Blue Chip Issue 92

BLUE 

CHIP 

THE OFFICIAL PUBLICATION OF THE FPI 

Issue 92 • Aug/Sep/Oct 2024 

www.bluechipdigital.co.za 

0.5 CONTINUOUS 

PROFESSIONAL DEVELOPMENT 

01 CONTINUOUS 


1.5 CONTINUOUS 


02 CONTINUOUS 


Cultivating growth 

harvesting excellence 

A vital future for finance 

ARTIFICIAL INTELLIGENCE 

IS INDEPENDENCE IMPORTANT? 

Momentum invests in advice 

JEANETTE MARAIS AND HANNES VAN DEN BERG 

Meet the top three FINANCIAL PLANNER OF THE YEAR 2024 finalists

A Multi Asset Approach: 

Achieving Real Returns 

The overarching objective of the multi-asset team is to achieve real (i.e. inflationadjusted) 

returns of three to five percent over the medium term, while also limiting 

negative returns over a rolling thirty-six-month period. 

A multi-asset approach to achieve this objective offers two potential avenues for 

generating returns. Firstly, it enables tactical allocation among asset classes 

(such as equities, fixed income, and cash) when disparities in relative valuations emerge. 

Secondly, it allows for the selection of the top-performing assets within each asset class. 

When constructing portfolios, the team is largely unconstrained by benchmarks. 

Each individual security included must significantly contribute to performance while 

also maximising the number of independent or non-correlated positions in the portfolio 

to mitigate concentration risk. 

Delivery through diversity

TM 

Financial Education For All 

Join the FPI at Africa’s largest gathering 

of business leaders, professionals and 

entrepreneurs on 10 September 2024 at 

Sandton Convention Centre.

BLUE 

CHIP 

FPI UPDATES | CEO Message 

Lelané Bezuidenhout, CFP®, CEO, 

Financial Planning Institute 

of Southern Africa 

Cultivate Growth to 

Harvest Excellence 

The CEO of the Financial Planning Institute of 

Southern Africa shares the FPI’s latest news. 

Welcome to this edition of Blue Chip magazine – 

the official FPI-supported industry publication. 

This year marks the 35th annual FPI Professional’s 

Convention, and it’s always an exciting journey to 

devise the theme and plan each year’s event. We have planned 

this convention with an approach of “for-members-by-members”, 

and this year has been no exception. We have gathered to share 

great ideas and reflect on the potential vision for the convention, 

focusing on practice standards, management and thought 

leadership over technical content. 

This year marks the 35th annual 

FPI Professional’s Convention. 

For technical discussions, the FPI hosts other events throughout 

the year like the Annual Refresher, Retirement and Investment 

Masterclass as well as various other masterclasses focusing on 

estates and trusts, ethics and AI. If you missed any of these events, 

you can still register to access the recorded content via our website 

and the FPI portal. 

Nevertheless, let me dive into providing all the details about this 

year’s convention in the breathtaking city of Cape Town, returning 

for the first time since 2016 at the Century City Conference Centre. 

Our theme, Cultivate Growth to Harvest Excellence, perfectly 

captures our goals to foster professional advancement and 

exceptional capabilities within our profession. 

We have convened respected local and international speakers 

to share insights on the latest trends and updates in financial 

planning, such as growth mindsets, great company cultures and 

striving for overall excellence. The convention offers a broad 

4 www.bluechipdigital.co.za

FPI UPDATES | CEO Message 

BLUE 

CHIP 

spectrum of topics, including innovative strategies, technological 

advancements and ethical considerations. 

Participants are able earn up to 12 verifiable Continuing 

Professional Development (CPD) hours across various educational 

sessions. These are critical for maintaining our professional 

standards and keeping up with industry developments. 

Networking and collaboration are, as always, a significant part of 

the convention, providing attendees a platform to build valuable 

professional connections. I am also particularly excited about the 

variety and effort our exhibitors have put into impressing and 

engaging with attendees this year. 

As is tradition at the FPI, the first day of the convention 

transitions into the Gala Dinner where we present several awards 

to deserving professionals. This year’s finalists for the Financial 

Planner of the Year are Gareth Collier, CFP®, Rudolph Geldenhuys, 

CFP®, and René van de Spreng, CFP®. 

Congratulations to all the finalists! 

Another highlight to look forward to is the announcement of the 

winners of the Diversity & Inclusion Award, Harry Brews Award, It 

Starts with Me Award, the student competition and recognising 

the Top Profession Competency Examination (PCE) candidates of 

the year. 

Other matters and updates 

On a note of gratitude, I would like to thank Soré Cloete, CFP®, Jill 

Larkan, CFP®, and Luke Martins, CFP®, for their years of dedicated 

service on the FPI Board. Their contributions have greatly enriched 

our profession. We are thrilled to welcome Dan Bergland, CFP®, 

and Thato Mahapa, CFP®, to the board, anticipating great strides 

in moving our profession forward. 

Looking ahead, we are transitioning to the Next Generation 

Standards starting in 2025, changing the format of our exam 

component to include a financial plan. The final PCE sitting in the 

current format is in October 2024. Registrations are open. 

The FPI will also feature at LeaderEx 2024, where our volunteers 

will provide consumer education. Members will offer pro-bono 

one-on-one sessions, so check out www.mymoney123.co.za or 

www.leaderex.com for more details. 

Lastly, in our commitment to enhancing the experience for our 

CFP® professionals, we have partnered with the Financial Planning 

Standards Board (FPSB) to launch digital credentialing, offering 

a new way for our professionals to showcase their certifications. 

This is just one of the many ways we are driving value-driven 

innovation in our profession. If you have not seen or activated 

your credential yet, please contact membership@fpi.co.za to 

assist you. 

That’s all from me for now. 

Until next time. 

Lelané Bezuidenhout, CFP®, CEO, Financial Planning Institute 

of Southern Africa 

This year’s finalists for the Financial Planner of the 

Year are Gareth Collier, CFP®, Rudolph Geldenhuys, 

CFP®, and René van de Spreng, CFP®. 

www.bluechipdigital.co.za 5

Financial advice: 

trust, courage, growth 

and excellence 

The purpose of financial advice is to assist investors and guide them to make 

informed decisions to achieve their investment objectives, says Edward 

Semenya, Alexforbes. However, he concludes that the true value of financial 

advice lies in the tangible actions and unique perspectives that financial 

advisors offer clients (page 46). 

Hannes van den Berg, Momentum Advice, says that only when you understand advice, 

do you understand its value. An advisor offers a holistic approach to financial planning 

by considering all aspects of a client’s life and financial circumstances before advising on 

a financial plan. He says that positioning the value of advice is critical to the growth of 

the industry (page 20). 

Rob Macdonald, Fundhouse, says that acting in the client’s best interest takes courage 

despite the risk this may pose to the client, the relationship and potentially to the financial 

planner’s income (page 66). 

And while on the topic of courage and financial advisors – it is time for the 35th FPI 

Professional’s Convention and the theme is Cultivate Growth to Harvest Excellence. 

We pay homage to this theme by announcing the three runners-up of the FPI Financial 

Planner of the Year Award 2024: Grant Collier, Rudolph Geldenhuys and René van de 

Spreng. Blue Chip congratulates all three of you and celebrates the growth that you 

cultivated and the excellence you are harvesting (page 26). 

And so, too, we celebrate other financial planners who have shown courage and 

cultivated growth to harvest excellence: Lara Warburton, CFP®, winner of the 2023 

Financial Planner of the Year Award, who encourages other financial planners to enter this 

competition and view it as a part of your personal growth as a professional. (Don’t miss her 

article on page 70.) Kim Potgieter, CFP®, won the FPI It Starts with Me Award 2023 for her 

unyielding dedication to promoting the CFP® certification (page 34). Olwethu Masanabo, 

winner of the FPI Diversity and Inclusion Award 2023, is celebrated for promoting the 

inclusiveness of diverse communities in the profession (page 33). Meet Stephan Lombaard, 

the 2023 Top Candidate Award winner on page 32. 

While we celebrate those who cultivate growth to harvest excellence, we honour 

Lelané Bezuidenhout, FPI CEO, for growing the FPI to what it is today and making it an 

Institute of true excellence. Blue Chip speaks to her on page 28. 

See you at the conference! 

Alexis Knipe, Editor 

Blue Chip Journal – The official publication of FPI 

blue-chip-journal 

Blue Chip is a quarterly journal for the financial planning industry and is the official publication of the 

Financial Planning Institute of Southern Africa NPC (FPI), effective from the January 2020 edition. Blue Chip 

publishes contributions from FPI and other leading industry figures, covering all aspects of the financial 

planning industry. 

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

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

FPI members are able to earn three verifiable Continuous Professional Development 

(CPD) points per edition of the print journal (four per year) under the category of 

Professional Reading. 

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

FPI Recognised Education Providers and FPI Approved Professional Practices. 

ISSUE 92 | 

AUG/SEP/OCT 2024 

BLUE 

CHIP 

Publisher: Chris Whales 

Editor: Alexis Knipe 

Digital Manager: Kerenza Lunde 

Designer: Monique Petersen 

Production: Sharon Angus-Leppan 

Ad sales: 

Gavin van der Merwe 

Sam Oliver 

Bayanda Sikiti 

Venesia Fowler 

Vanessa Wallace 

Tahlia Wyngaard 

Managing director: Clive During 

Administration & accounts: 

Charlene Steynberg 

Kathy Wootton 

Distribution and circulation manager: 

Edward MacDonald 

Printing: FA Print 

PUBLISHED BY 

Global Africa Network Media (Pty) Ltd 

Company Registration No: 

2004/004982/07 

Directors: Clive During, Chris Whales 

Physical address: 28 Main Road, 

Rondebosch 7700 

Postal address: PO Box 292, 

Newlands 7701 


Tel: +27 21 657 6200 

Email: info@gan.co.za 

Website: www.gan.co.za 

No portion of this book may be reproduced without written consent 

of the copyright owner. The opinions expressed are not necessarily 

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

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

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

support this publication by their submission of articles and with their 

advertising. All rights reserved.

CONTENTS 

ISSUE 

92 


04 

06 

14 

18 

FPI FOREWORD 

Message from the CEO of the FPI 

EDITOR’S NOTE 

By Alexis Knipe 

ON THE MONEY 

Milestones, news and snippets 

HAVING A FINANCIAL 

PLANNING AND 

INVESTMENT PHILOSOPHY 

Column by Rob Macdonald, Head of 

Strategic Advisory Services, Fundhouse 

19 

THE TWO-POT 

(THREE-COMPONENT) SYSTEM 

Column by Kobus Kleyn, Tax and Fiduciary 

Practitioner, Kainos Wealth 

20 

ADVICE: THE KEY TO BUILDING 

AND PROTECTING 

FINANCIAL DREAMS 

Momentum’s purpose is to build and 

protect its clients’ financial dreams 

26 

AND THEN THERE WERE THREE 

Meet the three 2024 FPI Financial 

Planner of the Year finalists 

28 

CULTIVATING GROWTH, 

HARVESTING EXCELLENCE 

Blue Chip interviews Lélane Bezuidenhout, 

CEO of FPI 

32 

STANDARDS OF EXCELLENCE 

Meet Stephan Lombaard, the 2023 

FPI Top Candidate Award winner 

33 

TRANSFORMING TRADITIONS 

Blue Chip meets up with Olwethu 

Masanabo, winner of the FPI Diversity and 

Inclusion 2023 Award winner 

34 

THE LEARNER LEADER 

Meet the 2023 FPI It Starts with Me 

Award winner, Kim Potgieter 

36 

MARKET MOVERS 

What drives the shifts in global 

equity markets, asks Peter Foster, Chief 

Investment Officer, Fundhouse 

40 

ROUND TABLE SERIES 

How and why a financial planner 

should use a DFM 

42 

COACHING SKILLS 

FOR PLANNERS 

Introducing Old Mutual Wealth’s integrated 

financial coaching course 

44 

DO YOU HAVE A “TYPE”? 

Finding the perfect investment 

partnership offshore, by Capital 

International Group 

46 

THE TRUE VALUE OF ADVICE 

The notion of financial advice is an 

intriguing one says Alexforbes 

48 

POST-RETIREMENT ANNUITY 

OPTIONS AMID POTENTIALLY 

HIGHER INFLATION 

Coronation Fund Managers explains 

the importance of choosing the right 

retirement income option within the 

context of higher inflation 

51 

LEVERAGING GAMIFICATION 

FOR ENHANCED RETIREMENT 

PREPAREDNESS ALONG MILLENNIALS 

Innovative approaches are imperative to 

engage and educate today’s workforce 

52 

CAPTURING VALUE FOR 

CLIENTS FROM SOUTH 

AFRICA’S ETF BOOM 

Kingsley Williams, Chief Investment Officer, 

Satrix attests that ETFs are an attractive 

option for investors 

54 

GAMES OF LOANS: CHOOSING 

AN INCOME MANAGER 

How do you choose an income manager 

best suited to your needs, asks André van 

der Merwe, Head of Retail, Matrix 

Fund Managers 

56 

CAPITALISING ON 

GLOBAL OPPORTUNITIES 

The case for South Africans investing 

in global income assets, by Bastian 

Teichgreeber, Chief Investment Officer, 

Prescient Investment Management 

58 

HOW MAZI MULTI-ASSET 

DELIVERS LONG-TERM RETURNS 

As professional fund managers, our job is to 

provide investors with solutions that meet 

their requirements 

60 

ADDRESSING KEY RISKS IN A 

RETIREMENT PORTFOLIO 

By Marius van der Merwe, Chief Executive 

Officer, Amity Investment Solutions 

62 

SUPPORTING INDEPENDENT 

FINANCIAL ADVISORS WITH 

GROWTH AND SUCCESSION 

Carmel Wealth has recently received 

strategic investments from two global 

investment companies 


Your investments 

deserve first-class 

treatment 

Harness the power of offshore investing with us. 

Isn’t it time to change how you see investing? 

ninetyone.com/change 

Ninety One SA (Pty) Ltd is an authorised financial services provider.

CONTENTS 

ISSUE 



64 

ROUND TABLE SERIES 

Offshore investing: tax issues 

and jurisdictions 

66 

COURAGE: ESSENTIAL FOR 

AUTHENTIC FINANCIAL 

PLANNING 

By Rob Macdonald, Head of Strategic 

Advisory Services, Fundhouse 

70 

INDEPENDENCE: IS 

IT IMPORTANT 

Lara Warburton, CFP®, 2023 FPI Financial 

Planner of the Year, speaks about the 

importance of independence for 

financial planners 

72 

ARE INDEPENDENT 

FINANCIAL PLANNERS 

FACING EXTINCTION? 

By Warren Ingram, CFP®, Executive 

Director and Co-Founder, 

Galileo Capital 

74 

THE GREATEST GIFT 

OF CONSOLIDATED 

INVESTMENTS IS PEACE OF MIND 

Private Client Trust cautions against 

messy portfolios 

76 

TOUCHING THE HEARTS AND 

MINDS THROUGH DESIGN- 

THINKING COMMUNICATION 

Medihelp speaks about the importance of 

having a strong communication strategy 

78 

ENHANCING CLIENT 

RELATIONSHIPS THROUGH 

STRATEGIC TOUCHPOINTS 

By Francois du Toit, Founder, PROpulsion 

80 

ARTIFICIAL INTELLIGENCE: A 

VITAL FUTURE FOR 

FINANCIAL ADVISORS 

Dr Roddy Carter, Physician, Performance 

Scientist, Master Coach, Corporate 

Leader and Author, takes us through this 

daunting path 

82 

HOW EMPLOYEE BENEFIT 

FIRMS USE AI TO 

BEAT COMPETITION 

Zeldeen Müller, CEO of inSite Connect 

and Creator of AgendaWorx, shows 

us how employee benefit firms are 

leveraging AI 

84 

CLICKS, CONVERSATIONS, 

CLIENTS 

Discerning the art of timely advice in 

modern (family) financial planning 

86 

THE FUTURE OF DIGITAL 

CURRENCY 

The proportion of cash versus digital 

currency is shrinking – slowly but surely 

88 

CRYPTO ASSETS: AN 

EVOLVING LANDSCAPE. 

PART TWO 

Second article in the series on 

cryptocurrency 

91 

MIRROR SUCCESS FOR 

ADVISORS 

A review of the latest book written by 

Kobus Kleyn, CFP®, Tax and Fiduciary 



THE PRACTICE MANAGEMENT 

AND COFI PUZZLE 

Building a successful practice under the 

much-anticipated COFI legislation and 

putting a jigsaw puzzle together are very 

similar, says Anton Swanepoel, Founder, 

Trusted Advisors 

95 

NAVIGATING SUCCESSION: 

FINANCIAL ADVISORS RETIRE 

MUCH LATER THAN THEY REALISE 

Succession planning for the independent 

financial advisor, by Jaco van Tonder, 

Advisor Services Director, Ninety One 

96 

THE TREATMENT OF PENSION 

INTERESTS IN DIVORCE 

By Hannah Wilson, Director, Simplifi Law 

98 

THE INVESTOR VALUE 

OF SMALLER FUND 

MANAGEMENT FIRMS VS THE 

BIG BEHEMOTHS 

By Reza Khan, CEO, Lodestar Fund Managers 

100 

PROFILING FINANCIAL 

PLANNERS 

Blue Chip asks the questions to the answers 

you always wanted to know 

102 

BIG DATA: THE DIGITAL 

DISRUPTOR RESHAPING 

THE SOUTH AFRICAN 

INSURANCE SECTOR 

The application of big data has become a 

cornerstone for transformative strategies 

across various sectors 


PRIVATE CLIENT HOLDINGS IS AN AUTHORISED FINANCIAL SERVICES PROVIDER. 

The licenses we hold with the Financial Sector Conduct Authority (FSCA) are: Private Client Holdings – FSP 613, 

Private Client Portfolios – FSP 399 78 and Private Client Wealth Management – FSP 399 79. 

PRIVATE CLIENT TRUST . BLUE CHIP MAGAZINE 2022

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Financial Coaching Short Learning Programme 

Employee Benefits Short Learning Programme 

Fundamentals of Short Term Insurance 

Short Learning Programme 

Advanced Financial Coaching Short Learning Programme

BLUE 

CHIP 

On the money 

Making waves this quarter 

Debt counselling, top wealth manager and the investor’s dilemma 

DEBT-COUNSELLING AS PART OF THE ASSET-MANAGEMENT INDUSTRY 

Benay Sager, Chairperson, 

National Debt 

Counsellors’ Association 

There is enormous potential to release 

back into the economy more of the R2.5- 

trillion in outstanding personal debt that 

South Africans owe. According to the 

National Debt Counsellors’ Association 

(NDCA), around R100-billion of this 

outstanding debt belongs to consumers 

who are in debt counselling, with an 

estimated R15-billion currently being 

paid back annually. 

“South Africa has a world-class 

debt-counselling system, which has 

been proven to work. It’s conceivable 

that if more people sought help to 

manage their debt, the R15-billion being returned to the economy 

annually could be increased to R25‐billion,” says NDCA chairperson, 

Benay Sager. 

It is estimated that there are around 250 000 consumers who are 

in debt counselling and are actively paying back their creditors every 

month. Collectively, they are estimated to pay around R1.25‐billion 

per month to creditors. Part of this includes regular repayments on 

20 000 homes and 60 000 vehicles. While this debt remains with the 

original lenders, it is still an asset which they want to recover, even 

when restructured as part of the debt-counselling process. Sager 

says that because debt counsellors help manage the repayment 

of these assets, it is time to think about the sector as an arm of the 

asset management industry, albeit one that is managing some of the 

distressed assets. 

TOP WEALTH MANAGER: BOUTIQUES 

Private Client Holdings has been recognised in the 2024 Krutham 

(previously Intellidex) Top Private Banks & Wealth Managers Awards as 

the Top Wealth Manager: Boutiques. 

These awards are based on a comprehensive survey of 170 wealth 

management firms and private banks and their clients to benchmark 

the top performers in South Africa. The Private Client Holdings team 

spent considerable time and effort reviewing its client journey across 

all its Family Office service pillars to identify client pain points and then 

challenged its teams to resolve them. 

“Our sincere thanks to all clients who participated in this year’s survey. 

Understanding what makes us good only drives us to be better,’’ Grant 

Alexander, founder of Private Client Holdings, said on winning the award. 

THE INVESTOR’S DILEMMA DECODED 

Few aspects of life are as important as personal finance, as suffused with misinformation, noise 

and confusion. Dr Roger Silk and Katherine Silk cut through that confusion and share with you the 

fruits of their knowledge developed over the last 43 years in the new book, The Investor’s Dilemma 

Decoded: Recognize Misinformation, Filter the Noise, and Reach Your Goals. 

After completing a PhD at Stanford where he studied at the cutting-edge of finance theory, Dr 

Silk’s experience includes managing billions of dollars at the World Bank and running a Family Office 

for one of the nation’s wealthiest families. For the last 26 years as CEO of the nation’s leading firm, 

Sterling Foundation Management, which advises high-net-worth individuals on financial aspects, 

Dr Silk has worked with countless financial professionals. Katherine Silk, who holds a master's in 

history from Stanford, adds a valuable historical perspective. 

The book gives you the tools that 99.9% of investors never master, allowing you to understand how 

to think about almost any category of investment. The Silks take a deep dive into topics including: 

• What generates investment returns (it’s probably not what you think). 

• Is owning a home an investment? 

• Should you own gold? 

• What is a hedge, and are commodity funds an inflation hedge? 

• What risk is, and isn’t, and why the “safe” course might be the riskiest. 

• How professional financial advisors can add huge value to their individual clients.

BLUE 

CHIP 

On the money 


New retail survey, career of choice and card payments 

ALEXFORBES LAUNCHES RETAIL MANAGER WATCH SURVEYS 

Building on the success of its Institutional Manager Watch series of 

surveys, Alexforbes is excited to announce its new Retail Manager Watch 

surveys. The new retail multi-asset class survey, published monthly, is 

segmented into three categories: low equity, medium equity and high 

equity. These categories, aligned with the Association for Savings and 

Investment South Africa (ASISA) guidelines, offer a granular view of 

performance and risk statistics, allowing IFAs and investors to make 

informed decisions. 

Low equity. Designed for conservative investors seeking steady 

growth and lower risk, this category includes portfolios with lower 

exposure to equities, offering more stable returns with reduced volatility. 

THE CAREER OF CHOICE FOR YOUNG PROFESSIONALS 

The days of sticking to one profession or even with one employer for life 

have quickly been replaced by a new generation of professionals. This 

younger workforce engages in “slash professions” by pursuing multiple 

income streams or job roles simultaneously rather than committing to 

a single profession for their entire career. According to Aubrey Faba, 

channel director at Momentum Financial Planning (MFP), this is the 

perfect time for young professionals to consider pursuing a career as a 

professional financial advisor. 

Faba says South Africa is facing significant economic challenges, with 

many grappling with financial insecurities and a lack of adequate financial 

literacy. He adds that the need for knowledgeable financial advisors has 

never been more pressing. Empowering a new generation of financial 

advisors is essential for true economic empowerment in South Africa. 

SA CARD PAYMENTS MARKET TO REACH $125-BILLION IN 2024 

South Africa’s card payments market is forecast to grow by 11.4% in 2024 

to reach R2.3-trillion ($125-billion), supported by a constant consumer 

shift towards non-cash payments, according to GlobalData, a leading 

data and analytics company. 

GlobalData’s Payment Cards 

Analytics reveals that card payment 

value in South Africa registered a 

growth of 13.4% in 2023, driven by 

a rise in consumer spending. 

Siddharth Das, an analyst at 

GlobalData, says, “South Africa 

remains a cash-driven society, with 

consumers preferring to use cash 

Medium equity. Balancing risk and reward, the medium-equity category 

includes portfolios that maintain a moderate level of equity exposure. 

These portfolios aim to provide reasonable returns while managing risk. 

High equity. For those with a higher 

risk tolerance, the high-equity category 

consists of portfolios with substantial equity 

exposure. These portfolios have the potential 

for higher returns but come with increased 

volatility, suitable for investors looking for 

significant growth over the long term. 

The survey is linked to the QR Code. 

However, to bridge the age gap and meet the evolving needs of clients, the 

financial planning industry requires a radical generational transformation. 

“In today’s fast-paced world, South Africans are looking for advisors 

who not only understand their financial goals but also resonate with 

their life experiences and aspirations. This is where the power of youth 

comes into play.” 

Faba says a younger population requires a youthful perspective and 

drive. By becoming a financial advisor, he says young professionals can 

leverage their unique insights and energy to connect with clients on 

a deeper level. 

“Becoming a financial advisor offers substantial benefits, including 

high earning potential and a flexible schedule. Financial advisors can 

earn significantly.” 

for day-to-day transactions. However, the country’s payments market is 

steadily shifting towards electronic payments, driven by the combined 

efforts of the government and financial institutions.” 

The central bank’s “Vision 2025” strategy includes several initiatives 

promoting financial literacy, with expanding the country’s payment 

infrastructure to support low-cost digital payments as one of the key 

initiatives. Retailers’ growing acceptance of payment cards and a rise in 

contactless payments are steering the transition towards card payments. 

South Africa is steadily transitioning towards becoming a less cashcentric 

economy, backed by government initiatives promoting electronic 

payment methods. The transition from cash to cards is evident in the 

number of POS terminals, which rose from 424 873 in 2020 to 531 387 

in 2024.

BLUE 

CHIP 

On the money 


Financial hub and the Joint Standard 

THE RISING GLOBAL SOUTH FINANCIAL HUB 

Auckland, New Zealand, is set to become one of the major financial 

hubs of the Global South within the next five years, predicts the CEO 

and founder of deVere Group, Nigel Green. 

He sees the city competing “more effectively and aggressively” with 

other international finance hubs in the Global South including São 

Paulo, Johannesburg, Mumbai, Shanghai and Singapore. He notes: 

“Auckland’s geographic position is a significant advantage, strategically 

JOINT STANDARD: CYBER-RESILIENCE REQUIREMENTS 

located at the crossroads of the Americas, Asia, and Oceania. This 

unique positioning facilitates international trade and finance, making 

Auckland a prime base for multinational corporations looking to 

expand in the Asia-Pacific region. 

Auckland International Airport is one of the busiest in the region and 

is undergoing significant upgrades to accommodate future growth.” 

The city’s port facilities are among the most advanced in the southern 

hemisphere. These robust infrastructural foundations enhance 

Auckland’s appeal as a global business hub, providing seamless 

connectivity for international trade and investment. “Compare this, for 

example, to São Paulo, which is more regionally focused compared 

to Auckland’s broader Asia-Pacific reach; and Johannesburg faces 

challenges with regional instability.” Government policies fostering a 

business-friendly environment are crucial. New Zealand has ranked first 

in the World Bank’s Ease of Doing Business Index, reflecting its efficient 

regulatory framework. 

The city is a burgeoning fintech centre, with numerous startups and 

established companies innovating in areas such as digital payments, 

blockchain and cybersecurity. The New Zealand fintech sector has a 

10-year compound annual growth of 32%, four times higher than the 

tech industry. 

The Financial Sector Conduct Authority (FSCA) and the Prudential 

Authority (PA) published Joint Standard 2 of 2024 on Cybersecurity and 

Cyber-Resilience Requirements in May 2024. The Joint Standard applies to 

all financial institutions as defined in the Joint Standard. 

It sets out the requirements for sound practices and processes relating 

to cybersecurity and cyber resilience for financial institutions. The Joint 

Standard requires financial institutions to: 

• Mitigate and cater for any risks relating to cybersecurity and cyber 

resilience from juristic persons structured under a bank, the insurer 

or the insurance group when applying the requirements of the 

Joint Standard. 

• Notify the responsible authority of cyber incidents or information 

security comprises they classify as a material incident. The specific format 

and manner for reporting these incidents are yet to be determined. 

• Establish and maintain a regularly reviewed cybersecurity strategy to 

manage cyber risks and address changes in the cyber-threat landscape. 

• Identify business processes and information assets that support 

business and the delivery of services, conduct risk assessments on its 

critical operations and information assets and maintain an inventory 

of all its information assets. 

• Ensure that access to information is limited to authorised users and 

devices only. Develop data loss prevention policies and measures. 

Implement a cybersecurity awareness programme. 

• Maintain effective cyber-resilience capabilities to monitor, detect, 

respond and recover from cyberattacks on IT systems. 

• Regularly test all elements of its cyber-resilience capacity. 

• Enforce strong password security controls for users to access IT 

systems and information assets. 

• Implement multi-factor authentication for all users with access to 

critical system functions, including user accounts utilised to access 

applications containing sensitive information. 

• Test and apply security patches to address vulnerabilities in IT assets. 

The Joint Standard strengthens the financial sector’s cyber defences. 

Financial institutions have one year to comply, requiring proactive 

measures for a smooth transition and a more secure future.

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OFFSHORE INVESTMENTS

BLUE 

CHIP 

COLUMN 

Having a financial planning and 

investment philosophy is key to 

influencing client behaviour 

Rob Macdonald, Head of Strategic 

Advisory Services, Fundhouse 

Rob Macdonald has held several 

senior positions in the investment 

industry. At Fundhouse, he acts as 

a consultant and coach to financial 

advisors and develops and 

facilitates training programmes 

in behavioural coaching and 

practice management. Before 

joining the financial services 

industry, Macdonald was MBA 

director at the UCT Graduate 

School of Business. He has 

written the book The 7 Pillars 

of Financial Health and is 

co-author of Rethinking Leadership 

and has consulted, written 

and spoken widely on a range 

of topics. Macdonald has a 

Master’s degree in Management 

Studies from Oxford University 

and is a CFP® Professional. 

I 

am always surprised when I ask a financial 

planner about their financial planning or 

investment philosophy and get a blank stare 

in response. When it comes to a financial 

planning philosophy the most common retort 

is that they follow the six-step financial planning 

process. But a process is not a philosophy. 

And regarding investing, I’m usually told that 

it is the investment managers who have the 

philosophies and that the job of a financial 

planner is to combine different philosophies 

when they choose investment managers. 

What is a philosophy? In literal terms, it is a 

“love of wisdom” and is usually associated with 

the concept of “fundamental truth”. People who 

study philosophy are trying to understand the 

fundamental truths about the world we live in. 

When we think about it as a practical application, 

it can be defined as “a theory or attitude that 

acts as a guiding principle for behaviour”. 

Therefore, the concept of having a philosophy 

is so important for a financial planner, because 

without a philosophy around advice and 

investing, what is the guiding principle that you 

use to influence the behaviour of clients? 

Financial planners often use terms such 

as educating, guiding, coaching, and even 

mentoring, when describing how they influence 

client behaviour. These are all great concepts, 

and each is effective in its own way. However, 

their impact is likely to be muted if not informed 

by a consistent and sound philosophy around 

advice and investing. 

