Collective Investment Schemes in Securities (CIS) should be considered as medium to long-term investments. The value may go up as well as down and past performance is not necessarily a guide to future performance. CIS’s are traded at the ruling price and can engage in scrip lending and borrowing. A schedule of fees, charges and maximum commissions is available on request from the Manager. There is no guarantee in respect of capital or returns in a portfolio. A CIS may be closed to new investors in order for it to be managed more efficiently in accordance with its mandate. CIS prices are calculated on a net asset basis, which is the total value of all the assets in the portfolio including any income accruals and less any permissible deductions (brokerage, STT, VAT, auditor’s fees, bank charges, trustee and custodian fees and the annual management fee) from the portfolio divided by the number of participatory interests (units) in issue. Forward pricing is used. The Fund’s Total Expense Ratio (TER) reflects the percentage of the average Net Asset Value (NAV) of the portfolio that was incurred as charges, levies and fees related to the management of the portfolio. A higher TER does not necessarily imply a poor return, nor does a low TER imply a good return. The current TER cannot be regarded as an indication of future TER’s. During the phase in period TER’s do not include information gathered over a full year. The Manager retains full legal responsibility for any third-party-named portfolio. Where foreign securities are included in a portfolio there may be potential constraints on liquidity and the repatriation of funds, macroeconomic risks, political risks, foreign exchange risks, tax risks, settlement risks; and potential limitations on the availability of market information. The investor acknowledges the inherent risk associated with the selected investments and that there are no guarantees. Laurium Capital (Pty) Limited is an Authorised Financial Service Provider (FSP No.34142). Prescient Management Company (RF) (Pty) Ltd is registered and approved under the Collective Investment Schemes Control Act (No.45 of 2002). The performance for each period shown reflects the return for investors who have been fully invested for that period. Individual investor performance may differ as a result of initial fees, the actual investment date, the date of reinvestments and dividend withholding tax. Full performance calculations are available from the manager on request. The investment performance is for illustrative purposes only. The investment performance is calculated by taking the actual initial fees and all ongoing fees into account for the amount shown. Income is reinvested on the reinvestment date.

Laurium Flexible Prescient Fund

The No. 1 fund over 3 years**Launched 1 February 2013, the Laurium Flexible Prescient Fund is ranked no.1 in the

South African Multi-Asset Flexible Category since inception and over 3 years to

31 March 2016, with a cumulative return since inception of 82.5% and return per annum

of 21.0% after fees (Source: Profile Media: April 2016).

For more information and basis of the ranking, contact the fund manager:

www.lauriumcapital.com or call us +27 11 263 7700.

Know your hedge fund managerHedge funds are a new alternative for many investorsPage 16

INSIDE your May issue of MoneyMarketing...

131 May 2016 | www.moneymarketing.co.za

First for the professional personal fi nancial adviser

Should advisers ‘pay back the money’?One must look both at the strictly legal position and take a principles-based approach as well.Page 9

Medical malpractice claimsClaims in excess of R5 million have increased by 900% since 2009Page 22

In a challenging environment, South African insurers are moving away from

‘business as usual’ and fi nding new ways to achieve growth. That’s the word from PwC in its latest insurance industry analysis.

PwC has identifi ed fi ve key megatrends impacting the insurance industry: FinTech, changing demographics, regulation, the rising signifi cance of emerging-market economies in the longer term, and changing climate and sustainability issues.

1 FinTechFinTech is defi ned as “a

dynamic new segment at the intersection of the fi nancial services and technology sectors, where technology-

focused start-ups and new market entrants innovate the products and services currently provided by the traditional fi nancial service industry.”

PwC says FinTech is gaining signifi cant momentum globally, using digital technologies to cause signifi cant disruption to traditional value chains in fi nancial services, including insurance.

“Funding of FinTech start-ups more than doubled in 2015, from R5.6 billion in 2014 to R12.2 billion in 2015. Cutting-edge FinTech companies are redrawing the competitive landscape, blurring the lines that defi ne players in the FS sector. Insurers participating in our 19th PwC Global CEO survey see up to 22% of insurance

business being lost to FinTech companies by 2020.”

