would be resolved soon.

How wrong were we?

The first blow to our optimism was the discovery of the new

Omicron variant by South African scientists in November 2021.

We were looking forward to the first festive season with no Covid

restrictions since 2019, but unfortunately global governments

“punished” South Africa by re-enforcing travel restrictions on us.

The year 2022 continued to deliver hits with a dramatic fall

in the “untouchable” global tech share prices in January, the

Russian invasion of Ukraine, exacerbating the already elevated

global inflation risk, the persistent higher than expected

global inflation and commensurate normalisation of global

interest rates. At the time of writing (early November), we saw a

spectacular sell-off in global equities and property. Not even the

traditional safe haven asset classes were spared. US treasuries

saw a record-breaking sell-off on the back of inflation fears and

higher bond yields.

Initially, South African asset classes were spared the brunt of

the global turmoil, with gold and resource shares supporting

our market. South African bonds, already trading at very

attractive yields as we went into 2022, were not spared the

volatility in global fixed interest instruments, but at the time

of writing, were still one of the safer asset classes to invest in.

The strengthening dollar did cushion South African investors

against the worst of the storm raging in the global markets.

Why partner with a DFM?

It is understandable that clients expect some guidance on

which markets, and maybe specific shares, would provide

the best or safest returns for 2023. I always get nervous when

financial advisors ask me what the “best” place to invest their

clients’ money would be. At Equilibrium, we believe that the

“best” investment for a client is the one that best matches

their financial needs and goals, allowing for their unique time

horizon, return requirements and risk objectives.

We recognise that each person’s financial needs are unique.

More importantly, we recognise that most of the time these

financial needs are independent of the performance of markets

and state of the economy.

Partnering with a discretionary fund manager (DFM), like

Equilibrium, will ensure that the appropriate risk/return profile

for an investor’s unique financial needs is achieved on the

underlying investments. Equilibrium does this by blending

different asset classes, investment strategies and fund managers

in proportions that speak to the investors’ unique time horizon

and risk tolerances to achieve the optimal return.

South Africa has world class investment managers who are

specialists. However, this specialisation seldomly speaks to the

investors’ unique financial needs. Certain asset classes and/or

investment strategies perform differently in various market and

economic conditions. Where advisors partner with a DFM, the

DFM bridges the gap between investors’ unique financial needs

and the specialist skills of investment managers.

What lies ahead for 2023?

Many of our clients ask me what my crystal ball shows as the best

place to invest their money. Strange how clear that crystal ball

is when we are optimistic about economic growth and markets,

and how dull and uninspiring it is when there are concerns

about markets. The year 2022 might have been different to what

we expected. And I am sure 2023 will be no different. Global

economic recovery seems to be at risk on the back of interest rate

normalisation, inflation remains stubbornly high and the Russia/

Ukraine conflict is continuing for much longer than expected.

Volatility in global and local markets persists with markets taking

guidance from press releases.

After the significant sell-off in most global asset classes,

these asset classes are starting to look attractive, but the main

drivers behind global markets for the foreseeable future are

going to be whether inflation will be reined in, the interest rate

decisions of central banks and the impact on economic growth.

The rand remains a big risk for foreign investments, particularly

if it strengthens. Most commentators on the local currency are

of the view that it is oversold and strengthening could erode the

potential returns of global asset classes.

On the local side we see value everywhere. Our bonds are

some of the most attractively priced bonds in the world while

our equity market is very profitable at the moment. This makes

these two asset classes very attractive on a relative basis.

Unfortunately, we do foresee economic growth, which typically

supports the equity market, to remain subdued for 2023.

Our economists and strategists believe that global inflation

should start to taper off towards the middle of 2023 with

a commensurate easing of interest

rates. This should support global

economic growth and markets to be

more optimistic. South African markets

(especially bonds) stand to be big

winners when this shift happens and

foreigners return to riskier markets.

This year may bring us as many

surprises as 2022 did. At this stage it

is important to remind your clients to

stick with their financial plan tailored

to their needs. Your clients’ financial

needs are unique and more importantly,

not dependent on the performance of

markets and economies. Changing an

investment strategy based on hope and

fears is very dangerous and may move

your portfolio away from sound financial

planning principles to speculation.

Bennie Crous,

Senior Portfolio Manager,


Equilibrium Investment Management (Pty) Ltd (Equilibrium) (Reg. No. 2007/018275/07) is an authorised financial services provider (FSP32726) and part of Momentum Metropolitan Holdings

Limited, rated B-BBEE level 1.






The changing world of

work and its impact on

client engagement

Technology is the lifeblood of the new world of work, affecting how we work and what work we do.

The Covid pandemic has accelerated changes in how we

work in financial planning. Before Covid, meeting clients

on Zoom was the exception. Now many clients (and

financial planners) prefer it. Apps, paperless processes and

automated workflows are here to stay.

In response to the changing world of work and the impact of

technology on our lives, in 2018 the World Economic Forum (WEF)

produced The Future of Jobs report. The report considers what work

roles are likely to become redundant, which would remain stable,

and new roles that will emerge. The WEF believes financial advisors

fulfil stable roles and won’t be consigned to the waste dump. I

am sure this is a relief to many financial planners, given the rise of

automated advice and the role of technology in facilitating financial

services generally.

If financial advisors still have a role to play in people’s lives, it

begs the question, what is that role and how will it impact on client

engagement in the context of rising dependence on technology?

Our tendency, when trying to understand the impact of change, is

to focus and even try to predict the potential changes that lie ahead.

Founder of Amazon Jeff Bezos says that he often gets asked the

question: “What’s going to change in the next 10 years?” He says this

is the wrong question to ask. If you’re trying to cope with change,

a better question he suggests is: “What’s not going to change in

the next 10 years?” In the case of Amazon, he believes that in 10

years’ time, people will still want good-quality products delivered

to their home or work at reasonable prices. This is not going to

change, no matter what else changes in the world.

As we think of the changing world of work and its impact on

client engagement, the challenge is to think about what is not

going to change in financial planning in the next 10 years.

What’s not going to change?

One thing that won’t change in the future is financial planning

clients will be human. If we take Bezos’ advice, understanding

what won’t change about humans will help us prepare for the

change we face. The 2022 PWC report on global work gives us an

insight into what is important to people in the changing world of

work and shows its impact on employee motivation.

The report predicts that one in five employees are likely to

resign in the next 12 months, the top three drivers of which are:

Pay – “being fairly rewarded financially”; Purpose – “I find my job

fulfilling”; and Authenticity – “I can truly be myself”. The report

also highlights the threat of technology. A staggering 30% of

respondents are concerned that technology will replace their

roles, while 39% feel that they are not getting sufficient training

in digital and technology skills from their employer.

50 www.bluechipdigital.co.za




Daniel H. Pink suggests in his book Drive: The Surprising

Truth About What Motivates Us, that there are three things that

motivate people at work. The first is Autonom: people want to

have a sense that they oversee their own destiny. They want

to believe that they are in control of the work they do. But to

have this autonomy, it’s important that people have the second

element, the necessary Mastery to do their work. Doing work

that one feels ill-equipped to do is a guaranteed demotivator.

The third element, Purpose, feeling your work makes a difference

in the world, Pink argues is a significant motivation to work.

Technological change combined with the Covid pandemic

magnified and legitimised Pink’s three motivational factors.

It seems that where Purpose is clear and Mastery is in place,

greater Autonomy is a boost, not a hindrance to productivity.

During the pandemic, employees around the world, despite

working remotely, still delivered on what was required of them.

A MAP for client engagement

It turns out that the unchanging nature of employee motivation

has parallels with what constitutes financial health. If we accept

that the purpose of financial planning is to help clients achieve

and maintain financial health, arguably this purpose is unlikely

to change any time soon. And what constitutes financial health

is also unlikely to change. People are after all people.