What constitutes a financial planning 

philosophy? I believe it’s articulating for your 

clients what you believe are fundamental truths 

about financial planning. At the core, you may 

wish to tell your clients that you are a partner in 

their decision-making, not an order taker. 

You may want to share beliefs like, needs are 

more important than wants, or return on life is 

as important as return on money. If clients don’t 

agree with your philosophy, then they will know 

immediately that you are not the right financial 

planner for them. Some financial planners have 

labels for their philosophy, like Lifestyle Financial 

Planning, Goal-based Planning or Financial Life 

Planning. The label is less important than having 

a philosophy, which will inform your financial 

planning approach. 

When it comes to investing, fundamental 

truths would include concepts such as: investing 

is a means to an end; risk and return are related; 

time in the market is more important than trying 

to time the market; and we can’t predict the 

future which is why diversifying investments is so 

important. If clients are clear on your investment 

philosophy and know the fundamental truths 

of investing, they are unlikely to come to you 

asking about your latest hot share or crypto 

pick. But if they do, you can remind them of 

your investment philosophy and encourage 

them to see another financial planner if they 

really want that hot pick. 

The power of having a strong philosophy 

was demonstrated in a different context in 

the recent political negotiations to form a 

Government of National Unity. Fikile Mbalula, 

the Secretary General of the ANC, spoke about 

how it was much easier to deal with parties who 

had a clear ideology, or political philosophy, 

than with parties whose ideology “changed 

with the weather”. It’s much easier to deal with 

people if you know where they stand. As we 

have seen in the political negotiations, this 

doesn’t mean the conversations will be easy 

or quickly resolved. Having a clear financial 

planning and investment philosophy doesn’t 

make your conversations easier or quicker 

with clients, but it does mean that your clients 

will know what you stand for. This will help 

you attract like-minded clients and is a critical 

starting point for being able to influence their 

behaviour on an ongoing basis. 

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www.bluechipdigital.co.za

COLUMN 

BLUE 

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The two-pot (three-component) system 

A guide for financial advisors. 

Kobus Kleyn, CFP®, Tax and 

Fiduciary Practitioner, 

Kainos Wealth 

Kobus Kleyn, CFP®, is a leading 

financial planner and tax and 

fiduciary practitioner in South 

Africa. He has published over 

200 articles and authored five 

books. He is a multiple awardwinning 

professional and holds 

memberships with eight local 

and international professional 

associations. His awards include 

four from the Financial Planning 

Institute, including a Lifetime 

Achievement Award, and two 

from the Million Dollar Round 

Table, including a Lifetime Award 

and the President’s Award. Kleyn 

also received the Liberty Group 

Lifetime and INN8 Diamond 

Award for Best Overall Impact 

and Contributions to the Advice 

Profession in South Africa. 

As the implementation date of South 

Africa’s two-pot (three-component) 

system approaches on 1 September 

2024, financial advisors must brace 

for a significant shift in the retirement planning 

landscape. This new framework aims to enhance 

the sustainability of retirement funds. 

Understanding the two-pot system 

The two-pot system restructures the traditional 

retirement savings model into three components: 

Savings pot. Designed to provide immediate 

access to a portion of retirement funds, this pot 

allows members to withdraw up to one-third of 

their contributions at any time. This component 

addresses short-term financial needs and provides 

a safety net for emergencies. 

Retirement pot. Comprising two-thirds of the 

contributions, this pot is preserved until retirement, 

ensuring long-term financial security. Withdrawals 

from this component are only permissible upon 

retirement age. 

Vested pot. This component includes funds 

accumulated before implementing the new 

system. These funds remain subject to the old 

rules and are only accessible upon retirement. 

Key implications for financial advisors 

1. Increased demand for guidance. Introducing 

the two-pot system will likely result in a surge 

of clients seeking professional advice. Advisors 

must be prepared to explain the system’s 

nuances, helping clients understand how to 

optimise their contributions and withdrawals. 

2. Reassessing client portfolios. Advisors must 

review existing retirement portfolios and assess 

the implications of transferring funds into the new 

pots. This includes evaluating the tax implications 

of withdrawals from the savings pot and ensuring 

clients maintain a balanced approach to their 

long-term savings goals. The transition period 

will be critical, and advisors must provide tailored 

strategies to ensure a smooth shift. 

3. Enhanced communication. Effective 

communication will be paramount. Advisors 

should proactively contact clients to discuss 

the changes and their potential impact. 

Personalising these communications will 

enhance client trust and engagement. 

4. Educating clients on financial discipline. 

While the savings pot offers flexibility, it also 

introduces the risk of premature depletion of 

retirement funds. Advisors must emphasise the 

importance of financial discipline, guiding clients 

on prudent withdrawal practices and reinforcing 

the benefits of preserving funds for retirement. 

As the implementation date draws near, 

financial advisors should focus on several steps: 

1. Continuous professional development. 

Staying updated with the latest legislative 

changes and best practices is essential. 

Collaborating with peers can also provide 

valuable insights and strategies. 

2. Client education initiatives. Developing 

educational materials, such as guides, FAQs 

and infographics, can help clients grasp the 

new system’s fundamentals. Ensuring that all 

communication is clear and jargon-free will 

enhance client comprehension. 

3. Strategic review of client portfolios. 

Advisors should conduct comprehensive reviews 

of client portfolios to identify opportunities 

for optimisation under the new system. 

Personalised action plans should be developed 

to align with each client’s unique circumstances. 

4. Strengthening client relationships. 

Building trust-based relationships with clients 

will be critical. Advisors should proactively reach 

out to clients, demonstrating their commitment 

to guiding them through this transition. 

Conclusion 

The advent of the two-pot system represents a 

significant evolution in South Africa’s retirement 

savings landscape. Financial advisors are pivotal in 

ensuring clients navigate this transition smoothly 

and make informed decisions that secure their 

financial futures. By staying informed, enhancing 

communication and providing tailored 

advice, advisors can turn this challenge into an 

opportunity to strengthen client relationships and 

improve their advisory practices. 


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FINANCIAL PLANNING | Advice 

Advice: the key to building and 

protecting financial dreams 

In our complex and fast-moving world, quality advice aligned to our clients’ specific needs is the 

most valuable key to building and protecting financial dreams. At Momentum, this is exactly what 

our purpose is. 

Dreams, by their very definition, are not reality, but they 

have the potential to shape a person’s future reality. 

Unlocking financial success is not only possible, but 

it also becomes probable when it starts with expert 

financial advice. This is why advisers have always been – and will 

always be – an integral part of Momentum’s business. It’s also 

why the best-of-the-best advisers work with us. And anyone who 

doesn’t, really should! 

Only when you understand advice, do you understand 

its value 

Hannes van den Berg says that only an adviser with the expertise 

to offer a truly personalised journey to success can provide great 

advice. No-one is the same, and no journey follows the same path 

to achieving one’s financial dreams. 

We believe advice should be: 

• Tailored to everyone to create healthy financial habits and a 

positive mindset towards money. 

• Recommended by experienced, trained professionals, informed 

by the most up-to-date information and offering the best 

products, solutions and services for every need. 

• Empowering and inspiring to meet each client’s long-term goals. 

• Ethical, without an emotional bias and based on the best 

interests of every client. 

• Results-oriented with meaningful outcomes and progress that 

can be measured. 

• Continuous through long-term one-on-one relationships that 

evolve and grow. 

An adviser offers a holistic approach to financial planning by 

considering all aspects of a client’s life and financial circumstances 

before advising on a financial plan. We offer the full spectrum 

of solutions and services for every stage of a client’s life, from 

cradle to grave, with the security of dealing with any unexpected 

challenges. We offer credibility, transparency and a clear fiduciary 

role in creating trust. 

Design simplified and impactful client experiences 

Jeanette Marais says, “We are committed to building 

long-lasting relationships based on trust, transparency 

and excellence. We believe that behind every 

event, every transaction and every decision, there 

is a human being with hopes, fears, dreams and 

aspirations, and a unique story that is unfolding. 

“We understand that money is not just about 

numbers but about emotions. So, giving advice is 

more than just about, for example, providing people 

with medical cover. What we do, makes people feel 

healthy. It’s not about giving people comprehensive 

insurance either; it’s about making them feel safe. It’s not 

about offering investment options and products, but about 

making people feel prepared. And it’s not about selling life 

insurance; it’s about making people and their families feel secure.”


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One of the ways in which Momentum strives to humanise what 

we offer clients is through simplicity. It is our strategic objective 

to design simplified and impactful client experiences. 

In today’s complex financial landscape and in an era where 

consumers are inundated with options and information, simplicity 

stands out as a beacon of clarity. By simplifying our offerings, 

we reduce complexity for clients, making it easier for them to 

understand and engage with our solutions, services and advisers. 

In an industry like ours, where trust is paramount, complex 

solutions and services can lead to confusion and distrust. By 

driving simplicity and embracing advice, we, as a business, are 

enabled to be more efficient and stay agile and responsive to 

changing market dynamics and our client needs. 

She says, “We also aim to enable our advisers to understand and 

anticipate the evolving needs of our clients, leading to solutions, 

service and advice that drive real value. For this, we focus on 

using technology and data analytics to offer insights and 

recommendations tailored to our clients’ needs. At the same 

time, these solutions enhance the human touch and drive real 

value for our advisers – creating a strong, positive outcome for 

clients and advisers.” 

Crucially, more than 90% of 

our payouts are made possible 

by financial advisers. 

Positioning the value of advice is critical to the growth of 

our industry 

Van den Berg says that advisers, as entrepreneurs, operate in 

the world of finance as the bridge between financial services 

institutions and ordinary households and businesses. To play 

this connecting role in an ever-evolving, complex environment, 

advisers are required to be equipped with a myriad of skills 

and a solid understanding of the law, economics, finance and 

human behaviour. 

Advisers contribute to economic growth and employment, 

playing a vital role in household wealth accumulation, ensuring 

that more South Africans can afford to retire with dignity and live 

their financial dreams while protecting their most important assets 

and growing their wealth. 

As our industry is still largely advised, this wealth accumulation 

would not have been possible without financial advisers. 

In the 2023 calendar year, Momentum alone paid R210-billion 

to clients in the form of claims and annuities. To put this in context, 

the Reserve Bank statistics show that gross household income 

from all sources amounted to R6.2 trillion in 2023. Of this, 

R1.9 trillion is income received from business, dividends, interest, 

rent, insurance and annuity receipts. That means our pay-outs 

to clients generated an income equal to 11% of non-salary and 

grant income. Crucially, more than 90% of our payouts were made 

Hannes van den Berg, Executive Head: Momentum Advice 


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possible by financial advisers. Put differently, advisers contribute 

massively to building and protecting our clients’ financial dreams 

– and helping us, as Momentum, to live our purpose. 

At the same time, it is well known that most of the population 

can’t afford to save, invest or insure. This means they are largely 

excluded from accumulating wealth through insurance and 

investments. Statistics from SARS and Stats SA indicate that only 

6.2 million people contributed to a pension or retirement product 

in 2023. This equates to only 25% of the labour force, or 27% of all 

households, providing for their retirement through pension funds 

and retirement annuities. And we know that only a small minority 

of those who are providing for retirement, provide enough. 

Our estimates from the Momentum/Unisa Household Financial 

Wellness Index indicate that around 750 000 households earning 

more than R30 000 per month (gross household income) do 

not provide for retirement. Our estimates also show that about 

one million households with an income exceeding R30 000 per 

month do not have any life insurance. 

As an industry, we need to work harder, for a start, to reduce 

these households’ financial vulnerability and include them in 

the wealth-building process. We recognise the gaps in financial 

inclusion, access to financial solutions and services, and use them 

effectively in South Africa. These underserved segments span 

various demographics, and our objective is to identify their unmet 

needs and address them effectively to create financial inclusion 

and empowerment. 

To make this possible, we as insurance and investment 

companies must grow and support financial advisers so they can 

assist more households to share in this wealth accumulation. 

Only an adviser with the 

expertise to offer a truly 

personalised journey to success 

can provide great advice. 

Enabling financial advice for all South Africans 

Van den Berg says, “To make South Africa a more inclusive 

country, we need to dramatically increase the number of qualified 

financial advisers. Our Momentum adviser value propositions are 

tailored to develop and grow experienced and new professional 

financial advisers. 

“By becoming serious about supporting new and experienced 

financial adviser entrepreneurs, we can assist in propelling 

significant economic growth.” 

Jeanette Marais, CEO: Momentum Group 

Humanity and innovation to serve client needs to empower 

great financial advice 

Danie van den Bergh adds that over a long time, the Momentum 

brand has established an incredible reputation for innovation. 



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The development of creative financial products and solutions 

has been a major focus of this innovation, so it should come 

as no surprise that Momentum product solutions have long 

been acknowledged as the most comprehensive, flexible and 

competitive in South Africa. At the same time, we were always 

very focused on developing solutions that would live up to our 

clients’ expectations. 

One of the ways in which 

Momentum strives to 

humanise what we offer 

clients is through simplicity. 

Because of its emphasis on the needs of the client, Momentum has 

consistently produced solutions with exceptional features and 

benefits that have exceeded clients’ and advisers’ expectations. 

Van den Bergh says, “In a world where our innovation is product 

solutions with unique benefits and features built into systems and 

processes, we realised that the human element plays an important 

part in such an environment. We are very proud of the culture we 

created that is described as a brand with a heart. Our employees, 

partners, clients, advisers and the public experience this when they 

engage with us.” 

This innovation and culture of caring naturally spilt over to the 

advice side, and we managed to attract many advisers in the 

industry to both our well-established and successful advice 

businesses in the group, one being a registered financial adviser 

(RFA) and the other a product supplier agent (PSA). Given 

that advisers have always been an integral part of Momentum’s 

business, our objective is to attract more best-of-breed advisers to 

work with us. 

To attract advisers, we needed to acknowledge and understand 

the challenges and requirements of advisers and create specific 

adviser value propositions for different adviser profiles. The following 

is an abbreviated list of the challenges advisers are facing: 

• Complex systems and processes 

• Inadequate succession planning 

• Limited or no ownership or equity in their practices 

• Vested advisers with large client books battle to service all 

their clients 

• New advisers in the industry struggle to find clients 

• Lack of adequate technology to manage their practices 

• Retention of clients 

• Lack of a sense of belonging and recognition 

• Growth in income 

• Limitation to diversify income 

o Limited product solutions on offer by FSP 

o The adviser is licensed for limited product solutions 

o Specialisation excludes other product solutions. Danie van den Bergh, Head of Acquisitions: Momentum Advice 


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Advisers contribute massively to building and 

protecting our clients’ financial dreams 

– and helping us, as Momentum, to live our purpose. 

A game-changing adviser value proposition from Momentum 

Van den Bergh says, “We are proud that the adviser value 

propositions we have created and further enhanced recently, solve 

the aforesaid challenges and even create new opportunities for 

growing practices.” Below is the positive impact it has: 

Career and personal needs 

• Our unique career contract enables advisers to build equity while 

earning an income with our compelling remuneration model. We 

encourage our advisers to be entrepreneurial, and therefore we 

provide advisers with capital assistance to grow their practices. 

• Our unique succession planning solution facilitates a positive 

outcome for an adviser and his complete client book. This is 

achieved with the assistance of capital regarding events such as 

death, disability and retirement. We do this for both an existing 

adviser’s practice and a new adviser joining us as the successor 

of the existing adviser. 

• Our compelling business model diversifies advisers’ income by 

partnering them with another specialist in a product category 

that is not their speciality. This enables advisers to ensure that all 

their clients’ needs are dealt with holistically and that they retain 

their clients within their practice. 

• For us, it is of the utmost importance that the meaningful 

contributions advisers make to the business and their clients’ 

lives are celebrated. We formally acknowledge and reward 

advisers’ achievements. 

Practice and office needs 

• With the realisation that advisers need cutting-edge technology 

with increased complexity, we offer one digital workspace with 

end-to-end processes, integrated advice tools and embedded 

compliance. The same workspace includes all data and 

functionality to manage your practice, including selected 

access for an adviser’s admin staff. 

• Within our advice businesses, advisers can tap into a team of 

experts from different product solutions, legal advisers and 

practice development managers to offer professional advice 

to their clients. 

• We have a trademarked business development programme and 

process that enables the adviser to grow a more sustainable 

advice practice and grow new business. 

Client solutions 

• We have developed a financial advice framework that follows a 

robust financial planning model across all major client needs. 

This advice process is on one platform with integrated tools 

and embedded compliance. 

• Our product offerings and solutions are widely regarded as the 

most comprehensive, competitive and flexible in the South 

African market. The adviser can reassure their clients that the 

product solution is always the best of the breed and that the 

advice methodology used will always secure a perfect match 

between the client’s needs and the appropriate solution. 

At Momentum, advisers are at the centre of building and 

protecting our clients’ financial dreams! 

Advisers who find this proposition compelling can engage with us 

confidentially by emailing us at advice@momentum.co.za or they 

can SMS Advice and their name and email address to 3 11 44. 



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Wealth accumulation would not have been 

possible without financial advisers. 


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FPI UPDATES | Awards 

And then there were three 

The FPI presents the three finalists for the illustrious 2024 FPI Financial Planner of the Year Award. 

Meet Gareth Collier CFP®, Rudolph Geldenhuys, CFP® and René van de Spreng, CFP®. 

The FPI Financial Planner of the Year Award is a highly 

sought-after prize that recognises excellence in the 

profession and practice of financial planning. The 

Award was launched in 2000 for FPI members with 

the first winner being crowned at the annual convention gala 

dinner in 2001. 

The competition to recognise the country’s top CFP® is stringent 

and challenging. It has developed over time to include the 

assessment of financial plans prepared by the financial planner and 

a site visit thereby examining the financial planner’s competency, 

practice management skills, knowledge of the wider financial 

planning industry and the ability to be the spokesperson for the 

financial planning profession. 

All the nominees had to showcase their talents and abilities, 

exhibiting innovative ideas, excellent skills and impeccable ethics 

when dealing with clients. 

The FPI Financial Planner of the Year competition is open to 

all CFP® Professionals who are practicing professional financial 

planners or those who provide specialist financial advice to clients 

as part of their full-time business. A practicing financial planner 

is defined as a person who engages in financial planning using 

the six-step financial planning process when working with clients. 

Africa’s most distinguished FPI Approved Professional Practices. His 

expertise extends to employee benefits, where he excels in crafting 

personalised, cost-effective solutions for employees. 

THE SIX STEPS OF FINANCIAL PLANNING 

1. Understanding the client’s financial circumstances. 

2. Identifying goals. 

3. Analysing the client’s current course of action. 

4. Developing financial planning recommendations. 

5. Implementing the financial plan. 

6. Monitoring progress and updating. 

MEET THE THREE FINALISTS FOR 2024 

GARETH COLLIER, CFP® 

Director, Crue Invest 

Gareth Collier is deeply committed to financial planning, guiding 

clients towards lasting financial freedom through strategic 

investing and wealth creation. He was awarded a BCom degree 

from UNISA and achieved the CERTIFIED FINANCIAL PLANNING® 

professional designation. Collier serves as a director and 

shareholder at Crue Invest, which is recognised as one of South 

Gareth Collier, CFP®, Director, Crue Invest 


FPI UPDATES | Awards 

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RUDOLPH GELDENHUYS, CFP® 

Senior Financial Planner, WealthUp 

Rudolph Geldenhuys graduated from the University of Stellenbosch 

with a BCom in 2012. He pursued further education at the University 

of Stellenbosch Business School, earning his postgraduate 

diploma in financial planning in 2014, followed by a specialised 

postgraduate diploma in financial planning (summa cum laude) 

from the University of the Free State in 2018, where he achieved 

top accolades in investment planning and financial planning law. 

Geldenhuys serves on the FPI’s Western Cape Regional Committee. 

He has a strong conviction about giving back to the community. 

RENÉ VAN DE SPRENG, CFP® 

Wealth Manager and Director, Apex Private Wealth 

René van de Spreng has worked in the financial services industry 

for both large corporate and independent advisory firms for close 

to two decades. He has a deep passion for independent financial 

planning, investment management, retirement as well as estate 

and tax planning. He serves as his client’s trusted thinking partner 

while understanding and addressing their needs. 

Blue Chip congratulates the three finalists. Keep cultivating 

growth and harvesting excellence. 

Rudolph Geldenhuys, CFP®, Senior Financial Planner, WealthUp 

René van de Spreng. Wealth Manager and Director, Apex 

Private Wealth 


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FPI FOCUS | Leadership 

Cultivating growth, 

harvesting excellence 

Blue Chip speaks to Lelané Bezuidenhout, Chief Executive Officer of the Financial Planning Institute of 

Southern Africa. 

Thank you for granting this interview and reflecting on 

another successful year for the FPI under your leadership. 

We have many milestones and achievements to celebrate, so 

let’s begin. Please provide an overview of the FPI since the 

2023 convention. 

The progress since the 2023 FPI convention has been substantial 

and multifaceted. From educational enhancements and 

professional achievements to digital innovations and community 

building, the FPI continues to lead the way in advancing the 

financial planning profession. Our continued focus on growth, 

coupled with a commitment to professionalism and excellence, 

ensures that the FPI remains a key force in shaping the future of 

financial planning in South Africa. 

What are the areas of growth for the FPI over the past year? 

The FPI is implementing its 2023-2025 Growth and Awareness 

Strategy, focusing primarily on increasing our pipeline of students 

and candidates. This year, under the leadership of Fatima Fakier, our 

education manager, we have successfully launched and initiated 

Student Professional Development (SPD) programmes. Our 

education providers and professional members have contributed 

significantly, delivering substantial content to students and 

candidates. We have introduced live student sessions nationwide, 

enhancing their preparatory journey in completing their studies. 

Additionally, more resources have been allocated to support our 

candidates, who transition from student status upon qualifying. 

Our Young Financial Professional Organisation (YFPO) 

committee has been notably active this year. Under Gugu Sidaki’s 

leadership, we have facilitated several collaborative sessions 

I advocate for an initiativetaking 

approach to learning and 

encourage those around me to 

embrace change, set clear goals 

and maintain a positive outlook, 

regardless of challenges. 

Lelané Bezuidenhout, CFP®, CEO, Financial Planning Institute of 

Southern Africa 

between younger professionals and those under the age of 45. The 

increasing interest and participation in YFPO activities are evident 

in the positive feedback and engagement on our YFPO YouTube 

channel and social media platforms. 

Professionally, the FPI has advanced to number six globally 

in the ranking of CFP® professionals. This ranking allows us to 

continue as a member of the Chief Executives Committee (CEC) 

of the Financial Planning Standards Board (FPSB), highlighting our 

sustained global participation in the CFP® certification programme. 

From a corporate perspective, our FPI Approved Professional 

Practices are contributing significantly to the growth of the 

profession by serving as approved mentorship centres. These 

practices have demonstrated exceptional efforts through their 

mentorship programmes and initiatives. Moreover, our FPI 

Approved Professional Practice Forum meetings have been a 

resounding success. These sessions discuss critical topics such as 

succession planning, skills development, nurturing talent, fintech, 

AI, practice management and regulatory updates from FAIS to 

COFI, to mention a few of the subjects covered in the year-todate. 

In terms of raising awareness, the FPI has adopted a digital 

marketing strategy, enhancing our engagement across various 



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social media platforms. This shift to digital has allowed us to reach 

a broader audience. 

Finally, consumer awareness has been strengthened by the relaunch 

of our websites, www.FPI.co.za and www.fpimymoney123.co.za, 

and the reintroduction of the Find a Financial Professional tool. This 

tool is crucial for consumers seeking professional members of the 

FPI, including Registered Financial Practitioner® (RFP®), Financial 

Services Advisor® (FSA®) and CFP® professionals. We have also 

revamped our consumer newsletter to provide relevant content 

from our members to their clients. 

And milestones reached? 

This year has seen significant milestones in both membership 

retention and growth. We have retained 97% of our CFP® 

professionals and about 90% of our RFP® and FSA® professionals, 

thanks to their continued trust and support. The number of CFP® 

professionals has grown from 4 748 in January 2023 to 4 804 in 

January 2024. We aim to reach 5 000 CFP® professionals this year, 

with the support of our education providers, corporate partners 

and professional practices. 

The growth in the RFP® and FSA designations has been slow but 

steady. The FPI has reintroduced these advice designations after 

recognising the need for such roles in South Africa. Our efforts to 

update and enhance the curriculum and competency standards for 

these designations have been met with positive feedback. 

Our events and conferences have marked significant milestones, 

with well-attended sessions like the Budget Breakfast and Annual 

Refresher events. We look forward to hosting more impactful 

events, such as the upcoming FPI Professional’s Convention in 

Cape Town and workshops on Estates and Trusts and Ethics and 

AI later in the year. 

We have more than 600 candidates who have sat for the 

CFP® Professional Competency Exam (PCE) to date, for 2024. 

Additionally, we launched the CFP® digital credential, and we thank 

those members who have updated their social media platforms, 

business stationery and emails with their digital credentials. 

What are the FPI’s near-term objectives? 

As we progress through our current three-year strategy, our nearterm 

objectives are clear and focused. We aim to grow our 

CFP® professional members to approximately 5 000 by 2025 

and increase our RFP® and FSA® professional members as 

well. The growth of our advice designations (RFP® and FSA®) 

is progressing more slowly than expected, partly because 

employers have not yet fully recognised the value of professional 

membership in contexts that primarily involve product advice. 

At the FPI, we are diligently working to help Financial Service 

Providers (FSPs) understand the benefits of professionalising 

product sales and encouraging their representatives to join 

a professional body’s peer community. This effort is aimed at 

enhancing the professionalism and quality of financial advice 

within the industry. 

Being professional builds trust 

and credibility with clients, 

peers, employers and the 

public, which are crucial in the 

financial planning profession. 

Ensuring that all the FPI corporate partners meet the 25% 

minimum professional membership target by the end of 2025 is 

also crucial. We furthermore plan to expand our FPI Professional 

Practices and enhance our digital marketing strategies to 

improve user experience. This includes incorporating AI into 

our CRM systems, launching a new online seminar system and 

increasing the relevance and frequency of our consumer and 

member newsletters. 

Please tell us about your journey as the FPI CEO. 

My tenure as CEO of the FPI since June 2019 has been challenging 

yet rewarding. We have navigated governance issues, lockdowns 

and even a flood in our office. Despite these hurdles, these years 

have been some of the most enriching of my career, offering 

opportunities for significant growth and improvement. We have 

transitioned to a more diverse and inclusive environment, both 

in terms of staff and board composition and have embraced 

technology to enhance our operational efficiency. We have also 

intensified our stakeholder engagement efforts to advocate for 

global financial planning standards and fair customer outcomes. 

What is your philosophy of continuous growth? 

My philosophy centres on the belief that continuous learning, 

resilience and adaptability are key to personal and professional 

success. I advocate for an initiative-taking approach to learning 

and encourage those around me to embrace change, set clear 

goals and maintain a positive outlook, regardless of challenges. 

A focus area for the FPI has been professionalism. Please discuss. 

Professionalism is a fundamental principle of the FPI Code of Ethics. 

It requires professional members and staff of the FPI to uphold the 

highest standards of integrity, competence and ethical behaviour. 

Being professional builds trust and credibility with clients, peers, 

employers and the public, which are crucial in the financial 

planning profession. Additionally, professionalism fosters a culture 

of continuous professional development and accountability. This 

encourages all members and staff to remain up-to-date with 

industry developments and adhere to best practices. A steadfast 

commitment to professionalism not only enhances the reputation 

of our members and staff but also elevates the entire profession, 

ensuring that clients receive the highest quality of professional 

financial advice and financial planning. 


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on the client’s financial well-being. Planners are also realising 

the importance of partnering with Discretionary Fund Managers 

(DFMs), fiduciary specialists and other allied professionals to 

provide a more comprehensive service to their clients. 

There are three types of transformations taking place globally: 

Digital transformation. This involves integrating advanced 

technology and AI into financial planning, as mentioned above, 

which helps in optimising client interactions and backend processes. 

Regulatory transformation. There is a global shift in regulatory 

frameworks, focusing extensively on anti-money laundering (AML) 

and counter-financing of terrorism (CFT). This transformation aims 

to enhance client outcomes and bolster consumer protection. 

Diversity and inclusion transformation. It is crucial to include 

a broader group of diverse candidates within the financial sector. 

True diversity is ineffective without inclusion. 

What is the Financial Planning Standards Board (FPSB) and 

what is the relationship between the FPI and the FPSB? 

The Financial Planning Standards Board (FPSB) is the standards 

board that establishes, promotes and enforces professional standards 

in financial planning. The FPSB owns the CFP® mark outside of the 

United States, while the CFP® Board owns it within the United States. 

Currently, the FPSB has affiliate and licensing agreements with 28 

territories globally. The FPI was one of the founding members of the 

FPSB when it was established 20 years ago. 

As mentioned, the FPI is an affiliate of the FPSB. As an affiliate, 

the FPI is the only licensed body in South Africa authorised to 

administer the CFP® certification programme. The FPI’s senior 

staff, including the CEO, the FPI board chairperson and education 

specialists, serve on various FPSB committees as volunteers. The 

FPI holds a position on the Chief Executive Committee as one of 

the top seven affiliates globally and is ranked sixth in terms of CFP® 

professional numbers worldwide. 

The FPI is on a mission to localise the latest global financial 

planning standards. Please expand. 

All FPSB affiliates are required to integrate the updated curriculum 

into their financial planning standards. The FPI is updating its 

curriculum and certification standards to include the “Knowing, 

Being and Doing” concept from FPSB’s revised guidelines. We 

have also started incorporating these updated learning outcomes 

into our CPD content and are working with the FPI Approved 

Educational Providers to revise their educational programmes 

accordingly. Nici Macdonald, CFP®, our Head of Certification and 

Standards, is leading these updates in collaboration with other 

FPSB affiliates. 

What are the latest trends, developments and innovations in 

the financial planning sector? 

Globally, financial planners are recognising the benefits of 

incorporating more robust financial planning technology and 

AI into their practices. This integration allows planners to spend 

more time with their clients and ensures a more thorough focus 

Additionally, more financial planning practices are adopting 

a client-centric approach, emphasising clients’ financial wellbeing. 

This approach includes setting clear financial goals and 

enhancing consumer education to help clients understand the 

broader financial landscape, with a particular focus on the client’s 

financial well-being. 

What advice would you give financial planners on how to 

cultivate growth so that they can harvest excellence? 

A growth mindset is key in the financial planning industry, where 

challenges teach resilience and determination. Continual learning, 

such as engaging in Continuing Professional Development (CPD), 

is crucial for meeting professional requirements and for personal 

and professional growth. Understanding the right technology 

and assembling a competent team is vital for business growth. 

Effective mentorship tailored to company culture further enhances 

staff development. 

Maintaining high ethical standards and adhering to a 

professional code of ethics are essential for cultivating excellence. 

