Blue Chip Issue 89

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.

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.


Create successful ePaper yourself

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

BLUE<br />

CHIP<br />

0.5 CONTINUOUS<br />


<strong>Issue</strong> <strong>89</strong> • Nov/Dec/Jan 2024<br />

www.bluechipdigital.co.za<br />

0.5 CONTINUOUS<br />







1.5 CONTINUOUS<br />


1.5 CONTINUOUS<br />






Noel de Kock, CFP®<br />

Tom Brukman, CFP®<br />


Meet this year’s three finalists<br />

. . .<br />

Lara Warburton, CFP®<br />



We are living through extraordinary times, indeed! And we can thank the<br />

Bokke for adding to the extraordinary! Well done, South Africa!<br />

We are experiencing big overall trends: climate change, technological<br />

disruption and social instability – all of which are reshaping the business<br />

environment and our world today. People are feeling burdened by all of this. On page 82,<br />

Judith Haupt attests that the risks these trends create only strengthen the relevance of<br />

solid financial planning, of creating stability where we can. She says, “What is important to<br />

realise though is that these trends pose new and huge risks, but also great opportunities<br />

to rethink our work and our world fundamentally. The way we will handle the problems<br />

we have today is going to impact the way we are able to work and live in the future.”<br />

Going back to the future is what it is all about.<br />

“Back to the Future” is the theme for the 2023 FPI Professional’s Convention. Key<br />

presentations will be on the future of financial planning, the psychology of financial<br />

planning, social media law and the South African political scene. At the gala dinner, the<br />

FPI will be hosting the prestigious awards ceremony where excellence in the profession<br />

is recognised. The event endeavours to acknowledge CFPs® from across Southern Africa<br />

who demonstrate innovation, professionalism and commitment to their clients and the<br />

profession. We wish the Financial Planner of the Year 2023 finalists, Noel de Kock, Lara<br />

Warburton and Thomas Brukman, all the best. Meet these three exceptional CFPs® on<br />

page 18.<br />

Rob Macdonald reflects on the words of Paul Saffo, a Silicon Valley-based forecaster<br />

who explores long-term technology trends and their impact on society: “The goal of<br />

forecasting is not to predict the future but to tell you what you need to know to take<br />

meaningful action in the present”. According to Chat GPT, “The future of financial advice<br />

is likely to be shaped by several key trends and developments, driven by advances in<br />

technology, changing consumer preferences and regulatory changes.” GPT outlines 10<br />

aspects that are likely to be a reality. Macdonald lists these and considers the implications<br />

of each, both now and in the future.<br />

With the COFI Act impending, technology innovation is imperative. COFI will replace<br />

the FAIS Act and it will shake up every component of FSP businesses. With these changes,<br />

every FSP business will need an equaliser. Anton Swanepoel argues that this equaliser is<br />

technology (page 62).<br />

Arthur C Clarke once articulated that “any sufficiently advanced technology is<br />

indistinguishable from magic”, Tim Slatter tells us. Social media possesses an escape from<br />

reality and a conduit for connection, yet financial advisors struggle to effectively harness<br />

its potential. In his article, Slatter guides you through the conundrum (page 68).<br />

Going back to the future, GPT’s forecast may not be accurate but it provides some<br />

indication of what meaningful action we can take in the present.<br />

Enjoy this issue and for those who are going to the FPI Professional’s Convention, see<br />

you there!<br />

All the best<br />

Alexis Knipe, Editor<br />

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

blue-chip-journal<br />

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

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

contributions from FPI and other leading industry figures, covering all aspects of the financial planning industry.<br />

A total of 7 500 copies of the publication are distributed directly to every CERTIFIED FINANCIAL PLANNER®<br />

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

FPI members are able to earn three verifiable Continuous Professional Development (CPD) points per edition<br />

of the print journal (four per year) under the category of Professional Reading.<br />

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

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

ISSUE <strong>89</strong> |<br />

NOV/DEC/JAN 2024<br />

BLUE<br />

CHIP<br />

Publisher: Chris Whales<br />

Editor: Alexis Knipe<br />

Online editor: Christoff Scholtz<br />

Digital manager: Charl Daniels<br />

Designers: Salmah Brown,<br />

Monique Petersen<br />

Production: Yonella Ngaba<br />

Ad sales:<br />

Sam Oliver<br />

Gavin van der Merwe<br />

Bayanda Sikiti<br />

Vanessa Wallace<br />

Managing director: Clive During<br />

Administration & accounts:<br />

Charlene Steynberg<br />

Kathy Wootton<br />

Sharon Angus-Leppan<br />

Distribution and circulation manager:<br />

Edward MacDonald<br />

Printing: FA Print<br />


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

Company Registration No:<br />

2004/004982/07<br />

Directors: Clive During, Chris Whales<br />

Physical address: 28 Main Road,<br />

Rondebosch 7700<br />

Postal address: PO Box 292,<br />

Newlands 7701<br />

www.bluechipdigital.co.za<br />

Tel: +27 21 657 6200<br />

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

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

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

of the copyright owner. The opinions expressed are not necessarily<br />

those of <strong>Blue</strong> <strong>Chip</strong>, nor the publisher, none of whom accept liability<br />

of any nature arising out of, or in connection with, the contents of<br />

this book. The publishers would like to express thanks to those who<br />

support this publication by their submission of articles and with their<br />

advertising. All rights reserved.


ISSUE<br />

<strong>89</strong><br />

NOV/DEC/JAN 2024<br />

01<br />

06<br />


By Alexis Knipe<br />



Message from the FPI CEO<br />

08<br />

14<br />


Milestones, news and snippets<br />


Column by Rob Macdonald, Head<br />

of Strategic Advisory Services, Fundhouse<br />

15<br />


HEALTH<br />

Rob Macdonald’s new book<br />

16<br />


Column by Kobus Kleyn, Tax and<br />

Fiduciary Practitioner, Kainos Wealth<br />

17<br />



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

18<br />


Meet the top three Financial<br />

Planner of the Year finalists<br />

22<br />


The power of professional<br />

financial planning<br />

26<br />


Nicole Loker, Investment Specialist,<br />

Fundhouse, unravels our irrational investing<br />

habits<br />

32<br />


The hype around investing<br />

offshore is back at euphoric levels,<br />

by Sheldon Holdsworth, Old Mutual<br />

International Regional Offshore Specialist<br />

34<br />



Schroders’ research shows that buybacks<br />

have became more widespread narrowing<br />

the gaps with the US<br />

36<br />


NEW CEO<br />

Meet Ferdi van Heerden<br />

37<br />


An investment strategy gaining<br />

significant traction in the global and South<br />

African asset management landscape<br />

38<br />


Florbela Yates, Head of Equilibrium,<br />

writes about the vast investment<br />

opportunity set available offshore<br />

40<br />


CHANGE<br />

Tiaan Herselman, Head of Advice, Old<br />

Mutual Wealth, speaks about the future of<br />

financial advice<br />

42<br />


Coronation Fund Managers<br />

celebrates its 30th anniversary<br />

44<br />



The rising relevance of DFMs, by Cogence<br />

48<br />


Investing with impact to tackle<br />

the dual climate and biodiversity crises, by<br />

Melville Douglas<br />

2 www.bluechipdigital.co.za



to help everyday people<br />

realise a future in which<br />

they can retire with dignity.<br />

Launch your business:<br />

Create your own professional<br />

brand while building capital value<br />

Align your business:<br />

For succession planning, reduced<br />

risk/liability and a better advice<br />

value proposition<br />

Join an established business:<br />

Join one of our partners to receive<br />

access to clients and mentorship<br />

Shape your tomorrow for<br />

your future<br />

Are you eager to leave a lasting<br />

legacy for your loved ones while<br />

ensuring your clients receive<br />

top-notch service even after you<br />

retire? Look no further. Our expert<br />

team is here to guide you through<br />

our proven succession planning<br />

framework and walk the journey with<br />

you. Let’s talk today.<br />

Your Future, Our Expertise, Your<br />

Peace of Mind.<br />

Contact us to discuss your options<br />

T: +27 (0) 12 683 3417 / 3422 | E: Info@gravitonwm.com | www.gravitonwm.com<br />

Address: Westend Office Park, Block D, 258 Hall Street, Centurion 0157<br />

Graviton Wealth Management (Pty) Ltd is an authorised financial services provider.<br />

Company Registration No. 2000/029/158/07 | VAT Registration No. 4310 204 468<br />

Financial Services Provider No. 8772


ISSUE<br />

<strong>89</strong><br />

NOV/DEC/JAN 2024<br />

50<br />


Offshore investing: where, how<br />

and how much?<br />

53<br />



Trevor Glassock, Head of Sales, Dr Roddy<br />

Carter, thought he did<br />

54<br />


The future of investing and the<br />

integration of quantitative and qualitative,<br />

by Prescient Investment Management<br />

55<br />




How emotional intelligence gives us the<br />

edge that allows us to co-exist with AI, by<br />

the School of Financial Planning Law<br />

56<br />


USING AI<br />

<strong>Blue</strong> <strong>Chip</strong> speaks to Zeldeen Muller,<br />

CEO of inSite Connect and creator of<br />

AgendaWorx<br />

58<br />



By Rob Macdonald, Head of Strategic<br />

Advisory Services, Fundhouse<br />

62<br />


Anton Swanepoel, Founder,<br />

Trusted Advisor, tells us that technology<br />

changes everything in the onerous<br />

regulatory environment<br />

64<br />



The Seeds Analytics solution<br />

66<br />



Francios du Toit, CFP®, Founder of<br />

PROpulsion, explains how to use<br />

technology to improve the customer<br />

experience<br />

68<br />




Why struggles exist and how to conquer<br />

them by Tim Slatter, Director, Slatter<br />

Communications<br />

70<br />


By Jeannie de Villiers-Strijdom, CFP®,<br />

Senior Lecturer and Postdoctoral Fellow,<br />

Department of Business Management,<br />

Faculty Economic and Management<br />

Sciences, Stellenbosch University<br />

74<br />



Two-pot system insights by Matthew<br />

Marrian, Chief Operating Officer,<br />

InvestSense<br />

76<br />



Karl Smith, Senior Education, Training and<br />

Member Support Manager, SAIPA, writes<br />

about four strategic steps to help SMEs get<br />

back on track<br />

78<br />


The role of a multi-family office in<br />

preserving wealth and protecting family<br />

legacies, by Private Client Holdings<br />

80<br />



By Stian De Witt, CFP®, Executive Head of<br />

Financial Planning at NMG Benefits<br />

81<br />



By Gary Feldman, Executive Head of<br />

Healthcare Consulting, NMG Benefits<br />

82<br />



Judith Haupt, Managing Director,<br />

CONTRACT South Africa, informs us how<br />

to use the opportunities of disruption and<br />

inclusive leadership to create a better world<br />

84<br />


From managing people to<br />

managing advice, by Guy Holwill, Chief<br />

Executive, Fairbairn Consult<br />

86<br />



Kim Potgieter of Chartered Wealth<br />

Solutions shares 10 key learnings<br />

4 www.bluechipdigital.co.za

Good things came to those<br />

who didn’t wait.<br />

We’ve spent the last 30 years dedicated to one thing and one thing only: turning<br />

long-term savings into real wealth. Take those who had invested R100 000 in our<br />

very first balanced strategy, Global Houseview, in Oct 1993 for example. They would<br />

have seen their investment grow to R6 437 540 by the end of September 2023.<br />

Not only did we grow their hard-earned money into real long-term wealth, but<br />

we earned their trust along the way. What are you waiting for? Invest today.<br />

Good things come to those who<br />

don’t wait to invest.<br />

Coronation is an authorised financial services provider.<br />

Past performance is not an indication of future performance.<br />

Returns for the strategy is quoted gross of fees.

BLUE<br />

CHIP<br />

FPI UPDATES | CEO message<br />

Nurturing<br />

better financial<br />

decision-making<br />

Lelané Bezuidenhout, CFP®,<br />

CEO, Financial Planning<br />

Institute of Southern Africa<br />

The CEO of Financial Planning Institute of<br />

Southern Africa shares FPI’s latest news.<br />

Since the last edition of <strong>Blue</strong> <strong>Chip</strong> magazine, the<br />

Financial Planning Institute (FPI) celebrated Women’s<br />

Month in August and contributed in numerous ways<br />

to enhancing the professional competency of our<br />

members and furthering financial education.<br />

This year’s theme for Women’s Month at the FPI was “Nurture<br />

the Future”. The many female professional members of the FPI<br />

nurture the future by helping their clients take control of their<br />

finances and make informed financial decisions.<br />

In July, the FPI submitted its response to Treasury’s<br />

two-pot/component retirement savings system proposals<br />

and facilitated a series of interactive peer collaboration<br />

sessions to support this work. The first two sessions, in<br />

July, hosted by the Practice Management Committee and<br />

the Employee Benefits Competency Committee, focused<br />

on practice standards and the proposed two-pot system<br />

respectively. In the third session, in August, the Technical<br />

Competency Committee focused on the Marriage Bill. The<br />

peer collaboration sessions generated diverse views, which<br />

were discussed and debated in good spirits.<br />

The FPI held workshops for financial planners in August<br />

and September. The retirement and investment online<br />

workshop on 30 August covered diverse topics, from<br />

cryptocurrencies and AI to the two-pot system. Our tax<br />

workshop on 28 September delved into laws that have<br />

a direct impact on financial planning. It covered Section<br />

42 transfers, tax matters around emigration as well as the<br />

functions and mandate of the Tax Ombud. If you missed<br />

these workshops, you can still register for the workshops via<br />

our website.<br />

The FPI plays an important role in fostering financial literacy<br />

and promoting the cause of professional financial planning in<br />

South Africa. We supported and participated in the following<br />

events over the past three months:<br />

• Money Smart Week. This annual financial literacy campaign<br />

by the National Consumer Financial Education Committee<br />

(NFEC) was held from 28 August to 3 September. The NFEC<br />

adopted the Global Money Week Theme for 2023: “Plan<br />

your money, plant your future”. The FPI is a member of the<br />

committee and participated in various consumer education<br />

activities during the week.<br />

• Leaderex 2023. Africa’s largest gathering of business leaders,<br />

professionals and entrepreneurs took place from 12 to 14<br />

September at the Sandton Convention Centre. The FPI had<br />

a stand at the conference and hosted a series of financial<br />

planning presentations.<br />

• Humans Under Management (HUM). Several Certified<br />

Financial Planner® members delivered presentations at this<br />

popular conference for the advisory industry on 19 September<br />

at the Allan Gray Auditorium, V&A Waterfront, Cape Town.<br />

• Financial Planning Week. This annual initiative by the FPI<br />

coincided with the International Organization of Securities<br />

Commissions (IOSCO) World Investor Week from 2 to 8 October<br />

and the Financial Planning Standards Board’s World Financial<br />

Planning Day on 4 October. The FPI is proud to be part of these<br />

6 www.bluechipdigital.co.za

The FPI plays an important role in fostering<br />

financial literacy and promoting the cause of<br />

professional financial planning in South Africa.<br />

global campaigns to show people the wide-ranging benefits<br />

of financial planning and the impact it can make in all areas<br />

of their lives.<br />

The highlight of the FPI’s calendar, the FPI Professionals<br />

Convention, takes place from 14 to 15 November at the<br />

Sandton Convention Centre. The theme is “Back to the<br />

Future” and key presentations will be on the future of financial<br />

planning, the psychology of financial planning, social media<br />

law and the South African political scene in the run-up to<br />

next year’s elections. The sessions will be streamed virtually<br />

for those who cannot attend in person.<br />

At the gala dinner on the evening of 14 November, the FPI<br />

will hold its annual awards ceremony, announcing the 2023<br />

Financial Planner of the Year and the 2023 Practice of the<br />

Year. The FPI will also announce the winners of the 2023 Top<br />

Candidate of the Year, Harry Brews, Diversity and Inclusion as<br />

well as It Starts with Me awards.<br />

This year’s finalists for the coveted Financial Planner of the<br />

Year title are Noel De Kock, CFP®, Lara Warburton, CFP® and<br />

Thomas Brukman, CFP®.<br />

Of interest to our members are the following announcements:<br />

• The FPI is excited to introduce the Next Generation Certification<br />

Standards for the CFP® designation. The assessment process to<br />

become a CFP® professional member of the FPI will be amended<br />

from 1 January 2025 to closely align with international<br />

requirements for certification. The process will incorporate a<br />

practical component to ensure that new CFP® professionals<br />

are tested in a practical manner across the knowledge, skills<br />

and abilities components of financial planning.<br />

• With input from members, the FPI has combined the<br />

foundational member regulations into a single handbook.<br />

The first edition of the FPI Member Handbook combines<br />

the seven parts of the FPI’s member agreement; the FPI<br />

glossary, standard interpretation rules and miscellaneous<br />

terms; the FPI memorandum of incorporation, member<br />

regulations, certification standard, disciplinary regulations<br />

as well as the FPI’s information use, confidentiality and<br />

data protection rules.<br />

• The FPI and Due Diligence SA have partnered to provide<br />

members access to the Due Diligence SA platform, providing<br />

company- and product-level due diligence documentation<br />

for asset managers in South Africa.<br />

• There will be four PCE examination opportunities available<br />

in 2024. Registrations for 8 and 9 February as well as 25 and<br />

26 April 2024 are already open.<br />

As we prepare for 2024, we reflect on 2023 and thank you for<br />

your support as none of the above would have been possible<br />

without the support of our members.<br />

See you at the Convention!<br />

Until next time,<br />

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

Institute of Southern Africa<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

On the money<br />

Making waves this quarter<br />

Win with Integrity and <strong>Blue</strong> <strong>Chip</strong><br />


The Financial Planning Institute of Southern Africa (FPI) is delighted<br />

to announce that Integrity Academy has been approved as an FPIrecognised<br />

education provider. Established in June 2013 by Johann<br />

Cloete, CFP®, Justin Cloete and Lynessa Spies. Integrity Academy has<br />

successfully served over 400 financial planning and advisory<br />

institutions and more than 17 000 students – marking a decade<br />

of excellence in the industry. As a significant milestone, the<br />

Occupational Certificate: Financial Advisor and National Certificate:<br />

Wealth Management offered by Integrity Academy will now<br />

be recognised as underlying qualifications for the prestigious<br />


the FPI. Starting from 2023, candidates who complete these<br />

qualifications with Integrity Academy will be eligible to apply for<br />

the designation without the need to undertake a professional<br />

competency examination with the FPI. For more information<br />

about Integrity Academy and its accredited online education<br />

programmes, please visit www.integrityacademy.co.za.<br />


“It was great to participate with Andrew Finlayson, Greg Strachan, Cobie Legrange and Hannes<br />

Viljoen at the recent <strong>Blue</strong> <strong>Chip</strong> Round Table Series on Offshore Investment. In a space filled<br />

with a great deal of conjecture, it was amazing to see the firm-founded opinions based on<br />

successful portfolio construction with experience in the field. It’s important to highlight that<br />

building a wealth portfolio is about having ascertained a diverse view of opinions and identifying<br />

your own. There is no luck in planning, but being prepared in your planning makes you open<br />

to opportunity. We are here to help you<br />

harness these opportunities within foreign<br />

exchange. We are happy to announce that<br />

Matthew Marrian of InvestSense is our<br />

winner of the Garmin Fenix watch which Matthew Marrian (left) and Lara<br />

was drawn from the registrants for the event. Lotter (right).<br />

A hearty congratulations from us here at<br />

Exchange 4 Free,” says Lara Lotter, Exchange 4 Free<br />

“The offshore conversation is always interesting and holds significant importance<br />

for us at InvestSense, especially when engaging with our clients. The complexity<br />

of offshore allocation means there is no one-size-fits-all answer. Therefore, it was<br />

enlightening to gain insights from Andrew and the panel regarding their perspectives<br />

on this matter and how they approach it within their respective businesses,” says the<br />

winner of the Garmin Fenix, Matthew Marrian, COO, InvestSense.<br />

The Garmin Fenix 7x Solar Smart watch. Read an excerpt of the <strong>Blue</strong> <strong>Chip</strong> Offshore Investment Round Table on page 50.

We’ve got a plan for<br />

everyBODY<br />

Big or small, we’ve got<br />

a medical aid plan for<br />

your employees.<br />

Medical Aid<br />

in Action<br />

As one of the five largest open medical<br />

schemes in the country, Medihelp Medical<br />

Scheme has 118 years’ experience in<br />

providing healthcare cover for<br />

South Africans.<br />

Our personalised approach means your<br />

employees get the service and products<br />

they need to make managing their<br />

medical aid effortless.<br />

To find out more SMS ‘everybody’ to<br />

32291, visit our website at medihelp.<br />

co.za, or scan the QR code.

BLUE<br />

CHIP<br />

On the money<br />

Making waves this quarter<br />

Unprecedented introductions and congratulations<br />



Brunhilde Gerber, Deputy Head, School of Financial Services<br />



Milpark Education has added a new qualification to<br />

its extensive portfolio, a Postgraduate Diploma in<br />

Risk Management. It will be the first of its kind in the<br />

country as it offers industry-specific streams. Deputy<br />

head of the School of Financial Services, Brunhilde<br />

Gerber, says this is an exciting chapter.<br />

“Applications are open for admissions and<br />

registration. The diploma gives the option of<br />

specialising in a field of interest rather than just having<br />

a broad overview,” she says.<br />

Gerber adds that there are other plans in motion for<br />

the school and concludes with the encouragement to<br />

“watch this space”.<br />

In support of the brilliant work done by the ASISA Foundation under the leadership of Ruth Benjamin-Swales and an unwavering<br />

commitment to promoting Financial Planning for All, the FPI has been working in partnership with the ASISA Foundation since 2017,<br />

with the shared goal of making financial planning an integral part of every South African’s life.<br />

Taking our collaboration to new heights, the FPI and the ASISA Foundation signed a Memorandum of Understanding in 2022,<br />

formalising our alliance and amplifying our joint efforts in supporting the ASISA Foundation’s mission to deliver impactful and objective<br />

financial literacy and micro-enterprise development programmes to South Africa’s most vulnerable communities.<br />

The ASISA Foundation, established in 2012 by ASISA, has already made significant strides in this domain, having successfully trained<br />

over 80 000 beneficiaries through a range of programmes. The foundation’s strategic objective as an industry body is to develop,<br />

implement and refine relevant financial education initiatives that bring about a positive and sustainable impact on South African society.<br />

Aligned with the vision of the FPI, which aims to provide financial planning and advice for all, the FPI has been actively involved in<br />

extending financial consumer education to South Africans, synergising with the ASISA Foundation’s ongoing efforts.<br />

The joint endeavours of the FPI and the ASISA Foundation are a testament to our dedication to fostering financial planning for all<br />

South Africans and to delivering impactful and objective financial education to more South Africans, creating a brighter and more<br />

financially secure future for the nation.<br />

NMG Benefits, a leading player in the financial industry, is excited to unveil<br />

its latest offering, NMG Wills & Trusts. This product is set to revolutionise the<br />

landscape of estate planning in South Africa by providing individuals and<br />

families with a seamless and effective approach to securing their legacies.<br />

Estate planning is an integral part of responsible financial management.<br />

However, the intricacies involved often lead to confusion and oversight.<br />

NMG Wills & Trusts addresses this need by offering a holistic and personalised<br />

approach to estate planning that aligns with each individual’s circumstances.<br />

For more information, simply email m1@nmg.co.za.

BLUE<br />

CHIP<br />

On the money<br />

Making waves this quarter<br />

Sustainable finance<br />


One of Africa’s most impactful discussion forums on sustainable and economic<br />

development will use its 2023 landmark event to focus on what sustainable development<br />

means for the accountancy professional.<br />

At its Africa Members’ Convention this December, the Association of Chartered Certified<br />

Accountants (ACCA) will bring together up to 1 000 distinguished ACCA members and<br />

business leaders from across the continent to hear from a range of leading experts.<br />

Representing all spheres of business and the public and private sectors, delegates will be<br />

able to tap into a wealth of expertise, inspiration and unparalleled insights.<br />

Jamil Ampomah, Director – Africa at ACCA says: “Developing the ‘Africa we want’ means<br />

that finance professionals must play effective roles in driving sustainable practices across<br />

business and maximising trade opportunities. This event is a forum for exciting discussions<br />

that will build awareness on the critical leadership, talent and partnerships demanded.”<br />

Registration is now open and more information can be found online.<br />

Jamil Ampomah, Director – Africa, ACCA<br />




1. Short-Term Insurance<br />

2. Retail Insurance<br />

3. Claims Assessor<br />

4. Wealth Management<br />


1. Financial Planning<br />

2. Health Benefits<br />

3. Corporate Retirement Fund Benefits<br />

4. Short-Term Insurance<br />

5. Insurance Underwriter<br />


www.integrityacademy.co.za<br />

info@ialearn.co.za<br />

012 348 1098<br />

@IntegrityAcademy<br />

integrity-academy<br />

061 407 9209<br />

or visit us at:<br />



| 0042<br />

1.Financial Advisor<br />


RCA-BCJ-23-2<br />

Our tailored platform services<br />

are meticulously crafted to cater to<br />

Independent Financial Advisors' needs.<br />

They provide you with unparalleled<br />

discretionary, dealing and custody<br />

solutions grounded on a solid<br />

foundation of decades of<br />

experience in the UK and<br />

International markets.<br />

Your Secure, Flexible, Offshore Partner.<br />

Complete your financial ecosystem today<br />

with our exclusive services and global<br />

custody solution while being assured; your<br />

clients remain solely yours.<br />

Contact Information:<br />

Nicole Jibrail<br />

Brenda Bannatyne<br />

Office: +27 21 140 1566<br />

Ramsey Crookall & Co Limited is the Isle of Man's longest-established<br />

independent firm of stockbrokers and investment managers.<br />

Ramsey Crookall & Co Limited is Licensed by the Isle of Man Financial Services Authority. Isle of Man Company No. 046435C

BLUE<br />

CHIP<br />

COLUMN<br />

Perception is reality<br />

This is why how financial planning fees are charged is important.<br />

Rob Macdonald, Head of<br />

Strategic Advisory Services,<br />

Fundhouse<br />

Rob Macdonald has held<br />

several senior positions in<br />

the investment industry.<br />

At Fundhouse, he acts as<br />

a consultant and coach<br />

to financial advisors and<br />

develops and facilitates<br />

training programmes in<br />

behavioural coaching and<br />

practice management. Before<br />

joining the financial services<br />

industry, Macdonald was<br />

MBA director at the UCT<br />

Graduate School of Business.<br />

He is co-author of the book<br />

Rethinking Leadership and has<br />

consulted, written and spoken<br />

widely on a range of topics.<br />

Macdonald has a Master’s<br />

degree in Management<br />

Studies from Oxford University<br />

and is a CFP® Professional.<br />

At the recent HUM SA conference,<br />

Alan Smith, a London-based financial<br />

planner and the founder of Capital<br />

Asset Management, shared some<br />

of the lessons he has learned in building his<br />

business. His talk was entitled Failing my way to<br />

success, reinforcing the reality that the path of<br />

progress is inevitably littered with both success<br />

and failure. Smith says that he started Capital<br />

with a clear vision to do things differently and<br />

wanted to challenge conventional thinking in<br />

financial services.<br />

One area where he did this is how Capital<br />

charges fees. Smith wanted to separate advice<br />

fees from a client’s asset base. In so doing, he is<br />

agnostic as to where a client’s money is invested<br />

or what financial products a client may have.<br />

Capital looks after the client’s total financial<br />

life for a fee. Smith saw this approach as giving<br />

him a competitive advantage as there are so few<br />

other financial planners who operate like this.<br />

The simplest analogy for Smith’s approach is<br />

the medical profession, where a client pays their<br />

doctor for assessment, diagnosis, advice and if<br />

necessary, a prescription. The client then pays the<br />

pharmacist for the products they are prescribed,<br />

even if there is an in-house dispensary, a<br />

separate payment is made. As difficult as it may<br />

be to envisage, the separation of advice fees<br />

from product fees must be an important step<br />

for financial planning to take its rightful place<br />

as a fully-fledged profession.<br />

In my recently released book, The 7 Pillars of<br />

Financial Health – Partnering with a Professional to<br />

Thrive, as the title suggests, I encourage people<br />

to partner with a financial planning professional<br />

to achieve financial health. A common response<br />

from readers who do not have financial planners<br />

has been that while they recognise the benefits<br />

of partnering with a professional, they don’t like<br />

the way financial planners are remunerated.<br />

Sadly, many still perceive financial advice as<br />

an incentive-driven, sales and commissionoriented<br />

service. This is despite the incredible<br />

work that so many financial planners do for<br />

their clients.<br />

Alan Smith has been able to counter this<br />

perception, saying he doesn’t have to worry<br />

about having conversations with clients about<br />

the link between his fees and products. His fee is<br />

for advice only. Whenever I have fee discussions<br />

with financial planners, the principle of<br />

separating advice and product fees is not<br />

necessarily disputed. The obstacle that many<br />

see to adopting this approach is how to charge<br />

the fee. Smith has solved this problem by<br />

charging a retainer fee to clients. He agrees on<br />

the scope of work and service with a client and<br />

the requisite fee the client will pay, irrespective<br />

of what products the client may need.<br />

Many financial planners are trying to go this<br />

route by charging fees for work done, whether<br />

for initial consulting with clients, drawing up a<br />

financial plan or implementing advice. But the<br />

real challenge is when it comes to ongoing<br />

fees. Here financial planners have legitimate<br />

concerns about having to invoice clients<br />

monthly and chasing debtors who get into<br />

arrears. However, product providers already<br />

have sophisticated and efficient systems for<br />

ensuring financial planners are effectively<br />

remunerated on an ongoing basis.<br />

Adapting these systems to enable financial<br />

planners to stipulate rand-based retainer<br />

fees to be paid to them regularly (monthly or<br />

quarterly), no matter the product type, would<br />

be a huge step in enabling financial planners<br />

to charge clients ongoing fees in the way that<br />

Alan Smith has shown is possible. It would also<br />

help people recognise that financial planning is<br />

a genuine and complex profession that focuses<br />

on helping clients achieve true financial health,<br />

rather than one that many still see as simply<br />

selling financial products.<br />

14 www.bluechipdigital.co.za


BLUE<br />

CHIP<br />

The 7 Pillars of Financial Health –<br />

Partnering with a Professional to Thrive<br />

<strong>Blue</strong> <strong>Chip</strong> interviews the author of The 7 Pillars of Financial Health, Rob Macdonald.<br />

What inspired you to write the book?<br />

I have always enjoyed writing and as you know I write regularly<br />

for <strong>Blue</strong> <strong>Chip</strong> and have previously co-authored a book entitled<br />