Sarah Newcomb, director of financial psychology at

Morningstar, in an article entitled “Where More is Less:

Rethinking Financial Health”, reports that a Morningstar study

found that there are two key elements to financial health. The

first is economic stability. They found that people with a full

“financial life plan” saved on average 20 times more money than

those with time horizons of less than a year. Even looking ahead

just a few years had a fourfold increase in savings.

The second element is emotional wellbeing. The study found

that across all income groups, “people who feel empowered in

their financial lives experienced more joy, peace, satisfaction

and pride in their financial lives”. They found that the impact on

the emotional wellbeing of clients’ feelings of empowerment

was more than twice the impact of income. The study did not

measure how much control a person had in their financial lives,

but how much control they believed they had. “It is the feeling of

power, not necessarily the exercise of it,” that Morningstar found

was linked to emotional wellbeing.

The research suggests that to help clients achieve financial

health, financial planners ideally will do two things with their

clients. First, get them to look as far as possible into the future,

ideally building a full financial life plan; and second, ensure that

clients have at least the perception that they are in control of

their finances.

How can we apply Pink’s insights around motivation to

financial health? I believe the three key concepts he has identified

offers a foundation for a financial planner’s approach to client

engagement. A client who is clear on Purpose, why they are

saving money, is likely to be able to articulate their future more

clearly and be motivated to work towards that future. A client

with Autonomy will be motivated to make decisions about their

life and money, and in so doing feel like they have control over

their life and money. This power will be enhanced by Mastery,

developing skill and knowledge when it comes to their life and

money. Juggling the order of the three words, Mastery, Autonomy,

Purpose, offers a MAP to apply to your engagement with clients.

How can you do this practically?

How can financial planners apply the MAP?

Firstly, it’s important to accept that clients are the expert in their

own lives, only they can know what they want their life to look

like. But most clients need help to do this. A prerequisite then

for financial planners in the future will be to develop intra- and

inter-personal skills to help clients articulate a purpose for their

lives and their money.

Secondly, in helping clients articulate their purpose, financial

planners will do well to recognise and facilitate the client’s

need for autonomy. This can be done through self-awareness

(knowing when not to give advice that might undermine the

client’s autonomy); and skillful conversation, enabling clients to

make their own decisions, rather than just taking advice. But it

can also be done through harnessing technology. For example,

automated advice tools are already showing us that there is an

appetite for clients to use technology to work out what they may

need to save or invest for specific goals. Financial planners can

provide clients with such tools that recognise and support this

need for autonomy.

Thirdly, as clients use these tools, whether they be for

budgeting, savings, cashflow forecasts or another purpose,

they will grow their own sense of mastery

over their financial life. They will do this

with the comfort that they still have the

financial planner, the expert, to consult and

ultimately guide and advise them.

Technology and the world of work

continue to change, but applying Pink’s

MAP concepts to client engagement, in

an informed and skillful way, I believe will

help human financial planners remain

relevant and important in helping people

achieve financial health, in the next 10

years and beyond.


Daniel H. Pink, “Drive: The Surprising Truth About What Motivates Us”, Penguin USA, 2009

PWC 2022 Global Workforce Hopes and Fears Survey

Sarah Newcomb, “When More is Less: Rethinking Financial Health”, Morningstar Behavioural Science Research, 2016

World Economic Forum, “The Future of Jobs Report”, 2018

Rob Macdonald, Head of

Strategic Advisory Services,






CLIENT ENGAGEMENT | Behavioural finance

The impact of mental health

on financial planning

How prepared are you to deal with this?

The link between mental health and financial health is increasingly evident.

52 www.bluechipdigital.co.za

CLIENT ENGAGEMENT | Behavioural finance



The financial planning profession is evolving. Financial

advice is not what it used to be or no longer sufficient.

Expectations of respected financial planners continue

to rise, beyond the previous shift from selling to

advising in the Sixties, the introduction of the steadfast sixstep

financial planning process in the Nineties, and now

towards an increasingly broader, and client-centred, offering1.

The impact of behavioural finance, over the last 20 years

especially, has meant that financial planners are not only

expected to track and tweak financial behaviour, but to skillfully

shift the client’s relationship with themselves and their money,

to modify behaviour fruitfully. As Michael Kitces reminds us,

“Giving advice to clients is a terrible way to help them change

their behaviour” and that developing “more therapeutic skills”2

may be the antidote to hackneyed advice.

These developments explain the burgeoning influence of

behavioural coaching on the profession, now surely recognised

as fundamental to a financial planner’s value proposition. And

as financial planning practices continue to advance, particularly

post-pandemic, we start to realise the importance of mental

health and wellbeing on clients’ financial health.

The realm of mental health is now a domain that financial

planners require cognisance of, at the very least. Sooner than

one thinks, it will be vital for planners to have a recognised level

of skill in navigating mental health issues.

There may be some disagreement or denialism among

practitioners as to their roles and responsibilities, but the link

between money, emotions and mental health is well known

and more prevalent than ever. So much so that forwardthinking

countries have necessitated institutions dedicated

to understanding and dealing with this challenge, such as

the UK’s Money and Mental Health Policy Institute launched

in 2016.

One undeniable fact, central to financial planning, is the link

between mental health, poor decision-making and financial

difficulties. In short, worrying about money can affect your

mental health and a mental health condition can affect the way

you manage your money. This creates a “vicious cycle”3. More

specifically, “common symptoms of mental health problems,

like increased impulsivity, low motivation, unreliable memory

and difficulties concentrating can make managing money

significantly harder”4.

What could this mean for financial planners today, and their

continued professional development?

Firstly, an awareness of the key themes within mental

health is fundamental.

The stigma of mental health, in all its forms, is a destructive

force, a barrier to the acknowledgement of personal struggle

and therefore a chokepoint to receiving the correct help

timeously. Encouragingly, attitudes towards mental illness are

shifting, again thanks in part to the pandemic. Covid’s silver

lining is surely that society has been forced to acknowledge

its humanity, its vulnerabilities, and this has counterbalanced

the stigma of having and talking about mental health concerns.

Planners who are aware of the damaging effects of discrimination

and judgement can show compassion and make a significant

difference in the lives of their clients.

As financial planners are on the frontline, at times being

the first person a client confides in, they play a part in making

mental health services accessible, another current theme. Most

people don’t seek help, and advisors can play a “gateway” role,

ideally providing clients with a pathway to support. This includes

having a trusted set of mental health professionals on hand,

acknowledging when the conversation has moved beyond the

scope of one’s expertise or comfort levels and knowing how to

refer appropriately.

Secondly, advisors will need to build appropriate and advanced

interpersonal skills.

Learning, and especially practising, one’s capacity for deep

listening and generative questioning are fundamental facets of

advancing one’s skills. There are some simple, game-changing

techniques planners could employ immediately, and which also

allow room for continuous improvement. Better use of silence,

being curious, collaborative, authentic and confident are all potent

capabilities. Several good coaching programmes, specifically

geared for financial planners, cover these and other essentials.

Thirdly, for those committed to integrating this approach into their

practices, a level of intrapersonal development will be required.

Intrapersonal development is personal “work” that includes

self-care, maintaining emotional wellbeing and the ability

to self-regulate, to name a few. Self-regulation, the ability

to understand and manage one’s internal states (sensations,

feelings and thoughts), is vital when listening to a client. This

may involve dealing with one’s own frustration or doubt,

common concerns among planners faced with unfamiliar

situations and awkward conversations.

Some planners who fully embrace

and develop inner maturity with this

approach may eventually be confronted

with the most uncomfortable of inner

conversations, ones in which they will

need to demonstrate courage. And that is,

the question of their own mental health

and wellbeing, and how it relates directly

to their ability to serve clients.