Regular feedback from clients and other stakeholders is crucial 

for identifying strengths and areas for improvement, ensuring 

that financial planners are responsive and initiative-taking in 

enhancing their services. 

What do you deem to be the most critical component of 

success for financial planners? 

Trust is the cornerstone of success in financial planning. Establishing 

and maintaining trust involves consistent ethical behaviour, 

transparency, competency and the ability to deliver tailored, 

effective financial advice. Building strong, trust-based relationships 

with clients ensures long-term engagement and success. 

How does the two-pot system respond to the socio-economic 

challenges in South Africa? 

We know that South Africa has a poor savings culture and that the 

average household carries more debt than they can afford to pay off. 

Access to the savings component, after taxation (at marginal tax rates) 



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and administrative fees, may leave fund members with an amount 

far less than they expected to receive. However, this access could 

provide some temporary relief for severely cash-strapped families. 

From the perspective of the retirement pot, the compulsory 

preservation until retirement will significantly aid in bolstering 

retirement savings over the long term. 

SARS collects taxes from members withdrawing at marginal 

tax rates which will provide additional revenue that could 

potentially support economic development and hopefully 

reduce public debt. 

What advice do you have for financial planners concerning 

the two-pot system? 

Provide your clients with sufficient information to make informed 

decisions. Only the relevant retirement and taxation laws were 

changed to accommodate the two-pot system; FAIS and its 

subordinate legislation remain. Financial planners need to ensure that 

they provide suitable advice and help clients understand the impact 

of withdrawing from their retirement savings before retirement. 

It is also in the interest of financial planners to stay up-to-date 

on the latest developments in retirement reform. Unfortunately, 

ignorance is no excuse for non-compliance with legislation. 

The bottom line is that financial planners must continue to do 

what they do best – always put the client’s interests first and act 

with due care, diligence and competence. 

Please discuss the challenges of bringing more women, people 

of colour and young people into the industry. 

The biggest challenge is the availability of funds to assist diverse 

candidates in obtaining the qualifications they need to operate 

in the industry, as well as opportunities to gain the right type of 

experience to become a financial advisor or planner. 

Focusing on product sales and meeting sales targets does not 

help diverse candidates reach their full potential, which could be 

achieved with more structured mentorship and guidance from 

experienced mentors. Additionally, I have observed that disparities 

in salary scales are unfortunately still a reality. Why is it acceptable 

to pay someone less just because they are female or young? 

Please provide a message to the FPI members. 

We extend our heartfelt thanks to our members for their 

unwavering support. During the Financial Planner of the Year 

final interviews, one entrant highlighted the importance of 

member involvement in the FPI. I wholeheartedly agree – a 

professional body is only as strong as the support it receives 

from its members. Reflecting on this, I am filled with gratitude for 

those members actively engaged in the workings of the FPI. We 

have over 300 members contributing to the FPI as an extension 

of our human capital arm, helping to advance our vision and 

mission. It would be impossible for FPI to achieve what we do 

with only our 40 staff members. We are who we are because of 

the support from our professional and corporate members. Thank 

you for your dedication and commitment. 


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FPI UPDATE | Awards 

Standard of excellence 

Meet the Top Candidate Award Winner 2023, Stephan Lombaard. The Award recognises the top candidate 

who completed the CFP® Professional Competency Examinations for professional membership of the FPI. 

Please supply a brief biography of yourself. 

I grew up in a small town called Wellington in the heart of the 

Boland, Western Cape. I originally studied Human Resource 

Management in Stellenbosch, after which I completed my 

Postgraduate Diploma in Financial Planning at the Stellenbosch 

Business School. I have always been passionate about working 

with people and during my undergraduate studies, I developed a 

strong interest in finance. Financial planning therefore served as 

the perfect intersection between the two. I am currently working 

at Allan Gray where I enjoy the corporate side of investments and 

finance. In my spare time, I enjoy making music and exploring the 

Western Cape with good company. 

I hope to see a future where 

our industry plays a larger role 

in advancing financial literacy. 

What did you achieve by entering the competition? 

I participated in the CFP® Professional Competency Exam (PCE) 

to earn the CFP® designation and equip myself with the essential 

knowledge to excel in my career. I knew that the standard of 

excellence that the mark provides would boost my career and 

provide me with the credibility and knowledge to navigate my 

future in the industry. 

The winner is selected from the highest 

mark received for the CFP® Professional 

Competency Examination. What did the 

examination entail? 

The PCE examination forms part of the 

requirements to gain the CFP® mark 

in South Africa. The exam is presented 

in a case study format and tests the 

application of the knowledge gained 

during the Postgraduate Diploma in 

Financial Planning. It covered all aspects 

of the financial planning process from 

the initial client meeting to preparing for 

retirement and managing a client ’ s estate. 

The exam requires individuals to go 

beyond memorisation of facts and instead 

tests their ability to apply knowledge 

across various topics and think critically, ultimately better 

preparing them for the industry. 

How did taking the examination equip you for the future? 

Passing the PCE exam has provided me with thorough 

knowledge of the financial planning landscape with an in-depth 

understanding of the product rules, tax and legislation. I believe 

that the knowledge gained is invaluable to anyone likely to pursue 

a career in the investment and personal finance sectors. 

Although I am not currently functioning as a financial planner, 

the knowledge gained is a massive value-add to my career as it 

gives me the confidence and ability to do my best in any direction 

I pursue. 

What changes would you like to see in the profession? 

A big challenge we face in South Africa is a lack of general 

financial literacy among most of the population. Many South 

Africans have little to no knowledge of investments, retirement 

planning or healthy financial habits. With savings rates being 

critically low and very few individuals being able to retire 

comfortably, education is imperative to lift our country out of 

poverty and inequality. I believe that the financial planning 

industry is uniquely positioned to address this gap through 

advocacy, training and education. I hope to see a future where 

our industry plays a larger role in advancing financial literacy and 

enhancing the accessibility of education through collaboration 

with government and local communities. 

Winner of the FPI Top Candidate Award 2023, Stephan Lombaard (centre). 



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Transforming traditions 

The FPI strives to increase professional opportunities for the widest spectrum of people so that all may 

thrive in the financial planning profession. The Institute established the FPI Diversity and Inclusion Award 

to promote the inclusiveness of diverse communities in the profession. Olwethu Masanabo was nominated 

as the winner of this Award in 2023. 

Please supply a brief biography of yourself. 

I am the director and founder of Pragmatic Academy which 

aims to be what I can only describe as a hub of excellence for 

financial planning with a particular focus on the black middleclass 

demographic. The services include training, coaching and 

mentoring of financial advisors to better service the black middleclass 

segment. We also have programmes for para-planners, 

managers of financial advisors and assistants to financial advisors. 

Our existence was sparked by a realisation that the world has 

ushered in remarkable diversity among financial professionals and 

the recipients of financial planning services. However, the methods 

employed for professional training have remained static and are 

suitable for serving a narrow demographic. 

I am also a non-executive director and chairperson of the Human 

Capital Management Committee and Diversity and Inclusion subcommittee 

at the FPI, a non-executive director at BDO Wealth, an 

independent trustee at the Old Mutual Black Distributors Trust as 

well as a non-executive director of the BDT SPV (a company that 

is owned by the Trust). 

Please talk to us about your background and experience of 

diversity and inclusion in the profession. 

I started in the industry as a financial advisor many years ago and it 

was extremely challenging for me as a black person. All the things 

we were taught that were meant to make us successful financial 

advisors just did not seem to work with black clients (which is the 

demographic I was mainly working in) and there were no alternatives 

that were provided. So, I ended up moving to other roles which 

included training financial advisors. That is when I started bringing 

in aspects of how financial advisors could better service the black 

population and add value to them based on my experience. I also 

started bringing in other aspects that could help black financial 

advisors to increase their chances of being successful. 

What did you learn through the process of applying for 

the award? 

Well, I did not apply for the award. You get nominated based on 

work you have done to advance diversity in the profession. I was 

not aware that I had been nominated and was pleasantly surprised 

when my name was called as the winner of the award. 


I would love to see a more diverse group of financial advisors in 

attendance when events are held for top advisors in the region. I 

would also love to see the average financial advisor in South Africa 

be more representative of the country’s population. 

In your view, how should the FPI attract more diversity in 

the profession? 

The FPI is involved in numerous initiatives which are aimed at 

increasing the diversity of the profession. Examples are the Young 

Financial Planners Organisation (YFPO), student competition as well 

as bursary funding for previously disadvantaged individuals which 

look at diversifying the FPI membership in race, age, gender, etc. 

Olwethu Masanabo (right), winner of the FPI Diversity and 

Inclusion Award 2023. 

What message would you like to convey to anyone who does 

not fit the stereotype of financial planners who is considering 

financial planning as a profession? 

If you do not fit the description of the average financial advisor in 

South Africa that does not mean there is no room for you in the 

profession. If there is no-one like you, you can be the first to carve 

a path for those who are like you. 


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The learner leader 

Kim Potgieter, author, speaker and expert financial planner, won the FPI It Starts with Me 2023 Award. The 

Award recognises a CFP® professional for their unyielding dedication to promoting the CFP® certification. 

How have you entrenched the CFP® mark in your work life? 

In our industry, there is often confusion about titles, whether we are 

financial planners, wealth managers or advisors. The CFP® mark 

clearly defines us as professionals in our field. Being a professional 

means having studied for the qualification and always acting with 

the client’s best interest at heart. This entails offering advice and 

planning tailored to the client’s unique circumstances, objectives 

and needs and structuring their financial plan intentionally to 

enable overall wellness and financial security. The CFP® mark 

elevates planners as professionals and ensures our dedication 

and integrity to provide clients with the highest standard of care 

and expertise. 

What motivates you to continuously seek to grow and invest 

in yourself and your career? 

The financial services profession is constantly evolving, and 

apart from keeping up to date with world markets and changing 

legislation, our clients’ needs are also changing. There is no onesize-fits-all 

approach to planning, and planners are increasingly 

asked to offer a value-added, life-centred service. This opens 

new fields of learning for planners, including facilitating 

vulnerable conversations and coaching clients through 

significant life transitions. 

Being a “learner” is one of my top strengths, and I have 

always prioritised connecting with people I regard as mentors 

and visionaries to bring new ideas and insights about financial 

planning back to South Africa. Coupled with my curiosity and 

love for learning, teaching and mentoring are also some of my 

top passions. Sharing what I have learned with the industry and 

our clients speaks to one of my highest values. 


I would like to see the profession place clients firmly at the centre 

of what planners do, which includes rethinking how planners 

are remunerated. There’s still much discussion needed around 

financial planners being compensated with salaries rather than 

commissions. This shift could help dispel the perception of our 

industry as commission-driven and ensure objective advice is given 

based on clients’ best interests rather than financial incentives. 

Additionally, mentorship is another area where I see great 

potential for growth. With many young professionals entering the 

industry, there’s an invaluable opportunity for more experienced 

planners to impart their experience, emotional intelligence and 

wisdom to the younger generation. Conversely, the younger 

generation brings fresh perspectives and new ideas from which 

the older generation can also learn. This “menternship” relationship 

can enrich our profession and enhance the quality of service we 

provide to our clients. 

What value do you bring to your clients as a CFP® professional? 

At Chartered Wealth Solutions, our approach to financial planning 

begins with life planning. We believe that understanding a client’s 

life goals, aspirations and unique circumstances is the foundation 

of effective financial planning. By charging a fee for our holistic 

plans, we ensure that our advice remains objective and unbiased. 

This allows us to deliver personalised life and financial plans that 

comprehensively align our clients’ finances with their life goals. 

One of the most beneficial skills we have embraced in our 

planning meetings is coaching, which equips our planners 

with the self-knowledge and empathy to facilitate vulnerable 

conversations and provide mentoring, enhancing the overall 

benefit for our clients. 

Kim Potgieter believes that you cannot plan for your money 

without planning for your life first and advocates that life 

planning is an integral part of financial planning. This allows her 

clients to live their best possible lives by aligning their money 

with purpose. As Director and Head of Life Planning at Chartered 

Wealth Solutions, she combines her two passions: helping people 

with their relationship with money and guiding clients to get the 

most life from their money in their second chapter. 

Kim Potgieter, winner of the FPI It Starts with Me 2023 Award. 


Are you ready to elevate your career and make a 

lasting impact in the world of finance? 

Seize the opportunity to distinguish yourself as a 

CERTIFIED FINANCIAL PLANNER (CFP®), 

FINANCIAL SERVICES ADVISOR (FSA TM ), or 

REGISTERED FINANCIAL PRACTITIONER (RFP TM ) 

this October. 

CFP® Exam: 3 & 4 October 2024 

FSA TM Exam : 3 October 2024 

RFP TM Exam: 3 October 2024

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INVESTMENT | Equities 

Market movers 

The allocation of global market equities is forever in motion and the structural shifts between markets are 

significant in generating investment returns. What drives these shifts and how can we better understand 

them, asks Peter Foster, Chief Investment Officer, Fundhouse. 

Have you heard of TEMU? The online retail platform owned 

by the Chinese mega-company, Pinduoduo, has made 

aggressive inroads into South Africa in recent months. 

You may also have noticed a somewhat more muted, but 

no less significant, launch of the Amazon Marketplace platform. 

Both companies are seeking to displace Takealot among other 

retail stores countrywide. 

Separately, the Australian-headquartered BHP lined up a takeover 

offer for Anglo American, a company established in 1917 and one 

of the stalwarts on the JSE. For now, it looks like this deal is off. But 

who would have thought it might’ve been possible for a company 

like Anglo to disappear from our shores? 

So, what do these headlines have in common? Each of them 

highlights two important aspects concerning investments: the 

value of listed companies available to local investors on the 

local stock market; and the profits earned by local companies to 

contribute to the local economy and its population. This dynamic 

is not unique to South Africa or even new. The allocation of 

listed equities across countries and regions changes slowly, but 

significantly, over time. To put this in context, consider this: in 1900, 

the largest stock market in the world was in the UK – accounting 

for almost 24% of all global listed equities. Despite only generating 

9.1% of global productivity or GDP, the UK had managed to get 

itself into a position where most of the publicly-listed equity 

was housed within its borders. These were the days of the great 



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1900 2022 

Market 

Share of 

Global Stock 

Market 

Share of 

Global 

Economy 

(GDP) 

Share of 

Global Stock 

Market 

Share of 

Global 

Economy 

(GDP) 

Change in 

Stock Market 

Share 

Change in 

GDP Share 

Rest of World 

China 

Austria 

Switzerland 

Netherlands 

Australia 

Canada 

France 

Germany 

Japan 

UK 

US 

Total 

22.8% 

0.4% 

4.8% 

1.1% 

2.7% 

3.4% 

1.3% 

11% 

12.2% 

1% 

23.8% 

15.5% 

100% 

41.5% 

11.4% 

0.8% 

0.6% 

0.8% 

0.7% 

0.8% 

5.4% 

7.5% 

2.8% 

9.1% 

18.6% 

100% 

13.4% 

3.6% 

0.1% 

2.5% 

1.3% 

1.9% 

2.5% 

2.8% 

2.2% 

6.3% 

3.9% 

59.5% 

100% 

43.7% 

15.8% 

0.4% 

0.7% 

1% 

1.5% 

1.8% 

2.9% 

4% 

4.4% 

3.1% 

20.7% 

100% 

-9.4% 

3.2% 

-4.7% 

1.4% 

-1.4% 

-1.5% 

1.2% 

-8.2% 

-10% 

5.3% 

-19.9% 

44% 

2.2% 

4.4% 

-0.4% 

0.1% 

0.2% 

0.8% 

1% 

-2.5% 

-3.5% 

1.6% 

-6% 

2.1% 

Source: Visual Capitalist: Our World in Data, Global Financial Data, OECD Trading Economics, Bloomberg, Federal Reserve of St Louis. 

British Empire, and intuitively it makes sense to: “Go forth and 

acquire!” The UK used its wealth and ambition to establish a global 

footprint of companies spanning sectors such as oil, commodities 

and finance. Revenues and profits from around the world were 

dragged back into London. 

At the same time, China accounted for just 0.4% of global equity 

markets, yet was already a driving force and producing almost 

16% of global GDP. In the US, they were just entering the fray, 

unbelievably, and held just 15.5% of global equity markets while 

contributing 18.6% of global GDP. 

The point should hopefully be clear: your country’s productivity 

is often owned by others! The table above illustrates how global 

stock markets have evolved since 1900. 

By 2022, the US held almost 60% of the value of all global 

stock markets 1 , while maintaining a relatively stable 20.7% of 

GDP market share. It has been the clear winner when it comes 

to building valuable businesses without doing all the work, and 

the UK (and Europe more generally) are the big losers. You could 

ask: “Why bother with anything other than a US equity portfolio?” 

Especially, when you consider that 60% of the S&P 500’s revenues 

come from other countries around the world. 2 

You can capture the global investment opportunity through the 

US alone and avoid the fuss of looking more broadly. These structural 

shifts between markets are significant in generating investment 

returns. How can we better understand what drives them? 

Next, we explore six drivers which collectively impact the 

relative success or failure of a country to grow its stock market 

share and its opportunities for investors. From this, we hope to be 

able to gauge where we are today. 

1. The competition for capital. This describes the broad 

environment within a country which makes it attractive to start 

a business, raise capital, source talent, education and training, 

the rule of law, governance standards and overall stability of 

the system. Simply, the more organised and better-resourced a 

nation, the more successful it will be in attracting and building 

investment opportunities. 

2. Growth and innovation. This speaks to the culture, ingenuity 

and talent pool within a nation, as well as the strength of the 

support systems such as banks, venture capital and other 

funding sources. In many respects innovation is a luxury 

afforded to those with the time to spare to create new 

businesses and technologies. Great examples here are Google, 

Microsoft and Tesla. Entrepreneurs are rare and they tend to go 

where they can get support for their ideas. 

3. Natural resources. Looking back through history, this has 

been a key factor driving market returns and is illustrated by 

the fact that resource-heavy countries such as South Africa 

and Australia are near the top of the performance tables when 

measured over 100 years+. At the turn of the 20th century, the 

oil majors were companies like Standard Oil (now ExxonMobil) 

and Shell. Anglo American (gold and other commodities), 

De Beers (diamonds), Goldfields, AngloGold, Harmony Gold, 

Implats and Amplats (both platinum) have all been material 

contributors to South African investment portfolios. Looking 

forward, it is less obvious who the main resource beneficiaries 

will be. Will it be those countries with base metals suited to 

the emerging electric car (EV) industry? Will oil still be relevant 

30 years from now? With green energy a clear trend, will those 


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countries with deep reserves in cobalt, manganese, copper, 

lithium and nickel be equivalent to the gold and diamond 

miners from the early 1900s? To be successful here, you need 

a lot of good luck. 

4. Acquisitions. The JSE has shrunk from over 600 listed 

companies in the late 1990s to ~350 today. Many of these 

delistings are due to being bought out by a global party with 

deep pockets, often taking advantage of overly pessimistic local 

valuations. Success breeds success, and a company with greater 

size and scale can acquire companies in parallel industries or 

foreign competitors to enhance their future growth. Mark 

Shuttleworth’s Thawte being bought by Verisign in 1999 was 

one such example 3 . These transactions shift market value from 

one country to another, and shift revenues, taxes and dividends 

to other domiciles. 

5. Home country size and scale. Size matters when competing 

against global stock markets. In a country with a larger, 

wealthier population, it is easier to reach scale quicker than a 

country with a similar innovation, but a smaller local population 

to support its growth. The US has excelled in this area. No other 

single country has both the wealth and the scale which the US 

does to help launch and grow new startups. 

6. Valuations. Lastly, valuations impact the relative size of stock 

markets around the world. For instance, the US today trades at 

27x the past year’s profits, whereas in China the stock market 

is trading at one-third of that level. Europe is about half. These 

differences can be temporary (excitement around AI driving US 

markets, for example), or structural, where a better regulated, 

more transparent, more liquid market with higher-quality 

companies will attract a higher average valuation level over 

time, claiming a higher proportion of investment markets 

globally. As a matter of interest, if the US reverted to its average 

valuation level today of ~18x profits, its share would fall to over 

50% of global markets. 

Looking ahead 

What does this mean for investment returns? We can make some 

simple observations: 

• It is not obvious that the US will stop growing its share of 

global stock markets. It is better organised and has the 

size and scale, culture, access to talent, ownership of key 

technologies and countless other advantages over other 

regions and markets. A hundred years ago, colonisation 

involved fleets of ships and armies. The US has financially 

colonised the world through innovation, hard work and a 

reliable system. 

• In the transition to a digital global economy, does it lower the 

barriers for the transition of stock market wealth? Our TEMU 

example above highlights this: a Chinese 4 company setting 

up shop in South Africa in a matter of months and able to 

compete using a substantially larger platform via its Chinese 

parent. The revenue generated by local companies declines, 

and the value of local equity markets suffers as a result. 

• When you consider that the region with the most favourable 

growth forecast is Southeast Asia and more generally the 

emerging markets, is it likely that these countries and regions 

will continue to accept their productivity being “captured” in 

foreign, developed world stock markets? Or will these countries 

start aligning themselves in a collective direction to own what is 

theirs? The “East vs West” theme arises, including South Africa’s 

involvement in the BRICS+. 

• Lastly, who are the candidates who have the potential to score 

across the six areas mentioned above and lay a claim for future 

expansion? Countries like India and China have the scale and in 

many cases, innovation and growth traits are a feature of their 

markets. But they fall in other areas such as competition for capital. 

Signs that either of these countries focus their strategic intent on 

becoming investor-friendly for old-school Western capital would 

change the dynamics quickly. And all the while their domestic 

wealth is growing to the point where they could outmuscle 

developed market companies when it comes to acquisitions. 

The migration of stock market wealth from Europe and the 

emerging markets to the US and China signifies who is winning the 

race for global competitiveness. Despite China’s current reputation 

as a higher-risk, investor-unfriendly environment, it looks poised 

to continue expanding its footprint as it leverages an increasingly 

broad wealth base and a strong culture of growth and innovation. 

The US will continue to form the rump of most investor portfolios, 

and while this is a welcome feature, there can be times when its 

share is oversized. At these points, allocations to regions that are 

not as organised or competitive but are substantially better valued 

and can yield higher returns for investors. 

[1] 

As at 30.04.2024, it now holds 63% of all listed equities. 

[2] 

Source: Factset 

[3] 

Thawte had a substantial global market share for Internet security outside of the US, but Verisign was 

dominant in the US and used this stronger position to acquire the smaller company in South Africa. 

Thawte was still private at the time and not listed on the JSE. 

[4] 

TEMU is headquartered in Ireland, presumably to lower its tax rate and provide easier business 

relationships around the globe. 

Peter Foster, Chief Investment Officer, Fundhouse 


BLUE 

CHIP 

ROUND TABLE SERIES | DFMs 

How and why a financial planner 

should use a DFM 

An exclusive Blue Chip discussion with three of the country’s top investment and financial planning 

professionals focusing on Discretionary Fund Managers and how financial planners can best utilise 

their services. 

PART ONE 

Andrew Finlayson [AF]: When evaluating a DFM, what should 

you caution against? 

Florbela Yates [FY]: Performance is important. I would argue that, 

as an advisor, you should look at the DFM the same way you would 

look at any asset manager. If they are not adding value after fees 

that would probably be a trigger. Unfortunately, the disadvantage 

is that the model portfolio offering isn’t regulated so it is difficult 

to compare the performance of one DFM to another. I would 

certainly be pro the industry becoming more regulated because 

then you’ve got transparency. But at this stage that’s difficult. From 

an advisor perspective, the only way to measure a DFM is to check 

if the portfolio is achieving the outcomes that you’re looking for 

and how they compare to the peers. You can look at the ASISA 

category to see what the peer group average is, for example. 

The second red flag would be how the fees are shown and 

how transparent they are. It’s important for advisors and clients 

to be able to see the DFM fee separate from the underlying 

manager fees. 

The most important thing for 

a DFM is to remain sustainable 

to cover your costs. 

The third point is if the philosophy has changed – so if you as an 

advisor have asked your DFM to put together a bespoke offering 

that’s aligned to your advice process and the DFM starts drifting 

from that, a mandate breach or they just start adding too many 

funds that you’re not comfortable with or there’s a huge cost drive 

and they start putting in too many passives just to manage costs, 

that would probably be a trigger. 

Sometimes businesses change, so the reason you appointed 

a DFM five years ago might be different now and you’re looking 

for something else. If the DFM you’ve chosen can’t give you that 

or they haven’t kept up with the tech and you need more tech 

in your practice, all those things could be a trigger to potentially 

replacing a DFM. 

Internationally we’ve seen a trend where advisors sometimes 

use more than one DFM. In South Africa, the market is so small I 

am not sure that it would necessarily be a trigger but what we have 

noticed is that sometimes an advisor would use one DFM for their 

local offering and a different one for their international offering 

and that’s become a little bit more pronounced. 

Certainly, at Equilibrium, we are asked more and more to come and 

speak to advisors who may be happy with the local partnership 

but want a global DFM to start managing their offshore portion. 

Craig Gradidge [CG]: For us, if the DFM becomes a bit too 

prescriptive in terms of the solutions and asset allocation, then 

they start to look like another fund manager selling products. 

Ultimately for us, independence adds enormous value to clients, 

and it is something we guard quite zealously. So, if the DFM says, 

“Well, it’s my way or the highway,” then for us, the highway would 

be what we choose. 

Also, if you have a DFM that’s a bit rigid in terms of issues 

like active and passive management, for example. We’re firm 

supporters of both, we think both have enormous value. So, a 

DFM that is a bit too rigid and prescriptive would be a big dealbreaker 

for us. I think a DFM who does not pay attention to issues 

like costs and volatility would also be a deal-breaker. 

AF: In the DFM space, it seems that scale is important because 

you have advisors wanting more – whether it be more tech or 

coverage of more assets. How much of a risk is this kind of race 

to the bottom from a fee perspective, given what is expected 

of them? 

FY: The most important thing for a DFM is to remain sustainable 

to cover your costs. As a DFM, you should be able to differentiate 

your offering so if a client is buying your standard off-the-shelf 

model portfolio, you probably could discount it versus a bespoke 

offering because with the off-the-shelf model you build scale in 

one portfolio range. If you’re running a bespoke offering you need 

to treat it as a separate range. 


ROUND TABLE SERIES | DFMs 

BLUE 

CHIP 

MODERATOR 

EXPERT PANEL 

Florbela Yates, Head, Equilibrium Investment Management 

Andrew Finlayson, Co-Founder, Maven Wealth 

Craig Gradidge, Investment and Retirement Planning 

Specialist, Gradidge Mahura Investments 

My view is that DFMs should be trying to drive overall costs down. 

You need to compare the total investment charge that you would 

be paying with the underlying funds as well as the DFM. So, 

advisors should add the underlying funds plus the DFM fee and 

compare that to what you would get as an advisor if you went 

directly to those fund managers and selected them yourself. You 

would pay the full retail fee in most instances. 

I don’t think it should be a race to zero because again if you’re 

not covering your costs you’re not going to be around. More 

importantly, it is also the types of underlying assets that you’ve got. 

The passive component should be cheaper while you pay a little 

bit more for the active. One should also factor in things like the 

value that advisors place on portfolio construction; they often can’t 

do all the underlying portfolio construction holistically so they’re 

happy to pay a fee for that. It must be an 

appropriate fee and commensurate with 

the service that you’re getting. 

To watch the round table series in full, 

visit www.bluechipdigital.co.za or 

scan the QR code. 


41

INTRODUCING OLD MUTUAL WEALTH’S 

INTEGRATED FINANCIAL COACHING COURSE 

COACHING SKILLS FOR PLANNERS 

Lifestyle financial planning goes beyond giving advice. It is 

about truly getting to know your clients, building meaningful 

relationships and understanding their needs. Only then can 

you co-create a financial plan that is tailored to their unique 

circumstances. Financial coaching is a powerful tool that 

enhances your ability to understand both yourself and your 

clients through effective interpersonal skills. It allows you to delve 

deeper into your clients’ way of living, asking the right questions 

that will help clients see more of what they want and how they 

can achieve it. This will lead you to be able to connect with 

your clients on a deeper level, building trust for strong and 

lasting relationships. 

Our Integrated Financial Coaching course covers essential 

coaching skills necessary to seamlessly integrate coaching into 

your practice. It incorporates the latest international trends, 

techniques and methodologies, helping you better understand 

your clients and their ambitions, enhancing your value-add to 

your clients. 

Old Mutual Wealth is an elite service offering brought to you by several licensed FSPs in the Old Mutual Group.

ENHANCING YOUR 

VALUE PROPOSITION 

AND CREATING UNIQUE 

CLIENT EXPERIENCES 

COURSE OVERVIEW 

With this course, you will: 

• Develop deeper listening and questioning techniques 

• Apply coaching methodologies and tools 

• Learn the neuroscience behind making decisions 

• Adopt the lifestyle financial planning philosophy and learn how 

to incorporate that into your planning process 

• Develop techniques and tools for questioning clients’ money 

relationships. 

You will have access to online workshops and unique training 

opportunities, providing you with all the practical tools you need to 

implement within your financial planning practice, ensuring better 

client outcomes. 

COURSE OUTCOMES 

1. Understanding coaching principles 

Grasp the basics of coaching and relate to your clients by using 

coaching skills and a coaching mindset. 

2. Connecting coaching and financial planning 

Understand the relationship between coaching and financial 

planning, and have meaningful conversations with clients to 

co-create financial plans aligned with their lifestyles. 

3. Using objectivity to advise clients 

Recognise how to step into the role of a coach, helping clients 

solve their problems objectively and effectively. Stepping into the 

role of a coach has proven to be the most effective way to help 

your clients become financially sound and successful. 

4. Understanding the impact of relationships with money 

on financial wellbeing 

Working with a client’s relationship with money and helping them 

break free from limiting beliefs and assumptions can only happen 

if you, as a planner, understand your own blind spots around 

money. Identify and be aware of your relationship with money, 

and let your judgement go, so you can see the client clearly. 

5. Working with limiting assumptions and the stories 

told around money 

Our assumptions and beliefs about money determine our 

financial story and how we relate to the world around us. Looking 

at and working with limiting beliefs can help a client reconnect 

with the true meaning of money, thereby helping them manage 

their investments in a way that best serves them. 

6. Understanding lifestyle financial planning and how to 

incorporate it into client engagements 

Planning for the person and not their money, focusing on what 

they want to achieve and how their money supports that, are 

important considerations. Define how performance and fees 

impact goal planning and identify what is in their control, to 

help them assume responsibility for their financial wellbeing. 

YOUR FACILITATOR 

This course is moderated by Sharon 

Moller, Financial Planning Coach at 

Old Mutual Wealth. She is a 

Professional Certified Coach (PCC) 

through the International Coaching 

Federation, a Certified Integral Coach ® 

through New Venture West, and a 

Certified Financial Planner ® . Sharon is responsible for embedding 

the Old Mutual Wealth advice process using coaching principles 

and methodology to help our planners articulate their core value 

proposition. With over 20 years of experience in the financial 

services industry, she is well equipped to assist planners in 

understanding their clients and how they relate to their money. 