Rethinking Leadership. About six or seven years ago, I began<br />

facilitating behavioural coaching programmes for financial<br />

planners and frequently got questions and queries about how the<br />

insights and ideas from these programmes could reach a broader<br />

audience. I thought the obvious way to do this was to write a book.<br />

When Covid struck my wife had just signed up to do a PhD so I took<br />

it as the perfect opportunity to begin writing the book.<br />

Who do you want to read it?<br />

When I initially began writing the book, I wrote it for the financial<br />

planner. I am a firm believer that financial planning is a noble<br />

profession that helps people make decisions about their life and<br />

money. Until now, the focus of financial planner education has<br />

been on the money and the technical aspects of the work, yet I<br />

believe human skills are critical to sound financial advice. When I<br />

took the book to my publisher Vindigo Press, they questioned why<br />

I was limiting the audience to financial planners as they believed<br />

with a little more work it would be appropriate for anyone who<br />

was considering getting financial advice, or who worked with a<br />

financial planner. The response from both financial planners and<br />

the person in the street has been very positive. My hope is that<br />

financial planners will see the book as useful for themselves and<br />

their clients.<br />

What do you think is unique about this<br />

book?<br />

I think you could put personal finance books<br />

into three broad categories. First, those<br />

that provide advice on technical aspects of<br />

investing, financial and retirement planning.<br />

Second, those that offer lessons about how<br />

to handle your money, whether from stories<br />

about people and their money or the author’s<br />

life experience. Third, there are books that<br />

focus on the person and their behaviour,<br />

whether about life planning or informed by<br />

insights from behavioural finance, which<br />

educates us on our many biases and how they<br />

influence our approach to money. My book is<br />

probably closest to this third category, but I<br />

believe is unique because it doesn’t only share<br />

information but also focuses on applying<br />

human skills, both intrapersonal and interpersonal, that are key to<br />

influencing behaviour, which I believe is the greatest determinant of<br />

financial health.<br />

How would a financial planner find this book useful?<br />

I hope it will challenge financial planners to look into the mirror and<br />

perhaps think differently about how they go about their work. There<br />

are also practical skills outlined in the book that financial planners<br />

will be able to apply immediately upon reading the book. These<br />

skills obviously require practice, but there is enough in the book to<br />

help a financial planner who wants to become more skilled on the<br />

human side of financial advice to practically implement new ways of<br />

interacting with their clients.<br />

How would a potential or existing client of a financial planner<br />

find the book useful?<br />

Firstly, to recognise that their financial health is not just about<br />

money and that the financial planning process provides clients<br />

with the opportunity to really think about what they want out of<br />

life. Secondly, that a successful financial planning outcome has<br />

more to do with our human skills, who we are and how we turn<br />

up in the world, than how much knowledge one has about money<br />

and finance. Thirdly, a key message in the book is that a client will<br />

be better off working with a professional financial planner than<br />

going it alone but that clients can also work on their human skills<br />

to improve their financial planning outcome.<br />

If there is one thing that you want the<br />

reader to take away from the book, what<br />

would it be?<br />

Most importantly, I would like the reader to<br />

enjoy reading the book. I love reading, but<br />

not everyone does. So, if someone chooses to<br />

spend some of their valuable time reading the<br />

book, if nothing else I hope they will enjoy it. I<br />

also hope that the book is a catalyst for anyone<br />

who is hesitant about seeking financial advice,<br />

to engage the services of a professional<br />

financial planner. Finally, I hope that financial<br />

planners will find the book a good resource<br />

for their work and that clients, or potential<br />

clients, recognise that financial planning is a<br />

noble profession and that their lives will be<br />

richer in all senses of the word by working with<br />

a financial planner.<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

COLUMN<br />

A New Horizon<br />

The Three Piggy Bank system and the future of retirement planning in South Africa.<br />

Kobus Kleyn, CFP®, Tax<br />

and Fiduciary Practitioner,<br />

Kainos Wealth<br />

Kobus Kleyn has published<br />

over 200 articles and authored<br />

four books. He is a multiple<br />

award-winning professional<br />

and holds eight memberships<br />

with professional associations.<br />

His most recent awards were<br />

lifetime achievements awards<br />

from the FPI (Harry Brews),<br />

The Million Dollar Round<br />

Table (Top of the Table Life<br />

Membership) and Liberty Group<br />

(Life Membership) in 2021/22.<br />

Retirement planning, at its core, is an<br />

interplay of saving, strategising and<br />

securing a future. As a Certified Financial<br />

Planner® (CFP®), I have witnessed the<br />

metamorphosis of these mechanisms in South<br />

Africa. Today, we stand on the precipice of one<br />

of the most transformative shifts in how we think<br />

about our retirement: the introduction of the<br />

“Three Piggy Bank” system.<br />

The origin of the Three Piggy Bank concept<br />

The term “Three Piggy Bank” system is nostalgic<br />

in my heart. As a child, I had three piggy banks<br />

where I would allocate my allowance. One for<br />

immediate spending, another for short-term<br />

savings and the third for long-term aspirations.<br />

These piggy banks acted as early lessons in<br />

financial planning, teaching me the importance<br />

of balance between immediate desires and<br />

long-term goals. Today, I see a reflection of that<br />

personal history in the proposed legislation for<br />

retirement planning in South Africa.<br />

Understanding the Three Piggy Bank system<br />

The proposed system divides retirement funding<br />

into three separate but interconnected components:<br />

1. Vested Component (Piggy 1). This “bank”<br />

is dedicated to safeguarding all retirement<br />

savings accumulated up to skrikkeljaar (29th<br />

February 2024). Beyond this date, its growth<br />

will be limited, except for some specific<br />

scenarios. For instance, those related to<br />

provident fund members aged 55 or above as<br />

of 1 March 2021 will find more flexibility here.<br />

2. Savings Component (Piggy 2). Starting<br />

from skrikkeljaar 2024, this “bank” will receive<br />

a third of all retirement contributions. It’s<br />

designed with flexibility, aiming to serve as<br />

a financial cushion. Annual withdrawals are<br />

allowed from this pot, offering solace during<br />

financial emergencies.<br />

3. Retirement Component (Piggy 3). Acting<br />

as the vault for most post-leap day 2024<br />

contributions (two-thirds, to be precise),<br />

this “bank” focuses on ensuring financial<br />

security post-retirement. While its primary<br />

purpose is preservation until retirement,<br />

provisions will exist for early withdrawals<br />

in specific situations, such as emigration or<br />

job redundancy.<br />

It’s essential to stress that the system is still<br />

evolving. While the foundation is being laid,<br />

the architectural details are in flux. Feedback,<br />

discussions and negotiations are an ongoing<br />

part of this process, making it a collaborative<br />

effort. Cosatu’s involvement has been noteworthy.<br />

Current discussions hover around a cap of<br />

R25 000 for the maximum annual withdrawal<br />

from the Savings Component in the initial<br />

year. Yet, given the energy and direction of the<br />

dialogues, I foresee this ceiling being revisited<br />

and adjusted upwards soon.<br />

Why this system holds promise<br />

South African retirement planning is navigating<br />

uncharted waters. Its blend of flexibility and<br />

stability makes the “Three Piggy Bank” system<br />

particularly promising. As a CFP®, I firmly<br />

believe that this structured, yet adaptive<br />

approach could serve as a bedrock for future<br />

generations and help mitigate the taxpayer’s<br />

load. The world is watching developments in<br />

our pioneering work.<br />

The ongoing negotiations and discussions<br />

are typical when introducing a change of this<br />

magnitude. They’re essential to refining and<br />

enhancing the system, ensuring it meets the<br />

diverse needs of our population. What’s crucial<br />

is to embrace the evolutionary nature of this<br />

process and to remain open to adjustments that<br />

align with the best interests of South Africans.<br />

In conclusion<br />

The coming of skrikkeljaar 2024 is set to mark a<br />

significant chapter in South African retirement<br />

planning. The proposed system, deeply rooted<br />

in a philosophy of balance, can potentially<br />

redefine our approach to retirement. Drawing<br />

inspiration from the simple financial lessons of<br />

my childhood, this system promises immediate<br />

financial relief and long-term security. I eagerly<br />

anticipate its role in shaping a brighter, more<br />

secure future for future generations. <br />

16 www.bluechipdigital.co.za

COLUMN<br />

BLUE<br />

CHIP<br />

Consider paying off<br />

debt prior to retirement<br />

Coming to the end of your working career requires a step up in terms of financial planning.<br />

Florbela Yates, Head of<br />

Equilibrium<br />

Florbela Yates is the head of<br />

Equilibrium in the Momentum<br />

Metropolitan group.<br />

Equilibrium is an independent<br />

discretionary fund manager<br />

that partners with financial<br />

advisors to help them enable<br />

their advice outcomes.<br />

Equilibrium brings balance to<br />

an advice practice by delivering<br />

services and investment<br />

solutions to help clients achieve<br />

their defined investment goals.<br />

You need to ensure you have sufficient<br />

means to afford a comfortable<br />

retirement. But as we know, despite<br />

having a well-thought-out budget<br />

and a tax-efficient financial plan, most South<br />

Africans still retire without having saved enough<br />

and often go into retirement with large debt<br />

burdens. Research conducted by the South<br />

Africa Reserve Bank and Stats SA shows that<br />

South Africans spend 75% of their take-home<br />

pay on refinancing debt, and one in three South<br />

Africans retire with debt.<br />

Planning for retirement takes time. If your<br />

clients leave it until the day that they retire, it<br />

will be too late. Some of the considerations that<br />

your clients will need to think about are:<br />

• How much money will I need to meet my<br />

monthly financial needs?<br />

• Will my emergency fund be able to<br />

supplement any unforeseen expenses?<br />

• Will sufficient cash be available to meet my<br />

funeral costs or estate duty if I die prematurely?<br />

• Is my current medical aid plan still going to<br />

suit me and be affordable post-retirement?<br />

• Do I want to leave a legacy for my family?<br />

In addition to the above considerations, it<br />

also depends on what stage your clients find<br />

themselves in their retirement years, being<br />

the initial retirement stage, the second stage<br />

of retirement, or the third or final stage of<br />

retirement. Regardless of the stage, additional<br />

circumstances will affect each person differently<br />

during each of these.<br />

One of the aspects not considered is being<br />

in debt in retirement. I asked a colleague<br />

who spent much of his career as a valuator<br />

and advisor to retirement funds how trustees<br />

tend to guide their members. Rowan Burger,<br />

head of strategic finance at Momentum<br />

Metropolitan and a regular commentator on<br />

regulatory and investment matters, says that it<br />

starts with how you consider your house in your<br />

retirement plan.<br />

A house should not be considered a capital<br />

asset but rather that it reduces the required<br />

retirement income as you do not need to pay<br />

rent. Banks extend debt to those who have<br />

income to cover the debt. In retirement, you<br />

don’t have a salary to cover the debt repayments.<br />

But in the event you have debt at retirement,<br />

should you pay it down immediately?<br />

Rowan suggests this is the wisest course of<br />

action. If you consider that a typical bond rate<br />

is a bit less than the prime rate, then currently it<br />

could be about 11%. Your investment return after<br />

fees would then need to be around 13% to cover<br />

the interest cost (as share growth attracts capital<br />

gains tax). It is very difficult to get a return of<br />

13% in the current environment, and at an older<br />

age, you certainly do not want to be taking on<br />

unnecessary investment risk. For that reason,<br />

taking one-third of your retirement fund as a<br />

lump sum (as clients are allowed to do) to settle<br />

any debt is a good idea (and even more essential<br />

for more expensive debt such as credit cards).<br />

Debt must be paid down as quickly as<br />

possible in the retirement savings plan. In future,<br />

there will be less scope for cash at retirement to<br />

bail out debt. This is a result of the introduction<br />

of compulsory annuitisation, which can be<br />

made worse by the two-pot retirement system<br />

if clients consume their one-third lump sum<br />

before they get there.<br />

At Equilibrium, we bring improved balance<br />

into your financial advice practice. Our unique<br />

advice-led model portfolios are designed to<br />

be efficient and optimised through market<br />

cycles, so your clients stay invested and achieve<br />

their investment goals. As an independent<br />

discretionary fund manager (DFM), we enable<br />

you to do what matters – spending more time<br />

with your clients so that you can help them<br />

make the right decisions for their retirement.<br />

Equilibrium Investment Management (Pty) Ltd (Equilibrium) (Reg. No. 2007/018275/07)<br />

is an authorised financial services provider (FSP32726) and part of Momentum Metropolitan Holdings Limited, rated B-BBEE level 1.<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

FPI | Financial Planner of the Year<br />

Born to win<br />

The Financial Planner of the Year Award was launched in 2000 and is the most prestigious award in the<br />

industry. It recognises South Africa’s top CERTIFIED FINANCIAL PLANNER®. Meet the three 2023 finalists.<br />

Zig Ziglar once said, “You were born to win, but to be a<br />

winner you must plan to win, prepare to win and expect<br />

to win.” The top three finalists for 2023 have planned<br />

and prepared to win and wait in anticipation for the<br />

FPI’s annual award ceremony on 14 November to discover who<br />

this year’s winner is.<br />


Retiremeant Specialist and Director, Chartered Wealth Solutions<br />

How has the process of applying for the Financial Planner of<br />

the Year Award benefitted or changed your business?<br />

It has benefitted our business as it has allowed me to take a step<br />

back from the day-to-day tasks of a financial planning specialist and<br />

really work on the business itself. We have built better processes<br />

around onboarding new clients as well as tweaking the financial<br />

plans we present to clients.<br />

I have built a deeper understanding of what best practice is and<br />

I have started to create a documented succession plan document.<br />

It is so important that our clients feel comfortable that their<br />

financial plans do not rest on my shoulders alone.<br />

What are the changes you would like to see in the financial<br />

planning industry?<br />

I would like to see it continue to professionalise and find its status<br />

at the top end of all revered professions. I would also like to see<br />

financial planning introduced at a school curriculum level so that<br />

the importance of financial literacy is taught to younger people.<br />

I believe that changes to legislation which set out who should<br />

be calling themselves a financial planner will go a long way<br />

in educating and protecting the public against compromised<br />

practices and individuals. The CERTIFIED FINANCIAL PLANNER®<br />

designation needs to be elevated through a combination of<br />

legislation, education and marketing.<br />

What are your long-term objectives?<br />

I want to grow my business (clients and employees) and bring<br />

in younger financial planners to mentor. This includes diverse<br />

planners as we need our country’s demographic to start<br />

reflecting more in our profession.<br />


I am a CFP® financial planning specialist and director of Chartered Wealth<br />

Solutions, Western Cape. I have nine years of experience as a financial planner<br />

and have been in the financial services industry for almost 15 years.<br />

From a relatively early age, I knew that helping people with complex<br />

decisions was something that I loved to do and I thrived doing it. Knowing<br />

this led me to the financial planning profession and the amazing career I<br />

have. I started a business and office for our Western Cape arm in 2019 and<br />

our business has been fortunate to grow each year since then.<br />

Financial planning is nuanced and deeply personal. I have learnt that<br />

being present and able to hear what my clients are grappling with is how I<br />

can best connect and help. My clients rely on me in many aspects of their lives<br />

and that is a privilege that I need to step up to every day. My clients share<br />

details of their and their families’ lives with me which few other people know.<br />

The emotion and value attached to money are well documented. Helping<br />

people deal with these emotions around money inevitably leads to good<br />

decisions and financial stability. I continue to improve myself as I believe<br />

that our profession evolves every day. We hold a key role, not only in our<br />

clients’ lives but in society at large and we must keep working hard to help<br />

people achieve their goals.<br />

18 www.bluechipdigital.co.za

FPI | Financial Planner of the Year<br />

BLUE<br />

CHIP<br />


Managing Director, Integral Wealth Management<br />

How has the process of applying for the Financial Planner<br />

of the Year Award benefitted or changed your business?<br />

The application process for this competition has been thoughtprovoking<br />

and has given me an opportunity to have a high-level,<br />

strategic look at what we do and how we do it. Our business is only<br />

seven years old, so our processes and tech support are designed for<br />

the current regulatory framework. As an FPI-approved Professional<br />

Practice, our business already meets the FPI practice management<br />

standards, so we are fortunate in that we don’t need to implement<br />

any changes because of the application process.<br />

What are the changes you would like to see in the financial<br />

planning industry?<br />

One of the challenges we have as financial planners is our ability to<br />

integrate data from the various product providers that our clients<br />

invest with. With the new COFI bill reporting requirements, we<br />

are going to be challenged with the collation of that information,<br />

especially if a company deals with a broad range of providers,<br />

which we do. In addition, many service providers are offering<br />

amazing tools to help us better service clients and better manage<br />

our businesses. If all the product providers could provide data<br />

regularly, which could be integrated into the various service<br />

provider tools, this would make our lives as financial planners<br />

much easier, and it would significantly add to the client experience.<br />

It would also foster greater client trust in our profession if we<br />

were able to quickly access clear information on product fees,<br />

which remain hidden or hard to access with some of the oldergeneration<br />

products. This is a project we have already discussed<br />

at the FPI-approved Professional Practice monthly meetings and<br />

we are planning a project to further this objective.<br />

The COFI bill is also going to place a greater onus on product<br />

providers to make sure the products they create have a target<br />

market, and it will require them to take greater responsibility for<br />

the suitability of products. I welcome this as a positive change – I<br />

still see clients who are being sold products that are not suitable<br />

for their circumstances and are extremely complex to understand.<br />

One of my concerns about our profession at present is the<br />

number of young interns who are qualifying as professional CFPs®<br />

and then being poached by the banks and product providers to<br />

become call centre agents, which effectively closes their door to<br />

becoming financial planners. It’s a great loss to our profession,<br />

and often marks the end of any personal growth for these young<br />

people who are attracted by the large salaries that corporates offer.<br />

What are your long-term objectives?<br />

Integral Wealth is structured differently from many of the other<br />

independent companies in that we have no restraints on trade,<br />

and we believe that in many instances the client-advisor relationship<br />

is stronger than the client-company relationship. We understand that<br />

when an advisor leaves our business, he or she will take most of their<br />

clients. We have a robust and scalable practice management model,<br />

supported by excellent systems.<br />

I hope that we will attract advisors to join our company, to better<br />

scale what we offer and spread the costs across a broader base of<br />

advisors. Our advisors are incentivised to run their own businesses<br />

within our company and there is no limit to their earnings potential.<br />

We also want our advisors to own shares in our company and<br />

contribute to the strategy and growth of the business. Financial<br />

planning is one of those careers that gives advisors a lot of freedom<br />

to live the lives they want and this is also the example we want to<br />

set for our clients.<br />

Integral Wealth has employed three ASISA interns over the past<br />

three years, who we are encouraging to become CFPs®. Two of<br />

them are now completing their post-graduate diplomas in financial<br />


My career in financial services began at Investec in its retail sales division<br />

and a year later I joined RMB Unit Trusts to start their unit trust business.<br />

Seven years later, I was sales and marketing director with a one-year-old<br />

second child and could not keep up with the travel requirements. I joined<br />

RMB International as the head of South African distribution. Two years later, I<br />

joined a client of mine in her independent financial planning practice, where<br />

we focused a lot on offshore investing as exchange controls relaxed. I then<br />

joined Imara Asset Management as managing director of their South African<br />

investment and wealth management business.<br />

Seven years ago, some colleagues and I started Integral Wealth. Our primary<br />

business focus is to always put our clients first as they are the lifeblood of<br />

our business and to build long-term relationships with all stakeholders of<br />

the company. A passion of mine is staff development. We are always on<br />

the lookout for advisors wanting to build their client base and become<br />

shareholders in Integral Wealth; strategic input is essential to our growth.<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

FPI | Financial Planner of the Year<br />

planning on our bursary scheme and we have registered them as<br />

representatives on our licence. They have started to see their own<br />

clients under supervision and are both excited to become financial<br />

planners, hopefully at Integral Wealth. I take great pleasure in<br />

upskilling them, and we plan to continue this work going forward.<br />


Executive Financial Planner, Nel & Associates<br />

schools, clinics, hospitals, SAPS and the Department of Correctional<br />

Services, both as an FPI member and in my personal capacity.<br />

I have seen how my skillset and knowledge as a CFP® have<br />

radically changed the lives of those who typically would not<br />

have access to a professional. My long-term goal is to both<br />

encourage and mobilise other professionals to do the same,<br />

as well as increase the scope and scale of how I continue to<br />

empower communities in our great country. <br />

How has the process of applying for the Financial Planner of<br />

the Year Award benefitted or changed your business?<br />

My intention in applying for the award was to, primarily, ensure<br />

that we’re doing right by our clients. We wanted to objectively<br />

assess not only our approach to financial planning, but also<br />

every other aspect in our practice that affects our clients; this<br />

includes our values and ethics, our internal processes and the<br />

way we use technology and coaching methods to better serve<br />

them and their families. And what better way to stress-test this<br />

than to have it assessed against the FPI’s practice standards. As<br />

a continual learner in our profession, we also wanted to see how<br />

we rank against our peers and learn from their best practices.<br />

I’m naturally overjoyed to find out that we’re on the right track<br />

in building a business that is sustainable, ethical and has our<br />

client at the very centre.<br />

What are the changes you would like to see in the financial<br />

planning industry?<br />

I would love to see the continued reform of financial planning<br />

away from being seen as an industry towards being seen as a<br />

profession. I believe that this would raise the bar with regard<br />

to advice and ethics across the board and root out those who<br />

may not have a client’s best interests at heart. What a day it<br />

would be when every financial planner aspires to attain the<br />

CFP® standards of ethics and competency as a baseline and<br />

the bare minimum.<br />

I would also like to see more professionals involved with<br />

pro bono work. I believe that we as financial planners (not<br />

just CFPs®) could lift families and entire generations out of<br />

poverty. We need to create a way for communities to access<br />

our knowledge and expertise. The future really is in our hands.<br />

What are your long-term objectives?<br />

I’m passionate about creating a future for my kids within our<br />

amazing country. To care about their futures means that I need<br />

to care about the future of the children in our communities<br />

that they’ll grow up with. The question I asked myself was: how<br />

do I, personally, care for those children? I can’t sit with every<br />

parent. I can, however, impact the key role-players that serve<br />

our communities, namely its teachers, police and nurses. If I can<br />

empower them and impact their futures, the knock-on effect<br />

should be the upliftment of the communities around them.<br />

This has spurred me on to give a large part of our time to pro<br />

bono initiatives where I present financial planning workshops at<br />


I see my main job as being a loving husband to my wife, Lara, and a proud<br />

daddy to my two boys and little girl. This passion extends to my clients,<br />

who I see as part of my family. A motto that keeps my practice centred is:<br />

“We’re all things to some people, not all things to all people, and we’re very<br />

specific about who those some people are.” Our clients are those whose<br />

values and ethics are aligned, who fully buy into the way that we conduct<br />

our business, and who want to walk a life-long journey with us. They<br />

become part of a family. We strive to know our clients deeply and specialise<br />

in helping them understand themselves and to see the big picture in their<br />

lives. We then use professional knowledge in tax, retirement, investment,<br />

risk and estate planning to create a long-term, integrated financial plan<br />

that helps them attain the future they want for their family. Although I<br />

hold a post-graduate diploma in financial planning from Milpark and am<br />

a proud CFP® professional, I’m very curious by nature, and love acquiring<br />

knowledge from a vast range of topics.<br />

20 www.bluechipdigital.co.za

BLUE<br />

CHIP<br />

FPI | Research<br />

The power of professional<br />

financial planning<br />

CFP® professionals benefit their clients holistically in ways beyond growing their wealth. Clients realise this, as<br />

shown in the FPI and Financial Planning Standards Board’s Value of Financial Planning Research 2023 study.<br />

A<br />

significant study by the Financial Planning Standards<br />

Board (FPSB) shows that South Africans who work with<br />


have a better quality of life, enjoy greater financial<br />

confidence and resilience and are more satisfied with their financial<br />

situation than people who have non-CFP® financial advisors or<br />

who do not use an advisor.<br />

The FPSB Value of Financial Planning Research 2023 study<br />

took the form of an online survey of 15 332 respondents<br />

across 15 countries in February 2023 by independent research<br />

company MYMAVINS.<br />

The research had three objectives:<br />

1. Lead the conversation about financial planning.<br />

2. Measure the benefits of CFP® professionals.<br />

3. Understand next-generation clients.<br />

The study examined the value of financial planning for consumers<br />

while debunking myths surrounding financial planning and<br />

analysing the future of the profession.<br />

The South African survey, undertaken in conjunction with the<br />

FPI, involved 1 005 respondents. To be included in the survey,<br />

respondents had to be over 25 years of age and earn over<br />

R1-million a year or hold more than R600 000 in investable assets.<br />

The sample included both advised and unadvised consumers.<br />

Advised consumers (519 respondents) were those who were<br />

currently working with a financial planner, who sought financial<br />

advice as needed or who had received financial planning<br />

advice in the past three years. They included 105 clients of CFP®<br />

professionals. Unadvised consumers (486 consumers) were those<br />

who had never received advice from a financial planner or had not<br />

received advice in the past three years. Table 1 gives a breakdown<br />

of employed versus retired respondents.<br />


The survey introduced the FPSB Value of Financial Planning Index,<br />

a quantitative measure of the financial and non-financial value for<br />

consumers of financial planning across four metrics: quality of life,<br />

financial confidence, financial satisfaction and experienced value.<br />

The index measures differences between those who do not<br />

use a financial planner and those who do (scores range from 0 to<br />

100). The CFP® Professional Delta is the positive difference a CFP®<br />

professional has on the lives of clients.<br />

1. Quality of life. Non-financial personal assets are the key<br />

pillars of a “good life”. They include health, personal connections,<br />

capabilities, purpose and life satisfaction. A CFP® Professional<br />

Table 1: Employment status of respondents.<br />

22 www.bluechipdigital.co.za

FPI | Research<br />

BLUE<br />

CHIP<br />

Graphic 1: Value of financial planning.<br />

Delta score of +5 showed that consumers who worked with<br />

a CFP® professional experienced a better quality of life and<br />

greater life satisfaction (72%) compared with their unadvised<br />

counterparts (67%).<br />

2. Financial confidence. Measuring financial confidence included<br />

a personal assessment of security and the ability to achieve goals<br />

and manage risks. A CFP® Professional Delta score of +4 showed<br />

that consumers who worked with a CFP® professional felt far<br />

more confident about their finances (61%) than those who were<br />

unadvised (57%).<br />

3. Financial satisfaction. This metric measured consumers’ personal<br />

satisfaction with their financial situation, including their spending<br />

behaviour, financial risk management, ability to adhere to a financial<br />

plan and overall wealth. A CFP® Professional Delta score of +4 showed<br />

that consumers who worked with a CFP® professional reported higher<br />

levels of satisfaction (54%) than those who were unadvised (50%).<br />

4. Financial planning experience. This measured the directly<br />

attributable value of the experience of financial planning and<br />

working with a financial planner, as well as tangible financial<br />

benefits such as financial gains and meeting critical financial<br />

needs. A CFP® Professional Delta score of +1 showed that clients<br />

who worked with a CFP® professional enjoyed a better experience<br />

(75%) than those who were advised by other professionals (74%).<br />


Of the 105 respondents who used a CFP® professional:<br />

• 74% agreed with the statement, “I am successful in sticking with<br />

my financial strategies” versus 64% of unadvised respondents.<br />

“Trust, honesty, integrity and loyalty no money can buy! Those are the most important foundations my<br />

relationships are built on. To have a financial advisor with those qualities is the best investment bonus ever!”<br />

Client of a CFP® professional | Female, 58, Gauteng<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

FPI | Research<br />

• 84% agreed with the statement, “I am satisfied with my dayto-day<br />

cash flow and spending confidence” versus 73% of<br />

unadvised respondents.<br />

• 80% agreed with the statement, “I am satisfied with risk<br />

management to protect my wealth” versus 70% of unadvised<br />

respondents.<br />

• 94% said the services provided by their planner were meeting<br />

their needs.<br />

• 86% agreed with the statement, “My CFP® professional has<br />

supported me to make the best financial decisions I can”.<br />

• 88% agreed with the statement, “My CFP® professional has<br />

helped me manage financial risks in my life”.<br />


The survey underscored the benefits the clients of CFP®<br />

professionals enjoy beyond purely financial ones:<br />

• 80% agreed that financial planning helped fulfil life dreams.<br />

• 65% said financial planning positively impacted their family life.<br />

• 83% felt they could cope better when faced with health issues.<br />

• 62% reported that financial planning positively impacted their<br />

mental health.<br />


The survey puts to rest several popular myths about the profession:<br />

Myth #1: Financial planning is only for the rich. Fact:<br />

Quality of life, financial confidence and financial satisfaction see<br />

improvement in the advised, even those with lower incomes.<br />

Advised respondents earning less than R1.25-million a year<br />

showed higher scores on all metrics compared with unadvised<br />

respondents in this income group.<br />

Myth #2: Financial planning is only needed at retirement.<br />

Fact: Advice has benefits to quality of life, financial confidence and<br />

financial satisfaction at all ages. Almost half of Gen Y respondents<br />

(47%) cited buying a property as their top trigger for seeking<br />

financial advice.<br />

Myth #3: Financial planning costs more than its worth. Fact:<br />

The experienced value of financial planning delivers benefits that<br />

far outweigh the fees clients pay. Almost nine in 10 advised clients<br />

(87%) agreed that financial advice had brought more value than<br />

it costs.<br />

Myth #4: Advisors lack objectivity. Fact: Unadvised consumers<br />

have concerns about finding a trustworthy financial planner. However,<br />

the evidence shows that advised consumers overwhelmingly trust<br />

their advisors to put their interests first – 94% of respondents<br />

using a CFP® professional said they trusted their planner and<br />

87% valued their planner for being independent.<br />


Of the 1 005 respondents in the South African survey, 508 were<br />

Generation Y or “Gen Y” (born between 1981 and 1996), 284<br />

were Generation X or “Gen X” (born between 1965 and 1980),<br />

and 213 were Baby Boomers or “BB” (born prior to 1965).<br />

“Having a financial planner gives peace of mind because they help you establish goals and<br />

achieve them. It also reduces the risk of losing money because you know the decision you are<br />

making is the best one. Since you are helped by a professional, you have confidence.”<br />