In summary, I invite you to be aware of

current mental health matters, continue

to upskill in the service of your clients,

and take great care of yourself and your

own mental wellbeing. I believe that

doing so will put you in a great position

to invest in the wellbeing of others,

particularly your clients.

Roland Cox, Executive

Coach, Aspiral Coaching

and Leadership

1 Lawson, Derek R., and Bradley T. Klontz. 2017. “Integrating Behavioral Finance, Financial Psychology, and Financial Therapy into the 6-Step Financial Planning Process.” Journal of Financial Planning 30 (7): 48-55.

2 Kitces, Nerd’s Eye View https://www.kitces.com/blog/kristy-archuleta-kansas-state-university-of-georgia-podcast-financial-therapy-association-counseling-communication/

3 https://www.mentalhealthandmoneyadvice.org/en/managing-money/how-are-mental-health-and-money-worries-linked/money-worries-and-mental-health/

4 Money & Mental Health Policy Institute (UK) https://committees.parliament.uk/writtenevidence/5460/pdf/



CLIENT ENGAGEMENT | Behavioural finance

Personality and triggers

How adapting the way you communicate with your clients can improve long-term outcomes.

Being an effective behavioural coach for your clients is not

as simple as following a “one-size-fits-all” approach. People

are different, with different views, ways of thinking and

personal preferences. Therefore, the ability to communicate

effectively requires a deeper understanding of each client’s

personality and triggers.

This is particularly true in volatile markets. Distinguishing

between the lower composure or “jumpy” clients and the higher

composure or calmer clients enables you to identify clients who

are more likely to be emotionally distracted by what is happening

around them (low composure/jumpy group), and those who

are not even noticing the investment opportunities the market

volatility is offering (high composure/calm group).

The Nedgroup Investments behavioural study, which was the

largest survey of its kind ever undertaken in Africa, revealed six

personality archetypes that people tend to cluster around. These

six personality groups can be separated into two broader groups

according to their level of composure – measured as someone’s

tendency to be emotionally engaged with the short term.

These two broad groups have very different needs and

preferences in terms of who is in control of investment decisions.

“Jumpy” clients will need help staying invested during turbulent

times and want to feel that you (their financial planner) are in control

and most importantly, calm and confident. Calm clients can benefit

from rebalancing during market weakness, as they can more easily

stomach buying growth assets in a falling market. They, however,

54 www.bluechipdigital.co.za

The six personality archetypes and the two broader groups they are separated into.

want to feel that they are in control of making their own decisions,

using you (the financial planner) as their sounding board.

• Communicate the importance of using an advisor as an expert

“sounding board” and to execute decisions effectively.

Credit: Nedbank

The key to communicating with “jumpy” clients

When it comes to engaging with clients who fall into the lowcomposure

group of personalities (sensitive, skittish, stressed),

there are a few practical tools that can make all the difference:

• First of all, it’s crucial as the financial planner or advisor to model

a sense of calm and not feed into the client’s anxiety or unease.

• Keep information presented to them simple and use infographicstyle

material rather than overwhelming graphs and charts. We

use a collection of engaging, simple sketches by Carl Richards

which illustrate the true value an advisor can play here.

• Avoid showing them new graphs and charts at this stage as they

are likely to find it overwhelming. Unless you have shown the

client a particular chart at the inception of your relationship, it is

probably best to wait until markets are more stable to introduce

new information.

The key to communicating with “calm” clients

Clients who have the highest composure will likely only feel

comfortable with a decision if they feel that they have done all the

research themselves. If you want to support their decision-making

process, it needs to be done subtly, by improving the decisionmaking

environment, rather than being prescriptive or reducing

their freedom to choose. Anything that feels like intervention or

assistance risks alienating them.

Practically, when communicating with this group of clients the

below guidelines may be useful:

• Empower the client to make informed decisions. Nedgroup

Investments has tools on its website like The Big Picture App to

allow the client to explore all the possible options. For clients at

or close to retirement, platforms such as MRS will also be very

useful here.

Knowing which personality group your client(s) fall into

Identifying a low-composure client or a high-composure client can

be as simple as asking them how they feel about a story about

a client whose portfolio dropped from R1-million to R600k in

less than three months during the 2020 Covid-19 crisis. A lowcomposure

client will show (extreme) discomfort, while a highcomposure

client will appear relatively unaffected and may simply

respond with a “that’s markets for you!”.

The Nedgroup Investments Financial Personality Survey,

conducted in partnership with Oxford Risk, assessed over 3 000

South African investors and advisors against 12 defined personality

traits that have been known to affect behaviour. One of the key

findings in the South African study was that there are multiple

dimensions to risk attributes when it comes to investing for South

African investors.

Amy Jansen, Head of Behavioural Solutions, Nedgroup Investments,

and Seugnet de Villiers, Investment Analyst, Nedgroup

Investments MultiManager






State of the advice

tech landscape

Insights into financial advisors’ relationships with tech from

the 2022 Linktank Advice Technology survey.

According to Linktank’s latest advice technology

survey, financial advisors’ greatest challenges are still

topped by integration options, the industry remains

frustratingly paper-based, and there’s an unbudging

gap in the perception of value vs cost of technology.

The end-2022 edition of the annual survey, which measures

gaps and trends in the technology-enablement space from the

perspective of financial advice businesses, attracted respondents

primarily from the life/risk and wealth management community

but generally spanned the entire advice industry and thus offers

some interesting insights.

Despite the flurry of progress towards greater digitisation

during the Covid years, almost three-quarters of survey respondents

still indicate an intention to revisit their technology strategy as a

key objective over the next one to three years. This is followed by

the closely-related goal of addressing operational inefficiencies.

These objectives significantly outweigh the importance of efforts

like succession planning, which usually tops the list, and points

to the stubborn challenges of appropriate selection, comparison,

implementation as well as adoption of technology solutions.

Defining and executing a forward-thinking technology

strategy that’s aligned with business growth and client servicing

objectives can cost a few cents, though. Yet almost three-quarters

of respondents say they currently invest less than 20% of their

1-3 year strategic objectives

Revisit the business' technology strategy

Address growth vs operational drag issues

Implement succession planning initiatives

Significantly increase or decrease team size

Obtain a business valuation, purchase, or sell a business

One-to-three-year strategic objectives.

revenue into technology (and more than half of those spend less

than 10%). On the other side of the fence, local industry technology

providers estimate an Independent Financial Advisor (IFA)

expenditure tolerance of around 10% to 15% of revenue and those

prepared to voice their thoughts on an appropriate investment

generally peg it at 20% or more.

The desire for personalised service, greater value and more

innovation, particularly regarding integration options, seems to

remain somewhat stymied by the general appetite for outlay and,

56 www.bluechipdigital.co.za




indeed, the continued perception of technology as an expense

rather than an investment.

greatest technology challenges

current investment (% of revenue over 3-5 yrs)

anticipated investment (next 3-5 years)

Lack of int egrat ion opt ions

< 10%

Balancing cost and value

10 - 20%

20 - 30%

Lack of time or skills to implement

> 30%

Le ss Sam e Mor e

Finding, compa ring, or se lect ing soft ware

Current and anticipated investment.

Complexity of digitising business processes

Most advice businesses realistically anticipate increasing their

investment over the coming few years, however. The most likely

places for those tech budgets to be utilised are, predictably, wealth

or risk planning tools and, of course, client relationship and practice

management solutions. The emergence of behavioural finance tools

in third place on the “most valuable” list is a bit of a surprise this year,

though, particularly since there hasn’t been evidence of significantly

increased expenditure in this segment of the software market yet.

perception of most valuable tools to invest in

Calc ula tors and tools for advisors

CRM or practice management

Behavioural finance / risk profiling

Docs management / sharing

Revenue administration

Client engagem ent / serv ice portals

Aggregation / consolidated reporting

Management info / business intelligence

Quoting / quote comparison

Marketing / social media

KYC automation

Robo platforms

Perception of the most valuable tools to invest in.