She is a Certified Level 1 and 2 Enneagram Practitioner. 

DURATION 

The Integrated Financial Coaching course is an induction 

programme which includes one virtual 90-minute workshop 

session per week. 

COST 

The course fee is R15 000 (excl. VAT), which can be paid as a 

one-off fee or in scheduled payments. 

HOW TO REGISTER 

For more information on how to register, 

please email futurefit@omwealth.co.za.

Do You Have a Type"? 

Finding the Perfect Investment 

Partnership Offshore 

" 

For any partnership to work, it needs to have defined 

expectations, unlimited trust and a certain amount of 

chemistry. Any healthy, mutually beneficial relationship 

requires each party to bring their qualities to the partnership, 

with the magic coming from shared visions and goals. 

As we progress through the various stages of our lives, 

it’s natural that our requirements for that partner 

change and evolve. It’s often that we are looking for a 

certain “type”, whether that be someone adventurous, 

trouble‐free or dependable. 

Capital International Group places significant importance 

on nurturing our relationships with you, the intermediary. We 

work to understand your clients; we adapt to their requirements 

and strive to meet all their investment needs under one roof. 

No matter what your “type”, we can provide a suitable solution, 

whether that be by using our execution-only investment platform 

or by outsourcing decision-making to our expert investment 

management team. We can understand and adapt to you, 

becoming your perfect offshore partner. 

The solid, reliable one 

Operating from the Isle of Man for over 25 years, Capital 

International Group provides that all-important stability upon 

which a great long-term relationship can be built. With crown 

dependency status, the oldest parliament in the world and a 

thriving and highly regulated financial services sector, the island 

has a lot to offer. Alongside a local team in South Africa, Capital 

International Group can provide a gateway to this jurisdiction, 

helping your clients enjoy its many benefits with peace of mind 

over their investments. 

The globetrotter 

It’s a big, wide world out there and what better way to make the 

most of the opportunities available than by exploring with a 

well-travelled partner? At Capital International Group, our open 

architecture, execution-only investment platform can provide you 

with simplified access to all corners of the globe, with the ability to 

invest in assets across all major stock exchanges in a wide range 

of asset classes – the choice is virtually limitless. Not only that but 

in terms of our physical presence, Capital International Group 

is a truly international business, with offices around the world, 

including Cape Town and Johannesburg, and a client base of 

financial intermediaries and high-net-worth individuals spanning 

over 100 countries. 

For South African investors looking to move money offshore, 

we know that there are many complex factors and considerations 

and that it is essential to find a partner that can take the stress out 

of the process and assist you and your clients on this journey. It is 

our collaborative approach that enables us to better understand 

your business, adapting to your unique requirements to ensure 

your needs always come first. 

The low-maintenance type 

We all know that relationships can be intense and demand lots 

of time and effort to maintain. However, depending on your 

circumstances, you may be looking for the exact opposite: a 

minimal-fuss partner that slots in seamlessly to your life yet 

manages to improve it immeasurably. 

Using our online investment platform and our highly attentive 

service teams, a relationship with Capital International Group 

enables you to focus on adding value to your clients and their 

financial planning requirements. If you are looking for a lowmaintenance 

way to invest, while reducing risk and freeing up 


INVESTMENT | Offshore 

BLUE 

CHIP 

Performance of one of Capital International’s balanced investment strategies, “H5”. 

your time to build better relationships with your clients, our 

discretionary investment management service team can take 

the stress out of the day-to-day management of your portfolios. 

The high-flyer 

To provide sustainable outperformance, we offer strategies and 

solutions to suit a range of client types. Our investment team 

possesses over 200 years of global industry experience and can 

be accessed by you and your clients at any point in the lifespan. 

Through the strength of the team, our investment strategies 

have delivered consistent and strong risk-adjusted returns 

benchmarked against relevant peer group indices, helping 

intermediaries like you to meet the high-flying performance 

expectations of your clients. 

A partner with simple solutions to complex problems 

Complex factors abound when investing offshore and it’s essential 

to find a partner that can provide innovative solutions to various 

challenges that arise. While many advisors will traditionally make 

use of endowments to appropriately deal with situs, probate, 

taxation and costs, due to recent changes in the market because 

of globalisation these products are not necessarily fit for purpose. 

Our investment team faced these same issues and with 

necessity being the mother of invention, the team built a single 

investment solution that deals with issues such as emigration, 

jurisdiction, situs and probate, among others. 

Capital International Group’s “Kinesis Service”, with the 

issuance of Principal Contracts, allows advisors and investment 

managers to establish their investment strategy within a Principal 

Contract. This removes the issues of situs and provides complete 

investment flexibility, while retaining simplified administration, 

all from a single service provider with minimal cost. The Kinesis 

Service can provide tax efficiencies for South African investors too. 

In addition, it provides the investment manager with simplified 

administration and reporting, can be transported globally, and can 

address multiple clients’ needs in ways that traditional investment 

vehicles simply cannot. 

By applying the same level of innovation that created the 

Kinesis Service, we ensure we are constantly evolving and 

investing in our offering to help intermediaries and their clients 

achieve their financial objectives. We recently adopted a Deed of 

Donation Mortis Causa (DMC) process framework. This allows an 

individual donor (the account owner) domiciled in South Africa 

to nominate a donee to receive the proceeds of their investment 

account after death. 

The DMC ensures that the proceeds of the investment account 

are payable upon the death of the account owner (or, in the 

case of joint account owners, on the death of the last dying joint 

account owner) and there is no requirement for the completion 

of probate in the Isle of Man nor for the administration of estates 

process in South Africa via the Master’s Office, as assets donated 

under a DMC do not fall within the deceased’s probate estate. 

Have you found your perfect partner? 

Capital International Group offers the ultimate suite of investment 

options; from our open-architecture investment platform to our 

managed bespoke portfolios, we have solutions to suit a wide 

range of client types and investment needs. 

We work closely and collaboratively with a broad spectrum 

of professional firms and advisory businesses, building trusted 

and transparent relationships, making us the perfect partner for 

investors looking to take their investments offshore. 

www.capital-iom.com 

Regulated investment activities are carried out on behalf of Capital International Group by its licensed member companies. Capital International Limited and Capital Financial Markets Limited are licensed 

by the Isle of Man Financial Services Authority. Capital International Limited is a member of the London Stock Exchange. CILSA Investments (Pty) Ltd (FSP No. 44894), trading as Capital International SA, 

is licenced by the Financial Sector Conduct Authority in South Africa. All subsidiary companies across both jurisdictions are represented under the Capital International Group brand. 


45

BLUE 

CHIP 

CLIENT ENGAGEMENT | Behavioural finance 

The true value of advice 

The notion of financial advice is an intriguing one. 

The purpose of financial advice is to assist investors and 

guide them to make rational, informed decisions to achieve 

their investment objectives. However, the difficulty lies in 

converting advice into value, in other words, placing tangible 

value on the opinions and recommendations of another. This is 

even more pertinent today, where the amount of advice available 

to investors – whether from friends or news and media outlets – is 

constantly available, reminiscent of the quote, “Opinions are like belly 

buttons; everybody has one.” 

For investors, it is often the case that performance is king. 

Their pursuit of returns and the desire to match or exceed market 

benchmarks can create pressure along the investment journey. It is 

for this reason that research consistently shows that investors who 

collaborate with qualified financial advisors significantly improve 

their chances of reaching their financial goals. 

What yardstick can we use to evaluate the performance of a 

financial advisor? 

A recent study by Russell Investments in the United States titled, 

“Value of an Advisor”, quantifies multiple ways financial advisors add 

value to a client’s investment portfolio due to a holistic focus. 

A 

Active rebalancing 

of investment 

portfolios 

B 

Behavioural 

coaching 

C 

Customised 

experience & 

family planning 

T 

Tax-smart 

planning & 

investing 

0.27% 

2.54% 

1.14% 

1.17% 

+ 

+ 

+ 

= 

*Based on differences in 

risk-adjusted returns of a typical 

actively rebalanced multi-asset 

portfolio held from 2003-2022, 

and one that was not rebalanced. 

*Based on differences in the 

average US equity investor 

returns from 2008-2022, and that 

of the S&P500. 

*Based on differential calculated 

over and above the basic asset 

management capability of a 

robo-advisor. 

*Based on average differences in 

return between tax-managed and 

non-tax managed US 

equity funds. 

Total 5.12% Value of a financial advisor 

in 2023 

Figure 1. Value of an advisor formula. 

Source: Russell Investments Advice in this climate 

With global events unfolding, including elevated interest rates, 

soaring inflation and geopolitical tensions, markets in general are 

proving tough to predict. There is no better time to have a financial 

advisor by your side. We believe that in addition to the financial 

and wealth management expertise provided by a financial advisor, 

it is the provision of discipline and reason to clients who are often 

susceptible to behavioural biases such as emotions that ultimately 

reward. The results from the study confirm that behavioural 

coaching contributes the largest portion (2.54%) of the overall 

value provided by a financial advisor. 

Let us briefly explore all four areas below: 

Active rebalancing of investment portfolios 

The study found that without any rebalancing, a hypothetical 

balanced portfolio, illustrated in Figure 2, allocated to 60% equities 

(including real estate) and 40% fixed income at the start of January 

2009, would have adjusted to 82% equities (including real estate) 

and 18% fixed income by the end of 2022, significantly altering its 

allocation and risk profile. The same drift in exposure would also 

apply to sector allocation and investment styles. 

The active role a financial advisor plays to avoid a set-and-forget 

approach manages to control any undue risk to a client’s portfolio. 

The value of an advisor in this regard would be the discipline of 

systematic rebalancing and monitoring, aligned with understanding 

investors’ goals. 

Figure 2. The set-and-forget approach. 

Source: Russell Investments 

Behavioural coaching 

It is well documented that trying to time the market by selling 

at the bottom or not getting back into the market until it is near 

the top (otherwise known as chasers), can significantly hurt 

investor performance. 

As disclosed in the study, the difference in returns of the average 

“chaser” in the US equity market over the 15 years under review 

and the S&P500 market index was quite substantial. 


CLIENT ENGAGEMENT | Behavioural finance 

BLUE 

CHIP 

Figure 3 illustrates that during times of big and long market 

cycles, investors experience fear and greed. These are two of the 

main drivers of the biggest behavioural mistakes investors make 

when investing. The beauty of behavioural coaching is that when 

panic sets in or an investor feels the urge to disinvest or invest 

more in the same thing, the calmness, perception and acumen 

of an advisor kicks in. Undoubtedly, this is the largest potential 

value-add of a financial advisor – helping clients maintain a longterm 

perspective through different market cycles and discouraging 

“chasing” – which can save investors from potential wealth erosion. 

Figure 3. Emotions can drive bad investment behaviour. 

Source: Alexander Forbes Investments 

Customised experience and family planning 

The demands placed on financial advisors have increased 

exponentially over the years. 

The study discovered that the guidance a financial advisor 

provides, helping clients through life’s defining moments, aligning 

investments with goals, and offering expertise on various financial 

matters like insurance, taxes and retirement planning, holds 

additional value beyond the basic asset management offered by 

a robo-advisor. 

As expectations for customisation and personalisation rise, fuelled 

by examples like Netflix recommending tailored shows, and 

as client lives and family dynamics become more complex, it is 

impossible for any single financial advisor to possess the broad 

expertise, experience or knowledge needed to address all client 

needs and priorities today. 

The ability of a financial advisor to manage these processes 

and collaborate with experts who share their clients’ interests, 

when necessary, can prove decisive. Only a financial advisor with 

a deep understanding of a client’s circumstances and a genuine 

care for their family and aspirations can spearhead their clients’ 

financial success. 

Tax-smart planning and investing 

It is obvious that no-one likes taxes, but investors need to fully 

understand the tax implications of some of their investment choices. 

The study analysed how investors lost an average of 2.07% of their 

return from non-tax-managed US equity products in each of the 

five years ending 31 December 2022. However, an investor who 

invested in favourable tax-managed US equity funds would have 

given up only 0.90%. The difference is significant, and even more 

so when compounded. 

Without proper tax management, many investors end up paying 

more than they need to every year. The myriad of taxes that 

investments can trigger can include a tax on dividends, capital 

gains tax, securities transfer tax, and so on. A financial advisor can 

proactively manage and implement a tax-conscious approach to 

benefit their client. It is clear from the insights above that significant 

“alpha” can be generated within an investment portfolio, thanks to 

the value-enhancing strategies of a financial advisor. 

Who advises the financial advisor? 

There are many facets to the transformation of the modern-day 

financial advisor. The value-adding responsibilities of acting 

as a behavioural coach, providing holistic advice and customer 

experience, ensuring tax-efficient planning, and crucially, 

continuing to advise on the technical aspects of investment 

advice are increasingly in the spotlight. Juggling everything while 

being keenly aware that clients are demanding more from their 

financial advisors as they keep an eye on the fees they are being 

charged, only adds to increased complexity. 

For the financial advisor, partnering with a reputable DFM, 

who possesses the necessary scale and expertise to take care of 

their investment research, analysis, reporting, compliance and 

day-to-day management of investment portfolios, is a smart 

move. It frees up significant time and resources for financial 

advisors to spend impactful time with their clients. 

Therefore, our advice to the financial advisor is: “Just as we 

advocate for investors to seek advice at all costs, we equally 

maintain a strong conviction that financial advisors themselves 

should tap into the expert DFM capabilities of Investment Solutions 

by Alexforbes to support them as an extension of their practice.” 

In conclusion 

While hypothetical scenarios attempt to quantify the value of 

advice, the reality is that the true worth of financial advisors 

lies in the tangible actions and unique 

perspectives they offer clients. It is the 

appreciation that a client’s time is valuable 

and should be spent partnering with a 

trusted financial advisor. We encourage 

advisors to clearly communicate their 

advice proposition, to scale the value 

back to their clients. We encourage 

investors to continue to maintain strong 

relationships with their financial advisors. 

For both, we believe, they will be 

making their greatest impact. 

Edward Semenya, 

Senior Investment 

Specialist, Alexforbes. 


47

BLUE 

CHIP 

FINANCIAL PLANNING | Retirement 

Post-retirement income options 

amid potentially higher inflation 

Inflation is the risk that investors will face in retirement. This requires careful navigation when selecting your 

retirement income options, argues Coronation. 

A 

retirement income that lasts or is delivered through 

a smooth return path is meaningless if it doesn’t 

produce the necessary returns to keep pace with (or 

ideally beat) inflation. Unfortunately, knowing what 

inflation figure you need to use, or stress test for, as part of 

your retirement income planning is a tough call to make. The 

potential outcomes are broad and the forecast risk is therefore 

high. This article explains the importance of choosing the right 

retirement income option within the context of potentially 

higher inflationary scenarios and how one of these options helps 

you avoid making such an important call about future inflation, 

regardless of the outcome. 

A quick reminder about your retirement income options 

Upon retirement, investors have two options from which to draw 

their retirement incomes: 

• A life annuity, which is an insurance policy that guarantees a 

pension income for the rest of your life. 

• A living annuity, which is an investment-linked account held 

in your name. 

In turn, the value proposition offered by living annuities did 

not meet expectations over the past decade, following a period 

of disappointing returns from South African assets in general 

and risky assets specifically. This has since resulted in a shift in 

asset allocation in favour of fixed-income assets supporting the 

portfolios that typically back this type of annuity. 

The downside of fixed percentage escalating annuities 

If you prefer a guaranteed retirement income, you can choose 

between a level, fixed percentage escalating or an inflationlinked 

income as explained below. In 2023, nearly all life annuity 

purchases were fixed escalating annuities, while very few retirees 

chose full inflation protection of their income stream. This 

preference is understandable, given the materially higher initial 

income level achievable as shown in the following figure. 

Figure 1. The three life annuity options. 

There are three types of life annuities, each offering a different 

guaranteed income drawdown rate for life. In the case of a living 

annuity, your income drawdown rate remains flexible (within 

certain legislated limits), allowing you to adjust it in response to 

the underlying performance of your chosen investment portfolio. 

Why life annuities have become more popular recently 

For much of the last two decades, living annuities have been the 

most popular retirement income option (comprising ~90% of 

annuity purchases at retirement). However, life annuities have 

become more popular recently, taking the split closer to 60% in 

favour of living annuity purchases and 40% in favour of life annuities. 

This growth in popularity is thanks to the higher starting 

retirement income rates for life annuities driven by elevated yields 

on long bonds. This is because the life insurers (who issue life 

annuities) typically buy government and other high-quality bonds 

to back the guaranteed future obligations (retirement incomes 

for life) they must pay to their annuitants. Long bond yields are 

currently high due to several country-specific factors, which we 

have written about on several occasions [1] . 

While the 5% escalation rate has been a good proxy for inflation 

in South Africa in recent years, coupled with the rhetoric from 

the South African Reserve Bank (SARB) around anchoring local 

inflation expectations lower to be more in line with global 

competitors, the implicit assumption that buyers of fixed 

escalating annuities make is that inflation will remain 

around 5% pa for the next 20 to 25 years. We think this is a 

mistake and akin to insuring your car against a fender bender 

(mild inflationary outcome), but not a total write-off scenario 

(double-digit inflation). 

We have become used to a benign inflationary environment 

in South Africa, with annual price increases typically within the 



BLUE 

CHIP 

SARB’s target range of 3% and 6%. The period of high inflation 

experienced in the 1970s and 1980s seems far in the distant past. 

Figure 2. South Africans have become used to a benign 

inflationary environment. 

The graph below represents the retirement income level for 

an investment of R1-million given certain assumptions (see 

figure below). The starting income for the level life annuity is 

defined by the mint bar, for the escalating annuity in blue and 

the inflation-linked annuity in grey. Suppose we assume the 

lowest starting income amount to be equal to your current living 

expenses (as represented by the light blue line) coupled with a 

benign inflationary environment (5% inflation over 20 years). In 

that case, only the level annuity’s income falls behind in purchasing 

power after 15 years. And after 20 years, selecting this annuity 

option would leave you 23% behind in living expenses. 

Figure 4. A benign (5%) inflationary environment. 

While our base case is that monetary policy will remain sound 

and that inflation should stay close to the target, the tail risk of 

a period of much higher inflation over the next two decades 

has increased. This is because of the additional funding required 

because of deteriorating government finances, as demonstrated 

by the increasing disconnect between government expenditure 

(blue line) and revenue (mint line). 

Figure 3. South African government expenditure vs income. 

Suppose we consider a blow-out scenario, with high inflation of 

15% pa over 20 years. In that case, the retirement income paid 

out by a level and escalating annuity will fall behind one’s living 

expenses by around year five. In contrast, the income from an 

inflation-linked annuity continues to offer protection for 20 years. 

Figure 5. A high (15%) inflationary environment. 

While National Treasury has done well in containing spending in 

the fiscal year 2023/2024, looking ahead, however, decisions about 

large allocations (such as the long-term future of the Social Relief of 

Distress grant, funding of national health insurance and additional 

investment in critical infrastructure) have yet to be made. 

Why this matters so much to investors 

Let’s consider a simplified model to illustrate the importance of 

selecting the right retirement income strategy within the context 

of potentially higher future inflation. 


49

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Life annuities force retirees 

into making a difficult tradeoff 

between maximising either 

their initial income rate or longterm 

inflation protection. 

Figure 7. Living annuity flexibility is valuable. 

Notably, while the 15% inflation scenario is purely hypothetical, 

it is not entirely inconceivable, as shown in Figure 2 (1970s to 

early 1990s). Think of this as a stress test of the robustness of your 

chosen retirement income strategy. 

Harnessing the flexibility of a living annuity 

Let’s compare this to a living annuity where the underlying 

investment portfolio consists of an actively managed multi-asset 

portfolio with enough growth assets (60% to 70%) to achieve 

meaningful real returns over time such as the Coronation Capital 

Plus Fund. (This fund aims to achieve a return of 4% above inflation 

while minimising volatility and has historically achieved 5% to 6% 

above inflation.) Importantly, the inclusion of growth assets in the 

portfolio funding your retirement income means that you have a 

decent probability of protecting purchasing power in both the 

benign and blow-out inflationary scenarios. 

Figure 6. Living annuity outcomes when return targets are met. 

Putting it all together 

Calculating the present value of the cash flows of the respective 

life and living annuity options is a different way of examining 

these scenarios. 

In the Figure 7, and using the same assumptions as above, 

we show how well your chosen annuity option protects the 

purchasing power of R1-million over 20 years given the two 

inflationary scenarios (5% benign or 15% blow-out). Note that a 

[1] 

https://www.coronation.com/en-za/personal/latest-insights/authors/nishan-maharaj/ 

present value of less than R1-million means that purchasing power 

hasn’t been protected over this period. 

Key observations 

• Of the three life annuity options, selecting the 5% escalating 

annuity offers the best value in a benign (5%) inflationary 

scenario, whereas choosing the inflation-linked annuity 

delivers the best outcome in a high inflation (15%) scenario. 

This demonstrates that the preferred life annuity option 

depends on the inflation outcome (an unknown variable), 

effectively requiring investors who purchase life annuities 

to bet on the rate of inflation over the coming decades. 

• In turn, the living annuity option (assuming the target 

rate of real returns are achieved from its underlying 

portfolio) managed to deliver good value in both benign 

and blow-out inflationary scenarios, potentially delivering 

much more valuable outcomes in a blow-out inflationary 

scenario. This is primarily thanks to the flexibility of a living 

annuity that allows investors to choose an underlying portfolio 

that can deliver inflation-beating returns through exposure to 

growth assets. 

In summary 

While life annuities are often perceived to be lower risk than 

living annuities as they remove sequence-of-return and longevity 

risks, they force retirees into making a difficult trade-off between 

maximising either their initial income rate or long-term inflation 

protection. The flexibility inherent in living annuities, primarily 

through enabling the inclusion of growth assets in your retirement 

portfolio, improves the probability of achieving good outcomes 

regardless of the actual inflation scenario. This removes the need to 

take a view on the future path of inflation at the point of retirement. 

This analysis shows that navigating post-retirement income 

options is complex and requires careful consideration, which 

explains why most investors will benefit from the assistance of 

their financial advisor when making life-defining decisions at 

the point of retirement. 



BLUE 

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Leveraging gamification for 

enhanced retirement preparedness 

among millennials 

In the ever-evolving landscape of financial planning, innovative approaches 

are imperative to engage and educate today’s workforce. 

One such promising strategy is gamification, particularly 

in the realm of retirement preparedness. A recent study 

by Chrizaan Grobbelaar, a doctoral candidate at the 

University of the Free State, has shed light on the 

potential of gamification to significantly enhance the financial 

literacy and retirement preparedness of millennials. 

Millennials, defined as individuals born between 1981 and 

1996, are currently between the ages of 28 and 43. They face 

unique financial challenges, including substantial student debt, a 

fluctuating job market and a general mistrust of long-term financial 

systems. Consequently, many prioritise immediate financial needs 

over long-term savings, often resulting in insufficient retirement 

funds. This demographic is also characterised 

by their tech-savvy nature, familiarity 

with gaming dynamics and preference for 

interactive and engaging experiences. 

Grobbelaar’s study aimed to explore 

the effectiveness of a gamified retirement 

planning application in improving 

millennials’ financial literacy and retirement 

preparedness. The research employed a 

randomised control experiment with three 

groups: a control group, an experimental 

group exposed to the gamified app and 

another experimental group provided with 

educational infographics. 

The study’s findings were compelling: 

Effectiveness of gamification. The gamified retirement planning 

app significantly improved basic financial literacy scores by 7.3%, 

compared to a 6.4% increase in the education group and a 3.3% 

increase in the control group. This suggests that gamification can 

make learning about financial concepts more engaging and effective. 

Financial retirement literacy. Interestingly, educational 

infographics were more effective in increasing financial retirement 

literacy, with a 12.9% improvement compared to a 2.9% increase 

in the gamification group and no change in the control group. 

This indicates that while gamification improves general financial 

literacy, traditional educational tools may still be more effective 

for in-depth knowledge on specific topics. 

Retirement preparedness. The gamification group 

demonstrated increased interest in retirement planning, 

highlighting the potential of gamified approaches to motivate 

individuals to engage with their financial futures. This increased 

engagement is crucial for fostering better retirement planning 

habits among millennials. 

The implications of these findings are significant for the financial 

planning industry. By incorporating gamification into financial 

education programmes, we can create more engaging and effective 

learning experiences that cater to the unique preferences and 

challenges of millennials. Gamification not only 

makes learning fun but also provides immediate 

feedback and rewards, which can motivate 

individuals to adopt better financial habits. 

However, it is important to recognise that 

gamification is not a one-size-fits-all solution. 

While it enhances basic financial literacy and 

engagement, traditional educational tools like 

infographics still play a crucial role in imparting 

in-depth knowledge. A blended approach that 

combines the strengths of both methods may be 

the most effective strategy for comprehensive 

financial education. 

Professor Liezel Alsemgeest, Director: As financial planners, it is our responsibility to 

School of Financial Planning Law, UFS innovate and adapt our approaches to meet the 

needs of our clients. By leveraging gamification, 

we can help millennials – and future generations – navigate the 

complexities of retirement planning and secure a financially 

stable future. Embracing such innovative tools not only enhances 

the services we offer but also contributes to the broader goal of 

improving financial literacy and retirement preparedness. 

Gamification holds great promise for transforming financial 

education. As we continue to explore and refine these tools, we 

must remain committed to providing the best possible resources 

and support to our clients, ensuring that they are well-equipped 

to achieve their financial goals and enjoy a secure retirement. 


51

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INVESTMENT | ETFs 

Capturing value for clients from 

South Africa’s ETF boom 

PwC’s report, ETFs 2026: The Next Big Leap, reveals that 58% 

of respondents expect global exchange-traded fund (ETF) 

assets under management (AUM) to reach USD18-trillion 

by 2026. Additionally, 84% anticipate that online platforms 

will become the primary source of future demand for ETFs. This 

global trend is mirrored in South Africa, where Satrix introduced 

the first ETF in 2000. 

The South African ETF industry has experienced impressive 

growth. As of December 2023, the total ETF industry AUM, including 

commodities, reached R147.9-billion, a growth of 25.4% from the 

previous year. Satrix, specifically, has seen its ETF AUM grow from 

R25.5-billion in December 2020 to R52.3-billion in December 2023, 

reflecting a compound annual growth rate (CAGR) of 27.1% per 

annum, compared to the industry growth rate of 13.2% per annum. 

We are still seeing healthy flows into ETFs midway into 2024, 

with nearly R4-billion of net flows into the range of ETFs available 

in South Africa, with Satrix receiving 40% of these flows. This robust 

activity, despite some product consolidation, underscores the 

ongoing appeal and resilience of ETFs. 

Here’s why ETFs should be an attractive option for financial 

advisors to diversify client portfolios: 

Greater certainty 

ETFs employ rules-based or systemic strategies, offering clients 

greater transparency and consistency in their investment choices. 

These strategies rebalance back to their stated objectives, providing 

clients with the confidence that they will always get what’s on the 

label. This predictability builds greater investor confidence. 

Compelling medium- to long-term performance 

The arithmetic of active management suggests that, after 

accounting for higher fees and transaction costs, the average 

actively managed rand will underperform the average broad-market 

indexed rand. While an index fund might slightly underperform 

the market benchmark it tracks, its cost-effectiveness often leads 

to significantly better-than-median returns over the medium to 

long term. The lower costs associated with index-based ETFs can 

significantly improve overall investment outcomes through the 

consistent compounding of lower fees. 

Unique cost structure 

ETFs are designed to protect existing investors from 

the costs generated by others entering or exiting the 

fund, unlike unit trusts. This design feature shields 

long-term investors from external churn, safeguarding 

their performance and ensuring a fairer cost structure. 

Extensive investment choices 

ETFs offer a broader range of investment strategies compared 

to index fund unit trusts, which enables advisors to construct 

more tailored portfolios for clients. They facilitate access to 

diverse asset classes through the stock exchange mechanism. 

This provides a transparent and liquid way to gain exposure to 

traditionally more opaque and complex asset classes, such as 

bonds, currency or commodities. 

The changing tide 

Five to 10 years ago, there was considerable scepticism 

regarding the adoption of ETFs in South Africa due to the unique 

characteristics of our market. However, with over two decades of 

index history now available for analysis, ETFs have proven their 

worth. We’ve also seen robust growth in the take-up of ETFs, 

since being made available on LISP platforms. The last three 

years to June 2024 saw AUM grow almost five-fold, from just over 

R1-billion to over R5-billion. The arithmetic of active management 

is becoming more evident to advisors and investors, further 

boosting the case for ETFs. 

Risk mitigation and diversification 

In volatile markets, ETFs provide significant benefits for risk 

mitigation through diversification. The increased range of 

investment strategy choices across different asset classes 

or even multi-asset class (balanced) ETFs allows advisors to 

construct well-diversified portfolios for clients that capture 

their desired themes. For example, advisors can employ a lowvolatility 

local equity strategy through the Satrix Low Volatility 

ETF or gain high rand-hedge exposure for clients via the Satrix 

JSE Global Equity ETF. Defensive options include interestbearing 

ETFs like the Satrix Local Bond ETF and Satrix Global 

Bond ETF. 

Offshore and local exposure 

ETFs offer both offshore and local exposure. For example, the 

Satrix MSCI ACWI ETF tracks the MSCI All Country World Index, 

providing exposure to over 2 800 companies across 23 developed 

and 24 emerging markets. Other options include thematic 

strategies like the Satrix Nasdaq 100 Feeder ETF for technological 

innovation and the Satrix MSCI World ESG Enhanced Feeder ETF 

for climate transition and ESG investing. 

The ETF boom in South Africa is multi-faceted, driven by 

cost efficiency, performance and accessibility. As advisors, 

understanding these drivers will help you guide your clients better 

and offer a broader palette of effective investment strategies. 

Kingsley Williams, Chief Investment Officer, Satrix

Indexation: Anything but Passive. 

Indices can be actively designed, like our Factor Range. 

Indices can be geographically diversified, like our Global ETF Range. 

Indices can be optimally designed like our Multi-Asset Range. 

Indices can be designed to target themes, like our Thematic Range. 

While indices can take many different forms, all are transparent 

and low-cost. 

Take control of what you’re investing in by 

incorporating indexation into your portfolio. 

Contact us to learn more at 

institutional@satrix.co.za. 

Satrix Investments (Pty) Ltd is an approved financial service provider in terms of the Financial Advisory and Intermediary Services Act, No 37 of 2002 (“FAIS”). 

Satrix Managers (RF) (Pty) Ltd (Satrix) is a registered and approved Manager in Collective Investment Schemes in Securities.