Client of a CFP® professional | Female, 28, Gauteng<br />

24 www.bluechipdigital.co.za

FPI | Research<br />

BLUE<br />

CHIP<br />

Gen Ys are proving to be highly engaged with their finances<br />

and are open to the value financial planning can bring. Now<br />

established income earners, Gen Ys are on the verge of receiving<br />

unprecedented levels of intergenerational wealth via inheritance<br />

or gifts.<br />

Almost half of Gen Ys (47%) and a similar percentage (43%)<br />

of Gen Xs already have or are likely to come into an inheritance<br />

or major financial support – 32% of Gen Ys and 44% of Gen Xs<br />

expect to do so in the next five years, and for some, the amounts<br />

will be significant. Over half of Gen Ys (54%) said they would<br />

turn to a professional advisor for help with their inheritance<br />

as opposed to obtaining help from family or friends or using<br />

other sources.<br />

The survey found Gen Y is different from older generations<br />

in the following respects:<br />

• While face-to-face advice is a top choice (73% of Gen Y versus<br />

82% of Boomers), Gen Ys are significantly more likely to turn<br />

to digital channels to manage their finances (77% of Gen Y,<br />

70% of Gen X and 67% of Boomers are using apps or websites<br />

to help with budgeting, investments or credit).<br />

• Gen Y is more hands-on, having greater experience with<br />

direct investing: 19% of them had taken up direct online<br />

trading since 2020, with a further 13% already trading before<br />

the pandemic and continuing to do so.<br />

• Gen Y prioritises socially responsible investing: over 90% of<br />

Gen Ys prefer to invest in companies that have some purpose<br />

beyond profits, higher than Boomers (seven in 10).<br />

• Gen Y is more interested in investing in novel, non-traditional<br />

asset classes. Crypto assets are more popular among younger<br />

generations: 40% of Gen Y respondents claim to currently<br />

have some crypto assets and 35% would consider it. This<br />

compares with 44% of Boomers who would not even consider<br />

it. However, Gen Ys are under no illusions about the risks crypto<br />

presents: 60% of them agreed that it is a “very risky investment”.<br />


Clients who have interacted with CFP® professionals are highly<br />

likely to recommend them to others. The Net Promoter Score<br />

(the difference between promoters and detractors) for CFP®<br />

professionals is significantly higher than for non-CFP® advisors:<br />

+34 versus +28.<br />

The CFP® designation is widely recognised even among<br />

respondents who do not use an advisor (55% of them were aware of<br />

it). Of those, 74% agreed with the statement “The CFP® designation<br />

is the only globally acknowledged mark of professionalism for<br />

financial planners”.<br />

So, what are the ongoing barriers to entry, and what would<br />

trigger someone to see a planner? Key reasons for not using a<br />

financial planner were:<br />

• Finding someone I could trust. (Gen Y 34%, Gen X 35%, BB 45%)<br />

• I feel it is too expensive. (Gen Y 32%, Gen X 38%, BB 40%)<br />

• Lack of urgency, I will do it when I am older. (Gen Y 23%)<br />

• I don’t know where to start. / It’s too complicated or confusing.<br />

(Gen X 24%)<br />

• Finding and assessing a suitable planner. (BB 27%)<br />

Key triggers were:<br />

• Buying a property. (Gen Y 47%, Gen X 24%, BB 13%)<br />

• Coming into a substantial sum of money. (Gen Y 37%, Gen X<br />

48%, BB 53%)<br />

• Approaching retirement. (Gen Y 34%, Gen X 50%, BB 41%)<br />

• Have more financial control/grow wealth. (Gen Y 36%, Gen X<br />

38%, BB 47%)<br />

• Financial distress/bankruptcy or debt. (Gen Y 37%, Gen X 40%,<br />

BB 31%)<br />


Money is a source of stress for many people. For some, it can take a<br />

personal toll, affecting their quality of sleep and even their mental<br />

health. The current economic climate isn’t helping. The global<br />

economic outlook is strained, with stubbornly high inflation,<br />

rising interest rates and living costs squeezing family budgets.<br />

The good news is that professional financial planners can enable<br />

people to take control of their financial lives, empowering them<br />

to feel more confident and stay on track to achieve their goals.<br />

Lelané Bezuidenhout, CFP®, CEO of the FPI, and Dante de<br />

Gori, CFP®, CEO of the FPSB, say the survey endorses the value<br />

of professional planners in today’s uncertain world.<br />

Bezuidenhout says, “Obtaining professional financial advice<br />

from a CFP® professional is important as they have specialised<br />

knowledge and expertise in various financial planning areas.<br />

CFPs® create personalised financial plans, helping clients achieve<br />

their financial goals, manage risks, optimise tax strategies and<br />

operate with a fiduciary duty to prioritise the client’s best<br />

interests. The findings of this study show that consumers should<br />

entrust their financial planning to a professional, and more<br />

specifically, a CFP® professional.”<br />

De Gori adds, “In this current volatile climate, where unexpected<br />

events can send shockwaves through the global economy, the<br />

role of financial planning in general and of CFP® professionals<br />

in particular has become even more critical in empowering<br />

consumers to make informed financial decisions and achieve<br />

their long-term goals while enjoying a better quality of life. The<br />

findings in this global study illuminate a compelling reality:<br />

the immense value that CFP® professionals bring in supporting<br />

clients’ financial needs amid times of uncertainty, reinforcing<br />

the reputation of the CFP® certification as the global symbol of<br />

excellence in financial planning.” <br />

“He is a certified financial advisor with ongoing studies, knowledgeable in keeping<br />

up to date with compliances, market performance, and products.”<br />

Client of a CFP® professional | Female, 65, Western Cape<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

CLIENT ENGAGEMENT | Behavioural finance<br />

Behavioural biases: unravelling<br />

our irrational investment habits<br />

Amid market volatility, currency fluctuations and a climate of uncertainty surrounding<br />

South Africa’s growth prospects, it becomes increasingly important to explore the<br />

common biases that can significantly impact financial decision-making.<br />

Biases, inherent to human psychology, often influence<br />

our judgements and actions in ways that may not align<br />

with rational economic principles. These biases become<br />

particularly relevant as we navigate the challenges posed<br />

by the current landscape. From Eskom’s persistent power supply<br />

issues to concerns over corruption and political uncertainty,<br />

these factors have contributed to a loss of faith in the system by<br />

many investors. By understanding and addressing these biases,<br />

individuals can strive to make more informed financial choices,<br />

mitigate risks and potentially navigate turbulent market conditions<br />

with greater resilience.<br />

In this article, we look at five of the most common behavioural<br />

biases that influence an investor’s decision-making.<br />

1. Confirmation bias<br />

Let’s start with one of the most common biases in finance –<br />

confirmation bias. This bias leads us to seek information that<br />

confirms our existing beliefs and ignore evidence that challenges<br />

them. An investor might have a strong belief that a particular<br />

industry or company is poised for success, leading them to<br />

selectively consider news and reports that support this belief.<br />

Buy when the blood is<br />

running in the streets.<br />

Unfortunately, this bias can hinder objective decision-making<br />

and prevent investors from considering alternative perspectives.<br />

One example of a well-known share that has experienced<br />

confirmation bias in the past is Steinhoff International Holdings<br />

N.V. (Steinhoff), a multinational retail holding company based in<br />

South Africa.<br />

Before the revelations of accounting irregularities in late 2017,<br />

Steinhoff was considered one of South Africa’s most successful<br />

and promising companies. It had a track record of rapid expansion,<br />

acquiring various retail chains globally and gaining the trust of<br />

many investors.<br />

Confirmation bias became evident as many investors and<br />

analysts held a positive view of Steinhoff’s financial performance<br />

and growth potential by focusing on all the good news. They<br />

focused on the company’s consistent revenue growth, its highprofile<br />

acquisitions and the apparent strength of its balance sheet<br />

which led to continued buying and an increase in its share price.<br />

However, when the accounting irregularities were exposed, it was<br />

revealed that Steinhoff had manipulated its financial statements,<br />

leading to a significant loss in market value and a collapse in investor<br />

confidence. This revelation highlighted how confirmation bias had<br />

influenced investors’ perceptions of the company.<br />

Despite analysts pointing out warning signs and red flags,<br />

such as complex and opaque financial structures, and even being<br />

laughed out of court, some investors chose to ignore or downplay<br />

these indicators that contradicted their optimistic viewpoint.<br />

They selectively interpreted positive news and disregarded or<br />

26 www.bluechipdigital.co.za

CLIENT ENGAGEMENT | Behavioural finance<br />

BLUE<br />

CHIP<br />

Chart 1: Steinhoff Historical Share Price<br />

Source: Sharenet.co.za<br />

undervalued information that highlighted potential risks or<br />

inconsistencies in Steinhoff’s financial reporting.<br />

The example of Steinhoff demonstrates how confirmation<br />

bias can cloud judgement and lead investors to overlook critical<br />

information that contradicts their preconceived notions. It serves<br />

as a cautionary tale about the importance of conducting thorough<br />

due diligence and considering diverse perspectives when making<br />

investment decisions.<br />

2. Anchoring bias<br />

Anchoring bias refers to the tendency to rely heavily on the first<br />

piece of information encountered when making subsequent<br />

judgements or decisions which can influence the valuation of<br />

assets. For instance, if an investor perceives a particular stock’s fair<br />

value to be at a certain level, they might anchor their expectations<br />

to that value, even in the face of new information that suggests<br />

a different valuation. A good example of anchoring bias is house<br />

prices.<br />

A closer to “home” look at behavioural anchoring bias and<br />

the influence of house price anchors. When individuals are in the<br />

process of buying or selling a house, they often encounter an anchor,<br />

such as the initial asking price, the listed price or the most recent sale<br />

price of a similar property. This anchor serves as a reference point<br />

that influences their perception of the property’s value.<br />

Assimilation Effect. In this case, individuals tend to adjust their<br />

perception of a house’s value closer to the anchor. For example, if<br />

a house is listed at a high price, potential buyers might consider it<br />

to be a premium property, even if it lacks certain desirable features<br />

or is overpriced compared to similar properties in the area. This<br />

assimilation effect can lead to buyers overestimating the value of<br />

a property and making offers that are closer to the anchor price.<br />

Contrast Effect. On the other hand, the contrast effect occurs<br />

when individuals adjust their perception of a house’s value away<br />

from the anchor. If a house is listed at a significantly lower price<br />

than similar properties in the area, potential buyers might perceive<br />

it as a bargain or a distressed sale. This contrast effect can lead to<br />

buyers underestimating the value of a property and potentially<br />

making lower offers than they would for similar houses with higher<br />

anchor prices.<br />

The anchoring bias in the housing market is further exacerbated<br />

by factors such as limited market transparency, subjective valuation<br />

methods and emotional attachments to properties. These factors<br />

can reinforce the influence of the initial anchor and make it more<br />

challenging for buyers and sellers to objectively evaluate the true<br />

value of a house.<br />

Another well-known example was during the launch of the iPad<br />

when Steve Jobs defied the experts’ prediction of a $999 price<br />

tag and surprised everyone with an actual price of $499, causing<br />

people to be amazed by its fairness due to the phenomenon of<br />

placing greater emphasis on the initial information encountered.<br />

In the investment world, a common scenario arises when<br />

investors accumulate an overweight position in shares because<br />

of their current or past employment, typically through a<br />

company’s share incentive scheme. However, over time, there<br />

may be a growing need to diversify these shares. Unfortunately,<br />

investors often fall into the trap of anchoring their expectations<br />

of future share prices solely based on previous highs or historical<br />

performance. They maintain the assumption that the shares will<br />

eventually reach or surpass those previous levels, disregarding<br />

changing market conditions or other factors that can impact the<br />

share price.<br />

Consequently, they tend to only consider selling when the<br />

shares breach or approach this specific threshold. This situation<br />

raises a critical question about whether potential alternative<br />

opportunities have been overlooked, irrespective of whether the<br />

share price may eventually rebound to its all-time highs.<br />

3. Herding behaviour<br />

Humans are social creatures, and this is evident in financial markets<br />

through herding behaviour. This bias describes the tendency to<br />

follow the crowd and make investment decisions based on what<br />

others are doing and is often seen during periods of market<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

CLIENT ENGAGEMENT | Behavioural finance<br />

euphoria or panic. When everyone is investing in a particular<br />

asset or sector, individuals may feel pressured to join in, often<br />

overlooking careful analysis of the investment’s fundamentals.<br />

Research showed that there is an 80% correlation ratio between<br />

Bitcoin prices and Internet searches for the asset. (The table below<br />

shows a snapshot of Bitcoin price vs Google searches for Bitcoin<br />

over a two-year period.)<br />

upside. A discerning approach, grounded in thorough research<br />

and analysis, is essential to identify attractive investments with<br />

strong fundamentals and promising growth prospects.<br />

By capitalising on mispricing caused by herding behaviour,<br />

investors have the potential to take advantage of this by buying<br />

assets with depressed prices. Baron Rothschild, a prominent<br />

financial figure, once famously remarked, “Buy when the blood<br />

Chart 2: Prices for Bitcoin vs online searches for the asset<br />

Source: Yahoo Finance, Google Trends<br />

On the home front amidst negative press triggering a collective<br />

exit of investors from South African-incorporated (SA Inc) stocks,<br />

herding bias emerges as investors follow the crowd. However,<br />

caution is warranted as this bias might lead to missed opportunities.<br />

Certain companies offering exceptional value and significant<br />

upside potential could be overlooked. By blindly succumbing<br />

to herding bias, investors risk missing out on undervalued<br />

opportunities that could yield favourable returns and significant<br />

is running in the streets.” By invoking the imagery of chaos and<br />

distress, Rothschild underscores the contrarian nature of successful<br />

investors who possess the courage and insight to act when others<br />

are fearful.<br />

4. Recency bias<br />

This bias occurs when we rely on recently available information<br />

when making decisions, rather than considering the entire range<br />

Table 1: Examples of well-known SA Inc stocks trading on single-digit price-earnings (P/E) ratios as end March 2023<br />

End March 2023 Over a five-year period (April 2018 to March 2023)<br />

Company name Current P/E Minimum P/E Maximum P/E Average P/E<br />

SAPPI 3.7 2.2 26.1 6.9<br />

ANGLO AMERICAN PLATINUM 4.2 4.2 29.5 15.3<br />

KAP 4.6 3.6 35.4 13.1<br />

SASOL 5.0 2.8 170.6 25.8<br />

STANDARD BANK GROUP 8.3 5.8 13.5 10.1<br />

Source: Refinitive<br />

28 www.bluechipdigital.co.za

CLIENT ENGAGEMENT | Behavioural finance<br />

BLUE<br />

CHIP<br />

Table 2: Demonstrates how last year’s asset class winners are not in the top quartile the following year<br />

Source: Refinitive<br />

of relevant data. For example, if a particular asset class has been<br />

performing well recently and receives extensive media coverage,<br />

investors may allocate an undue amount of their portfolio to that<br />

asset, neglecting the diversification principle.<br />

Similarly, investors often follow top-performing funds by<br />

electing to switch in after a much-publicised run of strong<br />

performance relative to peers, frequently selling low and buying<br />

high as a result. Recency bias is often heightened at points of<br />

volatility and when investors are anxious. An example on the<br />

home front could be investors looking to externalise their<br />

investments at any cost in the aftermath of the US accusation<br />

that Russia received arms in South Africa, with the Rand crashing<br />

to a new record low of R19.83/$.<br />

5. Home bias<br />

Home bias refers to the tendency of investors to exhibit a<br />

preference for investing in their home country’s assets, leading<br />

to an overallocation of investments domestically compared to<br />

offshore. In the context of South Africa, we frequently observe<br />

opposite home bias where investors show a preference for<br />

investing offshore due to recent strong offshore returns and<br />

negative sentiment towards our home country.<br />

Between January 1995 and October 2007, a notable divergence<br />

occurred between the developed and emerging markets. In the<br />

first phase, from January 1995 to March 2000, the developed<br />

world witnessed a growth-driven bull market known as the<br />

dot.com bubble, fuelled by a surge in investments in Internet<br />

and technology stocks. However, the hype surrounding start-ups<br />

The question that lingers is: what<br />

lies ahead for South Africa?<br />

reached its peak in March 2000, leading to a subsequent decline in<br />

the S&P 500, which fell by 49% from March 2000 to October 2002,<br />

and which for most of the 2000s remained negative for investors.<br />

However, at the same time, domestic investors benefitted from<br />

an unexpected windfall from 2003, earning bumper returns over<br />

the next four or five years as the following chart shows. Given<br />

the dire economic recession, high interest rates and political risk<br />

in our country at the time, many investors did not benefit from<br />

this surge to the extent they could have and it would have taken<br />

a courageous investor to be fully invested in South Africa over<br />

this period.<br />

The question that lingers is: what lies ahead for South Africa?<br />

Will the current negative trend persist or are we on the verge of<br />

a resurgence reminiscent of the period between 2002 and 2007?<br />

Changing your thinking<br />

To foster more rational thinking and overcome behavioural biases,<br />

several techniques can be employed:<br />

Decision-making frameworks. Implementing structured<br />

decision-making frameworks, such as setting investment criteria,<br />

defining risk tolerance and adhering to a disciplined approach, can<br />

help reduce the influence of emotions and biases.<br />

Education and awareness. Understanding the various<br />

behavioural biases that affect investment decisions is the first<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

CLIENT ENGAGEMENT | Behavioural finance<br />

Chart 3: JSE ALSI (in ZAR) vs S&P 500 (in USD) over period January 1995 to October 2007<br />

Source: FE Analytics<br />

step towards mitigating their impact. Educating oneself about<br />

cognitive biases helps develop self-awareness and enables<br />

investors to recognise their own biases in real-time.<br />

Seeking diverse perspectives. Actively seeking out diverse<br />

viewpoints and opinions, engaging in constructive debates and<br />

considering alternative scenarios can help challenge one’s own<br />

biases and promote more well-rounded investment decisions.<br />

Regular self-reflection. Engaging in regular self-reflection<br />

allows investors to critically evaluate their past decisions, identify<br />

patterns of bias and make necessary adjustments to their<br />

investment approach.<br />

Professional guidance. Collaborating with financial advisors<br />

or professionals who are trained to navigate behavioural biases<br />

can provide valuable insights, accountability and a more objective<br />

perspective on investment decisions.<br />

Conclusion<br />

Behavioural biases present significant challenges for investors<br />

and individuals seeking to make prudent financial decisions. The<br />

flow of money moving offshore appears to be partially influenced<br />

by a combination of these biases. However, by recognising<br />

and understanding these biases, particularly during times of<br />

heightened volatility or extreme market conditions, we can<br />

make well-informed investment choices that consider both the<br />

challenges and opportunities, locally and globally. <br />

Nicole Loker, Investment Specialist, Fundhouse<br />

30 www.bluechipdigital.co.za

BLUE<br />

CHIP<br />

INVESTMENT | Offshore<br />


Is it different this time?<br />

The hype around investing offshore is back at the euphoric levels of the mid-90s.<br />

Offshore investing trends in the mid-1990s differed<br />

hugely from today. Fund choices open to South<br />

Africans extended to no more than five options, yet<br />

almost every application form received allocated the<br />

funds, whether on a recurring premium basis or as a lump sum, to<br />

asset swap/feeder funds*.<br />

Gradually as the relaxation of exchange control limits began,<br />

investors had the option to use their newly introduced lifetime<br />

offshore allowance limits to invest directly offshore, in hard<br />

currency (US dollar, British pound, euro or Swiss franc) and access<br />

assets around the world. Investors or their heirs could redeem their<br />

investments anywhere in the world.<br />

These investments could physically leave South Africa via<br />

perfectly legal means and would be held in jurisdictions generally<br />

within the Channel Islands. The factor which attracted many<br />

investors to this option was protection against political risk, which<br />

was an important consideration but not the only reason to bear in<br />

mind when investing offshore.<br />

The value of a well-diversified investment portfolio cannot be<br />

overstated and the fact that both the markets and the currency<br />

could be cyclical also need to be considered in planning when and<br />

where to invest offshore. If not, when these cycles go against you,<br />

many investors make poor decisions driven by fear, when patience<br />

and resilience are required.<br />

It is however always so easy to reflect on these issues in<br />

hindsight, forgetting the factors in play at that specific time –<br />

especially in terms of political uncertainty. And while we are<br />

often reminded that past performance shouldn’t be an indicator<br />

of future growth, it is so tempting to invest in all the areas where<br />

money has been made most recently, as we often then feel like we<br />

are the only ones missing out on this opportunity.<br />

And while we as South Africans have previously been excluded<br />

from accessing these global economies, markets around the world<br />

have experienced amazing returns since the early 1980s. Looking<br />

at these hard currency returns and for so long having been unable<br />

to participate in this bull run, it is no surprise that South African<br />

investors jumped in boots and all. And just to add more incentive,<br />

the depreciation of the rand over that previous decade was yet<br />

another bonus when considered over and above the hard currency<br />

returns achieved. For example, the Cape Town Olympic bid to host<br />

the 2004 Olympics was based on an exchange rate of 25/1, and<br />

investors therefore expected a rand depreciation of at least 10%<br />

per annum going forward.<br />

Looking back, you could easily argue that the timing of the<br />

relaxation of exchange control was a perfect storm. The 18-year<br />

bull run in offshore assets had created an expensive market, and<br />

the commodity super-cycle driven primarily by the incredible<br />

demand for commodities from China resulted in significant<br />

benefits for South Africa as a resource-based economy. In line with<br />

this, we saw the rand appreciate from a level of just over R14 to the<br />

US dollar to just below R7 over the following decade.<br />

This impact also saw the South African market rally with returns<br />

of around 13% per annum from the turn of the century up until<br />

2013, while offshore markets ran flat over that period with the<br />

32 www.bluechipdigital.co.za

INVESTMENT | Offshore<br />

BLUE<br />

CHIP<br />

The value of a well-diversified<br />

investment portfolio<br />

cannot be overstated.<br />

added impact of the subprime crisis of 2008. We then once again<br />

witnessed offshore markets rally hard post the financial crisis<br />

over the proceeding 12 years and with a drop in demand for<br />

commodities, the South African market and the rand were under<br />

pressure once again.<br />

At this point, you may feel more confused and uncertain than<br />

before you started reading this article and leaving your money in<br />

the bank may seem like a pretty good idea. Alternatively, simply<br />

invest in the perceivably low-risk property market – at least you<br />

can see the asset and many investors have become very wealthy<br />

over the last 30 years plus. How many times at a braai have you<br />

heard someone bragging about buying a property and flipping it<br />

a year later, doubling their money?<br />

Although property is a very good asset class to include in a<br />

diversified investment portfolio, how often do we consider the<br />

concept of liquidity (a reality that hit home during the KZN riots),<br />

the fact that in the current environment of heightened political risk<br />

and focus on increased taxes aimed at the “easy targets”, the hassles<br />

and costs associated with managing those properties and finally<br />

the very real risk associated with legislation that clearly favours<br />

the tenant over the landlord, making it very hard to get rid of nonpaying<br />

illegal occupants?<br />

But fear not as there are solutions to manage these daunting<br />

decisions. While we would like it to be as simple as possible the<br />

fundamentals remain fairly aligned, they will inevitably differ<br />

from person to person and in many instances not simply based<br />

on objective financial planning but will also include some very<br />

emotive issues. Nevertheless, the ultimate way to establish financial<br />

independence and security in retirement is to invest across a<br />

diversified portfolio of assets. Yes, that’s the boring route, and<br />

you will never be able to be the person around the braai with the<br />

legendary tale of making quick money, but you will be the person<br />

who will be at the braai every year while the “big talkers” may not.<br />

Financial advice is key<br />

While my role focuses purely on direct offshore investment and<br />

the methods to simplify the tax and estate planning implications<br />

of holding funds directly abroad, I am not naive enough to think<br />

that this is the solution for all your funds and a one-way ticket<br />

to inflation-beating returns year on year. I do however believe<br />

that when constructing a diversified portfolio, you must be<br />

aware of some of the risks mentioned above. It’s also important<br />

to consider your overall assets and not just your discretionary<br />

fund when deciding what portion of your funds you should look<br />

to invest abroad.<br />

Once you have established, with the guidance of your financial<br />

advisor, what percentage of your portfolio should be invested<br />

offshore in line with your means and objectives, don’t underestimate<br />

the additional benefit of having those funds held physically abroad.<br />

These may never be required in your lifetime, but the chances of<br />

them being redeemable offshore for your children or grandchildren<br />

one day are a reality.<br />

In closing, to answer the question of it being different this time, the<br />

risks associated with markets will continue to be cyclical and the<br />

rand will remain volatile. However, the big question is how high<br />

the political risk barometer is and what impact it will have on our<br />

markets and currency going forward.<br />

It would be so easy to list these issues, but scaremongering<br />

should not cloud your decisions into focusing on one option such<br />

as putting everything offshore. We also need to be realists, as hard<br />

as that may sometimes be, and at the very least remain openminded<br />

about how these issues will impact our beautiful country<br />

in the future. While, like you, I hope that things will improve and<br />

we as South Africans will once again show our resilience in the<br />

face of adversity, use the options available to offer some form of<br />

protection, because this time it may well be different.<br />

Sheldon Holdsworth, Old Mutual International Regional<br />

Offshore Specialist<br />

*Asset swaps arise when a company uses its offshore investment allocation on behalf of clients to invest funds across a much broader range of assets around the world. These funds are ultimately only<br />

redeemable in South African rand and cannot be paid out abroad.<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

INVESTMENT | Economy<br />

The increasing popularity<br />

of share buybacks<br />

Schroders’ research shows that buybacks became more widespread in 2022, with<br />

some markets narrowing the gap with the US, where they’re most common.<br />

Kondi Nkosi, Country Head<br />

South Africa, Schroders<br />

Companies on the S&P 500 index spent $3.9-trillion<br />

buying back their own shares in the five years to 2022.<br />

This surpasses the $2.5-trillion they paid out in dividends<br />

over the same period. Buybacks divide opinion but one<br />

thing is clear: corporate buying has provided an incremental<br />

source of demand for US shares.<br />

Our new research confirms that buybacks continued to be more<br />

popular in the US than in other major markets in 2022. But that<br />

gap narrowed – with their use becoming more widespread in the<br />

UK, Europe and Japan. Buyback activity will always fluctuate over<br />

time, and one year doesn’t make a trend. But as a tailwind for equity<br />

demand and a mechanical boost for earnings per share numbers,<br />

their increased popularity outside the US is worth keeping an eye on.<br />

Why buybacks are a divisive subject<br />

Share buybacks divide opinion. On the one hand, they are a way<br />

for company management to return excess cash to shareholders<br />

in a way that is less binding than a dividend increase. And they<br />

can be more tax efficient for investors as capital gains are often<br />

taxed at a lower rate than income. On the other hand, they<br />

are open to criticism about being open to manipulation by<br />

management. The same earnings divided by a smaller number<br />

of shares leads to an increase in earnings “per share”. If executive<br />

remuneration is naively linked to earnings per share growth<br />

this could be enriching management at the possible expense<br />

of shareholders.<br />

Some also argue that they are a way for management to<br />

prop up an ailing share price, again potentially to boost their<br />

compensation. But the counterview is that if management<br />

believes their shares to be undervalued then this would be the<br />

best time to buy back their shares. An increase in buybacks may<br />

also signal an absence of profitable investment opportunities<br />

for the company concerned. So, rather than a positive, they<br />

could be interpreted as a negative. One indication of the<br />

strength of feeling about buybacks is that US policymakers have<br />

recently introduced a “buyback tax”, forcing companies to pay<br />

tax amounting to 1% of the value of any buybacks. This came<br />

into effect on 1 January 2023.<br />

US still leads buybacks, but UK and other markets closed the<br />

gap in 2022<br />

Based on our calculations, 45% of large US companies bought back<br />

at least 1% of their shares during 2022 (net of any shares that were<br />

issued). This is broadly in line with the average of the three years<br />

before Covid (buyback activity dropped dramatically in 2020,<br />

distorting any calculations encompassing this period).<br />

More unusually, UK companies almost matched the US on this<br />

basis last year (Figure 1). The proportion of UK companies buying<br />

back at least 1% of their shares soared to a record high in 2022.<br />

There has also been a rise in buyback activity among Japanese,<br />

French and German companies. Activity remains limited in<br />

emerging markets. In Japan’s case, many companies are valued<br />

at less than the book value of their shares and are hoarding<br />

cash. With regulators keen to see improvements in firms’ capital<br />

efficiency, buybacks can be considered one effective use of that<br />

cash, especially if shares can be bought back at a cheap valuation.<br />

Buybacks are less common among smaller companies<br />

Intuitively, smaller companies are less likely to engage in buyback<br />

activity and more likely to issue new shares than larger companies.<br />

Smaller firms are typically growing quicker and so potentially need<br />

the extra capital. This may also explain why emerging market<br />

companies have been less keen on buybacks. We can see this effect<br />

by comparing the proportion of large-cap companies buying back<br />

34 www.bluechipdigital.co.za

INVESTMENT | Economy<br />

BLUE<br />

CHIP<br />

1% of their shares (net of any issuance) with the proportion of the<br />

overall market doing so (Figure 2). And the same analysis is based on<br />

the proportion increasing their share count by 1%. For example, there<br />

are 627 companies in the MSCI USA index but 2 470 companies in<br />

the MSCI USA Investible Market Index. The difference between these<br />

two indices is the inclusion of 1 843 small and mid-cap companies,<br />

which make up 75% of the total. In all major markets, the number<br />

of small and mid-cap companies far outweighs the number of<br />

large companies.<br />

to another. For the same reason, we focus on individual countries<br />

rather than regions. The aim here is to capture only genuine changes<br />

in equity supply. In the 12 months to July 2023, net equity supply<br />

was negative in the US, UK, Japan, France and Germany (Figure 3).<br />

However, what is most striking is that the pace of de-equitisation<br />

has recently been greater in non-US markets than in the US. Mergers<br />

and acquisitions explain some of this. For example, UK companies<br />

have traded at a discount to US companies, making them attractive<br />

acquisition targets by both US companies and private equity.<br />

Continuing with the US as an example, 45% of large US companies<br />

bought back at least 1% of their shares in 2022 compared with<br />

33% of the broader corporate universe. In contrast, 20% of large<br />

US companies increased their share count by at least 1% compared<br />

with 30% of the broader corporate universe. This difference in<br />

behaviour between large companies and the broader market holds<br />

across other markets.<br />

Buybacks and “de-equitisation”<br />

There’s been much commentary around the shrinking pool of<br />

investable public equities in recent years. One way this happens is<br />

when more companies leave the market through de-listings (down to<br />

mergers and acquisitions) than join through new listings/initial public<br />

offerings (IPOs).<br />

But buybacks also remove equity from the public markets. By<br />

carrying out a similar calculation to that used above but applying it to<br />

the stock market rather than individual companies, we can get a sense<br />

of the scale of this “de-equitisation” trend. Unlike the previous analysis<br />

which focussed on net buybacks alone, this captures the combined<br />

effect of net buybacks and new entrants/delistings. We refer to this<br />

as “net equity supply”.<br />

Our analysis is based on the broad stock market of large, mid<br />

and small companies in each country to remove any distortions<br />

from companies being promoted/demoted from one size segment<br />

Delistings have also picked up considerably in Japan, with figures<br />

for last year almost triple what they were a decade earlier.<br />

With non-US companies continuing to be valued at steep discounts<br />

to their US peers, their appeal as takeover targets is unlikely to wane.<br />

Conclusions<br />

While much focus has been on the declining number of listed<br />

companies, we shouldn’t forget the contribution of share buybacks<br />

to the trend of de-equitisation. Use of share buybacks picked up<br />

significantly in 2022 and it will be interesting to see if this continues<br />

in the years ahead. With global interest rates expected to be higher<br />

for longer and a continuing weak growth outlook, firms have a lot<br />

to consider.<br />

They’ll be working out how to use any excess cash, the<br />

extent to which their equity prices look cheap, and whether the<br />

flexibility of buybacks is more attractive than dividends in an<br />

uncertain environment.<br />

Corporate buying, whether through buybacks or mergers<br />

and acquisitions, has the potential to support share prices. For<br />

investors, the increased popularity of buybacks outside of the<br />

US will be a trend to watch. And, so long as non-US companies<br />

continue to trade at large valuation discounts to their US peers,<br />

they are likely to feature prominently on lists of potential<br />

takeover targets.<br />

Important Information: For professional investors and advisers only. The material is not suitable for retail clients. We define "Professional Investors" as those who have the appropriate expertise and<br />