Other factors are likely to play a big role in value perception, too,

as highlighted by advisors’ greatest challenges with technology.

Entirely consistent with previous years’ survey findings, businesses

of all shapes and sizes still find it immensely difficult to deal with

the user-side complexities of applying technology to their business

needs, much less to a defined strategic growth plan.

Topping the frustration list, as usual, is integration. In practice,

this typically means that businesses are making use of multiple

solutions that overlap in functionality but don’t “talk” to each other,

necessitating the duplicated manual maintenance of similar data

across multiple interfaces. It’s very rare, in fact, for an IFA business

Access to adequate training and support

Cumbersome or inadequate functionality

Staying ahead, or fear of missing out

Transitioning from a paper-based environment

Greatest technology challenges.

to employ the use of a single piece of software to meet the

entirety of its operational, planning and servicing needs, so the

frustration with doubling up on data collection and maintenance

is entirely understandable.

The problem extends beyond the integration of internally

selected systems, though, and into the product provider and

platform space, where data provision for reporting purposes may

have improved significantly over the past decade but further

high-value capabilities, such as straight-through processing,

remain just about impossible for independent practices to

strive towards if they interact with multiple product providers.

The coming years will make for an interesting assessment of

just how much IFAs will re-frame their support of platforms or

product providers in the context of whether they help or hinder

practices’ ability to get ahead from an independent technologybased

client-servicing perspective.

The industry application programming interface (API)

landscape has unquestionably improved over the past few

years, as many tech providers have recognised the need to

offer standard, no-code integration options as a matter of

necessity rather than just a competitive edge. More than half

of independent technology providers on the market offer open

APIs and only about 10% say they don’t offer any API, closed

or otherwise.

Niche and purpose-specific solution providers are, more than

ever, actively seeking out integration partners to make their

users’ lives easier and to complement their own solutions, while

multi-purpose software providers generally base their response

on user demand.






tech providers’ approach to integration options

Pref er to encour age e xclusive use of own sol ut ions

Actively seek out and execute integrations valuable to users

Consider inte gr ation opt ions base d on demand

The emergence of behavioural

finance tools in third place

on the “most valuable” list is a

bit of a surprise this year.

Tech providers’ approach to integration options.

In the latter scenario, it’s realistically up to users to initiate

integration discussions and, in many cases, this also equates to

cost and effort commitments that most IFAs simply don’t have the

inclination to get into.

Some unfair expectations of the term “integration” persist,

though, and it sometimes emerges as a bit of a magical catch-all

prospect, making it difficult for tech providers to meet

expectations. Many of the prerequisite issues that need to be

addressed to make integration a successful experience still nag

at our heels. More rudimentary problems, like transition from

paper or manual business processes, are still prevalent as more

than half of advisors indicate a low level of digitisation and

fewer than 15% say they’ve mostly or completely converted

from paper-based environments.

than ever for businesses to map out a durable, adaptable

technology strategy that enhances and supports a client

servicing and operational model.

average user ratings (of multi-function solutions with broad feature ranges vs purpose-specific solutions with narrow feature ranges)

Features, functionality,

or "usability"

Average user ratings.

Ease of implementation

and adoption

Return on investment or

val ue f or m oney

Inte gr ation options (data

or other system s)

Support and training

Innova tion and fut ure -


Specif ic f eature r ange 4,1 3,9 4,0 3,3 4,1 4,0

Broad feature range 3,5 3,3 3,3 3,1 3,5 3,3

process systemisation

digitisation (transition from paper)







Process systemisation vs digitisation.

Even against a backdrop of sluggish digitisation, difficulty

in selection and implementation and a value perception gap,

advisors have been generous in their experience ratings of the

tools they’re familiar with. Breaking these solutions into two

rough categories – those that offer broader feature ranges (like

all-in-one CRM and planning tools) and those that offer narrower,

more specific features (like revenue administration or behavioural

finance tools) – it’s clear that purpose-specific solutions still

attract the most love at an average of just under four stars out of

a possible five compared to an average of 3.3 stars for one-stopshop


Never have advisors had so many options to choose from,

within either all-in-one or best-of-breed model approaches.

Therein lies part of the complexity, though, so it’s more important

Jen McKay, Director, Linktank

58 www.bluechipdigital.co.za




Financial planning

candidates rank top five

It was recently announced that the top five CERTIFIED FINANCIAL PLANNER® Professional Competency

Examination candidates (for the June 2022 examinations) are alumni of the School of Financial Planning

Law at the University of the Free State.

By Leonie Bolleurs


candidate with a Postgraduate Diploma in Financial

Planning or a BCom (Honours) in Financial Planning must,

among others, pass the Professional Competency

Examination (PCE) of FPI.

On the right trajectory

According to Henda Kleingeld, Programme Director of the

Postgraduate Diploma in Financial Planning in the Faculty of Law’s

School of Financial Planning Law (SFPL), they are incredibly proud

of the candidates.

“Being rated as the top five PCE candidates indicates that we are

on the right trajectory with the outcomes and assessments for our

diplomas. If the top five PCE candidates are alumni of the SFPL – we

are doing something right. We have made many changes in our

approach to financial education, and it seems like it is paying off.

“We now need to ensure that we provide our students with

the proper academic background and support to continue to

excel. This will seal our status as the oldest and one of the leading

educational providers of financial planning education in the

country,” Kleingeld adds.

Confidence in the qualification

The PCE sets candidates on the path towards becoming CFPs®. The

online exam consists of two case studies that test the candidates’

financial planning skills, knowledge and competent performance

in the defined competency areas for financial professionals.

In its PCE policy, FPI states that there are six financial planning

components: financial management, asset management, risk

management, tax planning, retirement planning and estate

planning. It strives to prepare PCEs that will provide candidates

with the opportunity to demonstrate core or professional

competence at a standard appropriate for entry into the financial

planning profession.

According to FPI, the CFP® designation – an internationally

recognised standard for financial planning professionals – gives

consumers confidence that the financial planner they are dealing

with is suitably qualified to provide advice and information and

gives the assurance that they remain up to date with developments

in the industry.

First academic institution to offer diploma

Kleingeld says the SFPL was the first academic institution in South

Africa to offer the Postgraduate Diploma in Financial Planning

and financial education has been its focus and passion over the

past 20 years. “Keeping up with industry

trends is very important to us. Our team

of academics and industry experts assists

us with maintaining a balance between

the academic requirements and how

they are translated into the workplace,”

she explains.

Kleingeld is of the opinion that

the graduates who have passed their

qualifications are doing exceptionally

well in the industry, with many prominent

industry leaders being alumni of the UFS

SFPL. “The school has a reputation in the

industry as being forward thinking and

innovative. We keep our fingers on the

pulse of industry developments, which

get incorporated into our curriculum.”


Henda Kleingeld, Programme

Director: Postgraduate Diploma

in Financial Planning, UFS





Conversations about

life and money

Lessons we’ve learned.

One year while at university my parents planned our

annual trip to the bush. As they drove a sedan and

a hatchback they thought it would be a treat to rent

a high-clearance SUV for the week, making for great

game viewing. I am a “car nerd” while my folks really don’t care

for cars, so they asked me to make the booking. After some

consideration I arranged a Toyota Fortuner. When it arrived, I

wasn’t home, and my mother received the vehicle. She rung me

rather disappointed: the rental wasn’t much higher than their

own cars. Perplexed I rushed home.

Upon arriving home, I found in my parents’ driveway not a

Toyota Fortuner but a Porsche Cayenne. My mother (a capable,

knowledgeable and world-wise woman) had received the keys

and simply not realised the difference. What she saw was a

vehicle that did not match her expectations at all: something

low and sleek without the high-ride height and big, open

windows she wanted.