BLUE 

CHIP 

INVESTMENT | Income funds 

Game of Loans: choosing 

an income manager 

Income fund investing is growing in importance, not only as a provider of income, but also as a real return 

driver. With a host of different possible styles and risks, how do you choose a manager to best suit your needs? 

There are several reasons to invest in an income fund – 

to generate income, to be a ballast in a multi-asset fund 

or as a temporary warehouse for funds pending their 

investment elsewhere. But you always need to ensure 

your choice of fund manager is based on sound reasoning and not 

just because it’s a well-known name or due to past performance. 

Income funds can be managed in different ways, from 

focusing on credit (corporate, parastatal or securitised debt) to 

increasing fund yields or managing terms and duration (interest 

rate risk) in anticipation of changes in monetary policy or other 

macroeconomic factors. 

There is no right or wrong – it ultimately depends on your 

investment needs. For example, how do they fit best into your 

total investment solution? What are the levels and types of risk 

you are willing to take? 

Here is a guide to help you make an informed decision: 

1. Define your investment objectives 

Spend time with your financial advisor considering such points as: 

• Are you saving in a retirement annuity or drawing income from 

a living annuity? 

• Are you investing temporarily pending investing elsewhere or 

is this a long-term investment? 

• Is this a stand-alone investment or part of a larger solution? 

• What level of income and liquidity is required? 

• What is your appetite for credit and duration risk? 

2. Look at the fund manager’s investment strategy 

Examine a fund manager’s strategy and ensure it’s designed to 

generate consistent and sustainable income. Assess how the fund 

allocates between income-producing investments and verify that 

the manager maintains this strategy over time. 

Popular investments include: 

• Government debt such as listed nominal bonds, inflation-linked 

bonds or treasury bills. 

• Fixed deposits and Negotiable Certificates of Deposit (NCDs) 

issued by banks. 

• Subordinated bank debt. 

• Corporate debt. 

• Parastatal and municipal debt. 

• Securitised debt (pools of loans, for example, mortgages, credit 

cards or vehicle financing). 

The credit quality can vary considerably between these types of 

loans, and, in some cases, the return of capital becomes more 

important than the return on capital. 

André van der Merwe, Head of Retail, Matrix Fund Managers 

3. Review performance metrics 

Look for income fund managers with sufficient experience and 

examine their track record across different market cycles. Look 


INVESTMENT | Income funds 

BLUE 

CHIP 

beyond recent performance for funds that consistently deliver on 

their promise over time. 

Although income funds focus on capital preservation and 

risk management, they also provide attractive real returns over 

inflation. These returns can have the occasional negative month, 

although most aim not to have any negative quarters. 

In some cases, the return of 

capital becomes more important 

than the return on capital. 

Examine the current and historical yield of the fund and 

compare this to the total return of the fund over time. Be aware 

if the performance is related to general market conditions or the 

manager’s abilities. 

4. Evaluate risk management practices 

“Rule No. 1: Never lose money. Rule No. 2: Never forget Rule 

No. 1.” – Warren Buffet 

Performance generally requires a trade-off with risk – to achieve 

higher performance one must usually take on greater risk which 

can be difficult to identify. 

Consider the various types of debt issued by high-quality 

borrowers – such as the South African government and big 

banks – that may offer low-risk yields of around 10% pa. Now, if 

a manager is holding an underlying security, let’s say something 

like securitised motor vehicle loans, that is yielding 15% pa, then 

you need be realistic about the risk associated in getting you 

that yield. 

Investigate the risk management techniques of the manager 

and look for strategies that include measures to protect against 

significant losses, such as diversification of credit exposure or 

hedging. Note that the standard deviation of past returns reveals 

nothing about credit risk. To the contrary, most high-yielding 

corporate and securitised debt instruments tend to show very 

little price volatility over time. 

Safety first 

At Matrix Fund Managers, we adopt a safety-first approach 

in assessing the different drivers of return and we favour 

those asset classes that will assist us in achieving our target 

performance with the least amount of risk. We focus on highly 

liquid securities with very low credit risk. We overlay thorough 

macro analysis and market research with proven in-house skills. 

Our robust processes have delivered compelling returns over 

time, in line with investor expectations on risk and volatility, 

without adopting unnecessary risk.

BLUE 

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FINANCIAL PLANNING | Investment 

Capitalising on global 

opportunities 

The case for South Africans investing in global income assets. 

Investors looking beyond South Africa’s borders to diversify 

their portfolios globally typically focus on the opportunities 

provided by global equities. However, high interest rates in the 

currently uncertain investment environment provide another 

compelling opportunity to invest in high-yielding, low-risk globalincome 

assets. 

Given the inherent volatility and political uncertainty of the 

South African economy, global diversification is crucial. Offshore 

investments in more stable economies act as a hedge against local 

economic fluctuations and provide a broader security net against 

domestic unpredictability, thereby mitigating the risks associated 

with the South African economy. 

Investing in equities has always been the obvious choice when 

looking to diversify globally because South Africa’s stock market 

represents less than 1% of global stock market capitalisation. The 

JSE also offers limited exposure to the myriad of innovative and 

fast-growing industries, such as technology and pharmaceuticals, 

which are not well-represented on the JSE. 

While investing in equities has traditionally been the go-to 

strategy for global diversification, South African investors need 

to explore other options. US dollar-denominated income assets, 

which are currently benefiting from the high-interest-rate 

environment offer a unique opportunity. These assets provide a 

conservative way to invest in US dollars, offering low-risk yields of 

5% to 6% in dollars, which significantly outperform money market 

funds or cash. 

Regulation 28 of the Pension Funds Act allows investors to 

allocate up to 45% of their portfolio offshore. This regulatory 

provision enables investors to diversify their investment exposure 

globally, and diversification, according to scientific evidence, has 

historically been the most significant risk-reducing strategy in 

investment that doesn’t compromise expected returns. 

Global income funds are particularly appealing in the context 

of current global financial trends. These funds offer asset class 

diversification, certainty of returns and a reduced risk profile. 

South African investors can access these through local 

investment platforms in the form of dollar-denominated funds or 

local currency feeder funds. Primary considerations when investing 

should be that the funds offer highly diversified exposure across 

the more than 10 000 high-yield instruments available globally. 

It should be invested based on a risk-aware philosophy that 

optimises returns through high-quality, high-yield income assets. 

As a systematic investment company committed to scienceand 

evidence-based investing, we understand the importance of 

empirically grounded investment strategies that take advantage 

of all available global investment opportunities, of which global 

income funds are an especially attractive investment option in 

a high-interest-rate environment. This strategy promises higher 

returns and ensures a more stable and diversified investment 

portfolio in the face of local and global economic uncertainties. 

Bastian Teichgreeber, Chief Investment Officer, Prescient 

Investment Management 

Prescient Investment Management (Pty) Ltd is an authorised financial services provider (FSP612). Please note that there are risks involved in buying or selling any financial product, and past of performance 

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 conditions. 

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 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 consequential) or expense 

of any nature whatsoever which may be suffered because of, or which may be attributable directly or indirectly to the use of or reliance upon the information. 


COULD AIRFARES 

IN AUSTRALIA 

AFFECT YOUR 

RETIREMENT SAVINGS? 

WE CONSIDER IT ALL TO GIVE 

YOUR INVESTMENTS THE ADVANTAGE. 

At Prescient Investment Management we analyse 

120 million data points daily, because we believe that 

the biggest returns can be found in the smallest insights. 

It’s been the Prescient way for 25 years. 

And it’s the future of investing. 

Prescient.co.za 

The future of investing. 

Prescient Investment Management (Pty) Ltd is an authorised financial services provider (FSP 612). For any additional information please go to www.prescient.co.za.

BLUE 

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FINANCIAL PLANNING | Portfolios 

How Mazi Multi-Asset 

delivers long-term returns 

“It is possible to fly without motors, but not without knowledge and skill.” – Wright brothers 

We all expect different things from investment 

portfolios. Some investors require income over the 

medium term without putting capital at risk, while 

others have more patience but require significant 

real returns in exchange for their tolerance. There are also those 

who are unsure of what they need or what to expect, as long as 

the value of their portfolio doesn’t get eroded by inflation. As 

professional fund managers, our job is to provide investors with 

solutions that meet their requirements. 

Broadly speaking, if you have a longer-term horizon, you 

may be better suited to higher equity allocations, typically up to 

75%, while those with a shorter timeframe will typically have an 

equity allocation of 30% to 40%, with defensive asset classes like 

bonds and cash making up most of the portfolio. This is a broadly 

acknowledged cookie-cutter approach to multi-asset investing. 

So, all good and well, we have the building blocks required to 

do so, but how do we approach the conundrum of trying to 

1.) Deliver an above-average return, in line with the 

specified requirements 

2.) Ensure that the investment portfolio’s 

purchasing power is not eroded 

3.) Safeguard their investments? Without 

going into the delicate intricacies of the 

multi-asset models we utilise, we can break 

this down into three wide-ranging guiding 

principles that we follow: 

Stick to the process 

Over the long term, asset allocation drives most 

returns in multi-asset portfolios, while security 

selection will add short- to mediumterm 

alpha. Our process is a 

fundamental one, applied to 

both top-down allocation 

and bottom-up selection. 

We don’t try to time the 

market; a fundamental 

valuation approach 

cannot be used to 

time markets. 

What we do is ensure that over time, we realise greater value than 

the price we paid for an asset. 

We remain disciplined through periods of poor performance, as 

there will be periods where capital markets do not deliver returns 

as anticipated. Markets have and always will be volatile, we can’t 

control what happens there, but we understand the historical return 

trend of asset classes, which helps with our allocations as well as to 

manage risk. 

Active management 

We are active managers, so we employ strategies to identify and 

capitalise on market opportunities. Over the short run, markets are 

driven by factors that change quickly such as headlines, trading 

activity and flows as well as sentiments. Markets can be very volatile 

over the short run and returns can be quite unpredictable. 

These are the ebbs and flows of capital market returns. Capital 

markets don’t move in a straight line, and hence we remain alive to 

the opportunities that we can distill through our process. 

We also remain wary of chasing yesterday’s winners and avoiding 

today’s dogs. Buying high and selling low is not the recipe for success. 

Risk management 

No-one will consistently get market forecasts correct. We aim to 

be correct 60% of the time. Knowing that we can get it wrong and 

admitting as much when we do get it wrong, helps avoid blow-ups. 

And every year, as we go through another 12 months of varying 

degrees of market performance, we learn new lessons and continually 

improve our process. 

We also note that while portfolio diversification is important, we 

want to do it without losing the incremental benefits of having highconviction 

calls. Executed properly, this will maintain portfolio returns 

without taking on undue risk. 

In conclusion, our approach to managing investment portfolios is 

anchored in a disciplined process, active management, and rigorous 

risk management. By adhering to these guiding principles, we strive to 

meet the diverse needs of our clients, ensuring that their investment 

objectives are achieved while safeguarding their capital. Through 

continuous learning within our diverse team, we aim to deliver 

consistent and above-average returns over the long term, providing 

our investors with the confidence and peace of mind they seek. 

Kopano Makhu, Portfolio Manager, Mazi Asset Management 


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Addressing key risks in a 

retirement portfolio 

Retirement is a life event that brings about mixed emotions. Many individuals in South Africa approach it 

with excitement, others with anxiousness and uncertainty. 

One of the challenges advisors face when preparing and 

managing a client’s retirement plan is to reduce the 

risk of the client running out of money during their 

retirement years. Some of the questions advisors often 

grapple with are: 

1. What if the client lives longer than the typical life expectancy? 

2. What if the client retires during a great financial crisis or a 

pandemic? 

3. How much growth assets and offshore exposure should the 

portfolio hold? 

4. How do you manage market risk in the portfolio? 

These are just some of the questions our research has focused on 

over the last few years. The aim was to have an evidence-based 

framework to help advisors navigate the difficulty and dilemma 

of investing during a client’s retirement years. 

Our research focused on developing strategies to address two 

key considerations when managing a portfolio for retirement: 

SEQUENCE RISK 

While sequence risk is not as important in the accumulation 

phase of a client’s investment journey, it can make or break them 

financially, and emotionally, during the decumulation 

phase. Clients retiring at the start of a bull market 

often have a much better investment experience 

than those starting their retirement journey just 

before a major market correction or an adverse 

event like the Covid-19 pandemic. 

But what can you, as a financial advisor, do 

to reduce sequence risk? Our research shows 

that appropriate asset allocation, based not only 

on long-term returns but also on incorporating 

different risk criteria, is critical in constructing 

a decumulation portfolio. Secondly, 

continuously applying tactical asset 

allocation based on the valuation 

of asset classes is one of the best 

strategies to mitigate sequence 

risk. However, implementing this 

requires a portfolio mandate 

specifically developed and 

managed for retirement 

investing. That’s why we believe an outcomes-based investment 

strategy implemented through building blocks is appropriate for 

this purpose. 

RUIN PROBABILITY 

The second consideration is longevity. In 2022, South Africa had 

the largest elderly population in its history. Living longer may be 

wonderful, but it also means your retirement portfolio needs to last 

longer. Therefore, when constructing a portfolio for retirement, the 

ruin probability should be considered. Ruin probability refers to 

6% initial 

withdrawal, 5% 

escalation, 30-year 

investment 

horizon 

7% initial 

withdrawal, 5% 

escalation, 30-year 

investment 

horizon 

Growth assets 40%-60% 80%-90% 

Defensive assets 40%-60% 10%-20% 

Local assets 70%-80% 65%-70% 

Foreign assets 20%-30% 30%-35% 

RUIN 

PROBABILITY 12% or less 33% or less 

the likelihood of a retirement portfolio being unable to provide the 

income required for the specified investment horizon. Our research 

found that ruin probability can be reduced through appropriate 

asset allocation. However, the optimal mix of growth assets and 

offshore exposure is affected by the portfolio withdrawal rate. 

Our research found that at a 5% withdrawal rate, the ruin 

probability can be reduced to less than 5%. It is also interesting 

to note that at this withdrawal rate, the ideal portfolio requires 

fewer growth assets and less offshore exposure – the main drivers 

of risk in a portfolio – than expected. As indicated in the table 

above, the exposure to growth and offshore assets increases as 

the withdrawal rate increases. However, increasing these assets 

does not mitigate the ruin probability. At a 7% withdrawal rate, a 

client has a 33% probability of running out of money before the 

30-year investment horizon. 

Findings like these indicate that constructing a retirement portfolio 

entails more than selecting the right funds; it requires portfolio design 

based on defined financial and behavioural outcomes. 

60 www.bluechipdigital.co.za 

Marius van der Merwe, Chief Executive Officer, Amity Investment Solutions

Delivering a great investment experience 

for clients is about more than just returns 

An engaging investment planning 

process 

Delivering planned outcomes Providing a valued client service Great investment experience 

A great investment experience enhances a client’s financial wellbeing by enabling 

their ideal life, ensuring the investment solution is behaviourally in sync, and 

delivering consistent investment returns. 

Amity Investment Solutions is a boutique DFM which enables financial advisors to 

consistently deliver a great advice experience to clients through our integrated 

investment management tools and outcomes-based investment solutions. 

Our range of outcomes-based investment solutions are managed to: 

DELIVER RETURN OUTCOMES 

Deliver a predefined return outcome over a 

rolling investment horison. 

MAXIMISE CONSISTENCY 

Maximise the consistency of achieving the 

outcome over a rolling investment horison. 

ACTIVELY MANAGE RISK 

Actively manage the solutions risk within a 

predefined risk budget. 

PRESERVE AGAINST INFLATION 

Preserve capital against inflation as a minimum 

outcome over the investment horison. 

Contact us to find out how Amity can enhance your advice proposition to clients. 

www.amity.co.za | 087 980 5321

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FINANCIAL PLANNING | Succession plans 

Supporting independent financial 

advisors with growth and succession 

Carmel Wealth, a leading South African wealth management 

firm, has recently received strategic investments from 

two global investment companies: Correlation Holdings 

(Correlation) and ThirdStream Partners (ThirdStream). 

These investments underscore Carmel Wealth’s commitment 

to driving future growth and delivering superior outcomes for 

independent financial advisors (IFAs). 

Strategic partnerships 

Correlation, a UK-based privately-held investment company, 

specialises in long-term strategic partnerships with premier 

financial services companies. Their backing of Carmel Wealth 

aligns with their mission to support highly experienced 

entrepreneurial businesses. ThirdStream, a US-based private 

investment entity, has increased its equity stake in Carmel Wealth. 

ThirdStream is known for investing in venture and strategic 

opportunities in leading financial technologies (FinTech) and 

financial services. 

Supporting future growth 

Since its inception in January 2023, Carmel Wealth has experienced 

solid growth. The firm focuses on providing IFAs with strategic 

growth opportunities and flexible retirement and succession 

solutions. By assisting with long-term capital, technology 

enablement, compliance and risk services, investment solutions 

and proposition enhancements advisors can deliver superior 

outcomes to their clients and unlock enterprise value. 

Strengthening independence 

The closing of these investments is a testament to Carmel Wealth’s 

unique growth strategy, now significantly enhanced by Correlation’s 

and ThirdStream’s extensive knowledge, experience, permanent 

private capital and patient long-term approach. Independence 

remains core to Carmel Wealth’s value proposition. The resources 

and long-term investments from Correlation and ThirdStream 

will ensure that Carmel Wealth’s management team and growing 

complement of independent financial advisors continue to direct 

the business in all respects. 

Statements from leadership 

Nico Marais, Chair of Carmel Wealth: “We are excited by this vote 

of confidence in Carmel Wealth. We are committed to offering South 

African advisors a home where they can truly focus on their clients, 

access capital, and enjoy attractive retirement and succession 

options while providing best-in-class solutions at competitive fees.” 

Hans de Nysschen, CEO of Carmel Wealth: "As a leadership team, 

we have invested considerable effort in planning our growth 

strategy and seeking patient, long-term capital that understands 

this strategy. Both Correlation and ThirdStream have stood out as 



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being like-minded partners who fully grasp the unique opportunity 

to provide independent financial advisors with a superior platform for 

growth and capital value unlocking.” 

Jaco Marx, Partner at Correlation: “Carmel Wealth has developed a 

unique proposition to offer growth capital to IFAs, alongside flexible 

succession and retirement solutions for an ageing IFA community. 

There are few independent wealth management firms in South 

Africa where advisors are equity partners and actively participate in 

running the firm rather than being treated as asset gatherers. This 

model highly correlates with Correlation’s proven partnership model.” 

Blake Grossman, Partner at ThirdStream: “We believe that investors 

should have access to the best global investment, tax,and structuring 

solutions, and are confident that Carmel Wealth is uniquely positioned 

to deliver these solutions in the South African marketplace.” 

About Carmel Wealth 

Carmel Wealth understands that each independent wealth 

management practice is unique, with varying needs in terms 

of growth aspirations, succession planning and unlocking 

enterprise value. 

As a long-term investment partner with a flexible approach, 

Carmel Wealth is both a house of top IFA brands, where 

advisors retain management autonomy and brand identity, 

and a home for independent advisors who prefer to integrate 

into a wealth business with a robust support infrastructure, 

allowing them to focus on their clients. This infrastructure 

includes risk and compliance services, technological 

enablement, investment solutions, growth support and 

financial planning proposition enhancements. 

Carmel Wealth is actively investing in the businesses of like-minded 

independent financial advisors and top wealth management 

entrepreneurs as part of its determined growth strategy. The first 

such acquisition was that of Wealth Associates in 2023. Benefits for 

independent advisors joining the Carmel Wealth Group: 

• Structural independence, allowing advisors to prioritise client needs 

without being compelled to support specific product providers. 

• A unique ownership model where advisors become ordinary 

shareholders in the Carmel Group. 

• A well-capitalised group enabling growth, scalability and efficiency. 

• A flexible partnership model, offering various collaboration and 

succession options, supported by a highly experienced board and 

management team. 

• Extensive global networks and partnering capability underpinning 

innovative solution structuring opportunities. 

Interested independent financial advisors can contact Hans de 

Nysschen or Kathryn van Dongen for more information: 

hans@carmelwealth.co.za 

kathryn@carmelwealth.co.za 

Hans de Nysschen, CEO 

Hans de Nysschen is an industry stalwart and seasoned financial 

services professional with over 25 years of experience in 

strategy development and management, covering mergers and 

acquisitions, insurance, investments, wealth management, private 

equity and venture capital. 

Kathryn van Dongen, COO 

Kathryn van Dongen is a qualified chartered accountant with a 

master’s in business administration (MBA). As an accomplished 

managing director and COO within the financial services sector, 

she is responsible for formulating and driving the Group’s 

expansion strategies and business operations. 


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ROUND TABLE SERIES | Offshore investing 

Offshore investing: tax issues 

and jurisdictions 

Three of South Africa’s top investment professionals discuss offshore investing and structuring financial 

plans to suit each client’s needs and objectives. 

PART ONE 

Warren Ingram [WI]: Dividends, tax and capital gains tax 

become a major issue when we are investing overseas. Would 

it not be better to get global exposure through a feeder fund 

(also known as an asset swap)? 

Hannes Esterhuyse [HE]: When you follow the route of an asset 

swap, there are two aspects that you need to keep in mind. First, 

you are not sanitising the geopolitical risk. For example, if you 

are concerned about the political situation in South Africa then 

in an asset swap, you are not taking the risk out of the equation 

because your funds will need to come back into South Africa 

and be converted into rands. So, although you may benefit from 

the currency movement in this scenario, you do not escape the 

geopolitical risk. 

The second point relates to how capital gains tax is calculated 

when you have an asset swap versus hard currency where there 

is a functional currency involved. The bottom line is that you pay 

more tax when you do an asset swap as opposed to when you go 

direct with hard currency offshore. 

WI: If you go overseas, how do we decide on where the home 

for the money is? Which jurisdiction do we choose? 

HE: Let’s say on the one hand you have America. Everybody 

wants to invest there but once you are in that tax net and take 

all their compliance issues on board, it becomes a challenge. 

On the other hand, you have places like Afghanistan, where 

no-one wants to invest. In between these two extremes, we 

have tax havens and international finance centres. A tax haven 

is a place where you can hide your money and your income will 

not be exposed to taxation. This is something that we do not 

want you to do as a client because we believe in doing things 

the right way. 

International finance centres are places like the Channel Islands. 

Let’s look at some of the characteristics of these jurisdictions. They 

are typically tax-neutral. In other words, you will not be paying any 

more or any less tax in those jurisdictions than you would have 

paid in South Africa or your tax residency jurisdiction. 

They are friendly towards offshore investment. There is a 

willingness to do business with international investments. 

Investing in hard currency is the whole purpose of the investment 

route. There is political stability so rating agencies would rate 

these jurisdictions well. International finance centres are where 

you want to go. However, a jurisdiction could be viewed as an 

international finance centre by one country and not another. So 

always check what the Financial Action Task Forces stated on it. 

WI: We are in a complex global environment of taxes and there 

is much to focus on and to be aware of. 

Barry O’Mahoney [BM]: I am not sure that the product providers 

are providing the financial planners with enough information about 

the consequences to a global family.A lot of South Africans are in the 


ROUND TABLE SERIES | Offshore investing 

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MODERATOR 

EXPERT PANEL 

Hannes Esterhuyse, Regional Manager, Momentum 

Wealth International 

Warren Ingram, Executive Director and Co-Founder, Executive 

Director and Co-founder, Galileo Capital 

South of England, America or Australia and these three jurisdictions 

are quite tough on receiving money from offshore endowments. 

A South African endowment is an offshore endowment to a UK 

taxpayer, and an endowment that’s in Guernsey or on the Channel 

Islands is also an offshore endowment to them and when they 

receive that money, it can often become income taxable in those 

people’s hands. 

Many planners think that they have their affairs organised for 

their client here, the parents in South Africa, but the consequence 

for the ultimate beneficiaries, the children, is not well-structured 

for them so a lot of thought needs to go into this. 

In your share portfolios, if you buy shares such as Apple or any 

of the Magnificent Seven, the minute you get past US$60 000 

Barry O’Mahony, Founder, Veritas Wealth Management 

(R1 083 636 at time of publishing), then on your death that money 

will get taxed at 40% estate duty in the US because they are 

US-listed stocks. 

Also, for South Africans who have bought properties 

in the UK or who may have inherited money over there, 

if the amount is higher than 

325 000 pounds, then you must pay a 

40% UK estate or inheritance tax. 

To watch the round table in full, visit 

www.bluechipdigital.co.za or scan 

the QR code. 


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FINANCIAL PLANNING | Behaviour 

Courage: essential for 

authentic financial planning 

I 

recently ran a series of workshops on courage with financial 

planners, and it was heartening to see how the topic resonated 

so strongly with them. I believe courage is a core skill for 

financial planners to develop and is one of seven key skills for 

clients and financial planners that I include in my book The 7 Pillars 

of Financial Health. 

What makes courage so important for effective financial 

planning? It is easy to see the benefit of courage in physical 

situations. I enjoy riding a mountain bike, but I’m fearful when 

navigating any route remotely treacherous. A little more courage 

would help me enjoy those rides more, and more importantly, 

would help me be more skilful when navigating challenging 

obstacles. I can’t get my head around the mantra that “speed is 

your friend” on a mountain bike. To appease my lack of courage, 

I now ride mainly on gravel roads, for which I have enough 

courage to enjoy myself. It’s comforting knowing I don’t have to 

take too many big risks. 

This brings me to the role of courage in an intra- and interpersonal 

sense, which are very different from physical courage. We probably 

all know what courage feels like inside us, but because it’s 



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Courage is extremely important for a financial planner, but what 

makes it so important if their clients are unlikely to know the 

difference? A risk is that financial planners may take the path of 

least resistance with their clients. Clients often don’t know what 

they want, what they need or what is good for them. It’s a bit like 

someone going to see a doctor and not realising that eating lots 

of sugar is not good for them. The doctor tells the patient directly. 

Telling someone that they are eating too much sugar is arguably 

easy. For a doctor to tell us that we have a terminal illness may not 

be as easy. But the doctor is bound by their Hippocratic oath to tell 

us the way things are, whether this is easy or difficult. 

Acting in the client’s best 

interests requires courage. 

intra-personal, it’s hidden from others. Similarly, with interpersonal 

courage, it’s not always easy to see whether it’s being demonstrated 

or not. It’s much easier to see courage being demonstrated on a 

mountain bike when the rider races down a hair-raising single-track 

trail. So in an intra- and interpersonal sense, we may know we’re 

being courageous but this won’t necessarily be clear to others. 

Teagan Philips, a South African cyclist, cartoonist and adventurer, 

in a TED Talk in 2017, coined physical courage as “sexy courage”; 

and intra and interpersonal courage as “unsexy courage”. Looked 

at this way, it is clear which courage is more appealing to act on. 

Financial planning, however, is more nuanced. Our poor spending 

habits may not be life-threatening, not in the short-term anyway. 

I often hear financial planners talk of clients who earn well but 

spend even better. The path of least resistance is not to challenge 

the client about this behaviour. I’ve seen financial planners who 

don’t want to “rock the boat” with clients. The potential risk to the 

relationship of challenging the client is too much for them. They 

would rather keep the client who may be valuable to them in 

other ways. They may have a large asset base, be a good source of 

referrals, or be someone with whom they have a warm relationship. 

But in such a scenario, courage is absent, the courage to focus 

on what is really in the client’s best interests despite the risk this 

may pose to the client, the relationship and potentially to the 

financial planner’s income. 

Acting in the client’s best interests requires courage, 

particularly when their behaviour is in the spotlight. Spending 

too much may be a symptom of something deeper. A troubled 

marriage, an unsatisfying career or something even deeper that 

requires clinical intervention. 

Simply telling someone they are spending too much is 

unlikely to have an impact. The challenge for the financial planner 

is to find a way for the spendthrift client to acknowledge their 

behaviour and own the need to change it. Easier said than done. 

How can courage help in a situation like this? 

A financial planner recently asked me for some observations 

about a client scenario that ultimately led to losing the client. 

In one sense the financial planner had shown great courage. He 

had addressed the client’s excessive spending. I asked how he 

had approached it. 

The client had said she wanted more “fiscal discipline”. The 

financial planner immediately thought of the solution, a budget. 

The client liked the idea. The financial planner drew up a budget 


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for the client. Yet nothing changed. In fact, things deteriorated to 

the extent that the client fired the financial planner because he 

had not made any difference in the client’s life. Despite showing 

courage by attempting to help the client rein in their poor “fiscal 

discipline”, the financial advisor failed both the client and himself. 

“Sexy” courage is for those 

who are happy to risk life 

and limb on their bicycles. 

What went wrong? The client clearly did not take ownership of 

the budget the planner had drawn up. The financial planner had 

obtained the client’s input: she had provided all the numbers. But 

whose budget was it? This was not a collaborative approach. 

This was the client delegating a task to the financial planner 

which ultimately the client needed to own and live by. It was 

much easier for her to suggest that the financial planner hadn’t 

helped, had done nothing to improve her life. The client was still 

sitting with the original problem of a lack of “fiscal discipline”. 

And this is where the financial planner would have been best 

advised to begin. 

What exactly did the client mean by “fiscal discipline”? The 

financial planner had failed to unpack this with her. What was the 

spending pattern in the client’s life? What was behind this pattern? 

In my conversation with the financial planner, he acknowledged 

that he hadn’t explored any of this. He was curious about what 

was driving the client’s behaviour but didn’t have the courage to 

ask the question. So often a financial planner chooses not to go 

there because they fear what they may find out. This is the courage 

financial planners need if they are truly to serve their clients. 

Rob Macdonald, Head of Strategic Advisory Services, Fundhouse 

Drawing up a budget is easy. But getting to the bottom of what 

drives a client’s self-sabotaging behaviour requires courage and of 

course well-developed interpersonal skills. But without courage, 

the most well-honed skills will not be enough. 

As Maya Angelou says, “Courage is the most important of all the 

virtues, because without courage you cannot practise any other 

virtue consistently.” 

And for financial planners and their clients, it’s the “unsexy” 

courage that is the virtue that will serve both best, “sexy” courage 

is for those who are happy to risk life and limb on their bicycles. 

The 7 Pillars of Financial Health 

Based on insights gleaned from coaching and consulting 

with hundreds of financial and investment advisors over a 

career spanning 25 years, Rob Macdonald, Fundhouse, has 

recently published a book The 7 Pillars of Financial Health. 

Macdonald outlines why we need to radically rethink 

how we approach money in this compelling read, which 

is highly recommended for advisors who want to remain 

relevant in their professions. Similarly, it contains practical 

information that clients could use in the process of dealing 

with investment concerns. As Warren Ingram writes in the 

foreword, The 7 Pillars of Financial Health is not only aimed 

at professional planners: “Whether you’re a seasoned 

investor, a young professional just starting out, or simply 

an individual seeking financial well-being, this book will 

revolutionise your understanding of money and its role in 

shaping a fulfilling life.” 