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<br />

any financial instrument/securities or adopt any investment strategy. Reliance should not be placed on any views or information in the material when making individual investment and/or strategic<br />

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<br />

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<br />

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<br />

not warrant its completeness or accuracy. <strong>Issue</strong>d in September 2023 by Schroders Investment Management Ltd registration number: 01<strong>89</strong>3220 (Incorporated in England and Wales) which is authorised<br />

and regulated in the UK by the Financial Conduct Authority and an authorised financial services provider in South Africa FSP No: 4<strong>89</strong>98<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

INVESTMENT | Leadership<br />

Momentum Investments’<br />

new CEO: Ferdi van Heerden<br />

Ferdi van Heerden took over the reins at<br />

Momentum Investments on 1 September<br />

2023. He has a wealth of experience<br />

in all areas of investments, locally and<br />

globally, and has spent the bulk of his decadeslong<br />

career at Momentum. During this time, he<br />

filled a range of executive positions in the group,<br />

culminating in more than a decade of leadership<br />

in the international investment industry as head of<br />

Momentum Investments' UK business, Momentum<br />

Global Investment Management (MGIM).<br />

Van Heerden will serve as a member of the<br />

Momentum Metropolitan Executive Committee and<br />

his portfolio includes among others Momentum’s<br />

retail investment offerings, all local and global<br />

investment management businesses, as well as<br />

Momentum Money.<br />

In his own words: “I see this role as a great new<br />

challenge for me, but also an opportunity to use<br />

all the skills I have developed and experience I<br />

have gained over the years to lead the Momentum<br />

Investments team on its continued journey, building<br />

on the sound foundations of the past five years.<br />

There’s much we need to do, with many challenges<br />

in a fast-paced, changing world. I look forward<br />

to helping navigate these challenges with our<br />

leadership team and to helping build our collective<br />

dreams into reality.”<br />

Jeanette Marais, Group CEO of Momentum<br />

Metropolitan, says “Ferdi is a highly respected leader<br />

who has filled a range of executive positions in the<br />

Group. His executive track record is proof of his<br />

ability to see the bigger picture, provide strategic<br />

direction, and lead businesses to successfully<br />

execute their plans. I am also particularly pleased<br />

that we appointed one of our executives to the<br />

Group level. This not only shows that we focus on<br />

growing our people, but it also enables continuity:<br />

Ferdi has been part of the Momentum Investments<br />

Exco for 13 years and truly understands our culture<br />

and the wider industry challenges.” <br />

Meet Ferdi van Heerden<br />

Academic and professional qualifications<br />

B.Sc Honours in Mathematical Statistics, Advanced Management<br />

Programme (AMP) from INSEAD (France), Diploma in General<br />

Management from Reading University (Henley Business School/<br />

UK), Member of the Chartered Institute for Securities and<br />

Investments (MCSI).<br />

Approach to business and life<br />

Positive mindset. His guiding motto is “Think with a positive mindset:<br />

Offer alternatives and seek solutions,” a testament to his optimistic<br />

and solution-oriented approach to challenges.<br />

Inclusivity matters. Throughout his life and career, Van Heerden<br />

values treating others with respect, dignity and inclusivity, ensuring<br />

everyone has a voice and a contribution to make.<br />

Belief in opportunities. He firmly believes that the more you explore,<br />

the more opportunities will cross your path. He believes in taking<br />

action and pursuing opportunities fearlessly.<br />

The best advice. Van Heerden holds dear the advice he received<br />

early in his career: “Outwork and outthink peers and competitors.” A<br />

principle he continues to live by.<br />

Making a difference. Van Heerden is most excited about the incredible<br />

people in this industry and the vital role we play in society as asset<br />

allocators, knowing we can genuinely make a positive impact on the<br />

world and society.<br />

Ferdi van Heerden, CEO, Momentum Investments<br />

36<br />


INVESTMENT | Asset management<br />

BLUE<br />

CHIP<br />

Demystifying Smart Beta<br />

Smart Beta, has disrupted the binary choice between active and passive investing.<br />

Combining the benefits of both active and passive strategies,<br />

Smart Beta offers a systematic and rules-based approach to<br />

portfolio construction.<br />

What is Smart Beta?<br />

Smart Beta, also known as active quant, offers an alternative<br />

to traditional market capitalisation-weighted indexing. Many<br />

passive index funds and exchange-traded funds (ETFs) are<br />

“capitalisation-weighted”. This means that the individual<br />

stocks within the index are based on each stock’s total market<br />

capitalisation or size. Stocks with higher market capitalisations<br />

are weighted more heavily than stocks with lower market<br />

capitalisations. As a result, it’s possible for some overvalued<br />

stocks to represent a large percentage of the index’s total value.<br />

Rather than relying solely on market size to determine a stock’s<br />

performance relative to its index, Smart Beta strategies seek to<br />

enhance returns or reduce risk by selecting and weighting stocks<br />

based on investment styles that have historically demonstrated<br />

the potential to generate superior risk-adjusted returns.<br />

Smart Beta is not a blend of active and passive investing but<br />

rather it is a standalone investment methodology that constructs<br />

portfolios systematically.<br />

How does Smart Beta work?<br />

Unlike fundamental active management, which relies on<br />

subjective judgements and individual stock selection by costly<br />

analyst teams, Smart Beta employs an objective, rules-based<br />

methodology using publicly available data. To exploit a particular<br />

investment style such as Momentum, Value or Quality, Smart Beta<br />

strategies use set metrics to determine whether a stock should be<br />

overweight, neutral or underweight relative to an index, ultimately<br />

aiming to combine the return of the market with the potential of<br />

outperformance with stocks that align to specific styles.<br />

Differentiating benefits of Smart Beta compared to traditional<br />

active and passive investing:<br />

1. Objectivity that cuts out human bias. Smart Beta strategies<br />

rely on a disciplined and transparent set of rules that guide the<br />

construction of a portfolio. This approach eliminates emotional<br />

biases and the potential for human error that may be present<br />

in traditional active management.<br />

2. Lower fees that affect client outcomes. Smart Beta strategies<br />

typically have lower fees compared to actively managed funds,<br />

making them an attractive option for cost-conscious investors.<br />

Furthermore, although they may have slightly higher expenses<br />

than traditional passive<br />

funds, the potential for<br />

enhanced returns justifies<br />

the incremental cost.<br />

3. Potential outperformance<br />

relative to benchmark.<br />

Unlike traditional passive<br />

funds that track the<br />

overall market, Smart Beta<br />

strategies focus on specific<br />

investment styles. For<br />

example, a value-based<br />

Smart Beta strategy would<br />

overweight stocks with<br />

lower price-to-earnings<br />

ratios. A quality-based<br />

approach would overweight<br />

stocks with stable earnings<br />

and low debt levels and<br />

lastly, a momentum-based<br />

Ali Simpkins, Fund Specialist,<br />

Momentum Investments<br />

approach would overweight stocks that have demonstrated<br />

positive price momentum over a defined period. This targeted<br />

exposure allows investors to potentially capitalise on styles that<br />

have historically contributed to excess returns.<br />

4. Diversification. Smart Beta strategies construct portfolios very<br />

differently when compared to traditional active and passive<br />

investing. That in itself is a diversification layer. Furthermore,<br />

each investment style represents a unique source of return<br />

that may perform differently under various market conditions.<br />

By combining multiple styles within a Smart Beta strategy,<br />

investors can diversify their portfolios across different drivers<br />

of returns.<br />

As a segment of the South African general equity market, Smart<br />

Beta assets have grown by approximately 31% per year over<br />

the last decade, albeit off a low base. As this innovative strategy<br />

continues to gain popularity, it is expected to play a significant<br />

role in shaping the future of asset management in South Africa.<br />

Investing is personal and Momentum Investments offers a broad<br />

Smart Beta offering including individual style unit trusts as well<br />

as a blended approach for each client’s unique circumstances.<br />

For more information, contact ali.simpkins@momentum.co.za.<br />

For more about our Smart Beta funds, visit momentum.co.za.<br />

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<br />

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<br />

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<br />

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<br />

investor report (QIR) for each portfolio which is available on momentum.co.za. All performance figures are net of fees and represent the A class in each portfolio.<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />


Global model portfolios<br />

for your advice practice<br />

There is significant interest in<br />

investing offshore, whether to<br />

address a specific investment<br />

need, hedge currency risk<br />

associated with the rand or provide<br />

exposure to bigger, deeper capital markets<br />

and unique industries and companies.<br />

However, the investment opportunity set<br />

available offshore is vast.<br />

So how do advisors decide which fund<br />

managers and asset classes to choose?<br />

Partnering with a discretionary fund<br />

manager (DFM) can help with this<br />

Florbela Yates, Head of Equilibrium<br />

conundrum. The new Equilibrium<br />

global model portfolios, sub-managed<br />

by our London-based investment<br />

business, Momentum Global Investment<br />

Management (MGIM), give South African<br />

investors access to a diversified range of<br />

global opportunities across a broad range<br />

of asset classes, countries, companies,<br />

currencies and market sectors.<br />

The model portfolios are designed to<br />

take the guesswork out of navigating the<br />

global landscape by removing the burden<br />

of selecting the optimal asset allocation<br />

and fund manager mix – our team in the<br />

UK does it for you. At the same time, we<br />

do not just invest in one country, in one<br />

stock market or use the expertise of one<br />

fund management house, but instead,<br />

look everywhere for the best investment<br />

opportunities globally.<br />

The global model portfolios are<br />

constructed using the same outcomebased<br />

investing philosophy as our local<br />

portfolios. This process starts with the<br />

portfolios’ long-term strategic asset<br />

allocations (SAA), which is the optimal<br />

blend of asset classes required to achieve<br />

the desired return outcomes in US dollar<br />

terms with as little risk as possible, while<br />

also minimising the probability of shortfall<br />

versus those objectives.<br />

To complement the SAA, shorter-term<br />

tactical tilts are overlayed depending<br />

on valuations and the outlook for a<br />

particular asset class at that point in time.<br />

Then finally, further value is added at<br />

the implementation stage by selecting<br />

specialist fund managers per asset class<br />

and per investment style and investment<br />

strategy – having a global presence enables<br />

the team to search far and wide for the best<br />

investment talent.<br />

The Equilibrium global model portfolio<br />

range consists of three risk-profiled<br />

portfolios, allowing advisors to select the<br />

most appropriate investment option based<br />

on their client’s individual risk profile and<br />

investment time horizon.<br />

The best way to get<br />

investors to their<br />

objectives is for them<br />

to stay invested<br />

through the cycle.<br />

The Equilibrium Global Cautious portfolio<br />

is designed for more conservative<br />

investors given its higher allocation to<br />

fixed-income instruments; the Equilibrium<br />

Global Managed Portfolio is for investors<br />

looking for a more balanced blend of asset<br />

classes; and the Equilibrium Global Growth<br />

portfolio is for investors with a higher<br />

risk appetite given its approximate 90%<br />

allocation to global equities.<br />

Through consistent application of the<br />

outcome-based investment process, the<br />

global model portfolios have an excellent<br />

track record of delivering on their return<br />

objectives in US Dollar terms over time, as<br />

represented by a similar strategy managed<br />

by the same MGIM investment team going<br />

back to 1 January 2016.<br />

The purpose of partnering with a DFM<br />

like Equilibrium is to ensure that there is<br />

alignment between your advice process and<br />

the investment portfolios that your clients<br />

invest in, whether that be local or global.<br />

Why is this important? We know that the<br />

best way to get investors to their objectives<br />

is for them to stay invested through the<br />

cycle. That means not only when markets<br />

are performing, but more importantly, even<br />

when they’re not. Let Equilibrium help you<br />

so that you can do what you do best: giving<br />

your clients the best financial advice for their<br />

unique circumstances.<br />

Equilibrium Investment Management (Pty) Ltd (Equilibrium) is an authorised financial services provider (FSP32726)<br />

and part of Momentum Metropolitan Holdings Limited and rated B-BBEE level 1.<br />

38 www.bluechipdigital.co.za

Partner with us, become an FPI<br />

Approved Professional Practice TM<br />

FPI Approved Professional Practice TM<br />

firms<br />

For more information, get in touch with us<br />

Email us<br />

businessdevelopment@fpi.co.za<br />

Contact us:<br />

Visit our website<br />

+27 11 470 6000 www.fpi.co.za

BLUE<br />

CHIP<br />

PRACTICE MANAGEMENT | Technology<br />

The Bermuda Triangle of change<br />

in the future of financial advice<br />

For many years, the financial planning profession has been<br />

striving to be recognised as a true “profession”. In this<br />

pursuit, we find ourselves navigating a complex landscape,<br />

which we can aptly describe as the Bermuda Triangle of<br />

financial planning. This triangle consists of three interconnected<br />

elements reshaping the industry as we know it: automation,<br />

artificial intelligence (AI) in the advice and planning stages and<br />

the fascinating field of behavioural sciences. Let’s take a closer look<br />

at our proverbial Bermuda Triangle.<br />


Automation provides financial planners with powerful tools to<br />

enhance their services. Here are some key methods of incorporating<br />

automation into the financial planning process:<br />

1. Client onboarding and reporting. Digital platforms are used<br />

to gather client data, introduce services and ensure compliance.<br />

Automation can be applied to simplify investment reports and<br />

financial documents for clients, saving time and improving efficiency.<br />

2. Data aggregation. In a world where financial data is scattered<br />

across various sources, automation can consolidate this<br />

information, offering a comprehensive financial overview for more<br />

informed decision-making.<br />

3. Portfolio management. Investment platforms equipped with<br />

automatic portfolio rebalancing help maintain portfolios aligned<br />

with client goals. Outsourcing this functionality to a portfolio<br />

manager is crucial for effective management.<br />

4. Online presence. Consistency is key in the digital era.<br />

Automation ensures a steady flow of content on social media<br />

platforms, enhancing an advisor’s online presence.<br />

5. Chatbots. Basic client queries are addressed instantly with the<br />

help of chatbots, saving time and providing quick responses to<br />

common questions.<br />

It is essential to remember that the personal touch in financial<br />

planning remains irreplaceable.Automation should serve as a complement<br />

rather than a substitute for the client-planner relationship.<br />


Artificial Intelligence (AI) is a transformative force in financial<br />

planning. Combined with insights from behavioural finance, AI<br />

reshapes the future of the profession. Here’s how:<br />

1. Managing emotions and educating clients. Financial planners<br />

guide clients through emotionally charged financial situations,<br />

ensuring that decisions are not solely driven by emotions.<br />

Educating clients about their behavioural biases can make them<br />

more informed and engaged in the planning process.<br />

2. Addressing biases. By identifying<br />

biases such as loss aversion or<br />

overconfidence, planners tailor advice<br />

to counteract these tendencies,<br />

leading to more rational financial<br />

decisions. AI also helps predict<br />

which clients would have more<br />

emotional reactions to market events<br />

and proactively remind financial<br />

planners to reach out to them at the<br />

appropriate time.<br />

3. Improved communication.<br />

Understanding behavioural biases<br />

helps planners communicate more<br />

effectively, resulting in clearer and<br />

more persuasive advice.<br />

4. Simplified choices. Decision<br />

overload can paralyse clients. AI assists<br />

in limiting options, making choices<br />

clearer and more manageable.<br />

5. Hybrid-advice offering. For<br />

clients with straightforward financial<br />

planning needs, such as planning<br />

for children’s education or a holiday<br />

home, automation takes care of<br />

financial planning and goal tracking,<br />

ensuring efficient solutions.<br />

Incorporating these technological<br />

advancements into financial planning<br />

practices enhances the advisor’s<br />

value-add to clients. However, it’s<br />

crucial to emphasise that the personal<br />

touch remains vital. Technology Tiaan Herselman, Head of Advice,<br />

should complement, not replace, Old Mutual Wealth<br />

the qualities of human intuition and<br />

empathy that financial planners bring to their clients.<br />

Furthermore, the incorporation of behavioural finance<br />

principles enables financial planners to provide more personalised,<br />

psychologically-aware advice. This approach leads to better<br />

outcomes and fosters stronger client relationships. As we navigate<br />

the Bermuda Triangle of change in financial planning, embracing<br />

automation, AI and behavioural sciences is not just a strategic<br />

choice but an essential one. In a world where change is constant,<br />

adaptability is the key to thriving and providing invaluable services<br />

in the evolving landscape of financial planning. <br />

40 www.bluechipdigital.co.za




At Old Mutual International, we recognise that investing offshore<br />

is all about opportunity. We provide access to the best investments,<br />

wherever they may be.<br />


For more information, visit www.omi-int.com<br />



Old Mutual Life Assurance Company (SA) Limited is a liscenced FSP and Life Insurer.

BLUE<br />

CHIP<br />

INVESTMENT | Economy<br />

Sticking to our knitting<br />

Reflecting on what has contributed to our investment success 30 years on.<br />

The year 2023 has been a period of reflection for Coronation<br />

Fund Managers as we celebrate our 30th anniversary.<br />

Over time, we have actively grown the long-term savings<br />

of millions of South Africans thanks to an unwavering<br />

commitment to a single investment philosophy and purpose.<br />

Since 1993, the critical tenets of our investment philosophy<br />

remained that of investing with a long-time horizon and a focus on<br />

valuation when selecting instruments or making asset allocation<br />

decisions. This enabled us to benefit from the increasingly<br />

shorter time horizons that we see play out in market prices and<br />

to implement portfolio-defining investment ideas with courage<br />

and conviction.<br />

The combination of these factors has resulted in a track record<br />

that, we believe, speaks for itself.<br />

But it’s not just about a sound investment philosophy<br />

A sound investment philosophy alone cannot drive a successful<br />

investment track record. Executing it requires a well-resourced,<br />

experienced and passionate group of people.<br />

Over the past three decades, we have focused on developing and<br />

investing in a global investment team of 55 professionals. Today,<br />

A 30-year track record that speaks for itself<br />

Growth of R100 since inception*<br />

R<br />

8<br />

7<br />

6<br />

5<br />

4<br />

3<br />

2<br />

1<br />

0<br />

Period<br />

Coronation<br />

Global<br />

Houseview<br />

Benchmark<br />

Alpha<br />

Total Value<br />

Added per<br />

R100m<br />

*SI cumulative 6 337,54% 4 537,44% 1 800,10% R1,8 bn<br />

*SI annualised 14,<strong>89</strong>% 13,64% 1,25%<br />

20 years (p.a.) 14,72% 13,75% 0,97% R244 m<br />

15 years (p.a.) 12,19% 10,98% 1,21% R84 m<br />

10 years (p.a.) 9,41% 8,23% 1,18%<br />

5 years (p.a.) 9,86% 7,67% 2,19%<br />

3 years (p.a.) 13,29% 11,45% 1,84%<br />

Coronation Global Houseview Strategy<br />

c.1 800,1%<br />

value added<br />

over 30 years<br />

Benchmark**<br />

Sep-93 Sep-98 Sep-03 Sep-08 Sep-13 Sep-18 Sep-23<br />

Performance is gross of fees: Annualised performance figures represent the geometric average return earned by the fund<br />

over the given time period. *Since inception - October 1993; **Benchmark - Median of peer group<br />

Performance is gross of fees; * Since inception – October 1993; **Benchmark – Median of peer group<br />

Source: Coronation, as at end-September 2023<br />

Source: Coronation, as at end-September 2023<br />

A sound investment philosophy<br />

alone cannot drive a successful<br />

investment track record.<br />

this team applies our tried and tested investment philosophy<br />

across all our portfolios in a collaborative and integrated manner,<br />

allowing us to pick the best investment ideas to be represented<br />

in our investment portfolios, regardless of asset class or region.<br />

People and philosophy also require a process<br />

We believe that the core strength of an investment process is when<br />

it enables the philosophy, the people and the investment work<br />

produced (the research, modelling, and constant interrogation of<br />

conclusions reached) to seamlessly come together when the big<br />

calls need to be made.<br />

R6 437,54<br />

R4 637,44<br />

Thinking slow, acting fast<br />

This core strength was best demonstrated during<br />

five key market moments that presented severe<br />

dislocations but also created the most attractive<br />

investment opportunities over our three-decade<br />

track record. (See table and graph on the right.)<br />

If we pause at each of the significant crises<br />

illustrated, our portfolio actions at the time<br />

were not informed by the prevailing market<br />

sentiment but instead by our long-term work<br />

(the ability to think slowly) that gave us the<br />

conviction to take advantage of the disconnect<br />

between price and value during those critical<br />

moments on behalf of our investors (by<br />

implementing quickly).<br />

When preparation meets opportunity<br />

When reflecting on why our positioning in<br />

these examples worked in our clients’ favour,<br />

the answer comes down to a tried and trusted<br />

investment philosophy that has been applied<br />

consistently over many years. Coupled<br />

with a deep and experienced team doing<br />

detailed proprietary work as the backbone<br />

of the process, it gave us the comfort to act<br />

42 www.bluechipdigital.co.za

INVESTMENT | Economy<br />

BLUE<br />

CHIP<br />

Thinking slow but acting fast when opportunity knocks<br />

Growth of R100 since inception*<br />

R<br />

8<br />

7<br />

6<br />

5<br />

4<br />

3<br />

2<br />

1<br />

0<br />

Coronation Global Houseview Strategy<br />

Commodity cycle<br />

GFC<br />

Benchmark**<br />

Covid<br />

Polycrisis<br />

Sep-93 Sep-98 Sep-03 Sep-08 Sep-13 Sep-18 Sep-23<br />

R6 437,54<br />

R4 637,44<br />

with conviction when the best investment<br />

opportunities became available.<br />

Sticking to what works<br />

As simple and obvious as our actions may look<br />

with the benefit of hindsight, the reality at the<br />

time was that we first had to endure painful<br />

periods of short-term underperformance<br />

while being as affected as everyone else by the<br />

prevailing news flow and headlines.<br />

However, a solid philosophy and trusted<br />

process, executed by an experienced team,<br />

enabled us to look beyond those moments of<br />

market panic and uncertainty. Having stuck<br />

with these principles over three decades stood<br />

us in good stead and we believe they will<br />

continue to contribute to us replicating our<br />

track record into the future. <br />

Coronation is an authorised financial services provider.<br />

Performance is gross of fees; * Since inception – October 1993; **Benchmark – Median of peer group<br />

Source: Coronation, as at end-September 2023<br />

The commodity boom of 2007<br />

The commodity bust of 2015<br />

The Global Financial Crisis,<br />

2008<br />

The Covid pandemic, 2020<br />

The polycrisis of 2022<br />

How did we respond?<br />

With commodity prices flying in response to China’s infrastructure rollout, our long-term work<br />

on commodity prices indicated normal prices were well below the spot. We significantly reduced<br />

portfolio exposure in response, which contributed to outperformance in subsequent years.<br />

When resource prices were in the proverbial hole following a slowdown in Chinese demand and<br />

the shale energy boom in the US, our long-term work indicated a strong disconnect between price<br />

and value, and we upweighted our commodities exposure in response. While this call contributed<br />

to underperformance initially, it added to significant alpha in 2016.<br />

After markets endured one of the most severe bear markets in history, our long-term work on equity<br />

valuations indicated a large margin of safety, giving us the conviction to take our portfolios’ equity<br />

exposure towards a full weighting by early 2009.<br />

While our portfolios were not well-positioned going into this unprecedented event (fairly full equity<br />

weighting and low exposure to the safe-haven assets of gold and USD cash), we leveraged our<br />

research process and spoke to as many experts as possible to understand how the pandemic<br />

would evolve and the impact of lockdowns on consumer behaviour and company results. We<br />

used this knowledge to update and refresh our models across the investment universe to refresh<br />

our valuation estimates. Cross-collaboration within the investment team unearthed the attractive<br />

opportunity presented by select equities, giving us the conviction to significantly increase equity<br />

exposure across our portfolios by December 2020.<br />

A big derating in global assets in response to higher inflation and interest rates coincided with the<br />

relaxation of Regulation 28’s offshore limits. Our long-term work on valuations allowed us to step<br />

into the opportunity presented by offshore assets meaningfully and rapidly – moving our Balanced<br />

Plus Fund’s offshore allocation from around 20% to 45%.<br />

Coronation Balanced Plus is the retail equivalent of the institutional Coronation Global Houseview Strategy illustrated in the visual. Coronation Balanced Plus was launched in April 1996. The Balanced<br />

Plus Fund should be considered a medium- to long-term investment. The value of units may go down as well as up, and therefore Coronation does not make any guarantees with respect to the protection<br />

of capital or returns. Past performance is not necessarily an indication of future performance. Unit trusts are traded at ruling prices and can engage in borrowing and scrip lending. The fund is mandated<br />

to invest up to 45% of its portfolio into foreign securities and may as a result be exposed to macroeconomic, settlement, political, tax, reporting or illiquidity risk factors that may be different to similar<br />

investments in the South African markets. Fluctuations or movements in exchange rates may cause the value of underlying investments to go up or down. Coronation Management Company (RF) (Pty)<br />

