The insurance risks of poorly maintained homes Considered the largest private residence in the European region, the 365-room Wentworth Woodhouse in South Yorkshire, England, was recently put on the market by its owner for £7 million. For a home with a rich history dating back to the 17th century, the sale of Wentworth Woodhouse may […]
By Mahesh Deva, Compliance Officer, Compli-Serve This is an updated version of an article that ...
Alwyn van der Merwe, Director of Investments Last year I applied a value bias in ...
While current falling commodity prices may stabilise, the extent of the supply side response in ...
After a long and hectic year, working South Africans are looking forward to some time ...
It is has been said that a will is one of the most important documents ...
- Q: How did you get involved in financial services - was it always something you wanted to do?
- A: I actually wanted to be a Chartered Accountant and focused my tertiary education on achieving this goal. After moving to Johannesburg in 1999, I joined M Cubed as an investment administrator, which is where I discovered the world of investments. Having had very little exposure to investments, I started with borrowing books from the library to better understand the characteristics of the investment instruments. Thereafter I completed the SAIFM Registered Persons Exam and changed my B.Com degree area of specialisation to Risk and Investment Management. In 2003, I was appointed as an investment analyst for M Cubed Multi-Managers, where I spent the next 5 years in fund management before joining Grant Thornton Capital as Head of Investments and subsequently started Global Investment Reporting for investment compliance reporting.
- Q: What makes a good investment strategy for a long term investment?
- A: One of the key factors to consider is the probability to outperform inflation. A good investment strategy would therefore increase the probability of outperforming inflation whilst reducing the risk of capital loss. Investors usually look for the highest return with no risk – whoever invents that investment product will be very rich! Depending on the investment asset class, volatility and risk can both enhance and erode performance which means diversification of risk through multiple asset classes should be included in the overall strategy. Long term investments should be seen as “buy and hold” strategies as constant review and change can lead to underperformance. Investors should also maintain their investments during good and bad times. Therefore, choosing between active or passive strategies seems less important than committing to a long term investment and sticking to it!
- Q: What is good about South African pension fund law and legislation and what needs more work?
- A: South African Pension fund law is amongst the strongest in the world, given the regulations and incorporation of First World ideologies such as Environmental, Social and Governance (ESG) investment principles. There has also been an increase in compliance and reporting to ensure protection from high-risk investments. These compliance limits are world class and will contribute to the success of the local retirement fund market. Although the compliance laws are in existence for more than 3 years, the regulator has created a self-regulation environment where funds only report if they have breached the prescribed limits. As the industry struggles to produce the compliance reports regularly and there are no consequences for non-compliance, many funds simply ignore the compliance reporting. In my opinion, the regulator needs to enforce its regulations through compulsory submissions, audits, on-site visits and trustee sign-off to ensure that funds comply with the risk parameters as the regulations are there to protect the interests of the members of the fund. By the same token, retirement fund trustees should proactively understand the regulations, implement direct compliance reporting and avoid conflicts of interest to meet their fiduciary responsibilities as described in Regulation 28.
- Q: Competition can breed innovation and result in many benefits for the end user - is our fund management and administration market competitive, is it easy for new market entrants?
- A: New entrants find it difficult to penetrate the investment and administration markets as clients resist change or “choose” to maintain the status quo – as it is easier than changing suppliers. Many funds enter into undefined contract periods with suppliers which lessens the requirement for performance evaluation and competition. New entrants usually bring innovative products, systems and efficiencies – but are unable to meet with key decision makers to demonstrate their capabilities. Although clients tend to gravitate towards larger, more established businesses, new entrants can sometimes deliver a superior service at lower costs, if they are given the opportunity. The industry should apply a defined contract period for services (5 years), after which the clients must go through a tender/due diligence process to confirm the service provider(s) meet all the requirements of the client. This would confirm the fund is receiving the best value for money.
It is time to wrap up 2015. A few days left yet – but those need to be spent relaxing. And taking it Easy. Technology free. Paper free. Stress free – that’s not possible but one can try! How has the year been for you – it has been a busy year, and a year […]
By Paolo Senatore, Chief Investment Officer Ashburton Investments As 2014 draws to a close it is appropriate to review just how the investment landscape evolved as the year progressed. What is certain is that investment markets behaved very differently to the economic predictions made by many economists and analysts. The year started with a bang […]
Geoff Blount, Managing Director of Cannon Asset Managers, argues that over the long term company performance tends to be average and is driven more by economics than other factors As humans, we generally like to think we are above average, especially corporate management teams. So stating that all companies are “average” over the longer term […]
Adam Samie, CEO of Lion of Africa Insurance, looks at the year ahead. The short term insurance industry is the grease which ensures that the economy functions successfully: it enables businesses to manage their risks and to focus on what they do best. Through transferring risk to an insurer’s balance sheet, a firm can mitigate […]
By Rory Judd, MiWay head of online marketing Extreme weather is a major cause of damage to property, with insurance claims of more than R1-billion racked up in the past year alone. For much of the Highveld in particular, extreme weather generally means violent thunderstorms and hailstorms which can lay waste to houses and cars […]
By Ben Wagner, Head of NATIVE VML Cape Town Trends are a bit like spending a dreamy, sunny day at the beach. The next thing you know you have a drenched towel and phone. High tide and trends work like that. Here are 10 things you need to know before the water hits you in […]
Sue Cogswell – Wealth and Financial Healthcare Advisor, BDO South Africa- December 04, 2014 – Once again the year is reaching its end and the time to seriously consider your medical aid plan for 2015 is upon us. You still have the opportunity to upgrade your plan, irrespective of your medical conditions. For those who […]
By Estelle Scholtz- Mare Head of Marketing for Financial Wellness at Momentum Economists do it, s hare analysts do it and almost everyone who owns a business does it. We are talking about scenario planning. Scenario planning has always been a tool used by armies to gain strategic advantages over their enemies. As a business […]
By Ian Middleton, managing director of Masthead While the financial reforms proposed by the Financial Services Board (FSB) in its RDR discussion paper aim to achieve better outcomes for the consumer, the changes will also direct financial advice businesses onto the road to sustainability. The FSB’s reforms will help build consumer confidence and trust in […]
Nedbank Private Wealth today (2 December 2014) released its annual Christmas Stock Picks with a selection of carefully picked stocks for various family members in 2015. Last year’s stocking selection for the 2013/14 period posted a market-beating performance, returning 23,3% (excluding dividends) over the measurement period against just 4,2% by the All-share index. The notable […]
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Newsletter 11 December 2014: An ABC to end the year
Welcome to our final newsletter for 2014. It has been a busy year. Today we […]
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