Macdonald suggests that money ranks as a leading 

source of relational conflict and household stress in 

surveys worldwide despite the abundance of information 

and technology to help us manage it. In the introduction, 

he says that we go wrong by failing to recognise how 

completely interconnected and interdependent our lives 

and our money are. 

Macdonald uses the analogy of our physical health. We 

all know what to do to be physically healthy – eat healthily, 

exercise regularly, get enough sleep and limit our stress 

levels. But we struggle to do this because we are human. We 

are tempted by chocolate cake, delicious wine and the fact 

that Netflix is much more fun 

than going to the gym. 

He says, “The foibles of being 

human are summed up by the 

quip that ‘we spend our health 

to gain our wealth then spend 

our wealth to regain our health.” 

To overcome the challenges of 

being human while developing 

financial health, he enlarges 

seven skills that we need to work 

on throughout our lives. 


LARA WARBURTON 

FPI Financial Planner 

of the Year 

DR RODDY 

CARTER (USA) 

Neurocentric 

Coaching Expert 

HANNAH WILSON 

Family Law 

Practitioner 

OTHER SPEAKERS 

Adam Bacher 

Paul Cleworth (UK) 

Reg Thomson 

Andy Hart (UK) 

Amanda John-Ncube Andrew Russell 

Warren Shute (UK) Guy Holwill 

Tim Slatter 

Rob Macdonald 

17 SEP 2024 

Allan Gray Auditorium 

V&A Waterfront 

Cape Town 

*CPD Accredited Event 

Tickets available at: 

humansundermanagement.com/southafrica2024

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FINANCIAL PLANNING | Ownership 

Independence: is it important? 

I’ve been a financial planner for 21 years and have always 

considered my advice to be independent and taken pride 

in this. I recently had reason to delve into the importance of 

independence for financial planners and me personally. Our 

company has been approached by a private equity company that 

is buying financial services companies and already owns two asset 

management businesses. We have been assured that should we 

join them we could maintain our independence and keep giving 

the best advice to our clients with no pressure to include any group 

products. Before I get into my story, I’ll give some background 

starting with the legal position. 

Independence under the FAIS General Code of Conduct for 

Authorised FSPs and Representatives of 2003 (as amended) hinges 

on three criteria: 

• Ownership (with focus on significant owner) 

• Remuneration 

• Types of relationships 

To describe oneself as independent, we may not: 

• Be a significant owner (15% or more) of any product supplier 

or associate whose products we render financial services for. 

• Be significantly owned (15% or more) by any product supplier 

or associate whose products we render financial services for. 

• Receive or be eligible for any financial interest from a product 

supplier whose products we render financial services for, unless 

it is reasonably commensurate with services rendered, it may not 

be a double payment for that service and it should not give rise 

to any actual or potential conflicts between client and advisor 

interest. If there is any actual or potential conflict of interest it 

must be effectively mitigated. Finally, it should not impede the 

delivery of fair outcomes to clients. 

• Have any other relationship with a product supplier whose 

products we render financial services for where that relationship 

gives rise to a material conflict of interest. 

For most planners, ownership and incentives are top of mind. There 

was a time not so long ago when practices were joining networks 

and franchises and receiving large joining bonuses. 

Client policies and investments were being churned each time 

the advisor received a new joining bonus. Fortunately, that has 

now ended, but as a generalisation, tied advisors usually receive 

better incentives and rewards than independent advisors. 

What about non-financial incentives? It’s a known fact that 

product providers provide significantly better client service to 

tied advisors than that offered to independents who only service 

existing clients. We receive shocking service from those providers’ 

call centres and have no dedicated consultant or management 

attention when escalating problems. This lack of service is the 

withholding of a reward to non-supporting advisors who are trying 

Our role as advisors and 

planners is to provide the 

best advice to our clients. 

to service the clients of those product providers. I hope the COFI 

Act will address this through the client service responsibilities it 

places on product providers. 

The UK went through its Retail Distribution Review (RDR) 

process over a decade ago, and its rapidly implemented legislation 

saw a quick decline in the number of independent advisors. The 

cost of providing advice became prohibitive for smaller practices. 

To stay in business many became tied agents. 

South African advisors are also weighing up the everincreasing 

compliance costs, regulatory requirements and 

time lost costs against the convenience of outsourcing this and 

becoming tied agents. 

There is a spectrum of independence, with completely tied 

agents who are largely dictated to by the companies they work 

for, following rigid advice processes with scripts and approved 

product and fund lists on the one end of the spectrum. In the 

middle are the independent companies that have selected 

one or two providers to work with, in the interests of keeping 

administration and reporting simple, but still being able to offer a 

range of funds and investment solutions. On the other end of the 

spectrum are the independent advice firms that have contracts 

with most local and many international companies, and that are 

constantly evaluating new entrants and always amending their 

product and service offerings. These advisors can take on existing 

clients with a broad range of products and providers, and service 

those contracts wherever they may be without the client incurring 

penalties to move the funds or policies. 



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titles that have been put forward). I’ve had the opportunity to think 

long and hard about the company we are building, the interests 

of all our staff, and most importantly the interests of our clients 

who have been loyal to me and our company. Is my ego holding 

our company back or are there valid reasons for maintaining our 

independence? The sale of some or our shareholding would have 

given us an always welcome cash injection into our business to 

source more talent and fast-track growth. 

In closing, the offering company went so far as to say that 

although we would not be “legally” independent, we could advise 

our clients that we were “ethically” independent. We have a duty of 

care to our clients and to uphold our ethics as individuals and as 

a company, and I realised I see things in black and white – there is 

no grey. The only grey is the grey hairs on my head, and these have 

been earned after 30 years in the financial services arena. I know 

from my many years of corporate, when the leadership changes 

the rules often change too. A corporate promise today may not 

be binding in future, and moving companies and our clients is a 

distraction best avoided. 

As a company, we will continue to enter discussions with 

interested parties to see if we can find common ground. I believe 

there are many advantages through synergy, but independence 

is worth fighting for. 

Our role as advisors and planners is to provide the best advice to 

our clients. Most product houses have certain areas of excellence, 

some products that underperform and some gaps in their suite of 

solutions, and tied agents are compelled to recommend from this 

range – their best advice is limited. 

Being independent carries additional costs – both in rands and 

time spent. The cost of regulation increases at a fast pace, and this 

requires increasing management attention in smaller businesses. 

Accreditation across a broad range of product providers is very 

onerous each year. Poor service from many call centres demands 

more internal administration resources to follow up and fix the 

many mistakes that affect positive client outcomes. Succession is 

also more difficult in an independent practice. 

To my mind, the benefits of independence outweigh those 

costs. In this ever-changing technology era, new product providers 

are bringing out self-service products at very low cost. Investment 

products are always being launched as new trends emerge – think 

ESG, crypto, infrastructure projects, new structured products, 

hedge funds – the list is endless, and independence enables us to 

consider them all – not all are worthy of investment! 

And now back to my personal story. I realised that my attachment 

to “independence” could be an ego issue. I view independence as 

superior to being tied (or hybrid or multi-tied or any of the other 

Lara Warburton, CFP®, Managing Director, Integral Wealth 

Management and 2023 FPI Financial Planner of the Year. 


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FINANCIAL PLANNING | Regulation 

Are independent financial 

planners facing extinction? 

Independence is often touted as a significant advantage in 

financial planning because clients have some reassurance 

that their financial planner is providing advice untainted by 

commissions or sales incentives. There is also an argument 

that one product provider cannot be the best solution for 

all problems. Unfortunately, independence from a product 

provider does not guarantee ethical behaviour. It would be 

naïve to think all independent financial planners are virtuous 

souls, but they are arguably better than the average tied agent. 

As a co-founder of an independent financial planning firm, I 

am biased toward independent firms. However, I wonder if they 

are becoming extinct. Independents are slowly drowning under 

increased regulatory compliance costs, decreasing fees and 

increasing administrative ineptitude from product providers. 

Many industry bodies and regulators pay lip service to the 

merits of independent financial planning, but their actions 

indicate a lack of will to help them survive. 

Why are non-independents problematic? 

Let’s start with some plain language. While we know what 

independent financial planners are, there seems to be no 

consensus description of businesses that are the opposite. When 

I asked some industry experts for the correct terminology for these 

businesses, I received the following replies: 

1. Corporate financial planning business 

2. Vertically integrated 

3. Tied 

4. Institutionally owned 

5. Institutional 

6. Corporately owned 

7. Non-independent 

For the sake of this article, I will refer to them as Corporates. These 

are businesses that are both product providers and financial 

planners. Some Corporates only allow their financial planners 

to sell the firm’s products. Other Corporates allow their financial 

planners to sell a range of products, but there are incentives to use 

the firm’s products. In both cases, I believe (I can't confirm) that 

these firms generally pay commissions (based on “production”) 

or have revenue-sharing arrangements with their financial 

planners. In other words, they don’t pay professional salaries like 

an accounting firm would pay its professionals. 

Very often, these revenue-sharing or commission payments are 

very lucrative for financial planners because the product provider 


FINANCIAL PLANNING | Regulation 

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earns fees at every level. This includes administration, fund fees, 

advice fees, performance fees (in some instances) and possibly 

other fees. It is not unusual for these fees to amount to more than 

3.5% per year. If the products offer a capital guarantee or have a 

fixed term, the fees might be much higher and paid upfront. 

Suppose you have a greater financial incentive to sell products 

offered by your employer rather than third-party products. There 

is the potential for you to compromise your advice standards in 

favour of becoming a product pusher. It might surprise you that 

even though there are great incentives for becoming a product 

pusher, some ethical people continue to work at Corporates while 

offering best advice. Very often, they end up using lower-cost 

third-party products to the displeasure of their managers, but 

they maintain their ethics and advise their clients appropriately. 

Consider the massive growth of firms that have aggregated 

large numbers of financial planners over the years. Initially, these 

businesses bought lots of planning firms around the country 

and allowed them the freedom to continue operating as usual. 

However, it is clear from the growth in assets of these firms’ unit 

trust companies that the financial planners started to switch clients 

from third-party asset managers to their new bosses’ funds. One 

must wonder if the third-party funds were always worse for clients 

or if incentives played a role in this process. Are all these clients 

better off now in a product-owning financial planning business? 

• Sell out to a Corporate. 

• Join a network of independents where you can share some 

resources to reduce your costs. 

• Find a new form of consolidation that encourages best advice 

without ethical compromise. 

From personal experience, I know that the fund managers and 

DFMs who generate significant revenue from independent 

financial planners are worried about the future of independent 

financial planners. Still, they are unwilling to help sustain 

independents in any meaningful way. Most of them offer 

excellent workshops, lots of networking opportunities and 

exposure to global experts. But please don’t ask them to use their 

financial muscle to underwrite funding for financial planners who 

want to buy other businesses or for founders to sell their firms 

to their staff. 

The regulators are pushing for more transformation in the 

financial planning industry. If regulators really want to push 

transformation in independent financial planning, they should 

create a mechanism where staff can access funding at reasonable 

interest rates to buy out the founders at slightly discounted 

prices. Banks, insurers and large fund managers have the capital 

to underwrite this; they are just not doing it. If the regulators 

added some motivation, I think we will transform the industry and 

maintain independent financial planners long into the future. 

Small businesses are either 

drowning under the cost of 

compliance or not complying 

with every regulation. 

Is bigger better for the regulators? 

When we review the impact of increased regulation on the 

financial planning industry, it seems that the regulations favour 

larger businesses. Small businesses are either drowning under 

the cost of compliance or not complying with every regulation. 

To comply with all the compliance regulations, companies must 

invest in expensive systems and compliance staff and spend a lot 

of time staying current with regulations often aimed at Corporates. 

The risks of non-compliance for small businesses are much 

higher than for a Corporate. When a Corporate falls foul of the 

regulators, it pays a fine and carries on. A fine could end the 

business if regulators find non-compliance in a small business. 

What of the future? 

It might be better for smaller independent financial planners to 

give up on the dream of running a small independent financial 

planning practice. Continued survival in the industry might 

require you to: 

• Join the race to get bigger as quickly as possible. 

Warren Ingram, CFP®, Executive Director and Co-Founder, 

Galileo Capital 


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The greatest gift of consolidated 

investments is peace of mind 

As wealth is accumulated, many investors find themselves 

with complex and unconsolidated investment portfolios, 

which are hard to manage, structurally inefficient and 

costly to change. There is much to be said for striving 

for relative simplicity in wealth management, which generally 

translates into better overall returns. Consolidated wealth 

management within a Family Office structure allows for focus, 

understanding and well-managed risk-return relationships. 

What is a messy portfolio? 

A messy portfolio is a group of assets with an undefined investment 

strategy. This includes asset purchases made without consideration 

of previous acquisitions, and which do not have the correct asset 

allocation or level of risk needed to achieve investment objectives. 

Investments in messy portfolios are usually haphazardly scattered 

across various sources, including asset management companies, 

banks, stockbrokers, legal firms and Linked Investment Service 

Provider (LISP) platforms. 

Messy portfolios are risky 

“A significant amount of coordination is involved, and potential 

capital is lost when investors rely on multiple advisors. The scenario 

is analogous to a symphony orchestrated by several conductors 

– the finished product is most certainly affected by inefficiencies. 

Advisors usually have a sliding fee scale based on the total 

assets under management or advice. The more capital invested 

or entrusted, the lower the fee as a percentage of assets under 

management or advice. If an investor is overpaying on fees, the 

long-term effect can be severe. Just as compound growth works 

in an investor’s favour regarding capital growth, it works against 

them when it comes to fees and lost opportunities – and these 

costs and losses compound over time,” says Mark MacSymon, a 

wealth manager at Private Client Holdings which offers a Family 

Office approach to wealth management. 

“There are also real estate planning benefits with a Family 

Office wealth management structure. Consolidation means 

that information is shared between wealth management pillars. 

The value of assets can be determined, and information shared, 

making decisions regarding the distribution of wealth to heirs a 

simpler process than with messy portfolios. With a messy portfolio, 

some assets may be overlooked and this significantly extends the 

winding-up of an estate, which may pressurise heirs if they are 

dependent on their inheritance,” says Elmien Pols, CFP®, FPSA®, TEP, 

a fiduciary practitioner at Private Client Trust, the fiduciary pillar of 

Private Client Holdings. 

Are there costs to portfolio consolidation? 

The barrier to consolidation is usually the cost of embracing 

change; however, attrition events such as capital gains tax (CGT) 

must always be considered. In appropriate circumstances, asset 

restructuring can result in rollover relief where no CGT is incurred. 

Furthermore, assets that have gained in value but are no longer 

appropriate to hold may need to be liquidated to broaden 

exposure to more quality assets. 

In practice, “it’s not always easy to avoid the tax tail from 

wagging the investment dog”. Alternatively, delaying the sale of 

an asset or utilising transactions that defer the triggering of capital 

gains to benefit from compounding off a higher base, has merit. If 



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Mark MacSymon, CFP®, Wealth Manager, Private Client Holdings 

structured sensibly, these transactions have the added benefit of 

introducing diversification benefits and better aligning investors' 

intended outcomes with expectations. This is a key component 

of wealth management success. 

Another consolidation cost is the emotional pressure of 

changing familiar structures or inheritance. The fear factor. 

Investors find it hard to sell assets they are attached to, such as 

a holiday home, family business or inherited assets. It is hard to 

sell an asset that has historically performed well but is too risky 

to hold over the long term. 

Investors may be put off by the cost of thorough analysis of 

their messy portfolio and the development of a comprehensive 

wealth management plan. The positives are often not shared 

openly, for example that there are no costs when unit trusts are 

transferred from one LISP platform to another, and the benefits 

of scale typically result in an overall lower fee experience. There 

are also no upfront fees on retirement fund transfers. 

The benefits of portfolio consolidation 

“A significant benefit of a Family Office approach to wealth 

management is the ability to manage capital actively and 

effectively as variables change, such as life circumstances, market 

opportunities and the emergence of new investment vehicles. 

The characteristics of each investment and the potential 

impact on the overall portfolio can be considered over time. 

This almost always enhances investors’ overall return and results 

in a far greater probability of meeting investment objectives,” 

says MacSymon. 

Elmien Pols, CFP® FPSA® TEP, Fiduciary Practitioner, 

Private Client Trust 

The greatest gift is peace of mind and the conviction that hardearned 

money is invested optimally and is actively managed and 

reviewed by a wealth management specialist who will ensure that 

each investment has a place and purpose in your portfolio and 

adjusts this as investor needs change. 

Consolidated tax information from various institutions and 

accounts are streamlined within a Family Office approach, 

reducing administration. With a consolidated portfolio, there is 

less paperwork and time is saved. Tax advice is central to the Family 

Office service ensuring that the most tax-efficient investment 

strategy is pursued, which could result in significant savings. 

South Africa’s financial regulatory landscape has been 

seriously impacted by the country’s greylisting, which has 

resulted in increased compliance and regulatory requirements. 

If you hold multiple accounts, you must complete the 

Customer Due Diligence (CDD) process with all your service 

providers. With a consolidated portfolio, you only need to do 

this with one provider, saving time and significantly reducing 

your administrative burden. 

“The benefits of wealth portfolio consolidation within a 

Family Office structure for investible assets of $2-million plus far 

outweigh the risks. This service is the ideal vehicle for effectively 

and efficiently managing investments. An accessible multidisciplinary 

team of financial experts, be they asset managers, 

fiduciaries or tax professionals, saves you time and fees. Don’t be 

held hostage by money and complexity. There is much truth in 

Martin Fisher’s quote, ‘Knowledge is a process of piling up facts; 

wisdom lies in their simplification,’” concludes MacSymon. 


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FINANCIAL PLANNING | Communication 

Touching the hearts and minds through 

design-thinking communication 

The Oxford Dictionary defines communication as “the 

imparting or exchanging of information by speaking, 

writing or using some other medium”. It seems simple but 

the process itself prompts, among others, the following 

questions: Does it apply to individual or mass interaction? Is it 

face-to-face or digitalised? Does it aim to inform, require action 

or simply put minds at ease? 

As part of its communication strategy, Medihelp continually 

aims to differentiate and institute various methods, such as 

segmentation and hyper-personalisation as well as channels to 

address and contextualise variables. The challenge is not only 

to diversify the communication platform but to ensure that the 

message is heard and taken to heart – not an easy task in a world 

where information overload is a real concern. 

Rising above the clutter 

Medihelp’s head of marketing, Lien Potgieter, believes that 

communication should not only be about what your message 

should say and how to get it across but also about why; in 

other words, the reasoning behind it. She lists the importance 

of empathy, a crucial element of design thinking when 

communicating with members is a top priority. “If you don’t 

connect with your target audience on an emotional level, you’ll 

completely miss the mark. People increasingly choose brands 

they perceive to share their values and beliefs and carry their best 

interests at heart. They need to see that a company has done its 

homework when it comes to addressing and resolving concerns. 

Medihelp emphasises research thereby not just assuming what 

members want to hear, see or read but basing communication on 

actual feedback, surveys and focus groups. The aim is to reach 

members in a way that expresses real understanding and trust.” 

Regular communication 

There is a fine line between frequent messaging and spamming. 

Potgieter believes that information should always be relevant. 

Still, due to differences in attention span, media usage and 

available time to access information, various platforms need to 

be utilised: “We use different formats on a regular basis. In the 

first month, the focus could be a newsletter featuring articles 

on health. The next month may use how-to clips, followed by a 

webinar during month three.” 

How much is too much? 

Although statistics show that people prefer short messages, 

consumer education remains a critical part of the overall 

communications strategy as the medical aid industry uses a lot 

of jargon. 

It is also important to remember that people tend to pay 

more attention to in-depth information regarding vital issues 

such as health as they realise that being informed (for example, 

to recognise symptoms and go for regular check-ups) could make 

the difference between life and death. 

Organisational psychologist, Adam Gran, writes in his book, 

Think Again, that during 2011, the average American consumed 

about five times as much information per day than just over two 

decades earlier. 

Today, more than another two decades later, people are 

bombarded with information through various platforms. In 

addition, we still operate within the era of instant gratification – 

it is almost expected that we are available to receive and respond 

to messages 24/7. That is why Potgieter firmly believes that your 

message determines the communication channel. “If you want, 

for example, to share four tips on keeping blood pressure under 

control, post an infographic on Instagram. If you need to convey 

in-depth information, opt for blogs or emailers. A news flash or 

a quick notice: WhatsApp. Social media is great for consumer 

education and informal feedback.” She lists media releases as 

one of the best ways to boost your organisation’s image with 

emails as the most popular format despite a choice of more 

communication channels than ever before. 

Final thoughts 

There is no straightforward answer when determining what 

effective communication entails. There is, in fact, more than one 

answer as topic and intent determine decisions such as choice 

of channel and the amount of information given. 

To reach your target audience 

you must be able to put yourself 

in their shoes by not only hitting 

the heart of the matter but also 

their hearts; those emotions that 

speak to their values, views, needs, 

dreams and fears. Simply put: it’s 

not about thinking that you know 

what they want to hear and see; 

it’s about knowing. Make sure 

that your communication strategy 

is founded on knowing your 

audience to ensure an invested 

and engaged interest. 

Lien Potgieter, Acting Head 

of Marketing, Medihelp 


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FINANCIAL PLANNING | Technology 

Enhancing client relationships 

through strategic touchpoints 

When you’re a financial advisor, you don’t just deal 

with money; you also must connect with your 

clients and earn their trust. I want to share with 

you how to make your client relationships better 

by being deliberate in how you talk to them, using technology 

smartly and following some simple tips. 

Being intentional in client interactions 

Being intentional means engaging with clients purposefully. This 

approach sets the tone for trust and long-term relationships. 

Purposeful engagement involves understanding client needs, 

addressing their concerns and providing tailored advice. It requires 

active listening and responding thoughtfully to client queries. 

VALUE-ADDING MOMENTS 

Mapping out the client journey helps financial advisors visualise 

the entire client experience. This journey typically includes: 

First interaction or initial contact. This is how the client forms 

an impression. Responses that are clear and compassionate can 

foster trust. 

Purposeful engagement involves 

understanding client needs, 

addressing their concerns and 

providing tailored advice. 

Onboarding process. An efficient and comprehensive onboarding 

process helps clients feel valued and informed. 

Goal-setting sessions. By setting financial goals together, we make 

sure that our service is aligned and tailored to the client’s needs. 

Assessing finances at first. A detailed and understandable 

evaluation shows skill and credibility. 

Review meetings. They keep the relationship strong and change 

strategies if needed. 

Checking-in proactively. This demonstrates care and dedication 

to the client’s welfare. 

Steps to add maximum value in the advice process 

Discovery stage 

Detailed client input. Collect in-depth data on client objectives, 

worries and dreams with thorough intake forms. 

Active listening. Pay attention to the client’s situation and needs 

and try to comprehend them during the first meetings. 

Planning stage 

Personalised financial plans. Create tailored financial plans 

based on the information gathered. 

Transparent communication. Provide the reasoning for each 

suggested strategy to help clients see how it contributes to 

their objectives. 

Implementation stage 

Smooth implementation. Make the financial plans happen easily 

for the client. 

Learning and enabling. Teach clients about the products and 

strategies used. 

Monitoring stage 

Review meetings. Have frequent meetings to check on progress 

and change plans if needed. 

Stay ahead of changes. Track external shifts and propose changes 

to the client’s plan before they ask. 



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Leveraging technology to enhance the client experience 

Using technology well can save time for more personal service and 

stronger relationships. Key tools are: 

CRM systems. These track client interactions and prevent things 

from being missed. 

Financial planning software. These tools make detailed, 

personalised financial plans quickly. 

Client portals. These offer a safe platform for clients to see their 

financial data and talk to their advisors. 

Communication tools. Video conferencing tools like Zoom and 

Microsoft Teams allow face-to-face talks anywhere. 

Document management systems. These systems organise and 

store financial documents safely. 

Mobile apps. These give clients easy access to their financial data 

and advisor updates. 

Step 3: Adopt technology. Evaluate current technology tools 

and look for new options that can automate and improve client 

interactions. Choose technologies that work well with each other 

to simplify workflows. 

Step 4: Adapt communication. Adjust communication strategies to 

suit client preferences, whether they favour digital communication, 

in-person meetings or a mixed approach. 

Step 5: Check and change. Set up a schedule for regular updates 

of clients’ financial plans and overall satisfaction. Use these updates 

to change plans and strategies as needed. 

Step 6: Ongoing improvement. Actively use client feedback to 

make ongoing improvements. Frequently inform your team about 

feedback patterns and new strategies being applied. 

Step 7: Assess success. Define clear KPIs to assess the success of 

applied strategies, such as client retention rates and satisfaction 

scores. Frequently check these KPIs to track progress and make 

data-driven decisions. 

CONCLUSION 

To adopt a client-centric approach, financial advisors need to 

be deliberate, use suitable technology and concentrate on 

valuable interactions. These steps can help them improve client 

relationships, establish trust and deliver excellent service. 

Avoiding common pitfalls in client interactions 

Excessive dependence on technology. Technology improves the 

client experience, but it should not substitute the human aspects 

of compassion and individual care. 

Lacking personal touch. Do not make client interactions only 

superficial. Clients appreciate being listened to and understood. 

Not paying attention to client needs. Listening poorly can result 

in giving unsuitable guidance and overlooking subtle hints about 

client worries or goals. 

Practical implementation steps 

Step 1: Review current processes. Perform an analysis of existing 

client interaction and management processes. Find areas that need 

improvement, with a focus on discovery, planning, implementation 

and monitoring stages. 

Step 2: Educate your team. Make sure all team members know 

the value of a client-centric approach. Provide training on attentive 

listening, personalised service as well as the tools and technologies 

used to improve client interactions. 

Francois du Toit, Founder, PROpulsion 


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Artificial intelligence: a vital future 

for financial advisors 

As the world continues to advance at a breakneck 

pace, the integration of artificial intelligence (AI) 

across industries is inevitable. For financial advisors, 

AI represents both a challenge and an unprecedented 

opportunity. This article, from the perspective of a neurosciencebased 

executive coach, explores the significant impacts of AI on 

the profession, the unique advantages it offers as well as the 

critical and urgent necessity to embrace this technology. But read 

to the end, for there is a giant and poorly recognised risk with AI 

that exposes us to substantial collective peril. Fortunately, there 

is a meaningful way to mitigate this risk. 

Will AI take your job? 

As I started to draft this paper, I asked ChatGPT 4.0 a question: “I 

have a client nearing retirement who hasn’t saved enough. How 

can I support him to change his investing behaviour in his final 

earning years?” 

After 40 years of working with human beings and their brains, 

I was hard-pressed to improve on the advice offered by Dr 

Adrian Cole, the world’s first AI-powered, virtual neurocentric 

coach. In less than 10 seconds, he gave me a comprehensive 

page of suggestions sanctioning me to understand my client’s 

beliefs and fears about money, empowering me to change his 

behaviour. Dr Cole provided detailed recommendations for how 

I could help my client explore, expose and address his dangerous 

underlying neuropsychology. He concluded by proposing three 

specific actions and suggested I return for more guidance once 

these were achieved. 

So, if you’re a financial advisor asking the question, “Will AI take 

my job?” the short answer is, “Yes.” 

The full answer is a bit more complicated. AI-based trading has 

demonstrated superiority over human-based trading, thanks to its 

ability to process vast amounts of data, identify trends and execute 

trades with precision and speed. However, the role of financial 

advisors extends beyond data analysis and trade execution. 

Advisors serve as the crucial interface between the objective 

world of financial markets and the subjective experiences of clients, 

providing personalised services that include deep psychological 

evaluations and tailored advice. 

Much like financial advisors, I initially believed AI could never 

replicate the trust, careful inquiry and deep understanding of 

human psychology required in my own profession. Proving 



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myself wrong, I have now developed three custom AI-based 

virtual coaches (including Custom GPT, Dr Adrian Cole, who is 

trained in my own unique neuroscience-based methodologies 

and more) that deliver personalised, insightful guidance 24/7, 

demonstrating that AI can fulfill roles traditionally thought to 

require a human touch. 

You can similarly embrace AI to enhance your services and 

stay relevant. Those who fail to integrate AI risk falling behind as 

clients seek the enhanced precision, speed and availability offered 

by AI-driven services. 

How can AI save your job? 

AI can revolutionise financial advising by providing deeper 

insights into clients’ beliefs, fears and behaviours. Consider these 

future scenarios: 

• Behavioural analysis and insights. AI analyses vast amounts of 

client data, including transaction histories and communication 

patterns, identifying spending habits, risk tolerance and 

investment behavior. Sentiment analysis detects emotional 

cues from client emails, revealing underlying beliefs and fears. 

• Personalised client profiles. AI develops detailed 

psychographic profiles by integrating demographic data with 

behavioural insights, helping you tailor communication and 

advice to match your clients’ personalities and financial goals. 

Predictive analytics forecast client behaviours, allowing for 

proactive addressing of concerns and prevention of impulsive 

financial decisions. 

• Enhanced communication and engagement. Natural 

Language Processing enables AI to respond to client queries 

in a humanlike manner. Chatbots and virtual assistants handle 

routine inquiries, allowing you to focus on complex needs. 

Emotional AI recognises and responds to clients’ emotional 

states, building stronger relationships and addressing 

concerns empathetically. 

• Behavioural nudging and recommendations. AI sends 

personalised nudges to clients, encouraging positive financial 

behaviour such as regular saving and timely portfolio reviews. 

AI-powered tools create customised financial scenarios to help 

clients understand potential outcomes of different investment 

strategies, fostering informed decision-making. 

• Continuous learning and adaptation. AI systems continuously 

learn from new data, refining their understanding of clients 

over time. Further, AI collects and analyses feedback from 

client interactions to enhance advisory services. This ongoing 

adaptation ensures advice remains relevant and effective. 

Most advisors will wait for large-platform technology to be 

developed before enjoying these benefits, but I hope a few 

courageous entrepreneurs will pioneer financial AI technology 

before then. Regardless, those who keep themselves informed 

will adopt, adapt, compete and survive best. Current tools are 

remarkably easy to master and as an applied neuroscientist, I 

assure you that old dogs can indeed learn new tricks! 

Dr Roddy Carter, MD, has guided and built international 

leaders and Olympic champions across his 40 years of 

professional contribution. At the height of his career, 

and facing deep personal tragedy, Dr Carter experienced 

a profound personal awakening. Applying his expertise 

in performance neuroscience, he identified that stressinduced 

psycho-protective brain adaptations, while 

ensuring short-term survival, often limit potential and 

cause hidden distress. Now, as an executive coach and 

author, he dedicates his unique approach to helping 

others unlock their full potential through compassionate 

neuroscience and personal mastery. To learn more about 

his work and publications visit www.roddycarter.com. 

Dr Carter will be speaking at the Humans Under 

Management SA Conference on 17 September 2024 in 

Cape Town. Information and tickets are available at: 

www.humansundermanagement.com/southafrica2024 

What is AI’s huge risk? 