Ltd is a Collective Investment Schemes Manager approved by the Financial Sector Conduct Authority in terms of the Collective Investment Schemes Control Act.<br />

www.bluechipdigital.co.za<br />


BLUE<br />


The rising<br />

relevance<br />

of DFMs<br />

In August 2022, Discovery launched Cogence, South Africa’s first truly global discretionary fund manager<br />

as well as the first discretionary fund manager to fully model retirement solutions by taking<br />

health experience into account.<br />

As an independent discretionary fund manager (DFM),<br />

Cogence plans to fill a gap in the country’s burgeoning<br />

DFM industry stemming from the increasing scale and<br />

sophistication of global markets, as well as the vital link<br />

between health and wealth.<br />

At a time when local investors enjoy unprecedented access to<br />

these markets, they also bear the burden of investment, as well as<br />

behavioural and longevity risk.<br />

To take advantage of all that the world has to offer, the local<br />

advice industry stands to benefit from DFMs that blend local<br />

knowledge with truly global asset management expertise to<br />

deliver optimally diversified portfolio solutions.<br />

To adequately consider the multi-dimensionality of individual<br />

retirement journeys alongside risk in a volatile and uncertain world,<br />

a blend of industry-leading technologies is essential to guide the<br />

conversation between financial advisers and their clients.<br />

Yet, many retail investors – and indeed many investment<br />

professionals – are unclear about the added value provided by<br />

this once-niche complement to traditional financial advice. Kenny<br />

Rabson, CEO of Discovery Invest, weighs in on why financial<br />

advisers should pay attention to DFMs.<br />

What is a DFM – in a nutshell?<br />

A DFM is an established asset manager with the requisite licence<br />

and mandate to buy and sell investments on behalf of its clients.<br />

In ideal cases, DFMs have research teams capable of assessing the<br />

vast global investment universe of unit trusts and passive solutions<br />

and the know-how to select from these to construct optimally<br />

diversified investment portfolios on behalf of financial advisers.<br />

Single-asset managers typically select investment instruments<br />

from within a unit trust fund. By contrast, a DFM, also known as<br />

a retail multi-manager, selects from multiple of these managers’<br />

funds to construct its solutions. While some DFMs offer bespoke<br />

portfolio solutions to financial advisers, others focus on providing<br />

model portfolio solutions for a range of risk profiles that suit an<br />

adviser’s clients.<br />

Regardless of the approach, DFMs all essentially fulfil the<br />

day-to-day active investment management of clients’ portfolios,<br />

therefore simplifying the investment process and creating<br />

efficiencies to the benefit of both adviser and client.<br />

Best-of-breed DFMs pair global reach and expertise with<br />

technologies that can help digest the enormous complexity of<br />

markets and translate this into both real-time and forward-looking<br />

insight relevant at the level of the individual portfolio.<br />

Why the interest in this sector?<br />

Globally, as well as locally, the use of DFMs has grown rapidly in<br />

recent years and most advisers expect this trend to continue. 1<br />

On the one hand, the investment universe grows ever<br />

more complex and sophisticated as well as more volatile and<br />

uncertain. As the number of investment options increases it is<br />

becoming practically impossible for advisory practices to build<br />

the internal research teams needed to keep abreast of it all.<br />

While global diversification has become vital to local investors<br />

44 www.bluechipdigital.co.za


BLUE<br />

CHIP<br />

given successive relaxations to the offshore limits of Regulation<br />

28 of the Pension Funds Act, this complexity grows by orders of<br />

magnitude when looking abroad. Few companies in the world<br />

have the analytic capabilities and global presence required to<br />

research and develop a comprehensive understanding of the<br />

risks and opportunities that exist in such a vast, volatile and<br />

sophisticated investment landscape. On the other hand, the<br />

regulatory environment is becoming more onerous for advisers,<br />

which increases the compliance risk they face in their practices.<br />

By bringing in a deep and broad level of local, and ideally global,<br />

investment expertise to perform asset management advice,<br />

DFMs allow financial advisers to focus on what they do best –<br />

providing financial advice. 2<br />

What are some of the benefits of a DFM?<br />

The principal benefit of DFMs is that they offer much more<br />

investment and research expertise than advisers generally can.<br />

Many DFMs emerge from other asset managers, and they have<br />

dedicated teams whose job is to focus on managing investments.<br />

In the South African context alone, there are more than 1 000<br />

unit-trust options available to investors. To know all their details<br />

requires significant research capability.<br />

At Cogence, we have brought in RisCura – which has established<br />

itself within the South African manager research environment,<br />

with over 20 years of experience and a dedicated team that<br />

researches every fund manager in the country, to select the local<br />

component of fund manager selection. When looking abroad – as<br />

is necessary given that clients can now have 45% of their money<br />

invested offshore under Regulation 28 of the Pension Funds Act –<br />

this scope expands enormously.<br />

We believe that a truly global footprint, with a presence and<br />

skillset in most major markets, is required to keep abreast of the<br />

global investment universe, which is why we have partnered with<br />

one of the world’s leading asset managers, BlackRock.<br />

DFMs have a FAIS Category II licence from the FSCA, which<br />

allows them to make changes easily on behalf of the individual<br />

client according to the investment mandate signed with the DFM.<br />

This removal of paperwork enables rapid changes to a portfolio in<br />

response to or anticipation of market events and opportunities.<br />

A further benefit comes by way of the efficiencies of scale.<br />

DFMs that reach a significant size can negotiate wholesale fee<br />

classes in the unit trusts selected, thereby reducing – or even<br />

nullifying – the overall DFM costs experienced by the end<br />

client. This scale also allows DFMs to provide enhanced access<br />

to investments such as private equity, global hedge funds,<br />

broad passive solutions and private credit. As we enter a period<br />

characterised by high inflation and uncertain, volatile equity<br />

market returns, these alternatives are growing in popularity.<br />

Technology is another key benefit.<br />

The pace and complexity of global markets alongside changing<br />

consumer behaviours in the wake of the Covid-19 pandemic and<br />

the increasing need for personalised, real-time-reporting and<br />

portfolio monitoring is quickly making use of advanced technology<br />

indispensable in the world of financial advice.<br />

DFMs allow<br />

financial advisers<br />

to focus on<br />

what they do<br />

best, providing<br />

financial advice.<br />

www.bluechipdigital.co.za<br />


BLUE<br />


For instance, Aladdin Wealth, an innovative portfolio analytics<br />

and risk management technology brought to South Africa by<br />

Cogence, equips advisers with a wide range of sophisticated<br />

tools that leverage data-driven insights to help improve portfolio<br />

management and reporting.<br />

This technology allows advisers to test their ideas for suitability<br />

against a client’s portfolio while also being able to stress-test<br />

against future risk scenarios, such as a repeat of the subprime<br />

mortgage crisis. Technology is also essential for factoring in<br />

modern demographic and behavioural trends that are becoming<br />

central to mapping out individuals’ retirement journeys.<br />

Finally, the combination of technology and expertise can greatly<br />

enhance reporting as a DFM can offer full transparency and a realtime<br />

overview of a client’s investment picture based on a variety<br />

of personalised metrics. Personalisation through digitisation can<br />

guide the conversation between adviser and client to overcome<br />

biases and help investors stay on track to meet their long-term<br />

goals, despite market volatility.<br />

A DFM introduces top-quality strategic allocation,<br />

increases efficiencies in the advisory practice and improves<br />

investor governance while allowing advisers to build better<br />

relationships with their clients, focus on their needs and<br />

find solutions to those needs. Ultimately, as most advisers<br />

are focused on performance when selecting a DFM, the<br />

partnership should work to improve the investment outcome<br />

for clients. <br />

website link: www.cogence.co.za<br />

Disclaimer<br />

Cogence (Pty) Ltd. Registration 2009/011658/07. An authorised financial services provider (FSP No 52242). BlackRock® is a registered trademark of BlackRock, Inc. and its affiliates (“BlackRock”) and is used<br />

under license. BlackRock makes no representations or warranties regarding the advisability of investing in any product or the use of any service offered by Cogence (Pty) Ltd. BlackRock has no obligation<br />

or liability in connection with the operation, marketing, trading or sale of any product or service offered by Cogence (Pty) Ltd.<br />

BlackRock’s Aladdin Wealth platform is designed for financial professional use only and is not intended for end investor use. Aladdin Wealth is a financial technology and risk analytics platform that is<br />

independent of Cogence. Cogence program users undertake sole responsibility and liability for investment or other decisions related to the technology’s calculations and for compliance with applicable<br />

laws and regulations. The technology should not be viewed or construed by any Cogence program users, or their customers or clients, as providing investment advice or investment recommendations<br />

to any parties. This material should not be construed as a representation or guarantee that the use of Aladdin Wealth technology will satisfy your legal or regulatory, tax or accounting, obligations.<br />

BlackRock, as provider of the technology, does not assume any responsibility or liability for your compliance with applicable regulations or laws, or tax or accounting obligations. BlackRock may modify<br />

or discontinue any functionality or service component described herein at any time without prior advance notice to you.<br />

[1] What are advisers thinking | NMG consulting on NinetyOne | https://ninetyone.com/en/south-africa/insights/what-are-advisers-thinking. 2020<br />

[2] South African DFMS, Multi-Managers & Wealth Managers | Insights into Investment Boutiques, RMI 2018 | https://bit.ly/3TYrEwH<br />

46 www.bluechipdigital.co.za

Calling<br />

ALL<br />

Financial<br />

Advisors<br />

Branded Reporting and Portfolio<br />

modelling at your finger tips<br />

Fund Research<br />

Comparison & Analysis<br />

Portfolio Modelling<br />

Presentations & Reports<br />

A ProfileData / FE fundinfo joint venture<br />

For further information, please contact Tracey Wise<br />

011-728-5510 / 079-522-<strong>89</strong>53 or email: tracey@profile.co.za<br />


BLUE<br />

CHIP<br />

INVESTMENT | Responsible investment<br />

Nature’s Dividend: investing with impact to<br />

tackle the dual climate and biodiversity crises<br />

Climate change and biodiversity loss are closely linked<br />

and mutually reinforcing. As climate change alters<br />

the habitats and ecosystems that support life<br />

on Earth, biodiversity loss reduces the resilience<br />

and adaptability of nature to cope with climate impacts,<br />

perpetuating a vicious cycle that is having an increasingly<br />

detrimental effect on the planet.<br />

Biodiversity loss affects climate change by weakening the<br />

capacity of nature to regulate the climate and store carbon. Forests,<br />

wetlands and oceans are natural carbon sinks that absorb and<br />

store large amounts of greenhouse gas emissions; however, when<br />

these ecosystems are destroyed by human activities, as they are<br />

currently, they release carbon into the atmosphere, contributing<br />

to global warming.<br />

The dual climate and biodiversity crises:<br />

What it means for our future<br />

The loss of biodiversity, be it through climate change and/or<br />

human interference, poses very real threats to the health and<br />

well-being of humanity. The World Economic Forum estimates<br />

that more than half of the world’s GDP depends upon nature and<br />

its services (including for water quality and disease control).. And<br />

consider that more than a quarter of the global population already<br />

experiences food insecurity. By 2025, half of the global population<br />

will face water insecurity – and South Africa will not be exempt.<br />

We will also have to deal with the increased spread of diseases as<br />

population migration and density increases. Not to mention that<br />

global heat records are being broken with alarming frequency. The<br />

year 2023 is on track to become the hottest year ever recorded.<br />

Globally, more than five-million people die each year because of<br />

excessive temperatures. These are just some of what these crises<br />

mean for everyday life<br />

Investing for impact<br />

Climate change is also influencing the financial world as asset<br />

managers struggle to assess the impact of physical climate risks<br />

on their investment portfolios. S&P Global Sustainable research<br />

estimates that over 90% of the world’s largest companies have at<br />

least one asset which is financially exposed to climate risks.<br />

Business is taking action though. Currently, over 4,000<br />

companies, covering over a third of the global economy’s market<br />

capitalisation, having either set, or committed to setting, Paris<br />

Agreement-aligned or Net Zero emissions targets via the SBTi<br />

(Science Based Targets initiative). A very high proportion (of<br />

these targets) are from listed companies in the developed world<br />

including Europe, North America and Japan. This is impressive,<br />

but we should also recognise that companies from these nations<br />

should be doing this (and more) when you consider their<br />

disproportionate national emissions. Four developed regions<br />

– North America, Europe, Japan and Australia – are responsible<br />

for around 53% of cumulative global CO2 emissions. Africa in its<br />

entirety has contributed only 4.8%, with South Africa accounting<br />

for approximately 1.5%.<br />

The responsibility of remedying our biodiversity and climate<br />

crises doesn’t rest entirely with companies. Investors have a key part<br />

to play, too, by directing resources to where they’ll be managed<br />

responsibly. Cue impact investing in the listed equity universe.<br />

Developed market-listed equities provide the most viable way to<br />

identify and mobilise significant amounts of capital into progressive<br />

companies that are intent on generating positive impacts and<br />

providing relevant solutions for a sustainable, more resilient future.<br />

Through the mobilisation of such<br />

capital, the market should reward<br />

impactful companies with superior<br />

share price appreciation. That is the<br />

essence of impact investing.<br />

There’s a perception around<br />

impact investing that one must<br />

sacrifice financial returns and<br />

forego performance to do good.<br />

This is not true. Impact investing<br />

is a strategy that aims to generate<br />

positive, intentional impacts in the<br />

real economy alongside positive<br />

financial returns by investing in the<br />

best quality and most forwardthinking<br />

companies that contribute<br />

to solving social and environmental<br />

challenges. This shared approach<br />

to growing wealth while leaving<br />

a positive footprint is one that<br />

investors need to determinedly<br />

champion if we are to avert the very<br />

worst scenario of global warming<br />

and its related impacts.<br />

Considering how detrimental<br />

both climate change and the loss<br />

of biodiversity are to the economy<br />

and our collective future, it’s time<br />

we got serious about this. <br />

Diane Laas, Global<br />

Impact Fund Manager,<br />

Melville Douglas<br />

Rob Stewart, Global<br />

Impact Fund Manager,<br />

Melville Douglas<br />

48<br />


Help us create a<br />

better tomorrow.<br />

Invest with impact.<br />

We know that investing means creating wealth for the<br />

future. We also know that critical issues like the climate<br />

crisis, scarcity of resources, biodiversity loss, and social<br />

insecurity raise serious concerns about what type of<br />

society we will leave behind for future generations.<br />

That’s why we’re focused on the longevity of the planet<br />

and its people when growing your long-term wealth.<br />

Our Global Impact Fund offers you a unique opportunity<br />

to align your values with your investments. We identify<br />

long-term growth themes that seek to solve the world’s<br />

most pressing challenges. Through our proprietary impact<br />

assessment, we invest in quality global companies that<br />

deliver positive, sustainable impact aligned to key social<br />

and environmental UN Sustainable Development Goals.<br />

Join us to deliver on a shared objective to grow your wealth<br />

while making a positive impact, the Melville Douglas way.<br />

To learn more, visit melvilledouglas.co.za<br />

Melville Douglas is a subsidiary of Standard Bank Group Limited. Melville Douglas Investment Management<br />

(Pty) Ltd. (Reg. No. 1987/005041/07) is an Authorised Financial Services Provider. (FSP number 595).

BLUE<br />

CHIP<br />

ROUND TABLE SERIES | Offshore investing<br />

Offshore investing:<br />

where, how and<br />

how much?<br />

In an exclusive <strong>Blue</strong> <strong>Chip</strong> discussion, South Africa’s leading<br />

investment professionals focus on offshore investing<br />

and why it is important to engage with a<br />

financial advisor. Part Two deals with the<br />

practicalities of taking money offshore, the<br />

exchange rate and the importance of timing.<br />


Andrew Finlayson (AF): In terms of the actual practicalities of<br />

taking money overseas, what are the different ways in which<br />

a client can physically take money out of the country?<br />

Lara Lotter (LL): The reality is that one is not limited to the<br />

amount that can be externalised outside of South Africa. The<br />

differences lie in the different requirements for different amounts,<br />

and for any level, being able to show the source of the funds.<br />

Single discretionary allowance of R1-million<br />

If you have a green barcoded ID book and a valid tax number,<br />

you can remit up to R1-million in a calendar year without<br />

having to obtain any clearance from the revenue office.<br />

One simply has to report where the money comes from.<br />

Additional investment transfer clearance process<br />

This process, formerly referred to as the foreign investment<br />

allowance, governs the amount after your single discretionary<br />

allowance (R1-million) up to a maximum of R10-million. The<br />

main requirement for this process is simply reporting the<br />

source of the funds to SARS (eg is it inheritance proceeds, a<br />

unit trust portfolio, a local matured endowment portfolio) with<br />

the supporting documentation. There are a few additional<br />

requirements such as declaring your global assets and liabilities,<br />

a certificate of good standing, and of course, providing<br />

your efiling profile so that the submission can take place.<br />

Letter of compliance application process<br />

The letter of compliance application process is for amounts<br />

over a total of R11-million (R1-million plus R10-million<br />

above). This is a tax clearance which must also go through<br />

the South African Reserve Bank, so there are two reporting<br />

entities that need to see the source of the funds. And some<br />

of the information is more rigorous; for example, if the<br />

source of funds is a unit trust portfolio, for the additional<br />

investment transfer clearance process (above), you would<br />

have to provide statements for three months, whereas for the<br />

letter of compliance application process, you would have to<br />

provide statements for six months. If you fulfil the regulatory<br />

requirements, there are no limits.<br />

AF: Practically, how has that affected your business and people<br />

looking to take money overseas?<br />

LL: In April 2023, the foreign investment allowance tax clearance<br />

and the IT21(a) tax clearance were merged forming the approval<br />

50 www.bluechipdigital.co.za

ROUND TABLE SERIES | Offshore investing<br />

BLUE<br />

CHIP<br />



Lara Lotter, Business Development,<br />

South Africa, Currencies Direct<br />

Greg Strachan, CFP®, Wealth<br />

Manager, Alpha Wealth<br />

Andrew Finlayson, Co-Founder,<br />

Maven Wealth<br />

Hannes Viljoen, CEO and Head of<br />

Investments, Kudala Wealth<br />

Cobie Legrange, Co-founder,<br />

Rexsolom Invest<br />

of international transfers (AIT) clearance or tax compliance<br />

status (TCS) pin letter and the processes that have changed<br />

from our side in terms of submissions and requirements have<br />

been very little.<br />

If you are trying to move funds<br />

offshore just because you<br />

believe that the rand is going<br />

to weaken you are really doing<br />

it for the wrong reasons.<br />

The one area where additional information requirements by SARS<br />

are significant is in reporting that your source of funds is coming<br />

from a trust. Then SARS wants to have a more comprehensive<br />

understanding of that inter vivos or testamentary trust, who the<br />

ultimate beneficial owners are and what your actual share or<br />

interest in that trust is. So, the process change itself has been for<br />

SARS internally, on how they handle the submissions. Does that<br />

mean that it is not going to change? Absolutely not, there will be<br />

a change, but at present all the requirements remain the same.<br />

There has been talk in the media that SARS is now requesting<br />

assets and liabilities, but that has always been the case. SARS is<br />

putting a more efficient machine into play to process clearances<br />

faster because there is a higher volume of them now than there<br />

ever was before when it comes to South African residents looking<br />

to send money offshore, diversify portfolios and so on. It’s just<br />

simply that they need to process them faster. That, at least, is<br />

our take on it.<br />

AF: And I suppose if one looks at what has happened, partly<br />

owing to factors such the Reg 28 legislation changing from<br />

30% to 45%, if anything, the move has actually been the<br />

opposite way; instead of being more restrictive it has been<br />

far more allowing of the flow of capital out of South Africa.<br />

Cobie Legrange (CL): I think what we have seen, quite possibly<br />

because of the greylisting that we went through at the beginning<br />

of 2023, is a tightening up on the processes rather than a material<br />

change to the movement of funds offshore.<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

ROUND TABLE SERIES | Offshore investing<br />

AF: A lot of South Africans take money overseas largely as<br />

a bet against the rand and aren’t too concerned about the<br />

performance of the offshore investment itself. Rather, they<br />

rely on the rand’s weakness to give them a rand return. Is this<br />

a sensible motive? And if you think it is, how do you manage<br />

clients around this issue?<br />

Greg Strachan (GS): I always try to dissuade my clients from<br />

making decisions based on trying to benefit from rand devaluation,<br />

because I think it is founded on the wrong principles. In an “offshore<br />

or not” decision, a key consideration should be determining what<br />

portion of your assets need to be held in the currency where your<br />

liability is. I can’t stress enough the importance of matching the<br />

location of assets and liabilities and this should be the key driver<br />

of your clients’ thinking about a move offshore.<br />

There are a couple of misnomers<br />

in the media from time to time<br />

around what’s permissible,<br />

limitations on what an individual<br />

can take offshore and so on.<br />

Once your client is clear about where their assets should be sitting,<br />

then a sensible decision can be made about taking excess capital<br />

offshore. And then once this decision is made, I don’t think it makes<br />

sense to put too much store on what the current exchange rate is.<br />

If the rate is a bit high, one can send it off strategically, say monthly<br />

or every two weeks, rather than trying to “call” the rate.<br />

To reiterate, it is very important to get the client to understand<br />

fundamentally the inherent risks associated with holding offshore<br />

assets, and it is really a case of making the client very aware that<br />

having funds offshore that are supporting a lifestyle in South Africa<br />

is not the most efficient way to hold assets. Having said that, some<br />

clients will still decide to take the risks as a premium against political<br />

instability in South Africa.<br />

AF: When your clients are looking to take money overseas how<br />

much do you look at the valuation of the asset on the other<br />

side versus the currency?<br />

Hannes Viljoen (HV): Our preference is squarely on the<br />

valuation of the asset on the other side. I believe if you are<br />

trying to move funds offshore just because you believe that<br />

the rand is going to weaken you are really doing it for the<br />

wrong reasons. It should be about what you believe your<br />

offshore asset is going to give you versus what your onshore<br />

asset is going to give you. Because the truth is, no-one can<br />

know what the future may bring, and how unforeseen events<br />

may affect the exchange rate one way or the other. So, we put<br />

most of the weight on the expected return rather than on the<br />

base of the rand.<br />



AF: The exchange rate looms large in many people’s minds and<br />

is a significant factor in when and how much they consider<br />

taking offshore. But how important should the exchange rate<br />

be in the decision, and more specifically, how important is<br />

getting the timing right? Is it worth, for example, getting a<br />

tax clearance in place, to be able to move quickly when the<br />

time is right?<br />

LL: I think it is very important to consider the realities of SARS<br />

turnaround times. At present, provided you have your ducks in<br />

a row in terms of documentation, etc, that turnaround time is 15<br />

to 21 working days (though they can be shorter). So, if you have a<br />

client who is likely to want to move funds soon, it makes sense to<br />

have an existing tax clearance certificate in play.<br />

There are also other measures available that help with timing<br />

for our wealth manager clients, such as rate watch facilities or<br />

forward exchange contracts.<br />

AF: Do a lot of your clients put a level at which they want to<br />

trade the currency and have that in the market, so the system<br />

can then just trade automatically?<br />

LL: Absolutely. Our rate watch facility works slightly differently<br />

though. What happens is there is a realistic target range set, we<br />

then monitor the rates via the client’s designated dealer and we<br />

monitor the markets. Should that rate alert trigger, we contact<br />

the client or the designated person (quite often this is the wealth<br />

manager) who then may determine whether to proceed. You can<br />

also reset the goalposts depending on what the market movement<br />

or market volatility is on local currency.<br />

So, again, it is about creating potential hedging strategies on<br />

foreign exchange whereas previously clients really haven’t been<br />

able to do that and have been at the mercy of whatever the banks’<br />

rate of exchange was. <br />

To watch the round table series in full, visit www.bluechipdigital.co.za or scan the QR code.<br />

52 www.bluechipdigital.co.za

FINANCIAL PLANNING | Self development<br />

BLUE<br />

CHIP<br />

So, you’ve been there,<br />

seen that and done it all?<br />

I thought I had.<br />

After almost 30 years in the financial services sector, the<br />

final 14 as a CEO of a profitable company, I believed that<br />

this was it: I’d reached the pinnacle of a successful life.<br />

Besides my professional qualifications and career, I had<br />

played sports at a national level, flown planes and had a healthy<br />

sense of self. Or so I thought. I honestly believed I’d achieved<br />

everything I wanted. The only niggling feeling of failure was related<br />

to my personal life and intimate relationships.<br />

A chance reading of a post by Dr Roddy Carter promoting<br />

his recently published book, Fireside Wisdom: Conversations to<br />

Inspire Personal Mastery changed me. Not just because Dr Carter<br />

and I were high-school classmates but because something else<br />

resonated deeply within me.<br />

My parents gifted me the book which I read over the Christmas<br />

break. I was riveted. An unsettling realisation became obvious:<br />

my mindset was my greatest impediment. I was jeopardising<br />

my own life through my thoughts, assumptions and responses.<br />

It was difficult to admit that I wasn’t leading the wonderful life<br />

I thought I was and that my brain was the obstacle! This book<br />

gave me a sense of how my mind “works” – with all the cognitive,<br />

emotional and spiritual elements that make for happiness and<br />

fulfilment. Using cutting-edge neuroscience, Dr Carter unravels the<br />

complex interplay between our thoughts, emotions and personal<br />

satisfaction. The path to success and happiness is about making<br />

your mind your best friend.<br />

A subsequent catch-up call where we reminisced about our<br />

school days became the gateway to an insightful three-month<br />

odyssey that revolutionised my perspective on life. Dr Carter’s<br />

candid admission that he wished he understood this science earlier<br />

in life was inspirational: Compassionate Neuroscience outlines all<br />

the untapped resources within each one of us. These resources<br />

have impacted every part of my life.<br />

Yes, I thought I had it all, but I found out<br />

how much I was missing. What a pity we<br />

don’t learn how to operate our brains<br />

much earlier in our lives.<br />

After our conversation, Dr Carter<br />

kindly couriered me his first book,<br />

Body Wealth: Journey to Abundance.<br />

During my career, I tailored, set<br />

and implemented financial plans<br />

achieving anticipated results. Once I<br />

familiarised myself with the ideas associated with Compassionate<br />

Neuroscience, I was hooked and was keen to participate in the<br />

Unstoppable YOU programme. Admittedly, my initial focus was on<br />

my failed personal relationships where I felt “stuck”.<br />

I enrolled for the 14-week Unstoppable YOU programme, which<br />

had me devoting 90 minutes every week to my feelings, fears and<br />

a sense of self-awareness. My “people-pleasing” tendencies soon<br />

emerged: I tend to think about the well-being and happiness of<br />

others at my own expense. I learnt, through the Brain Operating<br />

System, to manage my fears, identifying and confronting the<br />

justifications I use as excuses.<br />

Gradually, I identified the traits enriching my life and those<br />

sabotaging it. Time spent reflecting and writing enabled me to<br />

plan the life, professional and personal, that I ultimately want.<br />

Ironically, I have been doing this for my clients for decades, creating<br />

bespoke financial solutions for them while I completely ignored<br />

my personal development. It’s easy to let the numbers translate<br />

into a “successful” life. Through the Brain Operating System, I<br />

discovered what was to become one of my favourite concepts in<br />

the programme: the idea of “psychic push-ups”. When we initially<br />

confront our fears and negative perceptions, it’s uncomfortable<br />

and difficult. Over time, the benefits of “psychic push-ups” become<br />

evident – easier to practice and the rewards are priceless.<br />

After completing the lessons on Owning the Office of the<br />

CEO (read: mastering your brain), Clearing the Filter, Conquering<br />

Fear and Driving Belief, I noticed some fundamental shifts in<br />

how I handle personal relationships. As time went by, I began to<br />

understand and appreciate my assets and strengths, the positive<br />

character traits that were serving me well and the triggers which<br />

were negatively impacting my life. Admittedly, I needed to delve<br />

much deeper into my thoughts, feelings and fears. The simple<br />

exercises required by the programme taught me to pause, explore,<br />

think, question, challenge and disagree with what I had effectively<br />

been doing most of my life to understand the person whom Dr<br />

Carter refers to as the authentic you or the “you you”.<br />

Reflecting on the past eight months, it’s almost surreal to<br />

recall my initial state of mind. In today’s tumultuous world, rife<br />

with technological advancements and information overload,<br />

the programme stands as a beacon for personal mastery and<br />

resilience. To echo the words of Ralph Waldo Emerson, “The only<br />

person you are destined to become is the person you decide to<br />

be.” It is that simple. <br />

Trevor Glassock MBA, CA(SA), CFP®, Head of Sales, Dr Roddy Carter<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

INVESTMENT | Systematic investment<br />

Systematic investing:<br />

the future of investing<br />

In the rapidly evolving landscape of asset management,<br />

integrating quantitative and qualitative skills has emerged as<br />

a pivotal trend shaping the industry’s future. Quantitative and<br />

qualitative approaches bring unique strengths to the table, and<br />

it’s increasingly evident that synthesising these skill sets is essential<br />

in achieving investment success. The days of large, traditional asset<br />

management teams are fading, making way for leaner, technology<br />

and data-driven investment approaches.<br />

The symbiosis of quantitative and qualitative skills<br />

Quantitative skills, enhanced with coding experience, involve<br />

analysing vast amounts of data, constructing models and using those<br />

insights to inform investment decisions. Advanced algorithms and<br />

machine learning models underpin quantitative approaches because<br />

they can efficiently process massive datasets, identify patterns and<br />

correlations that are more difficult for humans to do and minimise<br />

the human tendency to detect patterns that don’t exist.<br />

On the other hand, qualitative skills help in holistically<br />

understanding broader economic trends, market sentiment<br />

and company fundamentals. Both approaches provide unique<br />

perspectives and the synergy between them offers a comprehensive<br />

view of investment opportunities.<br />

The scrutiny of fees and the need for efficiency<br />

Globally, investors are seeking cost-effective solutions without<br />

compromising on performance, which means the fees investment<br />

managers charge clients are under scrutiny, necessitating a leaner,<br />

more efficient operational structure.<br />

Research shows that asset management firms are recognising the<br />

essential role data science and quantitative skills will play in this costconscious<br />

environment. They allow for more streamlined and efficient<br />

decision-making and operations, minimising costs and optimising<br />

returns to the benefit of end investors.<br />

AI and machine learning, advanced statistical analysis, and detailed<br />

portfolio construction and optimal portfolio formulation.<br />

To deliver on the above, we have a dedicated in-house data science<br />

team that is an integral part of our investment process. We process<br />

over 120-million data points per day on our platform, allowing for<br />

enhanced analytics and creating operational efficiencies across<br />

the investment team.<br />

Our investment process is deeply rooted in rationality, driven<br />

by rules and evidence, while also underpinned by a data-driven<br />

approach that reduces human biases and promotes factual analysis.<br />

This enhances our ability to navigate complex market dynamics<br />

and ensures consistency in clients’ long-term outperformance.<br />

Research by S&P Global shows that few active equity funds<br />

outperform their benchmark over the longer term, while most<br />

fixed-income funds do. At Prescient, our systematic fixed-income<br />

investment approach allows us to generate consistent and<br />

reliable outperformance. Combined with Prescient’s derivative<br />

management expertise, we can generate enhanced passive returns<br />

in the equity space, offering a wide range of products across asset<br />

classes to fit the needs of our clients.<br />

Our experience shows that integrating quantitative, data-driven<br />

analysis and qualitative insights is indispensable in achieving<br />

consistent, long-term outperformance by efficiently navigating<br />

evolving markets in uncertain times, optimising costs, and<br />

providing consistent value to our clients.<br />

The Prescient approach<br />

At Prescient Investment Management, we are ardent believers that<br />

the future of asset management requires integrating quantitative and<br />

qualitative skills. The synergy of these two skills enables us to make<br />

investment decisions that consider it all, resulting in greater financial<br />

certainty for our clients. That is why we are committed to systematic<br />

investing and have been leading the way for the past 25 years.<br />

Our systematic approach to investing has three broad pillars:<br />

Conway Williams, Head<br />

of Credit, Prescient<br />

Investment Management<br />

Sajjaad Ahmed, Quantitative<br />

Analyst, Prescient<br />

Investment Management<br />

Prescient Investment Management Ltd, is an authorised financial services provider (FSP 612). Please note there are risks involved in buying or selling a financial product, and past performance of a financial<br />

product is not necessarily a guide to future performance. The value of financial products can increase as well as decrease over time, depending on the value of the underlying securities and market<br />

conditions. There is no guarantee in respect of capital or returns in a portfolio. The forecasts are based on reasonable assumptions and are not guaranteed to occur. Please note there are representatives<br />

acting under supervision. This document is for information purposes only and does not constitute or form part of any offer to issue or sell or any solicitation of any offer to subscribe for or purchase<br />

any investments. Opinions expressed in this document may be changed without notice at any time after publication. We therefore disclaim any liability for any loss, liability, damage (whether direct or<br />

consequential) or expense of any nature whatsoever which may be suffered as a result of, or which may be attributable directly or indirectly to the use of or reliance upon the information.<br />

54 www.bluechipdigital.co.za

PRACTICE MANAGEMENT | Technology<br />

BLUE<br />

CHIP<br />

Intelligence:<br />

the emotional and the artificial<br />

Emotional intelligence gives us the edge that will allow us to coexist and not resist artificial intelligence.<br />