2 DemographicsUN population

estimates suggest that another 1.15 billion people will be added to the world’s population by 2030, bringing the total to 8.5 billion people. Of this growth, 97% will come from emerging markets, including those in Africa. In addition, there will be 390 million more people over 65 by 2030, compared to 2015.

Insurers break away from ‘business as usual’

Client engagement

South African insurers are already engaging in projects to improve their technology, not only in order to support and optimise their current business operations but also to support customer-centric projects.

“Digital technology and data analysis ability will be signifi cant not only to facilitate more real-time engagement with consumers but also to anticipate their changing needs and to manage risks more proactively rather than reactively. Client centricity is in large part supported by advancements in technology.”

Discovery is already making strides in using technology to further enhance client engagement.

“Discovery launched its active rewards programme in partnership with Apple, using the Apple watch to monitor and reward client health improvement as part of the Discovery Vitality programme.”

PwC adds that the uptake of this programme by over 17 000 of Discovery’s clients within three months of the launch date “is a clear demonstration of changing customer behaviours and their desire for real-time engagement with their insurers.”

Continued on page 2

INSIDE

2 31 May 2016

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NEWS &OPINION The increasing longevity trend will bring new challenges

The increasing longevity trend will bring new challenges

EDITOR’S NOTE

Janice Roberts

“This age group will grow by 67% in Africa alone, compared to the 49% increase in the 15–64 age group. The increasing-longevity trend will bring new challenges or opportunities for insurers to adapt and create tailored retirement solutions,” PwC states.

It could also split the industry between those focused on serving young consumers and those serving the older ones.

“Either way, insurers will need to adapt their digital and data analysis capabilities in order to respond quickly to the need for new outcome-based products across the new demographic spectrum.”

3 Emerging economiesAccording to the IMF

World Economic Outlook for 2015, the GDPs of the E7 countries grew at an average of 6% per annum between 1994 and 2014, while the G7 average was 2%.

“We expect emerging markets to continue to grow strongly, buoyed by a growing and more skilled workforce and increasing infl ows of capital and technologies.”

By 2030, seven of the world’s top 12 economies will come from emerging markets, compared to fi ve in 2011.

“The majority view in our analyses suggests that insurers will grow their local presence

in emerging markets to meet the growing demand from emerging urban middle classes.”

4 RegulationUnfortunately, 94% of

insurance CEOs surveyed see over-regulation as a threat to their growth prospects, more than any other sector.

“The majority view was that regulators are becoming more intrusive, demanding detailed insight into operational processes and customer propositions.”

PwC says this could force traditional insurers to exit selected industry segments deemed too risky or complex. New entrants with alternative insurance solutions and customer-centric models could fi ll this gap.

5 Climate changeScientists predict that

average temperatures will increase by well over 2° Celsius in the 21st Century. Yields from rain-fed agriculture will drop by 50% in sub-tropical regions by 2020. The sea level is expected to rise by 23 inches by the end of the century, with a four-inch rise swamping large parts of South East Asia.

According to PwC, total property and infrastructure exposure will rise to $35 trillion by 2070 – an increase of 9%. By 2050, 15% of the world’s population would have had to move because of climate change.

“Already, globally insured natural catastrophe losses have increased from $3.4 billion per year in 1970 to $32.7 billion a year in 2010.”

The majority view was that regulators are becoming more intrusive

Continued from page 1

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© Money Marketing is not a fi nancial adviser. The magazine accepts no responsibility for any decision made by any reader on the basis of information of whatever kind published in the magazine.

EDITORIAL

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Dear Reader

The leaked documents from Panamanian law fi rm, Mossack Fonseca, have put the focus fi rmly on offshore investments. The

fi rm’s speciality appears to lie in setting up offshore companies for the seriously rich. The unidentifi ed leaker provided the International Consortium of Investigative Journalists with 11.5 million fi les, spanning around 40 years of the law fi rm’s dealings.