When clients meet with us they are on a journey. They come to

us because they want advice on the best route(s) to travel and the

best (investment) vehicle(s) for their circumstances. Much as my

parents trusted me as someone who knows cars to select the best

vehicle for their goals and budget.

I would suggest that there are two aspects to a client’s

investment “vehicle”:

• The “engine”. This is what happens “under the hood” like process,

blending, research, asset allocation and manager selection.

• The “experience” of driving the vehicle. Tax, liquidity, income,

volatility and returns.

My mother didn’t want to know about the Fortuner’s engine or

how it worked. Her expectation was that it worked: she wanted

– expected really – performance and reliability. She didn’t need

me to unpack with her how that was generated, she just wanted

to trust that I had selected an engine which could deliver it.

Similarly, many of our clients are not particularly interested in

“how the engine works” – they want to know that it works: that

it will perform reliably.

This isn’t true of all clients and for some it adds value to discuss the

investment engine. Those clients are “welcomed into the workshop”

to see our investment process and “get their hands dirty” working

through the mechanics of it. My partners and I enjoy – thrive on – the

technical investment elements (much as, when younger, I thrived on

learning about cars). We enjoy sharing this, but we are cautious to

only get technical to the extent that it adds value for a client.

60 www.bluechipdigital.co.za




What is obvious to us is not necessarily obvious to the client.

When my mother received the Porsche keys, she simply did not

realise they weren’t labelled Toyota. Similarly, we as planners

might think some things are obvious when in fact they are not.

Think of the difference between total investment charge (TIC)

and effective annual cost (EAC); strategic and tactical asset

allocation; passive and active; growth or value style investing.

What is important to us is not necessarily important to the

client. As planners, we may be proud to know that in our client’s

living annuity they own our best offshore equity managers on

asset swap at no extra fee… but the retired couple may simply

want to know that their portfolio will give them a healthy balance

so no single event can jeopardise their retirement income and

that it will grow sufficiently to protect them and their income

from inflation. How we “built the engine” may not be important

to them.

As planners, beware of getting in the way. My partners and I

stress that we must be careful not to impose our biases on the

client. When I called Avis to query the Porsche they were puzzled

at our disappointment. They thought the Cayenne was an upgrade:

a better car for the same price. Because they didn’t understand

what we wanted from our journey, they gave us their “best view”,

not something best suited to our goals.

Now here is the interesting part: the above is what we expect

of ourselves as planners and as a firm.

Irrespective of their interest in the engine, all clients will

experience the drive. For example: how and when tax is paid;

liquidity restrictions on the investment; performance, volatility

and so forth. A conversation about the drive which sets the right

expectations is crucial. I will return to this shortly.

How do we tie this metaphor together? At Omega Capital we

call our conversation one about a client’s life and money.

The investment vehicle falls in the “money” side of the conversation.

We would suggest that a range of high-quality investment vehicles

that a client can rely on to perform is… table stakes. It is the minimum

a quality planning firm should bring to the table.

Then there is the “life” side of the conversation: our client’s

journey. What are their goals, fears, aspirations? Who are the

people on this journey with them? What is difficult for them to

action or even to talk about? What compromises are they willing

to make in balancing life and money goals? What are the hard

questions we, as their advice partner, need to ask? Or the tough

things we need to coach them towards?

Who is most competent to speak to that? Our client. So, we

try to “shut up and listen”.

Against that framework, as planners, we feel the following is

important to be aware of:

What about our clients?

Using our metaphor there are a few crucial things. As I mentioned

above, we may not discuss “the engine” but we absolutely discuss

“the experience” of the drive.

A client must know what to expect from their vehicle. What

can the volatility be; what time horizon are they investing for (and

assessing the investment over) and what are realistically possible

returns over shorter and longer periods. If we get the expectation

wrong – the relationship fails and likely also the plan.

A client must know how to “drive” their vehicle(s). What

contributions did we plan for over time? Or,

inversely, how much can a retired client draw

from the portfolio? Critically, will they remain

invested when the journey gets challenging –

as it will at some point(s) along the way.

The best plan can be destroyed by an

investor’s bad behaviour.

In closing, after a conversation with us

about life and money where a client has

made decisions and executed them, what

would we want them to “drive out” with? We

expect that they would know:

• Where they are going: their plan.

• What ride to expect: volatility, time horizon.

• How to “drive” their investment: drawdown,

contribution, staying invested.

• Lastly, to the extent it adds value for them:

how the engine works.

Johannes Landman,

Financial Planner and

Partner, Omega Capital





CLIENT ENGAGEMENT | Financial literacy

Accessible money

conversations in

isiXhosa: YES PLEASE!

62 www.bluechipdigital.co.za

CLIENT ENGAGEMENT | Financial literacy



Ihave had the pleasure of interacting with many people who

do not speak indigenous South African languages socially

throughout my career. What always intrigues me about

these interactions is that topics such as inheritance or the

latest cryptocurrency are often part of the conversations in the

most casual social settings like braais for speakers of English and

Afrikaans. I found this quite fascinating because these kinds of

discussions rarely come up in social settings or media channels

that cater to or appeal to speakers of African languages.

These are some of the realisations that propelled me to create

my podcast, Epokothweni with Babalwa Nonkenge, and to the

best of my knowledge Epokothweni is the first platform of its

kind which produces personal finance content in an indigenous

South African language in podcast format. I believe that the lack

of such content is directly linked to the high rates of financial

illiteracy among South Africans.

The word epokothweni is derived from an expression in

isiXhosa – “ukungena epokothweni” which directly translated

means to “enter into someone’s pocket”. This is a euphemism

for overstepping boundaries; doing or saying something that

is not socially or culturally acceptable. In some African cultural

settings, the pocket has always been a realm of mystery where

no-one else besides the owner purportedly knows what is going

on inside it. Anecdotal evidence suggests that the subject of

money seems to be one that no-one was consciously taught

in homes or schools – meaning that one can surmise that most

adults just wing it and hope for the best.

The taboo regarding money matters creates a secrecy and

fear of saying something as simple as, “I don’t understand, please

help me.” The area of personal finances is one full of English

jargon and terminology which is difficult to understand even

for degreed individuals. The issue is further compounded in the

case of individuals who have little or no schooling and yet they

enter into financial commitments on a daily basis.

Epokothweni bridges this gap in that it gives individuals

access to content for free, in their own time and as they wish.

They interact with the podcast via social media. Since inception

in June 2021, each of our episodes is informed by the north

star which is to give dignity to the speakers of indigenous

languages by producing accessible conversations in the second

most spoken language in South African homes. The podcast is

available via all major podcast platforms and can be accessed

via virtually all smart phones regardless of location.

Epokothweni with Babalwa Nonkenge

Website: www.epokothweni.co.za

Social media handles: @Epokothweni

Email: Babalwa@epokothweni.co.za

WhatsApp line: 0726507641

Anecdotal evidence suggests that

the subject of money seems to be

one that no-one was consciously

taught in homes or schools.

The podcast has grown to be a space for conversation and

cocreation, a step taken deliberately – because the style is

conversational and borrows from the storytelling technique which

is quite an entrenched knowledge-sharing education and oral

history method for most African language speakers. Cocreation is

a very important aspect of what we do. We do not merely translate

from English as this would be a limitation because some of the

terminology does not exist in indigenous African languages. We

also use the phrase “financial stewardship” to describe the work

we do via the podcast as this demonstrates the idea that one can

be a good steward of their money whether they make R1 000 per

month or R1 000 000 per month.

In the early days of the podcast, we spent quite a bit of time

educating listeners about what a podcast is and how to subscribe to

one because our audiences simply didn’t know what a podcast was

– historically relying mainly on radio and television for information.