One of my bucket-list items has always been a solo trip<br />

abroad; this year I was lucky enough to realise that<br />

dream. My first stop was Istanbul, and on the train to<br />

my Airbnb I was scrolling on my phone when a meme<br />

that I shared on Facebook precisely five years ago popped up as a<br />

memory: “Travelling alone will be the scariest most liberating lifechanging<br />

experience ever. Try it at least once.” What an absolute<br />

goosebump moment.<br />

As the trip was a combination of work and some sightseeing,<br />

I made sure that I saw all the historical sights and museums.<br />

Most of Istanbul is older than South Africa, and you are acutely<br />

aware of the coexistence of past and present. There is evident<br />

respect for each other’s boundaries and the unique and diverse<br />

contributions both past and present bring to the flourishing<br />

metropolis of Istanbul, and it is blatantly apparent that without<br />

the other the city would be less. Not bad, not unable to survive<br />

or exist, just less.<br />

Sitting in the square in front of the ancient <strong>Blue</strong> Mosque,<br />

typing away on my smartphone with super-fast 5G, sipping on<br />

a coconut smoothie that I bought by simply tapping my phone<br />

on a card machine, made my mind jump forward a few centuries.<br />

I am sitting in an ancient place, using modern technology, and<br />

this made me question the uncertainty and fear the development<br />

of artificial intelligence (AI) is creating. Is it rational to fear this<br />

modern development and to think it might make human<br />

contribution obsolete?<br />

The point of AI should be to make our lives more comfortable.<br />

It will allow us to work smarter, not harder. AI can analyse data<br />

and put it in any specific<br />

format that we require (saving<br />

us precious time) and we<br />

can just apply our minds and<br />

original thought processes<br />

to find solutions. It will allow<br />

financial advisors to see more<br />

clients, as AI can do the “grunt<br />

work”. AI will not cause job<br />

destruction but job disruption.<br />

New human-centric careers<br />

will develop where emotional<br />

intelligence plays a vital role.<br />

These careers include financial<br />

planners, financial coaches,<br />

financial therapists and<br />

mentors. Financial therapy<br />

and financial coaching are<br />

newly developing careers<br />

focusing on people-centric<br />

mentoring, assisting people in<br />

Henda Kleingeld CFP®,<br />

FPSA®,TEP, Programme<br />

Director: PGDIP in Financial<br />

Planning, School of Financial<br />

Planning Law<br />

dealing with financial biases, bad spending habits and moneyscripts,<br />

as well as trying to find solutions to why our clients make<br />

unfavourable financial decisions. Our generation does not want<br />

advice on their money, investments and financial decisions from<br />

an AI bot.<br />

Research has shown that investment funds managed by<br />

people outperform those managed by AI. If the Covid-19<br />

pandemic taught us one thing, it is that people use machines<br />

to get things done, but people still need people. The high rate<br />

of mental health problems that have arisen since 2020 indicates<br />

that humans struggle when isolated.<br />

Individuals working in the financial industry are in a unique<br />

position in that we are used to dealing with constant changes<br />

and embracing new technology. We can be comfortable using AI<br />

for administrative tasks and then apply our minds and emotional<br />

intelligence to provide the best solution for our clients. We can<br />

embrace the benefits of AI by respecting the boundaries and<br />

coexist to ensure a more accurate service for our clients, but<br />

without losing that human touch that is such a vital part of what<br />

we do. I want to conclude with a quote from Sri Amit Ray, pioneer<br />

of Compassionate AI: “Emotions are essential parts of human<br />

intelligence. Without emotional intelligence, artificial intelligence<br />

will remain incomplete.” <br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

PRACTICE MANAGEMENT | Technology<br />

Effortless meeting<br />

minutes using AI<br />

Online Board Packs &<br />

Secure Board Portal<br />

<strong>Blue</strong> <strong>Chip</strong> spoke to Zeldeen Muller, CEO of inSite Connect and creator of AgendaWorx, about three board<br />

portal Artificial Intelligence automation tools that will help you transform your minutes process.<br />

First off, what is AgendaWorx?<br />

AgendaWorx is a cloud portal designed to automate all the tasks<br />

you need to make your life as a board member easier. Imagine<br />

having a single, secure location that isn’t cluttered with your<br />

everyday documents and emails.<br />

What if you never again had to wonder where that important<br />

document is, what the outcome of last March’s voting poll was,<br />

whether everyone has signed the resolution or where that email<br />

you sent to David last February has gone?<br />

Say goodbye to all that frustration. With AgendaWorx, you<br />

have one dedicated place in the cloud where you can find all your<br />

documents, sign resolutions, vote on decisions, jot down notes<br />

on agendas, chat about issues and so much more. It’s not just a<br />

searchable library; it’s also a comprehensive archive with easy<br />

access to recordings, signed documents, voting results, email logs,<br />

Section 37C files and shared documents.<br />

And let’s not forget about compliance. The need to meet both<br />

new and old compliance protocols is crucial. Failing to do so can<br />

land you in the sort of headline news no-one wants to be a part of.<br />

With AgendaWorx, automation takes care of that, too.<br />

Why did inSite Connect decide to include agenda and<br />

minute creation functionality into AgendaWorx?<br />

Modern technology, like Zoom and Microsoft Teams, has been<br />

helpful, but they often produce overwhelming amounts of text that<br />

secretaries must then distil into actionable minutes. AgendaWorx<br />

simplifies this by automating the creation of board packs using AI,<br />

thereby reducing the time spent on these tasks by 70%.<br />

Zeldeen Muller, CEO, inSite<br />

Connect and Creator,<br />

AgendaWorx, Board Portals<br />

How does AgendaWorx<br />

leverage AI to assist<br />

secretaries in creating<br />

board packs or minutes?<br />

AgendaWorx incorporates three<br />

powerful AI-driven tools:<br />

Firstly, we offer precise<br />

transcription services tailored to<br />

South African accents. Secondly,<br />

AI professionally rewrites these<br />

transcriptions, omitting any<br />

unnecessary chatter. If you’re<br />

handling minutes, the AI will<br />

convert your content into the past tense and rewrite it as if it<br />

were reporting on what occurred during the meeting. So, with a<br />

single click, you can transform your agenda content and meeting<br />

transcription into a professional set of minutes. Lastly, our software<br />

enables real-time collaborative editing of documents, which it then<br />

formats consistently with just one click. All these tools combine to<br />

revolutionise the process of taking minutes.<br />

That’s impressive. Can you elaborate on how these<br />

automated features improve efficiency?<br />

With AgendaWorx, everyone can contribute to the same agenda<br />

or set of minutes simultaneously. You can integrate content from<br />

emails, PowerPoints and reports, which in usual circumstances will<br />

be very messy. Then, with the press of a button, AgendaWorx will<br />

format your entire document according to your company’s style<br />

guide. It will fix all fonts and font sizes, justify your text, indent<br />

paragraphs and add breaks after headings.<br />

What about document assembly?<br />

Our one-button solution assembles all your attachments, adds<br />

them to the corresponding agenda items, numbers the pages<br />

and even creates an indexed, bookmarked PDF with clickable<br />

hyperlinks - all in a matter of seconds. If there’s a late addition, you<br />

can quickly drag and drop it into place and AgendaWorx updates<br />

everything for you.<br />

Given concerns around data security and AI, how does<br />

AgendaWorx ensure safety?<br />

We use the ChatGPT APIs, which are not employed by OpenAI to<br />

train its models. This means your data remains secure behind the<br />

AgendaWorx firewall.<br />

What is next for AgendaWorx?<br />

We’re working on features that allow boards to request and compare<br />

quotes directly within the portal. Also, we’re integrating AI to answer<br />

questions about board rules and other documents. Imagine the<br />

impact on efficiency when Zoom or Teams recordings can be<br />

automatically divided into relevant minute items, transcribed and<br />

professionally edited – all with a single button click!<br />

There you have it – an in-depth look at how AgendaWorx,<br />

powered by AI, is setting new standards in board governance and<br />

meeting documentation.<br />

56 www.bluechipdigital.co.za


YOU - will talk, not type!<br />

AI<br />

- will:<br />

1. Transcribe (99% accuracy with SA accents) & convert<br />

basic transcription into professional, AI edited copy;<br />

2. One button will: fix formatting (fonts, justification,<br />

spacing, indentation and more), one button will<br />

collate, number pages, create numbered index &<br />

add hyperlinked bookmarks. Yes, two buttons will<br />

do ALL this.<br />

Online Board Packs &<br />

Secure Board Portal<br />

Decrease the time to create your agendas and<br />

minutes by 80%. Can you afford not to try it?<br />


BLUE<br />

CHIP<br />

FINANCIAL PLANNING | Technology<br />

What does the future of<br />

financial advice look like?<br />

Last year Boris Eldagsen won the World Photography<br />

Organisation’s Sony World Photography Awards. Eldagsen<br />

submitted a piece titled The Electrician which looks like<br />

an old photograph showing two women, one of whom<br />

crouches behind the other and another person’s hand extends<br />

toward the front woman’s body. Eldagsen declined the award after<br />

admitting that he had submitted an AI-generated piece.<br />

In a description of his work, Eldagsen wrote, “Just as<br />

photography replaced painting in the reproduction of reality, AI<br />

will replace photography. Don’t be afraid of the future. It will just be<br />

more obvious that our mind always created the world that makes<br />

it suffer.”<br />

In a similar vein to Eldagsen, I thought of submitting an article<br />

on the future of financial advice written by Chat GPT. The reader<br />

would be none the wiser and there is every chance that it would<br />

be better than what I can conjure up on my own.<br />

I then considered the words of Paul Saffo, a Silicon Valley-based<br />

forecaster who explores long-term technology trends and their<br />

impact on society. Saffo observes that “the goal of forecasting is<br />

not to predict the future but to tell you what you need to know to<br />

AI and data analytics will<br />

enable completely customised<br />

portfolios with less work<br />

than current approaches.<br />

take meaningful action in the present”. With this in mind, rather<br />

than just leaving Chat GPT to predict the future, I thought I would<br />

join it in considering what meaningful action to take in the present.<br />

The result is a co-authored article between Chat GPT and me.<br />

To begin the writing process, I asked GPT the question: “What<br />

does the future of financial advice look like?” To Saffo’s point, GPT’s<br />

forecast may not be completely accurate but it certainly does<br />

provide some indication of what meaningful action we can take<br />

in the present.<br />

According to GPT, “The future of financial advice is likely to<br />

be shaped by several key trends and developments, driven by<br />

advances in technology, changing consumer preferences and<br />

regulatory changes.” GPT forecasts the future of financial advice<br />

by outlining 10 key aspects that are likely to be a reality. I list these<br />

aspects with brief observations from both GPT and me (RM) as<br />

we consider the implications of each, both now and in the future.<br />

Photo Edition Berlin<br />

Boris Eldagsen’s piece titled The Electrician.<br />

1. Increased use of Artificial Intelligence (AI) and automation<br />

GPT: AI-driven robo-advisors and virtual assistants will become<br />

more prevalent. These tools will provide personalised financial<br />

advice, portfolio management and answers to common<br />

financial questions.<br />

RM: These tools are already with us. GPT’s observation challenges<br />

financial advisors to determine what their real value add is. And<br />

provides the opportunity to become so much more efficient by<br />

embracing the tools.<br />

GPT: Automation will streamline routine tasks like account<br />

management, data analysis and reporting.<br />

58 www.bluechipdigital.co.za

FINANCIAL PLANNING | Technology<br />

BLUE<br />

CHIP<br />

RM: I believe you should do everything you can now to automate<br />

any repeatable process in your advice process and business. Start<br />

using AI to help you make decisions and do tasks.<br />

2. Personalisation<br />

GPT: Financial advice will become highly personalised, taking<br />

into account an individual’s financial goals, risk tolerance and<br />

life circumstances.<br />

RM: I believe that an in-depth understanding of a client’s life<br />

and money will be non-negotiable. This understanding will need<br />

to go beyond even what GPT suggests. A thorough personality<br />

assessment of each client will be the starting point of the advice<br />

process, as well as an exploration of the client’s relationship with<br />

money.<br />

GPT: AI and data analytics will enable advisors to offer tailored<br />

recommendations and solutions for each client.<br />

RM: Increasingly financial planners will be challenged to<br />

personalise solutions for clients. Often financial planners cluster<br />

clients into solution groups – for example, investment portfolios<br />

with an asset allocation that is appropriate for a group of clients.<br />

AI and data analytics will enable completely customised portfolios<br />

with less work than current approaches.<br />

Being human will be a financial<br />

planner’s superpower.<br />

3. Data-driven insights<br />

GPT: Advisors will leverage big data and analytics to provide<br />

clients with actionable insights into their financial situations. These<br />

insights can help clients make informed decisions.<br />

RM: Data will be personalised to ensure that each client’s<br />

uniqueness is catered for when it comes to making decisions.<br />

GPT: Predictive analytics may be used to forecast future financial<br />

scenarios and recommend appropriate actions.<br />

RM: Scenario planning in real-time with clients and the ability to<br />

consider actions in the calm before the storm is a key method<br />

of managing the behaviour of clients. For example, simulating a<br />

market crash and its subsequent recovery with the client’s actual<br />

portfolio will enable financial planners to agree on what action will<br />

be taken ahead of time. This will be a key behavioural technique to<br />

keep clients invested when they inevitably want to sell out because<br />

they are fearful.<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

FINANCIAL PLANNING | Technology<br />

4. Digital platforms and mobile apps<br />

GPT: Clients will increasingly access financial advice and services<br />

through digital platforms and mobile apps.<br />

RM: The trend for clients to use digital platforms and mobile apps<br />

is already with us. In April 2023, Amazon had 5.3-billion direct hits<br />

on its website from users wanting to make a purchase. A total<br />

of 20% of global retail sales are now made online, with 70% of<br />

transactions being done using mobile. Financial planners ignore<br />

this reality at their peril.<br />

GPT: User-friendly interfaces and intuitive apps will make it easier<br />

for clients to monitor their investments, track expenses and receive<br />

advice on the go.<br />

RM: If you don’t already have an app that your clients can use to<br />

access their information and interact with you, you are already<br />

behind the curve. Just think about how your clients access their<br />

banking services, retail purchases, medical aid providers, taxi<br />

services… you get the point. This is not something to resist. In<br />

the past financial planners have been the gate-keepers of client’s<br />

information. This time is now over.<br />

5. Hybrid models<br />

GPT: Hybrid models that combine the strengths of human advisors<br />

and technology-driven solutions will become more common.<br />

Clients may have access to both robo-advisors and human advisors.<br />

RM: Financial planners will need to embrace the concept of roboadvice<br />

to enable clients to do their own “fiddling” and “scenario<br />

planning”, but also to use robo-advice tools for their own planning<br />

with clients. Currently, many financial planners have tools that they<br />

use to “drive” the financial planning process. Enabling clients to<br />

“drive” as well won’t diminish the role of the financial planner, they<br />

will just empower clients to be more confident in the process and<br />

to take ownership of their financial futures. Positive outcomes for<br />

both planner and client.<br />

GPT: Human advisors will focus on complex financial planning,<br />

emotional support and building long-term relationships.<br />

RM: This is potentially the most important point that GPT makes.<br />

Firstly, despite advances in technology, financial planners will still<br />

need to be technically competent to deal with complex financial<br />

situations. Technology will do the maths, find the relevant tax<br />

regulation or do the first draft of an estate plan or will. However,<br />

the financial planner’s expertise will be needed to make sure that<br />

the outcome is appropriate for the client. Secondly, providing<br />

emotional support and building long-term relationships will be<br />

why clients deal with human financial planners rather than just<br />

robo-advisors.<br />

Being human will be a financial planner’s superpower, but only<br />

if they develop the advanced human skills which justify a client’s<br />

choice to work with a human rather than a robot.<br />

6. Regulatory changes<br />

GPT: Regulatory bodies are likely to continue evolving regulations<br />

to ensure transparency, fiduciary responsibility and consumer<br />

protection in the financial advice industry.<br />

RM: Financial planning is on the path to being a fully-fledged<br />

profession. Robust regulation and consumer protection are<br />

integral to this. Financial planners who do not put their clients<br />

first will be rendered redundant.<br />

60 www.bluechipdigital.co.za

FINANCIAL PLANNING | Technology<br />

BLUE<br />

CHIP<br />

There is no point in saving and<br />

investing for a future that is<br />

destroyed by climate change.<br />

GPT: Advisors will need to adapt to new compliance requirements<br />

and digital record-keeping.<br />

RM: The good news is that technology will enable compliance in a<br />

way that is totally integrated into the advice process. Compliance<br />

will no longer be regarded as an additional burden.<br />

7. Ethical considerations<br />

GPT: Ethical considerations and responsible investing will play a<br />

more prominent role in financial advice. Clients may seek advice<br />

on socially responsible and sustainable investing.<br />

RM: This is already happening, but perhaps not on the scale that<br />

Chat GPT anticipates will happen in the future.<br />

GPT: Advisors will need to be well-versed in ethical investing<br />

options and client preferences.<br />

RM: Ethical investing is likely to be magnified by the climate crisis<br />

which has resulted in unprecedented climate-related disasters in<br />

2023. Until now, the ethical agenda has tended to be driven by<br />

client preferences.<br />

In the future, it may need to become an advisor-driven<br />

consideration. In the same way that clients need nudges to save<br />

for their retirement, like debit orders for their retirement annuities<br />

and life insurance policies, they may need nudges when it comes<br />

to ethical investing. There is no point in saving and investing for a<br />

future that is destroyed by climate change.<br />

8. Continued education and certification<br />

GPT: As financial advice becomes more technology-driven and<br />

complex, advisors will need to continuously update their skills and<br />

knowledge.<br />

RM: While it is self-evident that advisors will need to become<br />

more technology-savvy, it is also clear that to justify their value to<br />

clients, advisors will need to develop advanced human skills. We<br />

already see the need for this with subjects like Financial Psychology<br />

becoming part of CFP® curricula in other parts of the world.<br />

GPT: Ongoing education and certifications will be essential to<br />

maintain professionalism and competence.<br />

RM: Financial planning is a complex and noble profession. As with<br />

other professions, ongoing professional development will be key.<br />

In the 21st century, financial planning will be as important as the<br />

medical professional. Increasing longevity in many parts of the<br />

world means that people don’t only need healthcare for longer,<br />

but also the means to access it.<br />

9. Globalisation<br />

GPT: Technology will enable clients to access financial advice and<br />

investment opportunities globally. Cross-border financial planning<br />

and investment management will become more accessible.<br />

RM: One of the biggest challenges that financial planners face in<br />

South Africa now is client emigration. Financial planners who want<br />

to retain these clients are developing the ability to provide crossborder<br />

advice and solutions. This is good preparation for the reality<br />

that a client’s location is no longer an indicator of where they will<br />

source their financial planning professional.<br />

10. Cybersecurity and data privacy<br />

GPT: As financial advice moves online, cybersecurity and data<br />

privacy will be paramount. Advisors will need robust cybersecurity<br />

measures to protect client information.<br />

RM: Cybersecurity and data privacy are already critical<br />

considerations for financial planners. Financial planners who are<br />

not already on top of these are tempting fate.<br />

GPT: In summary, the future of financial advice will be characterised<br />

by a blend of technology-driven solutions, personalisation and<br />

regulatory changes. Clients will have access to a wide range of<br />

digital tools and platforms that offer tailored advice, while human<br />

advisors will continue to play a crucial role in offering expertise,<br />

guidance and emotional support in complex financial matters.<br />

The industry will need to adapt to these changes to provide the<br />

best possible service to clients in an evolving landscape.<br />

Paul Saffo says that “first we invent our technologies — and then<br />

we turn around and use technology to reinvent ourselves as<br />

individuals, as communities and as entire societies”. GPT is one<br />

such technology that we (humans) have invented which suggests<br />

that the opportunity is here to reinvent financial planning and<br />

reinvent ourselves in the process. Doing this in partnership with the<br />

increasingly powerful technology we have available to us is a unique<br />

privilege of our generation. In the words of the legendary late Robin<br />

Williams from the film The Dead Poets’ Society, “Carpe diem”. <br />

Rob Macdonald, Head of Strategic Advisory Services<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

PRACTICE MANAGEMENT | Technology<br />

Technology innovation: the one<br />

thing that changes everything in an<br />

onerous regulatory environment<br />

As South African financial services providers (FSPs)<br />

prepare for the promulgation of the Conduct of Financial<br />

Institutions (COFI) Act in the next year or so, some of<br />

the leading FSPs are already in the initial exploratory<br />

stages to establish how COFI will impact the efficiencies in their<br />

businesses. The quest for business efficiencies is, and will remain,<br />

an ongoing process especially as regulatory reform continues.<br />

Few advisors, if any, will argue that technology plays an essential<br />

part in managing an effective, efficient and profitable business. In<br />

this article, we will only focus on the significance of technology<br />

innovation and the impact that it will continue to have on FSPs as<br />

we brace ourselves for COFI.<br />

During a recent Trusted Advisor survey, advisors were asked<br />

whether we are over-regulated as an industry and, given the<br />

current regulatory obligations and other factors impacting<br />

advisors and intermediaries, providing advice has become<br />

extremely challenging and increasingly difficult to do business<br />

profitably. Eighty-seven percent (87%) of advisors agreed.<br />

Regulatory reform may be well-intended, but it is an undeniable<br />

fact that legislation has brought with it complexity, additional<br />

administration and significant costs to financial advisory<br />

businesses over the last two decades.<br />

Regulatory reform started in 2001 when the Financial<br />

Intelligence Centre Act (FICA) was introduced, and shortly<br />

thereafter the Financial Advisory and Intermediary Services (FAIS)<br />

Act was implemented in 2004, and it was clear that legislation<br />

was here to stay. These laws added more requirements, more<br />

paperwork and administration and put further pressure on the<br />

advisor/client experience. More recently, the Protection of Personal<br />

Information Act (POPIA) added yet another layer of legislation and<br />

administration, which further exacerbated the process. As stated<br />

at the outset, it cannot be denied that the volumes, complexity<br />

and exacting nature of the legislation that applies to advisors<br />

and intermediaries puts a tremendous administrative burden on<br />

financial services providers. In this complex, admin intensive and<br />

exigent environment, FSPs need something that will help them<br />

to not only survive in the industry but to stay at the cutting edge<br />

of the profession.<br />

When there are only 24 hours in a day to do business and<br />

administration, and there are more things to do due to more<br />

legislation, logically, you will have to do things faster and more<br />

efficiently if you want to finish the work at the same time. At the<br />

risk of stating the obvious, if you do not want to employ more<br />

people to do the additional work, the only logical solution is to<br />

use technology effectively.<br />

With the COFI Act on its way in the next year or so, technology<br />

innovation is going to be more important than ever. COFI will<br />

replace the FAIS Act and it will have a ripple effect throughout<br />

every component of FSP businesses. With these changes, every<br />

FSP business will need an equaliser – a tool that can simplify<br />

the complexity of doing business, and automate business and<br />

compliance processes, whereby the effectiveness and efficiencies<br />

in the business are enhanced. Without it, FSPs will find it<br />

increasingly difficult, if not impossible to stay in business and meet<br />

their requirements.<br />

Fortunately, leading financial planning and CRM software<br />

companies are aware of this dilemma that FSPs are facing, and it<br />

offers great business opportunities for them to add tremendous<br />

value to their FSP clients. The leadership of business software<br />

solutions like Elite Wealth, Avalon and atWORK recognise that<br />

there are many components in the business of FSPs where<br />

they can make a significant contribution to enhance business<br />

processes and efficiencies. For them, it will be helpful to know<br />

that the underlying components of all FSP businesses can be<br />

illustrated as follows:<br />

S<br />

U<br />

I<br />

T<br />

A<br />

B<br />

I<br />

L<br />

I<br />

T<br />

Y<br />

Representatives /<br />

Supervisor / KI<br />

The 10-Step Process<br />

Prospecting<br />

Set up appointment<br />

Professional introduction<br />

Gather information<br />

Agree on services<br />

Conduct an analysis<br />

& prepare report<br />

Present the proposal<br />

Agree on production solution<br />

Implement the solution<br />

Ongoing advice & services<br />

Income / Remuneration<br />

R<br />

E<br />

C<br />

O<br />

R<br />

D<br />

K<br />

E<br />

E<br />

P<br />

I<br />

N<br />

G<br />

Culture & Governance<br />

P<br />

O<br />

L<br />

I<br />

C<br />

I<br />

E<br />

S<br />

Principal / Key Individual<br />

Business Management<br />

People<br />

Training<br />

Business infrastructure<br />

Processes & systems<br />

Marketing<br />

Risk management<br />

& compliance<br />

Administration<br />

Remuneration<br />

Financial management<br />

Income / Remuneration<br />

Directors / Principals<br />

/ Managers / Key Individual<br />

FSP Reporting<br />

FIC<br />

Prudential Authority<br />

Information Regulator<br />

Financial Sector Conduct Authority<br />

South African Revenue Service<br />

Profit growth<br />

Increased shareholder value<br />

Client experience<br />

Source: The fundamentals of practice management for representatives<br />

This illustration identifies all the essential underlying components<br />

of every single FSP, not only in South Africa but globally. Client<br />

engagement (column on the left) is the heartbeat of every FSP<br />

as it is during this process that clients are acquired and retained<br />

in the business. It is also from this process that revenue is earned.<br />

P<br />

R<br />

O<br />

C<br />

E<br />

D<br />

U<br />

R<br />

E<br />

S<br />

62 www.bluechipdigital.co.za

PRACTICE MANAGEMENT | Technology<br />

BLUE<br />

CHIP<br />

Professional client engagement is a process and through<br />

technology, many of these steps can be automated from<br />

an administrative point of view. Client engagement has<br />

two essential components that cannot be separated,<br />

namely best business practice aimed at building client<br />

trust, and compliance aimed at confirming suitable<br />

advice and keeping accurate records of advice and<br />

transactions. Best practice principles and compliance are<br />

inseparable and must be integrated to ensure consistent<br />

and efficient application.<br />

The 10-step process of professional client<br />

engagement is one of the most important processes for<br />

software and CRM companies to capture in a workflow.<br />

Advisor and client information must be prepopulated<br />

in compliance templates to save time, and automation<br />

is essential to enhance efficiencies and consistency in<br />

the process. Ideally, the FICA process and the POPIA<br />

requirements should also be integrated into the<br />

process and automated as far as possible. Prepopulating<br />

information, automation and even digitalisation will go<br />

a long way to enhance the advisor and client experience<br />

during the client engagement process, which will give<br />

real substance to the FSP’s value proposition.<br />

Technology is not only a game changer in the client<br />

engagement process. It can play a significant part in<br />

every component of the business, such as HR, training,<br />

systems, processes, marketing, compliance and financial<br />

management, etc. For example: COFI will be introducing<br />

a Conduct of Business Return (Omni-CBR), like the former<br />

compliance report that had to be submitted to the<br />

Financial Services Board a few years ago, but the Omni-CBR<br />

is going to be an FSP compliance report on steroids. I have<br />

conducted a high-level analysis of the proposed return<br />

and it did not take me long to realise that it is going to be<br />

impossible for FSPs to submit this report effectively and<br />

efficiently without the help of technology.<br />

There is no doubt in my mind that FSPs will become<br />

increasingly dependent on technology innovation by<br />

software and CRM businesses to absorb the additional<br />

burden of administration. This is one of the reasons why<br />

this topic will be discussed during the 2023 FPI Convention<br />

on the 14th and 15th of November at the Sandton<br />

Convention Centre. <br />

Anton Swanepoel,<br />

Founder, Trusted Advisor<br />

If you do not want to employ<br />

more people to do the additional<br />

work, the only logical solution is<br />

to use technology effectively.<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