Despite these massive steps forward, AI’s capacity to outperform 

human intelligence poses a substantial threat… if we do not 

master our natural intelligence first. 

Simple AI, like social media algorithms, already exploits our 

neurobiological vulnerabilities, leading to impaired decisionmaking, 

reduced impulse control and poor emotional regulation. 

If these simple algorithms can have such a profound impact, 

imagine the risks posed by more powerful AI systems. Even AI 

pioneers like Geoffrey Hinton offer strident warnings about our 

inability to control superintelligent AI. 

We must all urgently learn to master our own brains, cultivating 

self-awareness, emotional 

regulation and cognitive 

control, before we risk 

being collectively hijacked 

by an intelligence whose 

ultimate power will be 

greater than anything we 

have ever imagined. 

Conclusion 

The time to act is now. 

AI is here. Advisors who 

delay integrating AI 

into their practice will 

be left behind in an 

increasingly automated 

world. By mastering your 

natural intelligence and 

embracing AI, you will 

secure your personal and 

professional future. 

Dr Roddy Carter, Physician, 

Performance Scientist, Master Coach, 

Corporate Leader and Author 


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How employee benefit firms use 

AI to beat the competition 

Zeldeen Müller, CEO of inSite Connect and creator of AgendaWorx, takes us through various case studies, 

where we can see how employee benefit firms are leveraging AI to streamline processes, improve efficiency 

and deliver exceptional service to their clients. 

How can AI transform member support? 

With the introduction of the new two-pot system for retirement funds, 

member queries have increased significantly. To handle this influx, 

AI-powered support systems have become a game-changer. These 

systems offer smart responses, guide members to helpful resources 

and make query resolution smoother. 

How does this differ from standard bots or live agents 

assisting members? 

Standard bots offer limited responses via a highly restricted selection 

of options. Live agents are overwhelmed by the number of queries 

about savings pot withdrawals, leading to longer wait times. 

AI bots understand and respond accurately to questions raised by 

members, providing 24/7 support. For instance, a fund with 53 000 

members can support all their members simultaneously because AI: 

• Uses Natural Language Processing (NLP). This helps AI 

comprehend complex questions, even with typos, incorrect tenses 

or different languages. If a member requests a human agent, the AI 

can direct them appropriately. 

• Utilises sentiment analysis. This allows AI to respond 

empathetically to member concerns. 

• Can be trained. Firms can train AI on specific data to retrieve 

accurate information quickly. For example, AI can guide members 

through understanding the two-pot system with videos and flyers. 

One of our clients requested that our AI-bot-in-a-box product be 

trained on fund information and specific withdrawal processes 

of the administrator. The AI would suggest important videos and 

flyers, answer any questions and even motivate 

members to preserve their savings while 

answering queries. Members could engage 

it in any language. 

How can AI assist employee benefits 

firms in reengineering processes to be 

more competitive? 

Previously, when consultants had to 

dictate for secretaries, they had to ensure 

the sentence construction was correct 

and verbalise punctuation. With the 

AI in the new board pack tools, 

we find that our clients record their thoughts very haphazardly 

on AgendaWorx for their own use and the AI corrects grammar, 

removes “ums” and “ahs” and essentially writes the report, article 

or minutes item in a flash. 

Our clients use our AI to transcribe meeting recordings and 

generate professionally grammar-edited minutes in under 10 

minutes, properly formatted using their agenda items as structure. 

The AI highlights key points, decisions and action items. The 

result? High-quality minutes are ready for review and distribution 

in less time than it takes to have a coffee break. This also enhances 

productivity, allowing firms to focus on what truly matters – driving 

their business forward. 

How can AI address the cumbersome process of back-and-forth 

tracked changes with junior consultants? 

Instead of the onerous process of changes with senior consultants, 

junior consultants can upload meeting recordings and the AI can 

quickly transcribe and organise the content into polished minutes. This 

ensures key points, decisions and action items are accurately captured 

and formatted, reducing the need for extensive revisions. By using AI 

to handle the initial drafting, junior consultants produce high-quality 

minutes that require minimal oversight from senior consultants. This 

saves time and reduces frustration for both parties, allowing them to 

focus on more strategic tasks. Consultants can even ask the AI to fix 

grammar issues or make other general changes, such as converting 

chairman to chairperson or summarising trustee biographies. 

There seems to be a myriad of ways that AI can be used to make 

employee benefit firms more competitive. 

Yes, these use cases illustrate the transformative impact of AI 

on employee benefit firms. Embracing AI is not just a trend but 

a strategic move that can lead to significant improvements in 

efficiency and member satisfaction. As these real-life examples 

show, AI has the potential to transform the landscape of employee 

benefit firms, helping them to beat the competition and thrive in 

a rapidly evolving industry. 

The great thing is that there are off-the-shelf AI tools available to 

firms of any size. Our clients using our AI-in-a-box products range 

from small firms with 11 people to large retirement funds with 

over one-billion in assets. Technology has become so cost-effective 

that it is no longer the exclusive domain of large corporations. 

Zeldeen Müller, CEO of inSite Connect and Creator, AgendaWorx

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Clicks, conversations, clients: 

discerning the art of timely advice in 

modern (family) financial planning 

Have you ever been sitting with your spouse, partner, sibling, parent, child, best friend or colleague, and had 

a wedge salad moment? Oh, what’s a wedge salad moment? 

Let me catch you up. In the series, Modern Family, Phil comes 

home one day and tells his wife, Claire, that she must try 

this amazing thing that his friend (the legendary Skip 

Woosnum) just introduced him to: the wedge salad. Claire 

had been trying for years to get Phil to try a wedge salad and was 

hurt because she believed that Phil didn’t listen to her and didn’t 

appreciate her opinions. His friend mentioned it once, and now 

Phil can’t keep quiet about it. 

This “wedge salad moment” isn’t just a staple of sitcom gold; 

it mirrors a common scenario many financial planners face. How 

often have you suggested a course of action to a client, only to 

be ignored (or think they’re ignoring you), then later find they've 

embraced the same advice when it comes from a different source? 

It’s frustrating, right? 

But more importantly, it underscores the profound importance 

of communication – not just what we say, but how and when we 

say it. 

Just because your advice is good, doesn’t mean it’s timely. (Or… 

just because it’s sound, doesn’t mean it’s heard.) 

In the fluid and ever-changing vicissitudes of life, maintaining 

strong client relationships hinges on the ability to communicate 

effectively. However, consistently achieving mutual understanding 

with your clients over time is challenging. As financial advisors, the 

need to understand and adapt to each client’s unique life goals, 

financial fears and aspirations is paramount. 

As you will know, this involves more than just the sporadic 

exchange of information; it requires an intentionally forged 

foundation of empathy, patience and the ability to connect and 

engage in effective conversations. 

The power of preparedness 

It's a rarity to always be on the same page with all clients. 

Especially if you find that many client meetings happen when 

an annual review is due. Just because their portfolio is ready for 



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review, doesn’t necessarily mean that your client is ready to have 

that conversation. 

True alignment in communication is dependent on readiness 

– a dual readiness where both the advisor and the client are fully 

engaged. This readiness is not just about being prepared to talk; 

it’s about active listening and adaptively responding to needs and 

expectations so that messages can land “on fertile soil”. 

For professional advisors, facilitating these types of 

conversations means delving deeper than surface-level financial 

advice. It involves a comprehensive understanding of a client’s 

entire life journey and crafting a conversational communication 

strategy that can be perceived as authentic, relevant and relatable 

so that it resonates with client journeys at regular touchpoints. 

In our modern social media culture, we can explore and exploit 

digital platforms to intentionally forge these strategies that 

empower us to connect and engage effectively. 

Leveraging digital strategies 

We should never abandon traditional communication methods 

as these are still valuable and have a place, but maintaining an 

evolved level of connection and engagement requires more than 

traditional communication tools and methodologies. 

Digital strategies, particularly through personal websites, 

regular lifestyle blogs, monthly email campaigns and active social 

media engagement are crucial. 

Personal websites and social media profiles. These platforms 

are the primary interface between you and your digital audience. 

They should reflect your professional ethos and value proposition 

and be regularly updated to represent active engagement with life, 

current financial trends and client success stories. 

Regular blogs and articles. Integrating four to six blogs a 

month that cater to a variety of client interests and life stages 

is essential. Research indicates that businesses that prioritise 

blogging are 13 times more likely to achieve a positive return of 

investment on their efforts. Blogs not only keep clients engaged 

but also significantly enhance search engine visibility (SEO), driving 

more prospective clients to your digital doorstep. 

Each blog post is an opportunity to share insights, offer 

guidance and reinforce your role as a trusted partner in their 

financial journey while creating the space to direct and discern 

readiness for positive change. 

Monthly email campaigns. I still believe that correctly 

constructed email strategies are the most valuable tools in a 

financial advisor’s digital domain. These campaigns keep you in 

touch with your clients and give you invaluable insights into their 

readiness to engage while keeping the communication lines open, 

even when direct contact is not viable. 

It’s an effective way to help clients feel like their financial wellbeing 

is continually being considered. 

Daily social media engagement. This should include sharing 

relevant content (your blogs will help with this), engaging with 

clients’ posts and comments and inviting targeted potential clients. 

Social media is not just a platform for outreach; it's a powerful 

tool for building community and listening to what your network 

is concerned about. 

The impact of strategic online communication 

Strategic online communication allows financial advisors 

to create personalised client experiences that resonate on a 

deeper level. Each digital interaction is crafted to create and 

maintain trust and understanding, thereby enhancing client 

retention and satisfaction. 

So, while it is rare to always be on the same page as every 

client, much like Phil and Claire in their wedge salad moment, the 

goal extends beyond achieving momentary consensus. We aim 

to cultivate enduring partnerships founded on mutual respect 

and understanding. Just as Phil eventually recognised the value 

of Claire’s insights through a scrapbook of implemented advice 

(revealed at the end of the episode), the thoughtful integration of 

digital communication tools – blogs, websites, emails and social 

media – allows you to bridge communication gaps. 

This, in turn, helps guide your clients along their financial 

journeys at times when they realise just how much they need 

your expertise. 

Tim Slatter, Creator of Contatto and Director, 

Slatter Communications 


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FINANCIAL PLANNING | Currency 

The future of digital currency 

in South Africa 

With cold hard cash still accounting for much of the total value of transactions, South Africa remains a 

predominantly cash-based economy. However, the proportion of cash versus digital currency is shrinking 

– slowly, but surely. 

And, with more territories around the world edging 

closer to the establishment of Central Bank Digital 

Currencies (CBDCs), it appears that the mainstream 

adoption of digital currency may not be too far away. 

South Africa is no exception. There are, however, a few unique 

obstacles to overcome. 

It all began with Bitcoin 

The advent of Bitcoin in 2009 was assumed by many to be more 

of a fleeting fad than an enduring trend. The hype around this 

novel notion of cryptocurrency, however, spread like wildfire and 

before long, reached South African shores. Early adopters and 

tech-savvy individuals led the charge and soon after the launch 

of Bitcoin, South Africans had joined the global fray of people who 

were eager to line their e-wallets with this promising new currency. 

The market for digital currency has since come a long way. 

Today, according to the Financial Sector Conduct Authority (FSCA), 

at least six-million South Africans own a crypto asset. Online 

trading platforms have made the trade of crypto accessible to a 

wider audience – now anyone, regardless of their background or 


FINANCIAL PLANNING | Currency 

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The broader appeal of digital 

currency lies in its ability 

to promote greater levels 

of financial inclusion. 

economic standing, can enter the online trading arena. With everincreasing 

levels of mobile penetration, this rate is set to increase 

exponentially over the next few years. 

Most online trading platforms now market their cryptocurrency 

trading services and options right alongside more traditional 

market instruments like shares, indices or forex. For South Africa, 

this is no small development. It is an indicator that digital currency 

has become more mainstream than many may be aware. It is a sign 

of things to come. 

A South African CBDC – to be or not to be? 

Most recently, the South African Reserve Bank announced that it is 

looking into the feasibility of a CBDC that can be used domestically 

by consumers for general retail purposes. Put simply, a CBDC is a 

digital form of a country’s fiat currency issued and regulated by 

the central bank. 

Unlike cryptocurrencies such as Bitcoin, which operate on 

decentralised networks, CBDCs are centrally controlled and backed 

by the full faith and credit of the government. CBDCs aim to digitise 

traditional forms of currency, providing a secure and efficient means 

of payment and financial transactions in the digital age. 

South Africa’s investigation into a CBDC echoes developments 

in other countries around the world. Some countries have 

pioneered the use of CBDCs, including the Bahamas, with its 

SandDollar, Jamaica with its JAM-DEX and Nigeria with the eNaira. 

According to the International Monetary Fund, more than 100 

other countries, including South Africa, are in the exploration stage 

with territories such as Brazil, India and the UK leading the pack. 

Regardless of the outcome of the SARB’s feasibility study, the 

Reserve Bank’s interest in digital currency is illustrative of just how 

ubiquitous it has become, and of the very real possibility that cash 

may finally have a worthy contender. 

A game-changer in the making 

The benefits of wider digital currency adoption in South Africa 

are myriad. The transition could streamline financial transactions, 

reduce the costs associated with cash handling and enhance 

overall economic efficiency. Digital currencies can also facilitate 

easier cross-border transactions and boost international trade. 

Furthermore, the broader appeal of digital currency lies in its 

ability to promote greater levels of financial inclusion. In South 

Africa, where almost a third of the population is unbanked, digital 

currency has the potential to break through the barriers that 

prevent many from accessing traditional financial services. 

Regarding a CBDC, a currency of this nature would be regulated 

by the SARB and backed by the government, providing a stable 

and secure alternative to physical cash. At least in terms of what 

digital currency means for personal safety and the reduction of 

petty theft and armed robbery, the move could be revolutionary. 

Many hurdles to clear 

Like any other form of digital innovation, however, there are a 

few clear hurdles. South Africa recently became the continent’s 

cybercrime hotspot. The past few years have seen a dramatic spike 

in phishing attempts, cases of identity theft, digital fraud, malware 

and ransomware. 

Cybersecurity experts have been fast to react to this upsurge, 

but not before cybercrime put a damper on consumer trust and 

confidence. The digital currency innovators of the future will need 

to work hard to win the trust of the mainstream public and employ 

robust security measures to prevent that trust from being eroded 

by opportunistic criminals. 

There’s also the issue of accessibility to consider. On the one 

hand, digital currency could bring more people into the fold of 

economically active citizens; in another sense it could also widen 

the digital divide. 

Digital currencies require robust technological infrastructure, 

including reliable Internet access and digital literacy. In 

South Africa, where there are significant disparities in access 

to technology, with rural areas often lacking the necessary 

infrastructure, this digital divide could hinder widespread 

adoption and usage. 

Leaders and decision-makers will need to make a concerted 

effort to tackle the country’s challenges head-on and provide for 

the regulatory clarity, infrastructural development and enhanced 

security measures that will earn South Africa its place in the digital 

sun. With the country’s thriving generation of innovators and 

digital pioneers, the results may just surprise the world. 

Roger Eskinazi, Managing Partner, Tickmill 


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Crypto assets: an 

evolving landscape 

Part two 

This is the second part in a series of articles to provide 

readers with a more holistic understanding of crypto assets 

and the current South African regulatory framework. Part 

one is a brief overview of the most popular types of crypto 

assets. (The article is linked to QR code 1.) 

New technological advances in the financial sector, referred 

to as fintech, leverage big data, machine learning and artificial 

intelligence, distributed computing, cryptography and the reach 

of the Internet. While fintech may create new opportunities and 

business models, greater efficiency, better and more targeted 

products and services, better client experience, higher levels 

of financial inclusion and cost reduction, it is not without its 

It seems the consensus is 

that regulation should be 

flexible to remain effective. 

challenges for customers, services providers and regulators. 

Most financial sector legislation predates these fintech advances, 

resulting in the possibility that some of the services rendered and 

products provided by fintech firms may fall outside of the existing 

regulatory framework, leaving customers vulnerable and without 

any regulatory protection or recourse against unscrupulous firms. 

Many of these technologies also operate seamlessly across 

borders creating legal uncertainty (for example, where was a 

contract concluded) and the opportunity for regulatory arbitrage 

as regulatory approaches differ across jurisdictions (for example, 

different data privacy laws in different jurisdictions). Therefore, 

regulators must actively and continuously assess technological 

changes and the impact thereof on existing regulatory frameworks. 

The objective of financial sector regulation is to identify 

vulnerabilities and imperfections that weaken financial stability, 

undermine market efficiency and competition and expose 

customers to risks. In pursuing these objectives concerning fintech 

regulation, the consensus is that regulation should be flexible to 

remain effective, it should be technology-neutral, activity-based 

instead of entity-based and greater harmonisation between national 

regulatory frameworks is required. 

How are local regulators responding to fintech innovations? 

In 2016, the Intergovernmental Fintech Working Group (IFWG) 

was established. The current IFWG members are the Financial 

Intelligence Centre (FIC), Financial Sector Conduct Authority (FSCA), 

National Credit Regulator (NCR), Competition Commission, National 

Treasury, South African Revenue Service (SARS), Prudential Authority 

and South African Reserve Bank (SARB). The IFWG is a forum for 

these South African regulators to gain deeper insights into fintech 

innovation as well as to regulate and foster responsible innovation, 

ensuring the continued efficient functioning of financial markets, 

financial stability and the safeguarding of customers’ interests. 

The IFWG has published the following papers, worth a read to 

understand fintech developments, its challenges, and proposed 

regulatory treatment: 



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Year Title Description 

2018 IFWG Fintech Workshop The inaugural IFWG workshops, held during April 2018, focused on private 

crypto assets; financial inclusion, innovation facilitation and appropriate policy 

and regulatory responses to these topics. 

2018 IFWG Consultation Paper on Policy 

Proposals for Crypto Assets 

2018 Project Khokha – Exploring the use 

of distributed ledger technology for 

interbank payments settlement in 

South Africa 

This paper highlights the benefits and risks of crypto asset-related activities, reviews 

the approaches by other jurisdictions and presents initial draft recommendations 

for dealing with crypto assets from a South African perspective. 

Project Khokha was a 2018 proof of concept designed to simulate a “real-world” 

trial of a distributed ledger technology-based wholesale payment system. 

2019 IFWG Fintech Workshop The September 2019 IFWG workshops covered the following topics: artificial 

intelligence; central bank issued digital currencies; cybersecurity; digital 

identity; innovation for economic growth as well as open banking. 

2019 Fintech Scoping in South Africa The aim of this research was to have a clearer understanding of the South 

African fintech market and is based on 2019 data covering active fintechs 

founded during the previous 11 years that have a physical presence serving 

South African consumers. 

2020 IFWG CAR Working Group Position 

Paper on Crypto Assets 

This paper provides specific recommendations for the development of a 

regulatory framework for crypto assets in South Africa, including suggestions 

on the required regulatory changes to be implemented. 

2020 Vision for South Africa’s Fintech Sector This document provides a forward looking, high-level vision for South Africa’s 

Fintech sector. The vision is for South Africa to be a leading Fintech hub for 

Africa, promoting financial inclusion while spurring competition, digital skills 

and economic growth through innovation. 

2020 Non-traditional data research report The aim of the report is to unpack the increasing use of alternative sources 

of data in shaping customer value propositions offered by fintechs as well 

as key benefits and risks this introduces. The report covers global trends, key 

applications of alternative data, local insights, key benefits and risks, and key 

actions to be considered by regulators and fintechs alike. 

2021 IFWG CAR Working Group Position 

Paper on Crypto Assets 

2021 Fintech Digital Platforms – An 

investigation into Fintech Digital 

Platform activity in South Africa and 

their regulatory implications 

2021 IFWG Paper on articulating the policy 

rationale and policy imperatives for 

Open Finance in South Africa 

2022 Project Khokha 2 – Exploring the 

implications of tokenisation in 

financial markets 

2022 Feedback on the IFWG’s first 

Regulatory Sandbox initiative 

All of the above reports are linked to QR code 2. 

The paper confirms that crypto assets will be brought into the South African 

regulatory purview in a phased and structured manner. 

A research document investigating fintech digital platform activities in South 

Africa and their regulatory implication. 

The purpose of this paper is to present an initial collective view of the IFWG on 

various open finance considerations, including but not limited to issues such as 

the appropriate regulatory regime for open finance and the potential benefits 

and risks of open finance. 

The report explores the policy and regulatory implications of tokenisation in 

financial markets. As a practical proof-of-concept, the project trialled the trading, 

clearance, and settlement of debentures on distributed ledger technology. 

The report documents the IFWG’s experience in following a cohort-based 

approach in its multi-regulator sandbox. The RSB also seeks to provide 

regulatory clarity to participants and industry more broadly, while providing 

insight into innovation for regulators and the policymaker to inform 

appropriate policy and regulatory responses. 


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The IFWG also introduced the IFWG Innovation Hub to assist all 

financial sector innovators, including new start-ups, established 

fintech firms, incumbent financial service providers and adjacent 

industries entering the financial services market (for example, retail 

and telecommunications). 

Innovation Hub users have access to three avenues for assistance: 

• The Regulatory Guidance Unit assists market innovators in 

resolving specific questions regarding the policy landscape 

and regulatory requirements. It provides a central point of 

entry for market innovators to submit enquiries related to 

fintech and innovation-oriented policies and regulations. 

Responses from the Regulatory Guidance Unit integrate 

perspectives from relevant financial sector regulators, 

eliminating the need to contact multiple regulators. However, 

it must be noted that guidance provided is non-binding and 

innovators should seek formal legal advice on complex enquiries. 

• The Regulatory Sandbox (RSB) provides opportunities 

for financial sector innovators to test new products and 

services that push the boundaries of existing regulation, all 

under the responsible supervision of relevant regulators. 

The RSB first opened for applications in April 2020. 

The RSB works with participating regulators to extend 

possible regulatory relief, where required, to regulated 

and unregulated innovators to test products and services 

which do not fit within or challenge the existing regulatory 

framework. The applicant and relevant regulator(s) agree 

on what will be involved in a particular sandbox test, 

including a test plan, testing parameters (restrictions 

placed on testing to manage risks, including to customers), 

and the duration of testing. Participants must remain 

compliant with all existing regulatory requirements 

and entrance into the sandbox does not change a firm’s 

licensing status nor does it signal tacit or implicit approval. 

Participants are expected to report on testing progress 

at regular intervals. RSB testing offers the opportunity for 

regulators and innovators to consider the legislative and 

regulatory fit of emerging innovation. After testing, the 

insights gained should clarify how such innovation could 

be treated from a regulatory perspective in future thereby 

promoting regulatory certainty. Details of an applicant’s 

solution are not made public. However, where insights have 

broader market, policy or regulatory implications, they are 

shared with the industry. 

• The Innovation Accelerator provides a collaborative, 

exploratory environment for financial sector regulators to learn 

from and work with each other – and the broader financial sector 

ecosystem – on emerging innovations in the industry. 

More information on the above points is available at the IFWG 

Innovation Hub. 

In the next part of this series of articles, we will explore the 

provisions dealing with crypto assets that have been incorporated 

into the South African regulatory framework. 

Source: www.ifwg.co.za 

QR code 1. QR code 2. 

Hildegard Lombard, Governance, Legal, Risk and Compliance 

Management Consultant and Founder, Luculent Consulting 


FINANCIAL PLANNING | Book review 

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Mirror Success for Advisors 

Kobus Kleyn, CFP®, a distinguished leader in the financial services profession, has launched his latest book, 

Mirror Success for Advisors, an invaluable resource for financial advisors, offering knowledge and practical 

advice from Kleyn’s extensive professional experience. 

Mirror Success for Advisors is more than a compilation 

of strategies; it is a journey into what it takes to 

be a successful financial advisor. Kleyn’s book 

explores every key aspect of the profession, from 

building client relationships and ethical considerations to 

financial planning and client acquisition. Each chapter serves 

as a beacon, guiding advisors through the complexities of the 

profession while highlighting pathways to professional growth 

and client satisfaction. 

Kleyn pens the following words on education in Mirror Success 

for Advisors: 

“Setting clear and precise goals for your educational endeavours 

helps with your continuous professional development journey 

and your mastery of the discipline of financial advisory services. 

Continuous professional development is essential for staying 

ahead in our profession. 

Instead of vague aspirations to enhance your knowledge, 

specifying concrete objectives ensures a focused pursuit of 

educational milestones that contribute to your expertise and 

credibility as a financial advisor. 

Lifelong learning is a cornerstone of success in financial 

planning. Setting specific educational goals demonstrates your 

dedication to staying abreast of advancements, regulatory 

Kobus Kleyn, CFP®, Tax and Fiduciary 


changes and best practices. This commitment reinforces your value 

proposition to clients and prospects, positioning you as a trusted 

advisor who continuously invests in professional development. 

Specific educational goals allow you to strategically enhance 

your skill set in alignment with your professional objectives. 

Whether you are aiming to acquire specialised certifications, 

master niche areas like retirement planning or pursue advanced 

designations such as the CERTIFIED FINANCIAL PLANNER® (CFP®) 

designation, each educational goal serves as a strategic investment 

in your career progression and client service capabilities. 

Setting realistic timelines for educational goals while 

ensuring they remain challenging is essential. Breaking down 

long-term educational objectives, such as obtaining the CFP® 

designation, into manageable milestones fosters a sense 

of progress and momentum. This approach enables you to 

balance academic pursuits demands of effectively building 

and managing a successful practice. 

Your educational endeavours and practice development 

efforts should go hand in hand. Acquiring specialist knowledge 

and credentials enhances your expertise and credibility, 

positioning you as a trusted advisor capable of addressing 

complex client needs. Moreover, educational achievements are 

powerful differentiators in a competitive market, attracting highvalue 

clients and fostering long-term relationships. 

Regularly evaluating and adapting your educational 

goals is crucial in response to evolving trends and client 

preferences. Remaining flexible and open to adjusting 

your educational pathways based on feedback and 

emerging opportunities ensures ongoing relevance 

and competitiveness in the profession. Setting 

specific educational goals is not just about acquiring 

knowledge but about investing in your future as a 

financial advisor. By defining clear objectives, you pave 

the way for continuous growth, differentiation, and 

success in the dynamic world of financial planning.” 

In celebration of the launch, 

Kleyn offers a complimentary 

copy of Mirror Success for Advisors 

to Blue Chip readers. 

Available at 


and via QR link. 


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PRACTICE MANAGEMENT | Legislation 

The practice management and 

COFI puzzle 

As you will see in this article, practice management and COFI can be compared to a jigsaw puzzle – pieces 

of a picture that fit together to form a complete image. Building a successful practice under the muchanticipated 

COFI legislation and putting a jigsaw puzzle together successfully are remarkably similar. 

There are many moving parts in every advisory practice, 

and in most cases, similar to a puzzle, the underlying parts 

of the business and the regulatory requirements do not all 

form a complete picture yet. In most cases, like with a jigsaw 

puzzle, effective practice management is a work in progress. However, 

the difference between building a jigsaw puzzle, which is mainly for 

fun and building a successful practice in an extremely competitive and 

onerous environment, lies in the consequences if you get it wrong. 

Many people, if not most of us, have built at least one jigsaw puzzle in 

our lifetime, and if so, you will be able to relate to the power of using 

the analogy to establish and grow your practice in a COFI environment 

successfully. Out of curiosity, I asked ChatGPT the following question: 

“How does one build a puzzle most effectively?” 

The answer I received was, “Building a puzzle effectively involves a 

combination of strategy, patience and attention to detail.” 

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I immediately thought that the same can most certainly be said of 

practice management and legislation. 

Then, when ChatGPT presented me with the first very logical 

tip of how to build a puzzle most effectively, I knew that there was 

a powerful message for all of us, so here goes… 

GPT: sort the pieces 

“Start by sorting the puzzle pieces by colour, pattern and edge 

dull side of the puzzle, usually takes all the energy out of the room. 

What is the point of this analogy? 

Like with building a puzzle, sorting the puzzle pieces by 

colour, pattern and edge pieces, it is helpful to start by sorting the 

operational pieces of your practice to create order and establish a 

sound framework for your practice. Think about COFI later. From 

an operational point of view, practice management consists of the 

following parts (puzzle pieces if you like): 

pieces. Edge pieces are usually easier to identify because they have 

straight edges, so assembling them first can provide a framework 

for the rest of the puzzle.” 

It is important to note that a puzzle has two sides, namely the 

front or top side, which is usually very colourful, and the back or 

bottom side, which is usually an unimpressive, dull grey colour. 

Likewise, effective practice management and legislation are 

different sides to the same puzzle. They are inseparable. 

Financial advisors typically get excited when you talk about 

practice management. Their eyes light up and they are engaged, 

and quite rightly so. However, when you talk about legislation, 

risk management or compliance, it is as if darkness sets in and 

most people want to disengage. Ask any compliance officer and 

they will tell you the same thing. Back to the colourful and dull 

sides of the puzzle. Practice management creates excitement and 

gets the creative juices flowing and great ideas follow. This can be 

compared to the colourful side of the puzzle, but compliance, the 

If you want to build a successful practice, these are the pieces of 

your practice management puzzle. If you want to establish and 

grow your business effectively, naturally you will be driven to find 

the best way to plan and execute each activity. However, each 

piece of your practice management puzzle also has a regulatory 

component. The pieces in the illustration represent the colourful, 

top side of the puzzle, and legislation is the back side or “dull side” 

of each of these puzzle pieces. Now, when the most admired 

companies in the world started their journeys, they were always 

driven by the colourful, business side of things and they did it so 

well that they far exceeded their compliance requirements. 

In the book, The Bezos Blueprint, by author Carmine Gallo, we read 

about Jeff Bezos, the founder of Amazon, and his business philosophy: 

“Amazon’s first and most important guiding principle is customer 

obsession. For them, it means that leaders start with the customer 

and work backwards. They work vigorously to earn and keep 

customers’ trust.” 


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Notably, Bezos did not start by communicating to his staff that 

Amazon must put customers first and treat them fairly. He 

communicated over and over again that he wanted Amazon 

to blow their customers’ socks off! For Bezos, merely treating 

customers fairly was, and still is, uninspiring. 

To them, treating customers fairly (TCF) is a minimum standard 

and dull, and it does not get you to the top three of the Forbes 2024 

most admired companies list. 

However, being customer-obsessed and working vigorously 

to earn and keep customers’ trust is what gives you a competitive 

advantage. It also gets your peers to recognise you as one of 

the most admired companies in the world alongside Apple and 

Microsoft. So, if your main focus is on being obsessed with your 

clients and you work vigorously to earn and keep customers’ trust, 

it will set a standard that will give you a sustainable competitive 

advantage and it goes way beyond TCF. Make sure that COFI does 

not steal your joy. When that happens, chances are that your 

focus is on the dull side of the puzzle. 

puzzle, but using the dull backside pieces. He was a young Christian 

Wolff, the lead character in the movie, The Accountant, featuring 

Ben Affleck. However, it must be said that he suffered from highfunctioning 

autism. I do not know of any other person who would 

naturally start to build a puzzle with all the puzzle pieces the wrong 

way around, with the unimpressive dull grey colour pieces facing 

up. Logically, if all the colourful pieces of the puzzle are facing up, 

it makes the puzzle so much easier to build. If your focus is on the 

colourful “practice management” side of the puzzle you will be 

much more effective in building your practice successfully, and 

it will be more fun too. Focus on practice management and best 

practice principles first, and you will be surprised how often it will 

far exceed the standards set by the COFI legislation. 