Currently, the podcast enjoys support from Nguni language

speakers as far afield as Germany, UAE, Kenya and the US. In

June 2022, the podcast was awarded the Pan South African

Language Board award for multi-lingualism in the Business and

Technology category. We have been asked by various corporates

to provide financial wellness coaching to individuals and groups

(in English). We have also produced and published some pieces

of commissioned content by two prominent financial services

providers. In future, we hope to build life stage applications and

to design courses that individuals and groups can purchase and

consume in their own time.

The appeal of Epokothweni has

extended beyond those who are mother

tongue speakers of IsiXhosa (our main

language of delivery). The feedback

we are getting points to the fact that

our growth is being spurred on by our

simplicity of delivery and empathy in our

approach to conversations as part of the

success formula for the podcast.

One of our dreams is to offer the

material in more African languages, and

to this end we are always on the lookout

for opportunities to collaborate with likeminded

professionals within the financial

services sector.

Babalwa Nonkenge,

Personal Finance Expert,

Entrepreneur and

Award-Winning Podcaster






Financial abuse:

how can you identify

it and help your

clients deal with it?

Would you know how to spot the signs of financial abuse?

How difficult could it be to identify when a client’s spending

habits change drastically or if there was a fraudulent or unknown

transaction of large value on an investment or savings account? I

thought I would be able to identify the signs… but I was wrong. I

failed to spot the signs that my client was a victim of financial abuse.

I underestimated how easily this can happen. For this client,

her “loving” partner managed to convince her to purchase a

business property in his name. She agreed to withdraw her unit

trust investments to fund this transaction, while he was in the

process of getting together liquid funds to repay her. Ultimately,

he sold the property without her consent and failed to repay

her. As she was also a victim of physical abuse, it became near

impossible for her to recover her funds.

The reality is that a lot of the victims of economic or financial

abuse might not even realise what is happening, until it is too

late. In 2022, I received my Financial Abuse Specialist (FAS)

designation after completing the required course through

UK-based Standards International, to better understand this

world and avoid the scenario I mentioned earlier.

“He was just a bit controlling.” “He took care of all my finances

without me asking.” “I was not allowed to view my own bank and

investment statements.” “He would have inherited the money in any

case.” These are all phrases that I’ve heard in our meeting spaces.

Financial and economic abusers are not always men but in

our unequal society, the reality is that women and elderly people

are softer targets. The statistics are alarmingly high related to

child maintenance defaults and failure to pay even the smallest

amount towards the wellbeing of their children. At the root of

this sits controlling and coercive behaviour, a desperate attempt

to still control your ex-partner through the only mechanism

available: money.

During a financial planning process with new clients, we talk

about their financial history and what might stand out for them as

memorable moments where money was involved. One new client

shared with me the story of her ex-husband selling her paid-off

car, taking the full proceeds to purchase his own sports car, all

without her consent or knowledge. Only after we discussed what

financial and economic abuse is, could she label these actions and

understand how it impacted not only her relationship with money

but also her future romantic relationships.

How do we define financial abuse and how does it differ from

economic abuse?

Financial abuse is the illegal or unauthorised use of a person’s

property, money, pension or other valuables. This includes changing

the person’s will to name the abuser as heir, often fraudulently

obtaining a Power of Attorney, followed by deprivation of money

64 www.bluechipdigital.co.za




The reality is that a lot of the

victims of economic or financial

abuse might not even realise what

is happening, until it is too late.

or other property or by eviction from their home. It often also

applies in cases of elder abuse or domestic violence.

Economic abuse is slightly wider as it is a form of abuse when

one partner has control over another partner’s access to economic

resources, for example prohibiting one from working or earning

their own income. At the root of this abuse is controlling and

coercive behaviour.

This type of abuse is often the precursor to physical abuse and

should be seen as a major red flag. Amanda Cassar, co-founder of

the Financial Abuse Specialist (FAS) designation together with

Michelle Hoskin, shares as part of the learning material a case study

in which there was even an attempted murder by the abuser.

What can you do to help clients who are victims of abuse?

Now that we know who is at risk, as well as the potential signs of

abuse, it is important to consider what can we do to assist victims

of financial abuse. Here are four basic tips:

1. Make sure that you have a “trusted contact” listed for

your clients. The Security and Exchanges Commission

in America has made it a legal requirement to note an

emergency contact on your investment accounts and I

believe that this would be good practice for all clients.

Make sure that your client agrees to when you might

need to reach out to the trusted contact.

2. If you suspect someone might be suffering from financial

or economic abuse, do not accuse the abuser directly.

This may put the victim at risk unintentionally. Share with

the suspected victim stories and resources that might

motivate them to take action when they are ready.

3. Share an abuse survival kit with them. This includes a tick

box of items that they should get together before they

take action on moving themself and their family to safety.

This includes items like a separate bank account with an

amount of cash, copies of important documents, copies

of prescription scripts and a spare cell

phone with a SIM card.

4. Share contact details of helplines and

institutions like People Opposed to

Woman Abuse (POWA), Halt Elder

Abuse Line (HEAL) or Families South

Africa (FAMSA) who would be able to

assist with the necessary support.

I hope that we will continue to serve our

clients in the best way possible, by listening

to their needs and creating a safe space for

them to share whatever might be happening

in their lives.

Louis van der Merwe,

Certified Financial Planner®

and Coach







FPI Approved Professional Practice: Integral Wealth Management

Integral Wealth Management provides financial planning services and offers a full range of

investment products and platforms. Director, Michael Frantzeskou, CFP®, speaks to Blue Chip

about the high standards Integral Wealth upholds as an FPI Approved Professional Practice.

66 www.bluechipdigital.co.za




Please provide a brief history of Integral Wealth Management.

How did it come about?

Providing independent advice and putting our clients first are the

guiding principles that drove us to start Integral Wealth. Three of

us worked together at a listed company and we knew that if we

put our clients first in all that we did, we would have a successful

business. We opened our doors in May 2016, and fortunately our

strategy has worked – we grow through referrals from our existing

clients. We are based in Johannesburg and have clients all over

South Africa and many who have emigrated.

Why would a client choose Integral Wealth Management? What

sets you apart?

We pride ourselves on our culture of transparency and integrity.

We believe that our clients’ financial wellbeing must always come

first. This reputation has stood us in good stead, cementing strong

and trusting relationships which have contributed to our growth.

We do not have minimum client portfolio sizes or any other

strict criteria that determine which new clients we take on. Anyone

who wants to work with a financial planner and who is committed

to their own financial future is welcome to become a client.

We operate as a team, meaning that we are all able to assist each

other with product and market knowledge, providing a think-tank

for complex client solutions and assisting with client servicing in

the event of someone being ill or on leave.

Although small, our robust and skilled team believe strongly in

sharing knowledge and continuous professional development is at

the forefront of our business model. We believe that in upskilling

ourselves and keeping up to date with industry trends, we are best

positioned to provide effective client solutions.

We work hard to retain existing clients through high levels of

service. We conduct annual reviews at minimum as a standard

practice and interact with our clients using a variety of channels

such as email, monthly newsletters, face-to-face or virtual meetings,

telephone and WhatsApp.

We treat our clients the way

we like to be treated.

What is the company’s financial planning philosophy?

We believe that each client deserves a financial plan that is

personalised and actively managed to enable them to live the life

they deserve. We do this through the following:

• Organisation. Bringing order to our client’s financial life.

• Accountability. Helping them follow through with their


• Objectivity. Delivering insight from the outside to avoid

emotional decisions.

• Proactivity. Anticipating life’s transitions and being prepared

for them.

• Education. Exploring and bestowing knowledge to empower

client success.

• Partnership. Partnering to achieve the best life possible.

What services does Integral Wealth Management offer? How

do you charge for your services?