PRACTICE MANAGEMENT | Client service<br />

Elevating client service in wealth<br />

advisory: the Seed Analytics solution<br />

In the competitive world of wealth management, advisors often<br />

only have a few chances a year to prove their mettle – primarily<br />

during the annual review. Betting your practice’s success<br />

on these rare touch points is a risky strategy. This situation<br />

prompts the question: how can advisors differentiate themselves<br />

consistently throughout the year?<br />

The competitive landscape<br />

Wealth advisors must understand that they operate in a<br />

competitive market with rivalry. Clients are willing to jump ship<br />

at the slightest hint of better service elsewhere. This is why referrals<br />

are golden; they prove that one advisor can offer superior service.<br />

To stand out, advisors need to do two things:<br />

1. Provide value in every interaction.<br />

2. Increase the frequency of these value-added touch points.<br />

But herein lies the challenge. Consistently delivering these valuegenerating<br />

touch points absorbs considerable time – a resource<br />

better spent on growing the business and managing existing<br />

portfolios. Advisors often end up increasing their back-office staff<br />

to handle this load, inadvertently hiking operational costs.<br />

How can advisors differentiate<br />

themselves consistently<br />

throughout the year?<br />

The advantage<br />

The true solution to this dilemma is leveraging best-of-breed<br />

technology. Seed Analytics comes to the rescue by offering 12<br />

meaningful touch points in the form of monthly, white-labelled<br />

consolidated investment statements. These custom-branded<br />

statements not only keep<br />

clients updated on their<br />

investments but also<br />

elevate the advisor’s brand.<br />

When clients receive these<br />

statements, they associate<br />

the value they’ve just gained<br />

with their advisor, reinforcing<br />

loyalty and trust. Advisors<br />

can offer this service simply<br />

by hiring more back-office<br />

staff, but that would be<br />

expensive compared to<br />

Seed Analytics’ offering.<br />

Furthermore, the back-office<br />

approach increases business<br />

complexity. More staff<br />

demand more time from<br />

the advisor. The technologydriven<br />

approach Seed Analytics offers allows advisors to focus on<br />

what really matters – growing their client base and funds under<br />

management – while also providing an elevated level of service that<br />

sets them apart from the competition.<br />

Adopting Seed Analytics is not merely a way to provide a<br />

higher level of service; it is a strategic move to de-risk and scale<br />

the business. In a market where the difference between gaining<br />

and losing a client can be as simple as the frequency and quality of<br />

touch points, Seed Analytics offers a robust, cost-effective solution<br />

for advisors committed to excellence.<br />

Seed Analytics reduces advisor admin burden by producing<br />

white-labelled, monthly consolidated portfolio statements,<br />

rebalancing tools and book reports for wealth advisors. <br />

Find out more at www.seedanalytics.info<br />

Email: andries@seedanalytics.info<br />

Andries de Jongh, Senior Sales and<br />

Key Account Manager,<br />

Seeds Analytics<br />

64 www.bluechipdigital.co.za

BLUE<br />

CHIP<br />

PRACTICE MANAGEMENT | Technology<br />

Technology and the<br />

customer experience<br />

In today’s fast-paced digital era, the financial planning industry is<br />

undergoing significant transformation. With the advancement<br />

of technology, financial advisors and financial planning<br />

professionals face both challenges and opportunities. The key is<br />

to use these technological advancements to improve the customer<br />

experience, ensuring that clients get the best of both worlds: the<br />

efficiency of modern tools and the irreplaceable human touch.<br />

Douglas Adams’ technology rules<br />

The Salmon of Doubt is a book that was published after Adams’<br />

death. The book contained an essay he wrote titled, How to Stop<br />

Worrying and Learn to Love the Internet. For context, Adams was<br />

an early adopter of technology and was the first person to buy a<br />

Macintosh in Europe back in 1984. He is also the guy who wrote<br />

The Hitchhiker’s Guide to the Galaxy.<br />

Adams suggested in this essay that there is a set of rules we can<br />

follow to describe our relationship with technology:<br />

1. Anything that is in the world when you’re born is normal and<br />

ordinary and is just a natural part of the way the world works.<br />

2. Anything that’s invented between when you’re between 15 and<br />

35 is new, exciting and revolutionary. You could get a career in it.<br />

3. Anything invented after you’re 35 is against the natural order<br />

of things.<br />

I have a theory that, as we get older, most of us start losing our<br />

sense of curiosity and our energy for learning and exploring new<br />

ideas. However, that does not make the world stand still.<br />

The evolution of customer experience<br />

Traditionally, financial planning was dominated by face-to-face<br />

meetings, paper-based processes and manual data entry. While<br />

these methods had their advantages, they were often timeconsuming<br />

and lacked the scalability and efficiency that today’s<br />

clients are looking for.<br />

Enter the digital shift. With the introduction of online platforms,<br />

mobile apps and automated tools, the financial planning<br />

landscape is being transformed. Advisors can now interact with<br />

clients in real time, provide instant updates and provide a more<br />

streamlined service.<br />

Key technologies<br />

Several technologies stand out in their ability to improve the<br />

customer experience in financial planning:<br />

66 www.bluechipdigital.co.za

PRACTICE MANAGEMENT | Technology<br />

BLUE<br />

CHIP<br />

The key is to use technological<br />

advancements to improve<br />

the customer experience.<br />

1. Financial planning software. Modern software solutions<br />

provide real-time financial projections, scenario planning and<br />

risk assessments in many cases. These tools provide clarity and<br />

understanding, allowing clients to make informed decisions about<br />

their financial future. For example, Asset Map provides a great way<br />

for clients to not only see the big picture through informative<br />

visualisations but also to engage in the financial planning process<br />

while the Wealth Integrator tool from Old Mutual Wealth enables<br />

advisors and planners to make changes in real time while in<br />

conversation with clients to help them make appropriate decisions.<br />

2. Client portals and dashboards. These secure platforms<br />

provide clients with a clear view of their financial data. They can<br />

easily track their progress, set goals and communicate with their<br />

advisors. Clients trust such platforms because they have constant<br />

access to their financial information and can see the impact of<br />

their decisions instantaneously. Most of the financial planning<br />

and advice CRM providers now offer some form of client portal<br />

in South Africa.<br />

3. AI and chatbots. While receiving financial advice from a<br />

machine may seem impersonal, AI-powered tools can provide<br />

instant responses to basic client queries, schedule appointments<br />

and even offer preliminary financial advice. However, it is critical<br />

to strike a balance. While AI can handle routine queries, complex<br />

financial planning necessitates the nuanced understanding that<br />

only a human advisor can provide. Also, I want to mention that<br />

chatbots are getting a major upgrade through generative AI. Such<br />

virtual agents can have human-like conversations with context to<br />

what is being discussed. No longer will a chatbot be reliant on the<br />

right keywords.<br />

4. Virtual and augmented reality. Imagine a client being able<br />

to visualise their financial future through an immersive experience.<br />

VR and AR tools can provide interactive scenarios ranging from<br />

visualising retirement plans to understanding the potential<br />

outcomes of various investment strategies. Such tools can make<br />

the financial planning process more engaging and relatable. With<br />

the introduction of the new Apple Vision and Meta’s Quest 3 that<br />

was just introduced, you can expect amazing experiences in the<br />

future. For you and your client.<br />

Personalisation and data<br />

Financial advisors have a wealth of information at their disposal in the<br />

age of big data. By analysing client data, advisors can gain valuable<br />

insights into their clients’ financial behaviours, preferences and<br />

needs. This data can be used to personalise financial advice for each<br />

client. However, with great power comes great responsibility. The<br />

security and privacy of client data is critical. Advisors must be aware<br />

of regulations such as the Protection of Personal Information Act<br />

(POPIA) and ensure that they are compliant.<br />

Francois du Toit, CFP®, Founder, PROpulsion<br />

The human element<br />

Despite the abundance of technological tools available, the<br />

human element remains critical in financial planning. Clients<br />

seek advisors who understand their emotions, aspirations and<br />

fears. They value human interaction, the ability to ask questions<br />

and the reassurance that comes from speaking with a real person.<br />

Hybrid models, which combine the efficiency of technology with<br />

the personal touch of human advisors are becoming increasingly<br />

popular. These models provide clients with the best of both<br />

worlds, ensuring that they receive personalised, tech-enhanced<br />

advice without losing the human connection.<br />

Future trends and predictions<br />

The financial planning industry will evolve alongside<br />

technology. Emerging technologies, such as blockchain and<br />

advanced data analytics, have the potential to improve the<br />

customer experience even further. Furthermore, as clients<br />

become more tech-savvy, their expectations will shift. Financial<br />

advisors must stay ahead of these trends by constantly adapting<br />

and learning to meet their clients’ changing needs.<br />

Finally, technology provides financial advisors with a whole<br />

universe of tools to improve the customer experience. However,<br />

it is critical to remember that technology should be used to<br />

supplement, not replace, the human touch. By striking the right<br />

balance, financial advisors can provide their clients with a service<br />

that is both efficient and deeply personal.<br />

Stay curious! <br />

Visit www.propulsion.co.za for more information.<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

CLIENT ENGAGEMENT | Communication<br />

Unveiling the magic of social<br />

media for financial advisors<br />

Why struggles exist and how to conquer them.<br />

In 1931, Albert Einstein famously penned, “The most beautiful<br />

experience we can have is the mysterious.” Fast forward to<br />

the digital age, and this sentiment resonates deeply with our<br />

interaction with social media platforms. Social media possesses<br />

a magical allure – an enigmatic realm of wonder, a captivating<br />

escape from reality and a conduit for connection. Yet, within this<br />

captivating realm, financial advisors often grapple with a curious<br />

conundrum: the struggle to effectively harness the potential of<br />

social media and online communication.<br />

In the 1960s, Arthur C Clarke articulated that “any sufficiently<br />

advanced technology is indistinguishable from magic”.<br />

Today, the technology underpinning social media has<br />

progressed to a stage where it seamlessly intertwines with the<br />

notion of magic itself. We find ourselves captivated by the intricate<br />

hidden workings of algorithms, akin to the mystique of a magician’s<br />

sleight of hand. These platforms evoke a sense of empowerment,<br />

spark nostalgia for childhood memories and seduce our attention<br />

with a constant stream of content. The challenge lies in the need<br />

for a comprehensive strategy – both for the consumption and<br />

creation of content. We need a blueprint that brings boundaries<br />

and balance to the enchanting world of social media.<br />

In the decade that I’ve been helping financial advisors craft,<br />

recraft and carry out their digital communication strategies,<br />

I’ve relied on what I refer to as the three Cs of successful online<br />

communication: Content, Connection and Community – the<br />

glimmering stars of a conversational communication strategy<br />

designed to align with the fundamental questions of who, what<br />

and why. Content is often the blinding light of an online strategy,<br />

and it’s where most financial advisors focus all of their energy.<br />

Content simply for the sake of content only creates more clutter<br />

in our communication environments. This is where the struggle<br />

becomes real, but it’s not without a solution. We only need to dig<br />

a little deeper into our strategic intent.<br />

Our content needs to be directed to creating connections that<br />

transcend transactional interactions. Maya Angelou once said that<br />

people will forget what you said, people will forget what you did,<br />

but people will never forget how you made them feel. This doesn’t<br />

mean that we don’t really need to say anything specific; it means<br />

that our content needs to reach deeper than just the transaction.<br />

It needs to reach the hearts and minds in ways that spark change.<br />

We need to reflect on connection.<br />

Connection is the second C — a bridge that links advisors<br />

with their audience on a personal level. The power of connection<br />

extends beyond likes and shares; it delves into resonating with<br />

the lives, aspirations and challenges of the reader. Establishing<br />

these deeper connections fosters a sense of relevance and<br />

relatability, turning online interactions into valuable conversations<br />

that resonate at a life level. It’s about understanding that social<br />

media is more than a virtual billboard; it’s a vibrant avenue for<br />

forging meaningful relationships based on shared experiences and<br />

genuine understanding.<br />

This culminates in the third C: Community. Engaging with the<br />

right people is as critical as refining your value proposition and<br />

articulating your message. If you address the wrong audience,<br />

your content and value proposition might flounder for traction –<br />

and this becomes another reason why financial planners struggle<br />

with social media. Among the financial advisors I collaborate with,<br />

many have only connected with colleagues on LinkedIn, family on<br />

Facebook or their kids on Instagram. As soon as they strategically<br />

build a community of current clients and potential prospects, they<br />

engage more and struggle less.<br />

When we put these three Cs together, we find that we can<br />

be strategically conversational and not default to coming across<br />

as being transactional. Almost three decades ago (1996), Bill<br />

Gates said that content would be the new king in our digital<br />

communication era, and for a fleeting moment – he was right.<br />

But I believe that Conversation is the new king.<br />

Tim Slatter, Creator of Contatto and Director,<br />

Slatter Communications<br />

68 www.bluechipdigital.co.za

CLIENT ENGAGEMENT | Communication<br />

BLUE<br />

CHIP<br />

Amidst the sea of content, it’s the conversations sparked that carry<br />

the real momentum for change. This shift from content-centric to<br />

conversation-driven strategies is where the magic happens. The<br />

core principle of social media – that which birthed its existence<br />

– is reconnecting individuals digitally, fostering meaningful<br />

discussions with friends, family, colleagues and like-minded<br />

individuals. It’s about restoring the power of conversation in an era<br />

overshadowed by relentless ads vying for our precious attention.<br />

We need a blueprint that brings<br />

boundaries and balance to the<br />

enchanting world of social media.<br />

The journey begins by revisiting the core goal of social media:<br />

facilitating genuine connections. It’s about transcending the<br />

clutter and the noise to rediscover the joy of connecting.<br />

While platforms are flooded with ads striving for our attention, our<br />

greatest asset is indeed our attention. We need to shift this asset<br />

from mindless scrolling to purposeful engagements that foster<br />

lasting relationships.<br />

The rekindling of social media’s magic lies in sparking<br />

conversations of meaning. The Three Cs – Content, Connection<br />

and Community – converge to drive Conversations that matter. As<br />

financial advisors, it’s imperative to embrace this holistic approach<br />

and weave the threads of enchantment, strategy and connection<br />

into a seamless, sustainable digital presence.<br />

In the grand illusion of social media, let us not merely<br />

be dazzled by its allure. Instead, let us empower ourselves<br />

to use it as a catalyst for genuine connections, enlightening<br />

discussions and a realm where magic is the bridge between<br />

purpose and possibility.<br />

With the three Cs as our foundation, we can navigate this<br />

enchanting realm with clarity, forging authentic connections<br />

that illuminate the path toward meaningful engagement in the<br />

digital age. <br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

FINANCIAL PLANNING | Retirement<br />

Annuities: choose wisely<br />

Financial advisors have the critical challenge of helping their clients convert<br />

retirement capital into an income stream to see them through their retirement years.<br />

There are two main annuity income products (AIPs) that<br />

financial advisors assist their clients to choose from,<br />

namely: a guaranteed/life annuity (or annuitisation);<br />

and a living annuity (or self-annuitisation). The former<br />

guarantees an annuity income for life, whereas the latter<br />

exposes capital to volatile investment returns, with the possible<br />

danger of depletion before death, especially in the wake of<br />

excessive withdrawals.<br />

Contrary to the recommendation based on economic theory,<br />

very few people avail themselves of the benefits that a guaranteed<br />

annuity provides – instead most retirees prefer a living annuity, an<br />

investment portfolio from which the annuitant withdraws income,<br />

with the possibility of leaving heirs a bequest of the remaining<br />

retirement capital at death.<br />

The worldwide phenomenon of reticence among retirees to<br />

protect themselves against longevity and investment risk is an<br />

annuity puzzle that has been the subject of vigorous academic<br />

debate and applies especially in the South African context.<br />

A better understanding of the annuity puzzle is essential,<br />

especially in the wake of longer life expectancies of retirees due<br />

to medical innovation, unsustainable living annuity withdrawal<br />

rates and poor investment performance delivered by the<br />

JSE All Share Index (ALSI) from time to time.<br />

Annuity decision-making factors<br />

In my PhD research, I looked at the factors associated with annuity<br />

decision-making. Specifically, the factors (grounded in annuity<br />

puzzle literature) that relate to i) individuals’ annuity perceptions<br />

and intention pre-retirement and ii) annuitant satisfaction levels<br />

post-retirement, were investigated. The two parts of the study ran<br />

concurrently with distinctive samples. I performed a quantitative<br />

analysis on cross-sectional primary data collected by conducting<br />

survey research using online questionnaires.<br />

The sample for the first part of the study consisted of employees<br />

of Stellenbosch University (SU) who are members of the University<br />

of Stellenbosch Retirement Fund (USRF), and employees of Exxaro<br />

who are members of the Exxaro Retirement Fund.<br />

In part one of the study, 63% of the total sample (311<br />

respondents) had chosen a living annuity and 37% had chosen<br />

a guaranteed annuity. The ratio of respondents choosing a living<br />

annuity over a guaranteed annuity of ≈1.73:1 is expected, as most<br />

South Africans favour the living annuity option. The sample in<br />

part two of the study consisted of former employees of SU, who<br />

are fully retired from the USRF, and Glacier annuity clients. In<br />

part two, 76% (229 respondents) out of the total sample of 303<br />

respondents had chosen a living annuity, exactly as the<br />

annuity puzzle predicts. The data from both samples<br />

was collected in June 2020.<br />


70 www.bluechipdigital.co.za

FINANCIAL PLANNING | Retirement<br />

BLUE<br />

CHIP<br />

A discussion of how some of the annuity decision-making factors<br />

interrelate brings us to the main conclusions of the study.<br />

1. Managing retirement capital – burden rather than blessing<br />

The most unexpected finding from the research was that the<br />

desirability for flexibility and control over retirement capital to<br />

pursue capital growth significantly contributed to discontent.<br />

Paradoxically, the attributes that initially positively related to<br />

the favourability of a living annuity can often be associated with<br />

dissatisfaction in retirement. In other words, respondents (preretirement)<br />

with investor confidence and a desire for flexibility/<br />

control and accessibility find self-annuitisation beneficial.<br />

However, when another group of respondents were asked<br />

about the responsibilities that come with self-annuitisation<br />

in their retirement, these factors that were desirable before<br />

retirement, became a burden. Deductively, this finding challenges<br />

the accepted belief in Western culture that more control,<br />

choices, flexibility and autonomy lead to a better outcome or an<br />

improvement in well-being.<br />

The flexibility and control of managing a living annuity and<br />

earning an above-average return shift the responsibility and<br />

burden of not making suboptimal decisions to the annuitant,<br />

whereas a guaranteed annuity runs automatically and requires<br />

no further decision-making, once the initial irreversible decision<br />

of exchanging a capital lump sum for a consistent income stream<br />

of payments has been made.<br />

The belief of “doing better” with a living annuity (as opposed to<br />

a guaranteed annuity) could be attributed to investors looking<br />

at the annuity choice through the investment lens/frame,<br />

by focusing on the return and risk features of an AIP, without<br />

considering the consequences for consumption.<br />

Very few people avail themselves<br />

of the benefits that a guaranteed<br />

annuity provides – instead most<br />

retirees prefer a living annuity.<br />

The attractive feature of self-annuitising under the investment<br />

lens/frame is the possibility of generating superior investment<br />

returns, whereas the unattractive feature of annuitisation through<br />

the investment lens/frame is the potential to lose money in the<br />

event of premature death. The unattractive feature of a living<br />

annuity under the consumption frame is the possibility of outliving<br />

retirement capital. However, under the consumption frame, a<br />

guaranteed annuity is attractive, as it serves as a form of insurance<br />

for consumption throughout retirement.<br />

Annuity characteristics should be viewed through both lenses/<br />

frames to enable retirees to have a more balanced outlook on<br />

annuity decision-making. Retirees should be made aware that<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

FINANCIAL PLANNING | Retirement<br />

the extent of the responsibility/load in managing living annuity<br />

capital, especially in old age, or when the spouse who handled the<br />

finances dies first, can become unbearable.<br />

2. The fear of outliving retirement capital<br />

The fear of outliving retirement capital contributed to living<br />

annuitants’ dissatisfaction with retirement. Having the option to<br />

access retirement capital and withdraw large capital lump sums<br />

may tempt retirees to use such capital unwisely. A strong sense<br />

of discipline is required to honour the ultimate goal of retirement<br />

funds, ie providing the annuitant with an annuity income stream<br />

for life. The freedom of selecting investments and deciding on<br />

withdrawal rates therefore comes with much responsibility.<br />

In behavioural finance, the theory of risk-order bias supports<br />

the notion that individuals underrate the probability of far-off<br />

periods, in contrast to near periods. As a result, the probability of<br />

poverty in old age is gravely underestimated.<br />

Annuity decision-making tool<br />

For an annuity decision-making tool, consisting of two questionnaires<br />

and user’s manuals, to be used by financial advisors/benefit counsellors,<br />

in educating and guiding their clients (pre and post-retirement) with<br />

respect to their choice of an optimal AIP, the researcher can be contacted at<br />

jeannie@sun.ac.za.<br />

Understanding the tried-and-tested mechanisms underlying<br />

a formal guaranteed annuity market could offer retirees a<br />

lifestyle unencumbered by the fear of outliving retirement<br />

capital. Especially recently, given South Africa’s favourable yield<br />

curve/long rates.<br />

3. The bequest motive<br />

The bequest motive, which refers to the annuitant’s desire to leave<br />

the remaining retirement capital to heirs at death, is significantly<br />

related to individuals’ positive attitude towards a living annuity.<br />

The bequest motive is mostly driven by an altruistic desire<br />

to leave something of value behind to surviving family<br />

members at death.<br />

The uncertain nature of this potential bequest should be given<br />

due consideration, as no-one knows for sure what the amount of<br />

the bequest will be or when it will occur. The eventual size of the<br />

bequest could also potentially have a negative value, in the event<br />

of capital depletion before death, in which case family members<br />

may instead “inherit” the financial obligation to provide for the<br />

retiree. It could also be argued that relieving one’s family of the<br />

financial burden of support is an altruistic gesture in and of itself. A<br />

guaranteed annuity exempts the retiree’s family members from the<br />

financial risk and subsequent burden of providing for the retiree<br />

at some future date.<br />

4. Role of the financial or benefit counsellor<br />

Having trust in the integrity of financial advisors is significantly<br />

related to individuals’ annuity perceptions and intentions.<br />

AIP awareness and financial literacy are not only related<br />

to individuals’ outlook on annuities but also their eventual<br />

satisfaction in retirement.<br />

Therefore, financial advisors and benefit counsellors have a<br />

duty of care to assist their clients in extensively examining the<br />

validity and legitimacy of the underlying motives and reasons for<br />

favouring any AIP, otherwise, it may direct their choice unjustly.<br />

In addition, creating awareness of various cognitive biases<br />

present in annuity decision-making could facilitate rational and<br />

deliberate AIP choices.<br />

Closing remarks<br />

The freedom obtained by choosing the self-annuitising route carries<br />

a great responsibility and the burden of living with the potentially<br />

irremediable consequences of your choice. Alternatively, receiving<br />

a guaranteed income stream (either partly or in full) affords the<br />

freedom to live unbound without any further difficult investment<br />

decisions or the possible detrimental consequences of outliving<br />

retirement capital. <br />

Dr Jeannie de Villiers-Strijdom, CFP®, Senior Lecturer and<br />

Postdoctoral Fellow, Department of Business Management, Faculty<br />

Economic and Management Sciences, Stellenbosch University<br />

References<br />

1) De Villiers-Strijdom, J., 2021, “Annuity decision-making”, Doctoral thesis,<br />

Stellenbosch University. https://scholar.sun. ac.za/handle/10019.1/109846.<br />

2) De Villiers-Strijdom, J. & Krige, N., 2023, “Living annuity satisfaction”, Journal of<br />

Economic and Financial Sciences 16(1), a841. https://doi.org/10.4102/jef. v16i1.841.<br />

72 www.bluechipdigital.co.za

BLUE<br />

CHIP<br />

FINANCIAL PLANNING | Retirement<br />

The future of retirement<br />

planning: two-pot<br />

system insights<br />

In an era marked by ever-changing career trajectories and<br />

unforeseen financial challenges, the preservation of retirement<br />

savings has become an increasingly pressing concern.<br />

Enter the two-pot system, a legislative innovation designed<br />

to strike a delicate balance between safeguarding those<br />

hard-earned retirement funds and providing individuals<br />

with the flexibility to navigate short-term financial needs.<br />

This groundbreaking system is not only reshaping the landscape<br />

of retirement planning but also reshaping the way we perceive<br />

financial security in an unpredictable world. In this article, we<br />

delve into the intricacies of the two-pot legislation, unravelling its<br />

components and exploring how it aims to empower individuals<br />

to secure their financial future, one pot at a time.<br />

Intentions behind the two-pot system<br />

The primary goal of the two-pot system is to provide South<br />

Africans with the flexibility to access a portion of their retirement<br />

savings at various stages of their careers, creating a financial safety<br />

net for unexpected challenges. This need became evident during<br />

the Covid-19 pandemic when many individuals faced severe<br />

financial difficulties, often unable to access their retirement funds.<br />

Additionally, the system seeks to discourage individuals from<br />

prematurely depleting their savings by cashing them out when<br />

changing jobs or resigning solely to access their retirement funds.<br />

Components of the system<br />

The two-pot system is designed to strike a delicate balance<br />

between the long-term goal of accumulating retirement savings<br />

and addressing unforeseen financial challenges. To achieve this, the<br />

system introduces three distinct “components” within its framework:<br />

1. The savings component. This segment is tailored to meet<br />

the immediate financial needs of retirement fund members<br />

facing financial stress. It allocates one-third of a member’s net<br />

retirement fund contributions, which can be accessed before<br />

retirement. Members can make a single withdrawal from the<br />

savings component each tax year, with minimum withdrawals<br />

of R2 000 and a maximum of 100% of the component’s value.<br />

These withdrawals are subject to taxation at the member’s<br />

marginal tax rate. Any remaining balance in the savings<br />

component at retirement can be withdrawn in full, in part, or<br />

transferred to the retirement component to secure a retirement<br />

income through an annuity. However, waiting until retirement<br />

to access your retirement savings has a tax advantage. When<br />

taking lump sums from your savings pot upon retiring, it will<br />

be subject to the retirement fund lump sum benefits tax table,<br />

ranging from 0% to 36%, with the first R550 000 being tax-free.<br />

The goal is to discourage members from withdrawing funds<br />

from their savings pot prematurely and encourage them to<br />

maintain it for emergencies.<br />

2. The retirement component. Two-thirds of a member’s<br />

contributions are allocated to this component, accessible<br />

only as an annuity at retirement. Lump sum withdrawals are<br />

permitted in cases where individuals emigrate from South<br />

Africa and cease to be tax residents.<br />

3. The vested component. Comprising retirement savings<br />

accumulated before the implementation date of 1 March<br />

2024. This includes vested benefits from provident fund<br />

contributions made before 1 March 2021 and any growth and<br />

non-vested benefits. Members retain their existing access rights<br />

to these benefits after 1 March 2024. This means they can make<br />

full withdrawals upon resigning or being retrenched from an<br />

employer’s pension or provident fund, make one full or partial<br />

withdrawal from a preserved benefit in a preservation fund,<br />

or, upon retirement, withdraw the entire value of the vested<br />

benefit in cash and up to one-third of the non-vested benefit<br />

in cash.<br />

Once the new system takes effect, members can’t contribute to<br />

their vested component any more, except for provident fund<br />

members aged 55 or older on 1 March 2021. They can keep<br />

74 www.bluechipdigital.co.za

FINANCIAL PLANNING | Retirement<br />

BLUE<br />

CHIP<br />

contributing to their vested component until they retire or leave<br />

the fund they were in on 1 March 2021. If they choose to continue<br />

these contributions, their entire contribution goes to the vested<br />

component, and they can’t contribute to the savings component<br />

and retirement component. However, if they want to participate<br />

in the new two-pot system, they can’t keep contributing to their<br />

vested component and must split their contributions between<br />

the savings component and retirement component like other<br />

retirement fund members.<br />

Tax considerations<br />

Regarding taxation, the fundamental principles remain<br />

unchanged. Retirement fund contributions continue to be<br />

tax-deductible within existing limits. Investment returns on<br />

a member’s benefits in the three components remain taxexempt.<br />

Withdrawals from these components are subject to<br />

tax. Savings withdrawal benefits from the savings component<br />

will be taxed at the member’s marginal tax rate, with retirement<br />

fund administrators applying for a tax directive from SARS for<br />

each withdrawal.<br />

In summary, the two-pot legislation aims to strike a balance<br />

between preserving retirement savings and providing flexibility<br />

for members to address short-term financial needs. By allocating<br />

contributions to different components, members can access<br />

savings when necessary while ensuring a substantial portion<br />

remains preserved for retirement, ultimately enhancing<br />

retirement security and financial well-being. The legislation is set<br />

to benefit retirement fund members by increasing their retirement<br />

savings and providing more controlled access to their funds. <br />

Matthew Marrian, Chief Operating Officer, InvestSense<br />

Our financial planning<br />

qualifications are aligned<br />

with the FSCA requirements<br />

and the Financial Planning<br />

Institute of Southern<br />

Africa’s (FPI) designations.<br />

Our Postgraduate Diploma<br />

in Financial Planning offers:<br />

●<br />

●<br />

●<br />

Flexible starting dates<br />

Online lectures<br />

and exams<br />

High quality tuition by<br />

experienced professionals<br />

We’ve got you.<br />

You’ve got this.<br />

+27 86 999 0001<br />

enquiries@milpark.ac.za<br />


BLUE<br />

CHIP<br />

PRACTICE MANAGEMENT | Accounting<br />

Get back on track, in<br />

four strategic steps<br />

Accountants can help small businesses.<br />

By Karl Smith, Senior Education, Training and Member Support Manager, SAIPA.<br />

“<br />

Business Rescue” and “liquidation” are unfortunately<br />

words that are too often used in public discourse, due to<br />

the devasting impact companies – with depleted cash<br />

reserves – have realised over the past two and half years.<br />

With an increase of 44.8% in business liquidations (Stats SA)<br />

and fewer businesses reported to have entered Business Rescue,<br />

small businesses in South Africa are assessing financial positions<br />

too late – when they can no longer keep the doors open.<br />

This is where Professional Accountants (SA) can be a<br />

company’s internal advisor, helping to re-strategise operations<br />

for better success and restoring financial wellness. With small<br />

businesses employing from 50% to 60% of South Africa’s<br />

workforce and contributing around 34% of GDP, there is a new<br />

market opportunity and duty for Professional Accountants (SA)<br />

to provide advisory support to help keep small businesses on<br />

track and financially sound.<br />

Accountancy professionals are trained to exercise judgment,<br />

engage in critical thinking and have a deep understanding of<br />

complex multi-faceted operations and the resulting financial<br />

consequences. They are ideally suited to help small business<br />

owners and entrepreneurs identify their strengths, weaknesses,<br />

opportunities and threats, as well as create a plan to address them.<br />

With global entrepreneurship high on our country’s economic<br />

agenda, here are several ways Professional Accountants (SA)<br />

can strengthen the small business sector and help companies<br />

regain financial stability while wrestling through the tough<br />

economic climate.<br />

Review the business’ financial status<br />

The pandemic could have exacerbated financial issues that a<br />

business was already experiencing, such as cash-flow problems<br />

or a decline in business activity that resulted from changes in<br />

the business cycle or broader economic pressure. A professional<br />

advisor should assist in determining whether the business had<br />

any pre-existing conditions that are not necessarily related to<br />

the pandemic, but that may have been masked because of it.<br />

Cash flow management can<br />

be a deciding factor in a<br />

small business’ prospects of<br />

survival and ability to thrive.<br />

76 www.bluechipdigital.co.za

PRACTICE MANAGEMENT | Accounting<br />

BLUE<br />

CHIP<br />

Once a clear picture of where the business currently stands is<br />

established, the advisor and owner can look at ways to stabilise<br />

business performance.<br />

Create a recovery plan<br />

Cash-flow management can be a deciding factor in a small<br />

business’ prospects of survival and ability to thrive. Cash provides<br />

liquidity, negotiation power, a security reserve and a hedge –<br />

although arguably a depreciating one during inflationary periods.<br />

Having reviewed financial health and objectives, accountancy<br />

professionals can offer practical advice such as where to access<br />

finance to keep afloat if you have a gap in working capital<br />

requirements, help identify areas where you could cut costs to<br />

free up cash flow, and so on.<br />

Restore stability<br />

Having a good understanding of a business and how it operates,<br />

along with a familiarity with its financial strategy, helps advisors to<br />

plan the best next steps. While small business owners know their<br />

operations best, complexities such as taxes and debt restructuring<br />

are not always part of their daily operations. Partnering with an<br />

advisor who understands these processes in more detail and who<br />

can advise, will help restore stability.<br />

Talk about the medium to long-term vision<br />

Most of us have a sense that the pandemic has changed our<br />

world for good, but we are not entirely sure which changes will be<br />

permanent or which will dissipate. By partnering with professional<br />

advisors, SMEs can start to review which trends have had a positive<br />

or negative impact on their business and what strategies can be<br />

deployed to maximise the positive changes.<br />

The time for businesses to seek out and seize the opportunities<br />

emerging in the recovery is now. This involves conducting an afteraction<br />

review to collect data and insights on lessons learned and<br />

use these to prioritise actions to relook business models, enhance<br />

business value today and build strategic resilience for tomorrow.<br />

Small businesses that take these steps now will be well-placed<br />

to capitalise more effectively on the opportunities rising and to<br />

continue winning in their marketplaces as greater certainty and<br />

stability return. <br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

FINANCIAL PLANNING | Estate planning<br />

The art of estate planning<br />

The role of a multi-family office in preserving wealth and protecting family legacies.<br />

The greatest value of an estate plan is that it empowers<br />

an individual to draw a line in the sand at a particular<br />

moment in their lives and reconcile what they own<br />

and owe and how they want to manage, nurture and<br />

distribute their assets after their death. But estate planning is more<br />

than just setting up a trust and drafting a will.<br />

“It’s listening to what a client wants to happen when they die<br />

and structuring their finances and will accordingly. This includes<br />

structuring their estate in a way that enables them to achieve their<br />

goals while bearing in mind their liquidity needs and tax efficiencies,”<br />

says Luke Hirst, wealth manager, Private Client Holdings. The AfrAsia<br />

Bank Africa Wealth Report 2021 predicts that total private wealth in<br />

Africa will rise by 30% over the next eight years, reaching $2.6-trillion<br />

by 2030, making the multi-family office service a fast-growing wealth<br />

management segment in South Africa and Africa.<br />

Multi-family offices are usually privately held companies that<br />

handle investment and wealth management for several wealthy<br />

families with the goal of effectively growing and transferring wealth<br />

across generations. It is also where the personal financial affairs of<br />

the owners and related family members (companies and trusts) are<br />

overseen and managed.<br />

Private Client Holdings, a multi-family office based in Cape Town,<br />

has been managing the wealth of high-net-worth individuals for<br />

the last 30 years. Their Trust division specialises in estate planning<br />

and developing strategies to preserve a client’s wealth and protect a<br />

family’s legacy for future generations.<br />

Governance<br />

Governance is a critical element of estate planning at Private Client<br />

Trust. “It can be very expensive and frustrating to have your entire<br />

structure fail because there were no clear ‘rules of the game’,” says Sarah<br />