There are more “puzzle” analogies, but unfortunately, this is 

all we have space for in this article. Perhaps in the next article, 

we can continue with useful tips on how to build your practice 

management and COFI puzzle effectively. 

The practice management puzzle. 

The COFI puzzle. 

I have only seen one person in my lifetime who could build a jigsaw 

puzzle of Muhammad Ali, not looking at the colourful pieces of the 



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Navigating succession: financial advisors 

retire much later than they realise 

Succession planning for independent financial advisor (IFA) 

firms is a hot topic of debate within the industry. Besides 

issues such as which succession model is the best and how 

to value an IFA firm, when and how advisors practically 

retire is another key piece of the succession puzzle. Many wellintentioned 

succession plans experience strain because the selling 

advisor wants to continue working after their planned retirement 

date, whereas the buyer would like to see them retire. 

Data from the Ninety One Investment Platform reveals that most 

advisors are active in a practice up to at least age 65, maintaining 

a sizeable client load. Furthermore, a significant proportion of 

advisors continue working beyond age 65. It is only at age 75 that 

most advisors appear to give up practicing. 

Age distribution of independent advisors using the Ninety One 

Investment Platform. 

Source: Ninety One Investment Platform 

Having a shared understanding between a buyer and a seller on 

when an advisor will retire (as opposed to when they think they 

will retire) is a key input into a succession plan. Most succession 

plans should allow for the selling advisor to work until age 65. If we 

follow the data, there is a strong chance that a selling advisor will 

continue working beyond age 65, albeit with a reduced client load. 

Succession plans often fail because the founding advisor did 

not provide for their retirement 

It might seem strange that a financial planner neglects their 

retirement plan, but it happens frequently. Quite often, a founder 

advisor ends up at age 60 with limited financial provision outside 

of their advice practice. 

These succession plans are notoriously tricky to pull off as 

the selling advisor needs a very high valuation on the deal to 

fund their retirement. This has been the experience of several 

advisors looking to sell their firms to fund their retirement. We 

estimate that an advisor can only replace 50% of the earnings 

from running their advice practice if they sell the practice for 

cash and live off the proceeds. [1] Normally, this is not enough, and 

advisors in this position are often forced to continue working for 

the buying firm after the acquisition. This has big implications 

for the buyer. 

Don’t neglect the “softer” issues 

Focusing too much on valuation distracts firms from negotiating 

other important issues that can have far-reaching implications 

after implementing a succession plan. In our experience, an advisor 

considering selling their practice for succession purposes should: 

1. Spend time during the initial negotiation to agree on how 

a potential “divorce” will happen, should the deal fail for any 

reason. Ensure that this is documented in the sale agreement. 

2. Investigate the operational/technology infrastructure 

implications of the sale and the disruption it will cause to your 

clients and staff. 

3. Be clear about the employment future of your existing staff and 

what happens to them after the sale. 

4. If you have never worked for a large corporation before and 

are considering selling to one, obtain as much information 

as possible about the cultural differences and how they 

might affect your staff and clients. Speak to other advisors 

who moved from running their own business to working for 

a larger corporation. 

5. Be clear about the investment philosophy/ 

process and the client fee strategy of the buyer 

and how this will impact your clients. 

6. Make sure you have a full understanding 

of the strategic focus of the buyer post the 

transaction – what is the balance between 

growing new business and assets under 

management on the one side, and client service 

and relationships on the other? 

A successful succession requires 

structured planning and negotiation – 

and most importantly, an advisor needs 

to devote sufficient time to navigate 

this multi-layered process prudently. 

[1] Succession planning: creating an enduring 

advisor business 

Jaco van Tonder, Advisor Services Director, Ninety One 

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FINANCIAL PLANNING | Legislation 

The treatment of pension 

interests in divorce 

For the last edition of Blue Chip, I wrote an article on the 

various money issues that typically arise in divorce. That 

article addressed the division of assets in divorce. A related 

topic which I address in this article is the treatment of 

pension interests in divorce. 

Section 7(7) of the Divorce Act now makes it clear that pension interests do have to 

account on divorce. The section contains a deeming provision, which stipulates unequi 

pension interests of a person getting divorced are “deemed” to be part of their assets fo 

of calculating who gets what on divorce. In practical terms: the couples’ pension int 

added to their other assets for the purposes of calculating the total value of what mus 

divorce 5 . It’s important to note, however, that the section creates a legal fiction strictly fo 

of doing the divorce calculations. It does not give one spouse an automatic right to cla 

the other’s pension interest directly. 

At this point, an example might come in handy to better illustrate the practical applicatio 

section 7(7) and section 7(8) of the Divorce Act: 

Pension interests aren’t “assets” in the ordinary sense 

Pension interests fall in a quirky investment category because they 

don’t typically qualify as “assets” in the investor’s estate. As we all 

know: 

• They aren’t freely accessible to the investor 

• They’re not capable of being transferred 

• Creditors can’t attach them 

• They bypass the deceased estate on death 

Under the circumstances, there’s understandable confusion about 

how they are treated on divorce. Do divorcing couples have a claim 

on their soon-to-be ex-spouses’ pension, or not? 

Before 1989 (when parliament eventually amended the Divorce 

Act 1 ) the situation was nothing if not simple: pension interests 

didn’t come into the equation on divorce. Divorcing couples 

couldn’t even share their pension interests if they wanted to. 

Divorce litigation on the issue ensued between lots of 

disgruntled, disillusioned divorcing spouses. 

The situation since 1989: Section 7(7) and Section 7(8) of the 

Divorce Act 

Eventually, in 1989, parliament intervened and amended the 

Divorce Act 2 to include two new sections. Section 7(7) 3 and Section 

7(8) 4 of the Divorce Act now make it clear that pension interests do 

have to be considered in divorce. The section contains a deeming 

provision, unequivocally that the pension interests of a person 

getting divorced are “deemed” part of their assets to calculate 

who gets what on divorce. In practical terms: the couple's pension 

interests must be added to their other assets to calculate the total 

value of what must be shared on divorce 5 . 

It’s important to note, however, that the section creates a legal 

fiction strictly to do the divorce calculations. It does not give one 

spouse an automatic right to claim (or share in) the other’s pension 

interest directly. 

At this point, an example might come in handy to better 

illustrate the practical application and effect of section 7(7) and 

section 7(8) of the Divorce Act: 

Cedric and Cynthia are married in community of property. The 

assets and liabilities falling into their joint estate (co-owned and 

jointly managed), include (i) their house; (ii) their mortgage bond; 

96 www.bluechipdigital.co.za 

Total joint estate: R4 200 000 

(iii) Cedric all other and Cynthia debt; are (iv) married their respective in community cars; of (v) property. their discretionary 

The assets and liabilities fallin 

investments estate (co-owned and and (v) cash. jointly Their managed), pension include: interests (i) their do not house; fall (ii) into their mortgage bon 

debt; (iv) their respective cars; (v) their discretionary investments and (v) cash. Their pe 

the joint estate. 

do not fall into the joint estate. 

Cedric and Cynthia decide to get divorced. 

Cedric Before and the Cynthia amendment decide to of get the divorced. Divorce Act in 1989, their divorce 

(assuming it didn’t get nasty and involve forfeiture claims and the 

Before the amendment of the Divorce Act in 1989, their divorce (assuming it didn’t get na 

like), would simply have been a matter of dividing up the joint 

forfeiture claims and the like), would simply have been a matter of dividing up the join 

estate 

total net 

(with 

asset 

a 

value 

total net 

of R4 

asset 

200 

value 

000, in 

of 

this 

R4 

example). 

200 000, in this example). 

Post 1989, the effect of section 7(7) of the Divorce Act is that 

Cedric Post 1989, and the Cynthia effect of must section bring 7(7) of into the Divorce account Act their is that respective Cedric and Cynthia must br 

pension their respective interests, pension to determine interests, for the the total purposes value of of determining what they the are total value of what t 

to share in. 

entitled to share in. 

A word of caution here regarding the valuation of pension interests for this purpose: it is i 

note that pension interests must be valued on the basis contemplated by the Divorce Act. 

Applying section 7(7) of the Divorce Act to Cedric and Cynthia’s situation, we see tha 

entitled Applying to expect section to 7(7) walk of away the Divorce from the Act marriage to Cedric with R5 and 850 Cynthia’s 000 in value. At least in 

and situation, Cynthia we now see that have they to agree are each (or entitled a court will to expect decide to for walk them) away how to divide up th 

investments, from the marriage such that with they R5 each 850 end 000 up in value. with R5 At 850 least 000 in in theory. value. 

Cedric and Cynthia now must agree (or a court will decide for 

Cedric and Cythia are free to agree whatever they like with regard to how they want to 

assets. them) how One option to divide available up their to them assets is for and Cedric investments, to transfer such a portion that of his pension int 

as they part each of their end up final with divorce R5 850 settlement. 000 in value. But here's the thing with transferring pensi 

divorce: if pension interests are going to need to be transferred, they must be dealt wit 

settlement agreement and divorce order. 

Beware the court order 

If pension interests are to be transferred upon divorce, the wording of the settlement agr

FINANCIAL PLANNING | Legislation 

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to divorcing clients (who want to transfer pension interests) is 

that they should get the pension fund in question to approve the 

proposed wording of their divorce settlement agreement and 

divorce order, in advance of their actual divorce date. It’s much 

easier than having to go back to court after the divorce to get the 

order fixed. 

For those of our clients who have emigrated, the court order 

in question also needs to be made by a South African court. A 

pension fund member who has emigrated – and subsequently 

divorces in a foreign country – will have to apply to a South African 

court to have the divorce order recognised here if he or she wants 

it to be acted upon by a pension fund here. 

The treatment of pension interests in divorce is a rather 

technical area of law. In this article, I have merely scratched the 

surface of the topic, but I hope that I have given you some idea of 

what is involved. 

References 

1. Divorce Act No. 70 of 1970. 

2. The amending Act was the Divorce Amendment Act, No. 7 

of 1989. 

3. Section 7(7) of the Divorce Act 70 of 1970. 

4. Section 7(8) of the Divorce Act 70 of 1970. 

5. A word of caution here regarding the valuation of pension 

interests for this purpose: it is important to note that pension 

interests must be valued on the basis contemplated by the 

Divorce Act. 

6. In terms of section 7(7) read with section 7(8) of the Divorce 

Act and section 37D of the Pension Funds Act 24 of 1956. 

Cedric and Cynthia are free to agree on whatever they like 

regarding how they want to divide up their assets. One option 

available to them is for Cedric to transfer a portion of his pension 

interests to Cynthia as part of their final divorce settlement. But 

here’s the thing with transferring pension interests in divorce: if 

pension interests are going to need to be transferred, they must be 

dealt with in the divorce settlement agreement and divorce order. 

Beware the court order 

If pension interests are to be transferred upon divorce, the wording 

of the settlement agreement and the court order are critical. 

Pension funds are authorised 6 to transfer a pension interest 

(or a portion thereof) on divorce, provided that the court order 

in question meets all the legal requirements. My practical advice 

Hannah Wilson, Director, Simplifi Law 


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The investor value of smaller 

fund management firms vs the 

big behemoths 

As an analogy to what the fund management sector looks 

like, one can compare it to the golden shiner, a small, 

unremarkable fish that moves in shoals and prefers 

spending time in shady, dark waters. Individual golden 

shiners are oddly bad at finding shadows. This was demonstrated 

by Iain Couzin, a Princeton University researcher who placed an 

individual shiner in a pool with a regular pattern of shadows. It 

could not navigate its way to the darkness. It was so poor that it 

seemed to find shadows only by chance. 

However, shiners tend to do two things while wandering 

around aimlessly; they swim together and stop when they find 

a shadow. If a fish found a shadow it would stop moving and its 

neighbours would do the same. This is how the rest of the shoal 

found the shadow. Even though each fish is remarkably bad at 

discovery, a large group was very good at it. It’s an efficient system 

and an example of the wisdom of crowds in nature. 

This system is not only found in nature but in the modern 

world too. For instance, the wisdom of crowds is a well-covered 

behavioural finance topic. Whatever your investment approach 

or philosophy, we should be able to agree that a wide range of 

views, research and perspectives add value to the industry. More 

Reza Khan, CEO, Lodestar Fund Managers 

independent voices inject fresh insight and opinions to the 

discussion which leads to better price discovery and more efficient 

markets. This has been a particular strength of the South African 

industry; over many decades new firms with unique identities 

have added their perspectives and views. Certainly, the industry 

as whole would be in a worse off state without new firms entering 

the industry. Up to about 10 years ago there has been a constant 

flow of new firms. Many of whom were considered upstarts and 

underdogs, and now form “the establishment”. 

Back then the industry created opportunities and incentives for 

the entrepreneurial spirit to flourish for founders of these firms and 

ultimately it was investors that benefited. 

“Show me the incentive and 

I’ll show you the outcome.” 

– Charlie Munger 

Unfortunately, things have since changed. While lots of attention 

has been focused on narrowing opportunities in South African 

markets, what has slipped by unnoticed is how the flow of new 

firms into the industry has declined significantly. We believe there 

are many reasons why almost no new entrants have entered the 

sector recently. These include high startup costs, large corporate 

remuneration packages and increased specialisation. 

Full disclosure, I am the founder of a small asset management 

firm, so my bias is to say that clients are unwilling to use small firms. 

This, in my opinion, misses the larger point that it is easier to 

ignore small firms if there are so few of us. Rather, the problem is 

deeper and more structural than a current preference. 

We are amidst the consolidation of the industry as the stream of 

new firms dwindles and the average age of owner-run firms spans 

multiple decades. This is a fundamental change to the ecosystem 

that has developed, flourished and allowed clients to meet their 

investment goals, over time. Investors and advisors should be 

concerned; the path we are on could resemble the old days where 

the only options were products from a small number of market 

behemoths with pricing power and misaligned incentives. 

An unlikely group has emerged in the face of increased market 

concentration. Small black-owned firms that were launched about 



BLUE 

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10 years ago. These firms began with the early support from 

institutional investors looking to expand representivity within the 

industry. The founders were typically young(er) fund managers 

with a good track record although the current age of these firms 

means that their leaders are now veterans of several market 

and business cycles. These are not startup firms anymore but 

established small businesses. Their longevity also means that their 

track records bear scrutiny and many have award-winning funds. 

Irrespective of their success, this group has added an independent 

voice to an industry that is unfortunately moving in the opposite 

direction. If this group fails, who could blame new rising stars for 

climbing the corporate ladder instead of building something new? 

Despite many of these firms having long and successful track 

records with institutional clients, they have not gained traction in 

the retail market. Small firms have always struggled in this area. I 

believe that this change in the landscape means that the interests 

of small fund managers, investors, IFAs and DFMs have now 

converged. Investors need a well-functioning financial ecosystem, 

from minnows to apex predators, yet currently, we are seeing 

virtually no new entrants. Fund manager consolidation means 

that DFMs and IFAs will struggle to differentiate their investment 

strategies and will have few options if or when they need to 

make changes. Consolidation is great for the profitability of large 

firms but is unlikely to serve the rest of us well. 

The call to action is very simple: look at your portfolio mix 

and ask if your fund managers represent your long-term best 

interests or if the selection is contributing to the erosion of the 

fund manager ecosystem? I appreciate why it feels safe to pick a 

familiar name, but it is far more prudent to thoroughly evaluate 

all managers with the right skills across the sector and not just the 

ones with billboards on the highway and banners at the airport. 

Manager research must be fit-for-purpose and not tinged with 

old biases. It should no longer be acceptable to simply hide behind 

the weak platitude that an experienced fund manager is “not ready 

yet”. Nor should a firm’s credibility be dismissed because it requires 

extra work to explain who they are and why they may be the right 

option for a client. 

Charlie Munger said, “Show me the incentive and I’ll show you 

the outcome”. The current approach perpetuates an environment 

without an incentive for anyone to start a new firm. The result 

will be a scenario where we all rely on the good nature of the 

very large. 

Lodestar Fund Managers (Pty) Ltd is an authorised financial services provider, FSP 49808. All relevant disclaimers are available on the Lodestar website. 


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FINANCIAL PLANNERS | Profiles 

Profiling financial planners 

Ever wondered how others in the profession think, what their perspectives are or how they charge clients? 

Blue Chip speaks to CERTIFIED FINANCIAL PLANNERS® and gives you the inside scoop. 

Kim Lewis, CFP®, Naviganti Financial Planning cc 

What are the biggest mistakes that you see clients make? 

The biggest mistakes we see clients make are usually related to 

emotion. People habitually give money away, often money that 

they cannot afford to family members without understanding – or 

ignoring – the implications of doing so. In the same vein, clients who 

do not action the hard, uncomfortable advice or ignore the warnings 

that we have given them regarding the actions that they are taking 

do, unfortunately, must face the consequences of these decisions. 

What do you enjoy most about being a financial planner? 

There are a few things that I enjoy about being a financial planner 

but mostly it is the personal element of becoming better 

acquainted with many of our clients. I love getting to know 

people and watching their stories emerge – it is incredibly 

rewarding to be part of someone’s journey and struggles when 

they finally come out on top. 

What are the biggest challenges you face as a financial planner? 

Globalisation, especially for young people, is a massive problem 

in the industry and something that I face as a financial planner 

constantly. The “old way” of advising clients is becoming irrelevant 

amid a changing landscape where young people are constantly 

on the move, often do not know what their goals are and have no 

idea where they will end up. This, combined with an increasingly 

redundant “retirement” plan because people will need to work 

longer and are going to live longer, means that advising and 

planning for young people in different jurisdictions is incredibly 

challenging. This is something that we are extremely aware of, and 

we are working on, and have made strides towards, implementing 

a plan better suited to the needs of these individuals. 



Where clients have had bad or unsuitable experiences with 

advisors, products and/or investment vehicles used, there is 

a common thread that they did not question the advisor to 

ensure they fully understood and agreed with the implemented 

recommendations. This can often be a case of not wanting to 

appear ignorant or dismissive of the advice. While a certain level 

of trust is ultimately needed, clients should be comfortable and 

encouraged to ask whatever questions they may have and as 

often as needed to be comfortable with their portfolio. 


Being able to make a positive impact on individuals, their families 

and businesses is such a joy. We try never to lose sight of the fact 

that we are invited into deeply personal spaces of people’s lives 

and have a duty and responsibility not to allow our own biases 

or personal opinions to affect the appropriateness of our advice. 

Some conversations require us to be encouraging and supportive, 

while others require us to be firm and help redirect certain 

behaviours or thought patterns. Knowing that the work you do 

truly makes a difference in not only the lives of your clients but 

also has a secondary impact on those who go on to participate 

within other areas of their lives is a very fulfilling thought. 

Kim Lewis, CFP®, Naviganti Financial Planning cc 


Most directly it is how the term financial planner is so loosely 

defined and liberally applied. Since anyone, from those with two 

weeks of product training up to those with commerce degrees, 

postgraduate qualifications and board certifications, uses the 


FINANCIAL PLANNERS | Profiles 

BLUE 

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term financial planner, it does create inconsistent experiences 

and expectations for clients and consumers. 

There is an ever-growing number of people entering and 

improving within the general industry to turn it into the 

profession it deserves to be however; there are still too many 

large institutional influences that treat our young profession as 

a glorified sales industry. When your focus and incentives are 

built around production figures and no attention or recognition 

is given to the relationships created with clients, the bulk of the 

interactions will remain centred around what can be earned 

from a prospective client rather than what can be built with 

them over time. 

This profession is simultaneously 

the cruellest out there and 

yet incredibly rewarding. 

co-author and help you write the story of your future. People are 

amazing and complex; they keep me intrigued, curious and on 

my toes daily. 

This profession is simultaneously the cruellest out there and 

yet incredibly rewarding. The rewards should not be measured on 

the financial success of your FSP but on the positive outcomes you 

help your clients reach. That is my reward. 


Regulation. Financial services is one of the most regulated 

industries in South Africa, and ensuring one is always up to date 

with the requirements of the regulatory bodies is exceptionally 

time-consuming. Previously, the challenges included recruiting 

the right staff, but that has been taken care of now. 


Terence Tobin, CFP®, Director and Founder, Rich Ideas Group 


Thinking they know it all. I love it when clients have done 

research and due diligence, but sadly their data sample size 

is often limited to their own lived experiences or the lived 

experiences of those around them. Using a Certified Financial 

Planner® professional who will help them see what they can’t 

see and help them zoom out to understand the bigger picture 

has incredible value. It often takes years for them to discover 

the true value of a financial professional. 


Stories. Everyone has a story and I love to hear your story. Your 

story has led you to where I find you today and I want to be your 

Terence Tobin, CFP®, Director and Founder, Rich Ideas Group 


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Big data: the digital 

disruptor reshaping the 

South African insurance sector 

In the rapidly evolving landscape of the digital era, the application of big data has become a cornerstone 

for transformative strategies across various sectors, particularly within the insurance industry. 

Big data presents unparalleled opportunities for deriving 

insightful patterns, trends and associations, especially 

concerning human behaviour and interactions. This article 

explores how South African insurance companies leverage 

big data to enhance strategic decision-making and overcome 

challenges unique to the region. 

THE FUNDAMENTALS 

Big data, marked by its vast volume, velocity, variety, veracity and 

value, allows for the generation of insights that can significantly 

influence business strategies and operational efficiencies. This 

multifaceted nature of big data supports a nuanced understanding 

of risk factors, customer segmentation and market trends, which 

enhances insurers’ decision-making capabilities. 

How is big data shaping governance, risk and regulatory 

compliance (GRC) practices in this industry? 

Enhanced risk management. Big data enables insurers to perform 

sophisticated risk assessments by integrating and analysing vast 

amounts of data from various sources. This includes traditional 

data like claims histories and policyholder information, as well 

as unstructured data from social media, IoT devices and other 

digital interactions. By leveraging predictive analytics, insurers 

can identify potential risks before they materialise, allowing for 

proactive risk management. For example, data from telematics 

devices can be used to assess driving behaviours and adjust 

premiums accordingly, thereby reducing risk exposure. 

Improved compliance monitoring. Compliance with 

regulatory requirements is a major concern for South African 

insurers, especially given the evolving nature of financial 

regulations. Big data tools enable continuous monitoring of 

compliance data, helping insurers stay ahead of regulatory 

changes and avoid penalties. Advanced analytics can automate 

the tracking of compliance across different functions, highlighting 

anomalies or discrepancies that could indicate breaches or noncompliance. 

This real-time monitoring is crucial in environments 

like South Africa, where regulations such as the Protection of 

Personal Information Act (POPIA) impose strict guidelines on 

data privacy. 

Streamlined reporting processes. Regulatory reporting is a 

time-consuming process that requires accuracy and timeliness. Big 

data technologies facilitate streamlined reporting by automating 

data collection and report generation. This reduces the likelihood 

of errors and ensures that reports are completed on schedule, 

which is particularly important in meeting the requirements set 



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handling and decision-making processes. This transparency is 

crucial for both internal accountability and external audits. It 

also builds trust among policyholders and regulatory bodies, 

as insurers can easily demonstrate their compliance and ethical 

handling of both business operations and customer data. 

by regulatory bodies like the Financial Sector Conduct Authority 

(FSCA) in South Africa. Automated reporting also frees up 

resources, allowing staff to focus on more strategic tasks. 

Advanced fraud detection. Fraud detection is a critical 

component of GRC. Big data analytics improve the ability to 

detect and prevent fraud by analysing patterns and trends across 

large datasets. For instance, machine learning models can identify 

unusual claims or policy applications that deviate from normal 

patterns, triggering alerts for further investigation. This capability 

not only helps in mitigating financial losses but also plays a vital 

role in maintaining the integrity of the insurance sector. 

Decision support for governance. Governance in the insurance 

industry encompasses the frameworks and processes that ensure 

the organisation is managed in a way that is ethical, responsible 

and aligned with business objectives. Big data aids governance by 

providing executives with comprehensive insights into operations, 

market conditions and customer needs, facilitating better decisionmaking. 

Data-driven governance supports strategic planning 

and helps insurers adapt to changing market dynamics while 

maintaining robust internal controls and oversight. 

Enhanced transparency and accountability. The integration 

of big data tools increases transparency within insurance 

organisations by providing clear, traceable audit trails of data 

KEY CHALLENGES IN INSURANCE GRC 

In the insurance sector, governance, risk and compliance present 

a set of complex challenges that can impact the effectiveness of 

these functions. Here are some of the main challenges experienced 

in the sector: 

Regulatory compliance and changes. One of the most 

significant challenges is keeping up with frequent changes in 

regulations. Insurance companies operate in a highly regulated 

environment where laws and standards can vary significantly 

between jurisdictions and are often subject to change. For 

instance, changes in data protection laws such as the Protection 

of Personal Information Act (POPIA) in South Africa require insurers 

to continuously update their policies and systems. Compliance 

requires not only understanding these laws but also implementing 

processes that can swiftly adapt to new requirements. 

Data management and security. With the increasing reliance 

on big data for risk assessment and customer management, 

insurers face the challenge of managing vast amounts of data 

while ensuring privacy and security. The risk of data breaches and 

cyber-attacks is a constant threat, with potentially severe financial 

and reputational consequences. Ensuring robust cybersecurity 

measures and data governance policies that comply with legal 

standards is a continuous challenge. 

Integration of technology. While technology can streamline 

compliance and risk management processes, it also poses 

challenges in terms of system compatibility, employee training and 

the initial financial outlay. Moreover, there is the ongoing task of 

maintaining and updating technological solutions to keep up with 

both new regulatory requirements and advancing cyber threats. 

Fraud detection and prevention. Fraud remains a pervasive 

issue in the insurance industry, encompassing everything from 

claims fraud to internal financial fraud. Developing effective 

systems to detect and prevent fraud, particularly in an age where 

fraudulent schemes are becoming more sophisticated, is a major 

challenge. This requires continuous investment in advanced 

analytics and fraud detection technologies. 

Resource constraints. Many insurance companies, especially 

smaller ones, face resource constraints that can affect their GRC 

functions. Allocating adequate budget and manpower to ensure 

compliance, manage risks and maintain governance standards 

without compromising other business operations is a balancing 

act. This can limit their ability to invest in the best technologies or 

hire the necessary expertise. 

Cultural and organisational challenges. Establishing a 

culture of compliance and risk awareness across all levels of 

an organisation is challenging. Employees at every level must 

understand the importance of GRC and how they contribute to 


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these areas. This involves ongoing training and communication, as 

well as a clear demonstration from leadership that GRC is a priority. 

Quantifying and managing risks. Insurance companies must 

predict future risks based on available data, which can sometimes 

be incomplete or inaccurate. This uncertainty can complicate risk 

management strategies and insurance product pricing. 

Ethical and reputation risks. The insurance sector is highly 

susceptible to reputational damage arising from non-compliance, 

ethical breaches or poor handling of governance. Companies must 

navigate these challenges while maintaining trust with clients and 

regulators. Any failure can lead to significant reputational damage 

that can affect the company long-term. 

Identifying, quantifying and 

managing risks proactively 

can be challenging due to the 

uncertain nature of risk itself. 

5. Belhadi, A., Abdellah, N., & Nezai, A. 2023. The effect of big data on the 

development of the insurance industry. Business Ethics and Leadership, 

7(1), 1-11. 

6. Bhardwaj, M. and Agarwal, S., 2022. Decision-making optimisation in 

insurance market using big data analytics survey. In Big Data Analytics in 

the Insurance Market (pp. 57-80). Emerald Publishing Limited. 

7. Bischof, C. and Wilfinger, D., 2019. Big data-enhanced risk management. 

Transactions of FAMENA, 43(2), pp.73-84. 

8. Bohnert, A., Fritzsche, A. & Gregor, S. 2019. Digital agendas in the 

insurance industry: the importance of comprehensive approaches. The 

Geneva Papers on Risk and Insurance. Issues and Practice, 44, 1–19. 

9. Cappiello, A. 2020. The technological disruption of insurance industry: A 

review. International Journal of Business and Social Science, 11(1), pp.1-11. 

10. Chen, H., Chiang, R.H., & Storey, V.C. (2012). Business intelligence and 

analytics: From big data to big impact. MIS Quarterly, pp.1165-1188. 

11. Gandomi, A., & Haider, M. (2015). Beyond the hype: Big data concepts, 

methods, and analytics. International Journal of Information Management, 

35(2), pp.137-144. 

12. Laney, D. (2001). 3D data management: Controlling data volume, 

velocity, and variety. META Group Research Note. 

13. Manyika, J., Chui, M., Brown, B., Bughin, J., Dobbs, R., Roxburgh, 

C., & Hung Byers, A. (2011). Big data: The next frontier for innovation, 

competition, and productivity. McKinsey Global Institute. 

FUTURE TRENDS 

Looking forward, the integration of AI and IoT with big data 

analytics is set to transform the South African insurance sector 

further. These technologies will enable more sophisticated risk 

management solutions and more personalised customer service, 

propelling the industry towards a more data-driven future. 

CONCLUSION 

In the South African insurance sector, big data is transforming GRC 

by enhancing risk management capabilities, improving compliance 

and reporting efficiency, advancing fraud detection methods, 

supporting effective governance and increasing transparency and 

accountability. As the volume and variety of data continue to grow, 

the strategic implementation of big data technologies will be vital 

for insurers to navigate the complex landscape of regulations and 

risks effectively. 

References 

1. Afrank, A., Bell, M., Kennedy, O., Upton, J. & Yang, M. 2023. How the 

Internet of Things (IoT) is Adding Proactivity to Insurance. 

2. Alalawneh, A.A. and Alkhatib, S.F., 2021. The barriers to big data adoption 

in developing economies. The Electronic Journal of Information Systems 

in Developing Countries, 87(1), p.e12151. 

3. Al-Qirim, N., Rouibah, K., Serhani, M.A., Tarhini, A., Khalil, A., Maqableh, 

M. & Gergely, M. 2019. The strategic adoption of big data in organizations. 

In Managerial perspectives on intelligent big data analytics (pp. 43-54). 

IGI Global. 

4. Arumugam, S. & Bhargavi, R. 2019. A survey on driving behavior analysis 

in usage based insurance using big data. Journal of Big Data, 6, pp.1-21. 

Vuledzani Dangale, CFP®, MBA Head: Regulatory 

Implementation and Monitoring, SARLSA, Liberty Group 

South Africa 


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