We provide financial planning and wealth management services

to individuals and corporates and offer a full range of investment

products and platforms, as well as life assurance and medical

aid. Each plan is tailored to a client’s unique requirements, and

we adhere to the highest level of ethics and integrity in all our

client and product provider relationships.

We pride ourselves on providing independent financial advice

that is client-focused, and appropriate based on each client’s

personal requirements and situation. If we cannot add any value,

we would prefer to steer a client in the right direction rather than

earn fees without adding value.

We have contracts with most investment and life firms in South

Africa, and contracts with a few offshore service providers. We

also provide advice on medical aids, wills and trusts as part of our

service, but we do not establish or manage trusts or draft wills.

Our planners are all salaried employees who do not earn

commission based on sales. Staff are remunerated by way of profit

share annually, encouraging everyone to have a vested interest in

the success of the business.

What is the practice’s vision and mission?

Our ethos as a business is to always put our clients and their best

interests first, and all our planners and assistants have a track

record of delivering on that promise. Part of this ethos is ensuring

that the following criteria are met:

• Client-centric

• Value for money

• No client is too small

• Full transparency and disclosure

• Honesty, integrity, ethics and professionalism

• Compliance is embedded in our culture

• Work as a team and value our staff

• Owner-managed and independent

Please detail how you have integrated the FPI’s Code of Conduct

into your practice.

We follow the six-step financial planning process, treating all

clients with the same care and diligence. We do not turn away any

client and do pro bono work for low-income earners introduced

by existing clients.

We have employed interns and trained them in all aspects of

our business, offering them permanent employment at the end

of their internship. We encouraged them to study towards the

Post-Graduate Diploma in Financial Planning and to become

CFPs®. It is our intention that our two current interns will

progress to become independent financial planners with us,

and we plan to repeat this process soon. We require all new

planners to be CERTIFIED FINANCIAL PLANNERS®, or to be

studying towards the designation when they join us. We believe

the biggest contribution we can make to transformation of our

industry is through training and giving people the opportunity

to grow themselves.






Empathy is critical to success.

Our remuneration model is designed to incentivise the

correct behaviour. We have no cut-off dates to achieve

targets or sell more. We sell advice, not products, and clients

who receive good advice tend to be long-term clients. It is

much cheaper to look after the clients we have than it is to

start working with a new client, so we treasure the clients

we have.

We believe that by working as a team we are also putting

clients first – there is always someone to deal with their query,

and the attention they receive is personal as everyone is

trained and willing to assist.

Our MD sits on the FPI Technical Committee and has been

involved in various FPI Committees over the past 20 years.

We have also participated in industry events like Leaderex, at

the FPI stand, and have written commentaries for Blue Chip

in the past.

To what extent do you use technology in your practice?

We have always invested in technology as we believe it

enables our staff and our business to perform optimally and

proficiently. We utilise a Dutch system called iManage for

all storage, which is encrypted cloud-based storage used

mainly by banks and legal firms. Diligent recordkeeping

and protection of data is key to our business processes.

We also subscribe to value-adding services like Asset Map

and Commspace.

We have an outsourcing arrangement with an IT firm that

provides live service support and checks the health of our

network and equipment on a regular basis.

Our IT systems enable all staff to work in the same way

whether they are in the office or at home or travelling

anywhere in the world. There was no disruption to business

in 2020 when we were forced into lockdown during the

Covid pandemic.

What do you think are the keys to being a successful financial

planning practice?

We treat our clients the way we like to be treated. Empathy

is critical to success. Behavioural finance has been the fastestgrowing

area of financial planning education and training of

late, and Covid taught us the importance of understanding the

underlying issues that drive financial behaviour. We try to have

the difficult conversations with clients early on and encourage

them to commit to their own plans.

Our business has a combination of structure and flexibility –

structure around our procedures and how we work, and flexibility

around the solutions we can offer clients – tailored to their likes and

dislikes, so no one-size-fits-all.

What are the biggest challenges you currently face as a practice?

We are fortunate in that we have a good spread of clients and are not

dependent on a few to sustain us, and we have committed and loyal

staff. As we are still relatively young (six years old), our biggest challenge

is going to be managing our growth and balancing that with finding the

right staff to look after our client base. Regulation keeps changing which

keeps the industry professional, and offshore investing becomes a larger

part of our focus as the world becomes a smaller place and emigration

increases. There are no givens in our planning for the future.

How has being an FPI Approved Professional Practice benefited you?

The experience of going through the FPI audit highlighted areas

where our business could improve, which was helpful to us and

strengthened us.

It has been a difficult period to measure benefits, due to Covid,

but when we applied, we were confident that if we wanted to be

at the top of our field, we wanted to align with the best, and meet

the highest standards, and that drove us to become an approved

professional practice.

What advice would you give another practice considering applying

to be an FPI approved practice?

Don’t hesitate on this. The application and approval process are a great

eye-opener. The designation has significant meaning in the industry

and to our clients.

Would you like to add anything?

We have spoken about the challenges

we face as a business, but not about

the challenges to our industry. It is

widely recognised that transformation

has been slow, and we welcome the

internship programmes run by FPI

and ASISA, which specifically target

our industry. We encourage other

financial planning companies to

appoint newly-qualified graduates –

it is a wonderful way to train young

people and enhance the profession.

The prestigious Approved Professional Practice accreditation is the result of a stringent

audit by FPI to ensure that a business adheres to the highest standards of knowledge,

expertise and ethical conduct.

Michael Frantzeskou, CFP®,

Director and Financial Planner,

Integral Wealth Management

68 www.bluechipdigital.co.za



FINANCIAL PLANNING | Estate planning

Preserving wealth while

keeping up with global trends

Andrew Ratcliffe is a director at Private Client Holdings

(PCH), a multi-family office based in Cape Town that

has been managing high-net-worth individuals’ (HNWI)

wealth for more than 30 years. “While South Africa has its

challenges and the global and local economic and political woes

of 2022 have certainly kept us on our toes, the country still has

a middle-income class that is steadily moving towards high-networth.

Preserving wealth, not only in South Africa, but across the

continent is key to the growth of our economies, even as times

and trends change,” says Ratcliffe.

PCH continuously follows and embraces emerging trends and

the impact they have on driving wealth creation, investment and

growth. “Immigration and semi-gration are two rapidly growing

trends in South Africa,” says Ratcliffe. “While semi-gration is where

families choose to relocate within a country, such as families

moving down to the Western Cape from Gauteng, many families

are leaving South Africa in search of more tax-friendly jurisdictions,

opportunities as well as popular residency and citizenship

programmes. The money goes where the opportunities are and

the families often follow.” PCH’s tax consulting and fiduciary

arms provide ongoing advice to their clients to ensure that they

understand the complexities of immigration and how to manage

their affairs when moving jurisdictions.

Another emerging trend is that of digital currencies and

alternative asset classes. According to the 2022 UBS Global Family

Office Report1, 28% of family offices are investing in decentralised

payments or technologies by way of private equity, while 26% of

family offices are currently investing or considering investing in

cryptocurrencies. “Embracing technology is just as fundamental

now to our advice,” says Ratcliffe. “There is a myriad of other

options now available, which are becoming more mainstream

however, there must be a good reason to have these as an asset

class in one’s portfolio.”

Ratcliffe is also seeing a demand for doing the right thing.

“Our clients’ values feed into our ethos and advisory process,

with a shift towards ESG and being mindful of issues like climate

change.” To implement ESG strategies, the company works with

the best fund managers in the market, from a global context,

who are skilled in constructing portfolios suited to individual

and family needs.

According to the same UBS survey, family offices think sustainable

investments will continue to at least match broader market returns

over the next five years. A total of 41% said they were actively

allocating more to companies/sectors that are focused on directly

impacting real world issues (e.g. lowering carbon emissions,

renewable energy, etc).