Love, fiduciary practitioner, Private Client Trust. When developing<br />

their governance plan, Love uses principles from the Organisation<br />

for Economic Co-Operation & Development and in a South African<br />

context, the King code.<br />

“We incorporate principles of fairness, responsibility and<br />

transparency to ensure that the advisor who will work within the<br />

structure and with future generations is well-prepared to ensure the<br />

long-term wellbeing and responsible stewardship of family wealth,”<br />

says Love.<br />

Purpose-driven structuring<br />

“When estate planning for families, we start with purpose-driven<br />

structuring,” says Love. “This entails a deep dive into their world<br />

to understand any current structures as well as the geography of<br />

individuals, entities and investments. During this process we look at<br />

a client’s long-term intentions and goals, the nature of their businesses<br />

and investments, where they run their businesses and investments,<br />

where they live and how they fund their lifestyle,” says Love.<br />

Against this backdrop, Love’s team will consider various local and<br />

offshore trusts and corporate structures to meet a client’s needs.<br />

“We do this as administratively and tax efficiently as possible. Not<br />

everyone needs a trust, but those that do can’t afford not to have<br />

one,” adds Love.<br />

Managing expectations<br />

At some point during the estate planning process, the next generation<br />

must be introduced to the family’s generational wealth plan. This<br />

timing is unique to each family. “In some cases, there are opportunities<br />

within a family business for the next generation, other families<br />

have a philosophy that the next generation must work elsewhere<br />

before joining a family business, while others believe that the next<br />

generation must take care of and/or work on a family property, or<br />

part of its philanthropic portfolio to understand the responsibility of<br />

the family’s stewardship role,” says Hirst.<br />

The “art” of estate planning<br />

With family members increasingly scattered across the globe, this can<br />

make estate planning more complicated for families. These are some<br />

of the complexities that the Private Client Trust team helps clients<br />

navigate during the estate planning process:<br />

1. Where does the client currently live and is this likely to change?<br />

Do the beneficiaries live in the same or a different country and<br />

how will beneficiaries living elsewhere receive their inheritance?<br />

2. Is a trust and/or a company involved? If so, are there loans between<br />

the trust and company? How will these be dealt with and what tax<br />

and cashflow implications need to be considered?<br />

3. Who are the beneficiaries of life insurance policies, living annuities<br />

and other structures? Have beneficiary details been kept up to date<br />

or changed when necessary to ensure the right people inherit and<br />

to prevent any unintended tax consequences?<br />

Given the complexities of estate planning, especially when multigenerational<br />

wealth is involved and where family members are in<br />

different geographies, Love advises getting input from a fiduciary<br />

specialist. “When a wealth creator dies, we provide support and<br />

guidance to ensure the family’s wealth grows and is seamlessly<br />

transferred to the next generation,” concludes Love. <br />

Private Client Holdings is an Authorised Financial Services Provider (License #613). Private Client Holdings has taken care to ensure that all the information provided herein is true and accurate. Private<br />

Client Holdings will therefore not be held responsible for any inaccuracies in the information herein. The above press release does not constitute advice and the reader should contact the author for any<br />

related concerns. Private Client Holdings shall not be responsible and disclaims all loss, liability or expense of any nature whatsoever which may be attributable (directly, indirectly or consequentially)<br />

to the use of the information provided.<br />

78 www.bluechipdigital.co.za

GOALS<br />





BLUE<br />

CHIP<br />

FINANCIAL PLANNING | Medical aid<br />

Limiting medical aid<br />

increases isn’t the answer<br />

Earlier in the year, the Council for Medical Schemes<br />

(CMS) recommended that medical aid schemes cap<br />

their contribution increases for 2023 at 5.7%. On the<br />

face of it, limiting medical aid increases looks like a<br />

prudent cost-cutting measure. The bigger challenge is that<br />

private healthcare is not sustainable in its current format.<br />

There is clear overservicing in many areas. That’s why both<br />

the private and public healthcare systems need to be reviewed<br />

to come up with a system that affords all South Africans access<br />

to decent healthcare.<br />

In the meantime, the healthcare industry is trying to<br />

balance affordability and sustainability. It’s essential that the<br />

industry finds ways to manage rising healthcare costs. However,<br />

restricting contributions to medical aid schemes is a blunt<br />

response to a complex and nuanced situation.<br />

The harsh reality is that few if any medical aid schemes will<br />

adhere to the 5.7% contribution cap being proposed by the CMS.<br />

Claims have gone back to pre-Covid levels, so schemes will come<br />

under severe financial pressure if they don’t make more realistic<br />

increases now.<br />

What type of increases can we expect? In general, medical<br />

inflation is around 3% higher than the consumer price index (CPI).<br />

What that means is that we can expect to see increases of at least<br />

CPI plus 3%, if not more. Some schemes will justify contribution<br />

increases above inflation due to some industry-specific cost<br />

factors. We’re already seeing hospitals increasing their prices by<br />

10% or more, for example. It doesn’t help that providers hike their<br />

rates by 10%, but funders can only increase their contributions by<br />

5.7%. That’s simply not sustainable. To ensure the sustainability<br />

of schemes, we anticipate increases of between 7% and 10%. Of<br />

course, the bigger question is what steps need to be taken to<br />

create a more sustainable and equitable healthcare system. At<br />

the moment, there are about 4.5-million registered members of<br />

different medical schemes, serving a total of around nine-million<br />

beneficiaries.<br />

That leaves 51-million South Africans who rely on the public<br />

health system. And here, the elephant in the room is National<br />

Health Insurance (NHI). Make no mistake, an NHI is necessary,<br />

because everybody in the country has the right to access decent<br />

healthcare. As we know all too well, there are several challenges<br />

to NHI. Perhaps the biggest of those challenges is that there’s<br />

low to zero trust in the ability of government to manage what<br />

will effectively be a medical scheme that’s 20 times bigger than<br />

Discovery. Then there’s the funding of the NHI, which remains<br />

a well-kept secret. Throw into the mix the chronic shortage of<br />

doctors, nurses and facilities in our country, and you’re starting to<br />

get an idea of the mountain facing NHI. Medical schools are still<br />

generating the same number of doctors they did 30 years ago, and<br />

our population has doubled since then. At the same time, the brain<br />

drain is robbing us of the highly trained medical professionals our<br />

healthcare system is crying out for. The bottom line? NHI may not<br />

be fully implemented in our lifetime.<br />

We’re already seeing many members downgrading their<br />

plans and options, and any further increases will only put more<br />

pressure on consumer wallets that are already under immense<br />

strain. Most of the larger medical aid schemes have introduced<br />

network options to maintain affordability. Other than that, their<br />

options are limited in the current healthcare setup. The best<br />

thing medical aid members can do at this<br />

stage is to speak to an informed<br />

broker to ensure they get the<br />

best coverage for their<br />

family’s needs at a price<br />

point they can afford.<br />

Ultimately, balancing<br />

affordability with the<br />

provision of quality<br />

healthcare requires<br />

a holistic approach<br />

that recognises the<br />

complex relationships<br />

between the various<br />

stakeholders in the<br />

system. Until then, we’re<br />

not going to reduce<br />

healthcare costs, let<br />

alone ensure a<br />

robust and<br />

sustainable<br />

healthcare<br />

ecosystem<br />

for all. <br />

Gary Feldman, Executive Head of Healthcare Consulting, NMG Benefits<br />

80 www.bluechipdigital.co.za

FINANCIAL PLANNING | Retirement<br />

BLUE<br />

CHIP<br />

How to support your<br />

ageing parents financially<br />

A growing number of South Africans are finding themselves supporting their ageing parents,<br />

thanks to the combination of a tough economy and insufficient retirement funding.<br />

It’s critical to plan this key transition<br />

carefully to ensure your own finances<br />

stay on track and to maintain a healthy<br />

relationship with your parents.<br />

Financially preparing for ageing<br />

parents is an important responsibility that<br />

requires proactive planning and open<br />

communication, says Stian De Witt, CFP®,<br />

executive head of financial planning at<br />

NMG Benefits. By starting early, establishing<br />

budgets, understanding healthcare costs,<br />

seeking professional advice and regularly<br />

reassessing the plan, you can make a major<br />

impact on your parents’ financial stability.<br />

Here’s how to help your parents ensure<br />

their long-term financial security and<br />

well-being.<br />

Start the conversation<br />

This is the first and most crucial step to<br />

helping your parents with their finances.<br />

Have an open discussion with your parents<br />

about their financial situation, including<br />

their income, savings, investments and<br />

any debts they have. This will help you to<br />

understand their current financial situation<br />

and how much support they will need.<br />

Estate planning is<br />

important for the<br />

entire family.<br />

Create a budget<br />

If your parents don’t already have a<br />

budget, help them to set one up. Ask if<br />

you can look at their bank statements<br />

to make sure there are no hidden costs,<br />

such as banking charges. See if there<br />

are ways for them to save money, like<br />

downgrading their cellphone contracts.<br />

They could also trade their car in for a more<br />

economical model.<br />

Assess their healthcare requirements<br />

This is a key element of financial planning for<br />

the elderly. What are the future healthcare<br />

costs you need to consider? Do your parents<br />

need chronic medication? Will they need<br />

specialised treatment in future? If they<br />

have a medical aid, make sure they’re on<br />

the most appropriate plan for their budget<br />

and needs. Here, the help of a financial<br />

planner could make all the difference.<br />

Get their estate planning up to date<br />

Estate planning is important for the<br />

entire family. If they don’t already have<br />

one, encourage your parents to create a<br />

will and get all their financial documents<br />

and policies together in a safe place. This<br />

is a vital step to make sure their wishes<br />

are respected. It will also help avoid<br />

delays and legal complications that arise<br />

when an estate is wound up without a<br />

will in place.<br />

Get professional advice<br />

Speak to a professional financial advisor<br />

about your own financial plan, and that of<br />

your ageing parents. Regularly review and<br />

update these plans as your circumstances<br />

change. Make sure you stay involved in<br />

their financial matters to provide ongoing<br />

support as they need it.<br />

Be sensitive and empathetic<br />

This is a difficult time for your parents as<br />

well. Make sure they understand you’re not<br />

trying to take away their independence,<br />

and that any assistance you provide is<br />

based on their preferences and needs.<br />

“Being prepared, having a plan in place and<br />

monitoring your plan regularly will give<br />

your family the best chance at achieving<br />

your financial goals and keeping your loved<br />

ones financially secure,” says De Witt. <br />

Stian De Witt, CFP®, Executive Head of<br />

Financial Planning at NMG Benefits<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

FINANCIAL PLANNING | Leadership<br />

Disruption, reinvention and<br />

inclusive leadership:<br />

how can we use the opportunity<br />

to create a better world<br />

We are living through extraordinary times,<br />

experiencing big overall trends; climate change,<br />

technological disruption, a mental health crisis, a<br />

fracturing world and social instability – all of which<br />

are reshaping the business environment and our world today.<br />

Many people are feeling hugely burdened by all of this, and<br />

rightly so. The risks these trends create only strengthen the weight<br />

and relevance of solid financial planning, of creating stability<br />

where we can. What is important to realise though is that these<br />

trends pose new and huge risks, but also great opportunities to<br />

rethink our work and our world fundamentally. The way we will<br />

handle the problems we have today is going to impact the way<br />

we are able to work and live in the future – and I want to take it as<br />

far as saying it will impact how we inhabit our planet.<br />

The need for reinvention<br />

In its recent CEO survey, PwC interviewed over 4 000 CEOs in over<br />

100 countries. Almost 40% of CEOs said that if they continued their<br />

current course, their business would not be viable in 10 years’ time.<br />

“Evolve or die,” many of them said. A big need was identified: the<br />

need for reinvention. Reinvention being the shifting of mindsets,<br />

the “re-imagining and re-making of our reality to create something<br />

new and improved, with new qualities and attributes”.<br />

If businesses are pressured to reinvent, so are their leaders<br />

and their people… this creates pressures and burdens for<br />

individuals, yet once again opportunities! What if the rethinking<br />

and re-imagining of our current reality could create something<br />

better? Better working conditions, a more humane economy, a<br />

better treatment of our planet?<br />

82 www.bluechipdigital.co.za

FINANCIAL PLANNING | Leadership<br />

BLUE<br />

CHIP<br />

What if disruption could be used<br />

as a positive force for good?<br />

What if individuals could see their own reinvention as impacting<br />

today’s society and its transformation? What if disruption could be<br />

used as a positive force for good?<br />

Let’s encourage ourselves, our clients and each other to tap<br />

into new voices and new thoughts to reinvent and create new<br />

opportunities out of the risks and challenges we are facing.<br />

If we did more of this, I think we might just be able to agree<br />

with this beautiful quote from Arundhati Roy:<br />

“Another world is not only possible, she’s on her way – on a<br />

quiet day, I can hear her breathing.” <br />

Using disruption as a positive force<br />

When people are demotivated, worried or burdened by the<br />

disruptive and worrying events we face today, it can be useful to ask:<br />

• How could what you are experiencing be “forcing” you to rethink<br />

things, to reinvent?<br />

• How could you tackle what is happening to you differently and<br />

shift your approach for the better?<br />

• Could what is happening today be the basis for us to create a<br />

new, better way?<br />

One aspect that is helpful in rethinking things or tackling<br />

something from a different perspective is to look in different<br />

places and to listen to different voices. This is best described as<br />

inclusive leadership.<br />

Inclusive leadership as force for reinvention<br />

Inclusive leadership is a practice of recognising the uniqueness and<br />

value that every human being can possibly bring to a discussion. It<br />

is about creating psychological safety for everyone to be part of a<br />

discussion and bring themselves in, without fear of being judged<br />

or discriminated against.<br />

It is also about bringing in marginalised voices. By valuing<br />

and respecting diverse perspectives, inclusive leaders encourage<br />

open dialogue, active participation and constructive dissent.<br />

They establish a culture that embraces different viewpoints and<br />

encourages everyone to contribute their thoughts without the<br />

fear of being judged or marginalised.<br />

Who can practice inclusive leadership? Absolutely every one<br />

of us. Whether we are leaders in organisations, whether we are<br />

financial planners serving our clients, leaders of our own lives…<br />

absolutely everyone. We need new thinking in our world today, so<br />

let us not listen to the “usual” voices, but rather those who have<br />

not been heard so much so far!<br />

What does this all mean?<br />

South Africa is so culturally rich and filled with such incredibly<br />

different people, but we do not fully tap into this potential. We<br />

have incredible potential to use disruption as a positive force for<br />

good; to reinvent and to practice inclusive leadership.<br />

How do we encourage ourselves, our clients and our network<br />

to search for differences rather than similarities? To look for<br />

answers to their challenges in new places? To be able to reinvent<br />

ourselves, our organisations and our lives to face many of the<br />

risks we face today.<br />

Judith Haupt, Managing Director, CONTRACT South Africa<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

CLIENT ENGAGEMENT | Behavioural finance<br />

The evolution of advice<br />

From managing people to managing advice.<br />

There is a saying credited to the Greek philosopher<br />

Heraclitus that says that “the only constant is change”.<br />

This is as true for the interactions between people as it is<br />

for the interactions between people and machines – and<br />

financial advice finds itself at the intersection of these two.<br />

On the one hand, we’ve got the rise of Artificial Intelligence<br />

(AI) that is threatening to disrupt jobs, and on the other, we’ve got<br />

a movement where financial advisors are becoming behavioural<br />

coaches rather than technicians. I believe that you need to make<br />

this shift to avoid being disrupted by AI and to enhance the value<br />

that you add to your clients.<br />

Let me explain by starting with your value to clients. Most<br />

advisors have an elevator pitch about how they add value to clients.<br />

In many cases, it is something about independent advice, which<br />

sounds great until you realise that you’re anchoring your value<br />

in product selection. Wouldn’t it be better if you said something<br />

about “helping clients achieve their dreams” or “taking the stress<br />

out of retirement” rather than talking about the products that<br />

you’re going to sell to people?<br />

Make no mistake, as a financial advisor you need to be able to<br />

advise on the money and select the best solutions for your clients.<br />

But there is a growing number of advisors who understand that<br />

clients have different hopes, dreams, fears, biases and so on. These<br />

advisors understand that two clients with very similar financial<br />

needs and resources may need to be treated differently or end up<br />

with different financial solutions. That value add is very different<br />

to offering independent advice on the products.<br />

Many advisors who have bought into this attend Humans Under<br />

Management (HUM), which is a conference for financial advisors<br />

that was started by Andy Hart in the UK and now happens annually<br />

Turning a money business<br />

into a people business.<br />

84 www.bluechipdigital.co.za

CLIENT ENGAGEMENT | Behavioural finance<br />

BLUE<br />

CHIP<br />

in both South Africa and the UK. The title is a pun on Assets Under<br />

Management and the strapline is, “Turning a money business into<br />

a people business”.<br />

Without trying to summarise an entire conference in a short<br />

article, here are some of my notes and take-outs from HUM SA<br />

2023, which will give you a sense of the topics that were discussed:<br />

• When it comes to identifying scams, a clear red flag is when<br />

they promote a supposed “new way to build wealth”. The reality<br />

is that there is no “new way”, and the traditional method still<br />

works beautifully. You simply need to contribute to a diversified<br />

portfolio and give it enough time.<br />

• Behavioural coaching is about understanding the clients’<br />

emotional drivers. This approach has led to different product<br />

recommendations such as advising a wealthy retiree who was<br />

terrified of running out of money to take a guaranteed annuity,<br />

even though there was very little chance that they would run<br />

out of money.<br />

• The most value you can add to a client is simplification.<br />

• Don’t refer to coaching because many people don’t want to be<br />

coached. You need to make it fun.<br />

• When you start working with a client, you’ll be in a “fix phase”<br />

that is fun for both you and your client because you are problemsolving<br />

and implementing solutions. However, once everything<br />

is in place, you’ll move to the “fine phase” where things can<br />

become boring. If you don’t intervene here, there is a risk of<br />

drifting apart. To prevent this, you need to move to the “flourish<br />

phase” where you get new insights and set new goals so that you<br />

return to the “fix phase” and repeat.<br />

numbers, objective analysis and optimising solutions (managing<br />

money), but they are very bad at understanding people’s emotions<br />

(managing people). This means that AI will become a threat to<br />

advisors who manage their clients’ money and will complement<br />

those who manage their clients.<br />

So, whether you choose to join the movement towards behavioural<br />

coaching or whether you want to future-proof your business from<br />

AI – you need to think about turning your money business into a<br />

people business.<br />

To see how far you are on this journey, think back over the last<br />

year and count the number of investor roadshows vs the number<br />

of seminars on the psychology of money that you attended. I<br />

suspect that this will show that most advisors are managing their<br />

clients’ money rather than their clients. That’s okay because the<br />

shift is a process and not an event. So long as you choose to make<br />

the shift from managing money to managing people.<br />

: Fairbairn Consult is a Licensed Financial Service Provider and a member of the Old Mutual Group.<br />

Now let’s consider the impact of AI. In 2017, I completed an online<br />

course through MIT to understand the impact of AI. At the end<br />

of the programme, I wrote an article called “What do artificial<br />

The most value you can add<br />

to a client is simplification<br />

intelligence and robo-advice mean for financial advisors”, which<br />

you can read on my LinkedIn profile. My conclusion was: “We<br />

should see AI as an ‘employee’ that is amazingly efficient, always<br />

consistent, gets smarter every year, never forgets anything,<br />

doesn’t need sleep, is never sick and doesn’t expect an annual<br />

bonus. And one last thing, we need to think about the skills that<br />

advisors will need to thrive in a world where technical financial<br />

planning skills are no longer the primary requirement.”<br />

This may have been truer in 2017 than now, as AI has<br />

jumped significantly since then with the advent of generative<br />

content. These jumps will continue over and over, which<br />

means that AI like Chat GPT 10 will become a genuine threat<br />

to jobs at some point.<br />

Before you despair, let’s think about AI’s strengths and<br />

weaknesses. Machines are very good at research, crunching<br />

Guy Holwill, Chief Executive, Fairbairn Consult<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

PRACTICE MANAGEMENT | Business development<br />

20 Years of building a<br />

financial planning business:<br />

10 key learnings<br />

As we mark the 20-year milestone of our independent,<br />

privately-owned financial services company, it’s not<br />

just about celebrating but acknowledging resilience,<br />

adaptability and a journey marked with profound<br />

challenges, learnings and insights.<br />

Chartered Wealth Solutions began as a small venture two<br />

decades ago, but John Campbell and Barclay Hoar envisioned<br />

something bigger. They placed clients at the heart of their business<br />

and wrote comprehensive financial plans instead of offering a list<br />

of products. In 2003, they introduced lifestyle financial planning,<br />

which made them realise that their role extends beyond helping<br />

clients accumulate wealth to delivering customised financial<br />

planning solutions aligned with their clients’ life plans.<br />

From the outset, Campbell and Hoar opted for a salaried<br />

approach rather than commission-based incentives. They also<br />

incorporated investment consultants into the business model,<br />

started recruiting planners who shared their passion and vision<br />

and employed their first hire not involved with clients.<br />

Chartered has grown into a business serving over 2 000 clients<br />

with a dedicated team of over 80 staff. Looking back at the past<br />

20 years, we have reflected on some of the lessons learned and<br />

insights gained along the way.<br />


#1 Work on the business – not in the business<br />

Campbell and Hoar started with weekly Friday strategy meetings<br />

on how to build a successful planning business. Fast-forward 20<br />

years, and we are still strategising how to improve and grow our<br />

business. We constantly ask how we can do it better. This year, six<br />

members of the Chartered team were sponsored to participate<br />

86 www.bluechipdigital.co.za

PRACTICE MANAGEMENT | Business development<br />

BLUE<br />

CHIP<br />

We have learnt that there is a<br />

story, as well as dreams and fears<br />

behind every financial decision.<br />

in the Stanford Seed transformation programme. It was a hugely<br />

beneficial opportunity to study and analyse the Chartered business<br />

from a team MBA perspective.<br />

We have learnt that clients are a valuable source of feedback.<br />

We appreciate listening to their views on what’s working, what<br />

should change and their recommendations for improvement.<br />

Insight. Working on the business (as opposed to in it) has<br />

transformed our roles from planning meetings to management.<br />

Seeing clients you have spent years building relationships with<br />

happily meeting with other team members can be a bitter-sweet<br />

experience. Although we miss our time with clients, we know they<br />

are well looked after by planners within the company.<br />

#2 Distinct value proposition – putting clients at the centre<br />

of everything we do<br />

Campbell reflects on his most defining moment at Chartered:<br />

“Putting clients at the centre of everything we do and providing<br />

proper, holistic financial planning is crucial to our success. This<br />

understanding was the foundation for all the decisions and actions<br />

we took during the growth and development of the company.”<br />

At the heart of the Chartered philosophy lies the conviction<br />

that financial planning interconnects with the clients’ aspirations<br />

and that guidance, advice and implementation should always<br />

support the enabling of dreams and life visions. This approach,<br />

helping clients get the most meaning from their money, has been<br />

instrumental in shaping our culture, service approach and client<br />

relationship focus.<br />

#4 Cultivating a team in a connected culture with shared values<br />

With our value proposition focused on relationships and enabling<br />

clients’ lives and our values crystallised, we started recruiting<br />

people who would be a good fit for our culture. At first, we called<br />

our team the Chartered Family as we were a small, close-knit<br />

group, but this term evolved to TEAM, representing our shared<br />

vision and values, as opposed to being part of the same family.<br />

Our approach is professional but warm, approachable, caring and<br />

passionate about what we do.<br />

Insight. It is not always possible to retain planners, and it is easy<br />

to feel despondent when great planners leave your business. We<br />

have learnt that planners occasionally join us for only a part of their<br />

career and have embraced the opportunity to grow, develop and<br />

train them regardless.<br />

#5 Creating a WOW client experience<br />

We always aim to make our clients feel supported, valued, seen and<br />

heard. One of our significant investments was purchasing a building<br />

and refurbishing Chartered House to create a warm, inviting and<br />

comfortable space for clients to meet. This may be one of the best<br />

investments we’ve made – and our clients love visiting us here, often<br />

popping in for a slice of cake and the best cappuccino in town. Being<br />

in the relationship business, we have realised that small gestures go a<br />

long way. Our clients value the little things we do, from hand-written<br />

birthday cards and gifts to our beautiful bathrooms, invitations to<br />

events and ongoing communication.<br />

#6 Our financial plan is our product<br />

Putting clients at the heart of our business has instilled a deep<br />

commitment to serving their best interests, and we’ve invested<br />

many hours in research and foundation work to conceptualise a<br />

product that speaks to our philosophy and fits each client.<br />

#3 Crafting a unique brand identity<br />

Our “Purple Cow” (borrowed from Seth Godin for a product<br />

that’s intrinsically different) is life planning and Retiremeant.<br />

I introduced life planning in 2008 when I joined Chartered,<br />

reinforcing the value proposition of providing clients with a<br />

return on life and a return on investments. In 2009, we tailored<br />

our services to a specific retirement demographic, allowing for a<br />

deeper understanding of our clients’ lives.<br />

The term Retiremeant – to get more meaning from your<br />

money in your second chapter – connects seamlessly with our<br />

value proposition. Now, 20 years later, we have extended our<br />

expertise with a new tagline “Planning with Purpose”, helping<br />

clients across different life stages and transitions with a meaningful<br />

financial plan that aligns with their life goals, enabling them to live<br />

their lives to the fullest.<br />

www.bluechipdigital.co.za<br />


BLUE<br />

CHIP<br />

PRACTICE MANAGEMENT | Business development<br />

“We prioritised developing a comprehensive understanding of<br />

each client’s unique situation, enabling us to tailor our advice and<br />

recommendations to their specific needs,” says Campbell. Today,<br />

our financial plan is our product and comprises four parts: a life<br />

plan, scenario plan, investment plan and estate plan. We did not<br />

charge for this plan at first but realised that clients don’t see much<br />

value in something offered for free. Today, we charge a standard<br />

fee for a financial plan.<br />

#7 Collaborative planning meetings – teams of two<br />

We have implemented a simple yet profound concept of having<br />

two planners present during planning meetings, bringing<br />

diversity and using planners to their best strengths. Each planner<br />

brings a unique worldview, influenced by their age, gender and<br />

experience and by pairing different planners, clients receive<br />

a blend of fresh, innovative ideas and wisdom. We mostly see<br />

couples and found it hugely beneficial to have both a male and<br />

female planner in the room. It allows for a broader understanding<br />

and a more rounded approach.<br />

In addition, our articled programme for young Certified Financial<br />

Planner® professionals to join Chartered and gain mentorship and<br />

experience without having to acquire their own clients has been a<br />

game changer. It challenges our thinking all the time!<br />

Insight. When we deal with clients, their lives and their money, it is<br />

difficult not to get emotionally involved. Feeling the pain of clients<br />

during tough times is difficult, and when clients face loss, illness<br />

or heartbreak, we feel those things with them.<br />

#10 Upholding professional standards<br />

As an FPI-approved practice and active member of the FPI, we<br />

strive to promote the financial planning industry as a profession.<br />

We regularly share our learnings and insights at conferences and<br />

use every opportunity to promote financial planning as a profession.<br />

Conclusion<br />

We are extremely grateful to our wonderful clients who have<br />

allowed us into their lives and shared their dreams with us. We<br />

have learnt that there is a story, as well as dreams and fears behind<br />

every financial decision. We are equally grateful to our team at<br />

Chartered, our suppliers and planning practices who sold their<br />

businesses and entrusted their clients to us.<br />

#8 In-house specialist services<br />

As the business grew and more and more clients asked for<br />

additional financial services, we expanded our offering across<br />

investment solutions, will and estate services as well as tax<br />

planning, ensuring that the same company manages every<br />

part of the client’s portfolio, with the planner involved in every<br />

aspect. Recently, due to changes in the financial landscape, we<br />

recognised the need for strategic investment management and<br />

created WealthStrat. Our Cat II licence also allows for more control<br />

in changing investment consultants if necessary and minimises<br />

fees for our clients.<br />

#9 A relationship business<br />

Financial planning is managing your client’s relationship with<br />

money and guiding them to put money in its proper place – as<br />

an enabler of their goals and dreams. Money is not an easy topic<br />

to discuss, and very often, life-planning conversations are deeply<br />

traumatic, unveiling a host of underlying emotions such as fear,<br />

anxiety, worry and shame. Yes, planners do need exceptional<br />

financial and technical skills, but these three skills in building and<br />

nurturing relationships are equally important: curiosity, coaching<br />

and self-awareness.<br />

We have learnt a great deal from life planning with clients and<br />

invested in interpersonal skills and self-development training<br />

for all our team members. We teach planners to be curious, ask<br />

probing questions, respond with empathy, have non-judgemental<br />

listening skills, authenticity as well as the ability to coach, mentor<br />

and inspire.<br />

Kim Potgieter CFP®, Director, Chartered Wealth Solutions,<br />

ICF Professional Certified Coach, New Money Story® Mentor<br />

Coach, Certified Dare to Lead Facilitator<br />

88 www.bluechipdigital.co.za




Pros<br />

• You continue to own your business<br />

• You no longer need to be an accountable<br />

institution or the KI<br />

• You don’t need to worry about the additional<br />

compliance from CoFI<br />

• You have real succession options<br />

• You have access to over 100 product providers,<br />

but you don’t need to stand surety on contracts<br />

• You can leverage our scale to afford great tech<br />

like automated client portfolio statements<br />

Cons<br />

• While you can give unbiased advice, you can’t<br />

describe yourself as independent<br />

ombds 08.2023 C8469<br />

To find out more, visit www.fairbairnconsult.co.za or scan these QR codes.<br />

Fairbairn Consult is a firm of Registered Financial Advisers.<br />

We are a licensed FSP and a member of the Old Mutual Group.

Hooray! Your file is uploaded and ready to be published.

Saved successfully!

Ooh no, something went wrong!