Despite the noise in the system, PCH continues to adhere to

its goals-based approach to wealth management and more than

ever to focus on its responsibility of being

in the “trust” business. “Wealth management

and wealth preservation requires a lot of

attention, focus, empathy, care and listening.

A lot of what we do is like being a counsellor

and a coach, listening carefully to the needs,

wants, fears and dreams of our clients. We’re

in the trust business,” says Ratcliffe. This

trust extends to their relationships with

independent financial advisors who they

partner with to navigate complex wealth

management strategies, with demanding

fiduciary and tax structuring requirements.

If you’re looking for this kind of partnership,

contact Andrew Ratcliffe, CFP® on

andrew@privateclient.co.za or visit


Andrew Ratcliffe, CFP®, Director,

Private Client Holdings

1The 2022 UBS Evidence Lab Global Family Office Report includes insights from 221 single family offices that collectively oversee wealth of US$493-billion and have average assets under

management of US$2.2-billion. A total of 16% of the survey sample were from the Middle East and Africa.

70 www.bluechipdigital.co.za


The licenses we hold with the Financial Sector Conduct Authority (FSCA) are: Private Client Holdings – FSP 613,

Private Client Portfolios – FSP 399 78 and Private Client Wealth Management – FSP 399 79.


The value of

a professional


Trust forms the core of the relationship between a

financial professional and their client. The client trusts

the financial professional not only with their finances,

but also with their long-term goals and objectives. There

is a fiduciary duty on the financial professional to always act in

the best interest of the client and put the needs of the client first.

The financial advice industry has suffered from bad press in

the past, due to unscrupulous advisors not acting in the best

interest of the client, but rather acting in their own best interest

to the detriment of the client. Unfortunately, these bad practices

have tainted the view of the industry despite the majority of

financial planners whose businesses revolve around their client,

their needs and objectives.

A professional designation is an indication to clients that the

financial planner or advisor you are dealing with has distinguished

themselves not only in terms of qualifications and experience, but

also holds themselves to a set of ethical standards governed by

a body of their peers.

The Australian Council of Professionals describes a profession

as: “a disciplined group of individuals who adhere to ethical

standards and who hold themselves out, and are accepted

by the public, as possessing special knowledge and skills in a

72 www.bluechipdigital.co.za

widely recognised body of learning derived

from research, education and training at a

high level, and who are prepared to apply

this knowledge and exercise these skills

in the interest of others. It is inherent in

the definition of a profession that a code

of ethics governs the activities of each

profession. Such codes require behaviour

and practice beyond the personal moral

obligations of an individual. They define

and demand high standards of behaviour

in respect to the services provided to the

public and in dealing with professional

colleagues. Often these codes are enforced

by the profession and are acknowledged

and accepted by the community.”

How did the financial planning profession

evolve in South Africa? In 1981, a group of

advisors in the life insurance and pension

fund industry founded the Institute of Life

and Pension Advisors (ILPA) to professionalise

the industry which, at that time, did not

have as many regulatory guidelines to

protect consumers as it does today. In 1998,

this Institute became one of the founding

members of the Financial Planning Standards

Board (FPSB), which owns the CERTIFIED

FINANCIAL PLANNER® mark outside of the

US. In 2000, this organisation changed its

name to Financial Planning Institute of

Southern Africa (FPI).

FPI is a professional body recognised by

the South African Qualifications Authority

and has three designations registered with

this Authority. The certification standards that

apply to all three professional designations

are based on four Es: Education, Experience,

Examination and Ethics.

The internationally recognised CERTIFIED FINANCIAL

PLANNER® designation is based on international standards for

financial planning as set by FPSB. These standards are localised

by the FPI to ensure that they cater for the uniquely South African

environment. All prospective CFP® members must meet the

certification requirements before they apply for membership. This

designation is underpinned by a formal qualification in financial

planning, at a postgraduate degree level.


FINANCIAL PRACTITIONER designations are available to those

financial advisors in the industry who have a graduate degree

or diploma in financial planning or related fields and meet the

additional certification requirements as set by FPI.

Why are these designations valuable?

Being a professional member of FPI distinguishes you from

the crowd. It reflects your commitment to becoming and

remaining a professional in the broader financial services

industry. An increasing number of financial institutions are

seeking to employ representatives and key individuals that

are professional members in good standing at FPI. Being an

FPI professional member means that you already meet the

competency (Education and Experience) and CPD standards of

the FSCA. You furthermore adhere to the FPI Code of Ethics and

Practice Standards and are subjected to peer review should you

step over the line in terms of the mentioned code.

Being a professional

member of FPI distinguishes

you from the crowd.

All of this assists the financial institution to continue to comply

with the fit and proper requirements as contained in BN 194 of 2017.

Being a professional member in good standing with FPI means that

you meet our ethical, competency and CPD standards.

Consumer trust is also very important when it comes to business

retention. A happy consumer is someone that stays with you as

they trust you. Having a professional designation showcases that

you are committed to the principles of FPI which are:

• Client first

• Integrity

• Objectivity

• Fairness

• Competence

• Confidentiality

• Diligence

• Professionalism

To circle back to the value of a professional designation

The value can be summarised in a few key words: employability,

competency, professionalism, consumer loyalty and trust.

Consumers trust competent professionals and financial firms

employ competent financial advisors and financial planners that

are going to grow with the practice or corporation.

Still not a member of FPI but really want to become a member?

Visit www.fpi.co.za and apply for membership today. Alternatively

contact us on (011) 470-6000 or membership@fpi.co.za.





The FPI Financial Planner

of the Year competition

is composed of very

stringent tasks faced by

the finalists in all three

rounds. Only applicants

demonstrating their

talents and abilities to

the highest degree made

it through the rounds.

Here is a roundup of

the winners of the FPI

Financial Planner of the

Year 2022 competition.

A huge congratulations to the 2022 Financial Planner of the Year,

Palesa Dube, CFP®.

The FPI Financial Planner of the Year is judged by independent

judges including academics, industry experts, FPI senior

management and board members. Congratulations to the top

three finalists, Philippus Hendrik Spies CFP®, Palesa Dube, CFP®

and Tom Brukman, CFP®.

Lelané Bezuidenhout, CFP®, and Philippus Hendrik Spies, CFP®.

Lelané Bezuidenhout, CFP®, and Palesa Dube, CFP®.



Find out about the

Young Financial Planners


Lelané Bezuidenhout, CFP®, and Tom Brukman, CFP®. Lelané Bezuidenhout, CFP®, with Palesa Dube, CFP®, FPI 2022

Financial Planner of the Year and Ryan McCaughey, CFP®, FPI

2021 Financial Planner of the Year.

The Top Candidate Award, presented by Nici Macdonald, CFP®,

FPI head of department for certification and standards, which

goes to the candidate whose performance surpassed all the

others in the FPI’s CFP® Professional Competency Examination

went to Bryan Nicol, CFP®.

The It Starts With Me Award which recognises a CERTIFIED

FINANCIAL PLANNER® professional for their unyielding dedication

to promoting the CFP® certification, went to Ricardo Teixeira, CFP®.

The Diversity and Inclusion Award, presented by the FPI’s HOD

for policy and engagement, David Kop, CFP®, which speaks to the

efforts of the individual exhibiting tireless endeavour to foster

diversity in the financial planning profession, went to Mona

Manzambi, CFP®.

The Harry Brews Award, presented by the FPI chairperson, Kirsty Scully, which honours an extraordinary individual for undying

and dedicated service to both the FPI and the financial planning profession in general, was awarded to Noel Maye, MBA. Maye is

the outgoing CEO of the Financial Planning Standards Board and is recognised for his unwavering support to the financial planning

profession and his tireless dedication to growing the profession from only a few territories to over 27 today with over 203 000 CFP®

professionals worldwide.





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FSP No: 48998, registration number 01893220. (Incorporated in England and Wales).

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