No one has yet accused Mossack Fonseca of criminal deeds. However, the leak has brought about several probes in several countries against some of the names in the leaked papers who allegedly moved assets around. Many of these names were blacklisted by the US government for carrying out transactions with rogue states, drug traffi ckers or terrorists.

The Panama Papers saga has indeed brought negativity to the concept of offshore investing – but it shouldn’t have. An ‘offshore’ company is merely a company established in a jurisdiction other than one’s own. However, the phrase is widely used to refer to fi rms set up in tax havens such as Panama.

Investing in SA at present is viewed by some as carrying a great deal of risk and most local investors see a need to use offshore investing as a tool of diversifi cation.

I would expect wise investors anywhere in the world to keep money offshore, provided the investments are open and above-board.

For South Africans, holding funds in offshore investments is not illegal – as long as the authorities have given their approval and required disclosures have been met. (With this in mind, don’t miss our June Offshore Supplement).

Those South Africans who have evaded tax through offshore transactions have been given yet another chance by the country’s National Treasury to come clean. I suggest they take it – it may be their last chance.

Janicejanice.roberts@newmediapub.co.za@MMMagzawww.moneymarketing.co.za

331 May 2016

Always after the facts.Never afterthe fact.At STANLIB, we keep a finger on the pulse of the markets. This is why our investment professionals take an in-depth look at over 300 listed companies to make sure that we never miss an opportunity for our clients.

Speak to your financial adviser and invest today with the team that proudly manages and administers R579 billion in assets.

www.stanlib.com

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4 31 May 2016

NEWS &OPINION There are different options based on your goals

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The blend of different assets with a good fund manager should give you good resultsAnthony Katakuzinos says his relationship with fi nance started at a very young age when his mother opened a savings account for him.

“That’s when I was fi rst introduced to the concept and value of saving and transacting. Every birthday and Christmas my allowance was a subject of debate with Mom about how much should be saved. She provided the basic principles of savings.”

His father followed the stock exchange very closely then too – checking stocks in the JSE pages in the daily newspaper every evening after a hard day’s work, “which was the way stocks were followed in those early days.”

This, he adds, is where he soon learnt that the only way to grow money was to invest in equities.

“As it was diffi cult at the time to invest in equities without a stock broker, (there was no online share trading in those

days), I took my hard earned savings

and when I

was in fi rst year at university I bought into an equity unit trust.”

This relationship grew into a passion, which turned into a career.

“I started my journey in the industry when I served articles at KPMG and worked in their Financial Services division auditing banks, insurance companies and unit trust management companies.”

Asked what makes a good investment in today’s economic environment, Katakuzinos says: “That’s a very broad question because in any investment, you need to fi nd a good match between the aim/goal for saving and a suitable blended portfolio.”

He adds that economic conditions at a point in time can impact investment decisions, but should not stop you investing in an appropriate portfolio to meet your goal and objective of saving.

“There are different options based on your goals, i.e. if you are looking at short-term money/investments – then you should consider a money market or Income Fund. If you’re looking for something more long-term – then a diversifi ed long-term portfolio (which is typically a good asset allocation balanced fund, which consists of bonds, property, equity etc.) will be more suitable.

“There is no right answer, but

According to the International Monetary Funds (IMF)’s latest World Economic Outlook document, preliminary data suggest that global growth during the second half of 2015, at 2.8 percent, was weaker than previously forecast, with a sizable slowdown during the last quarter of the year. The unexpected weakness in late 2015 refl ected to an important

extent softer activity in advanced economies especially in the United States, but also in Japan and other advanced Asian economies. The picture for emerging markets is quite diverse, with high growth rates in China and most of emerging Asia, but severe macroeconomic conditions in Brazil, Russia, and a number of other commodity exporters.

to reduce volatility of any one asset class, a well-managed asset allocation fund is always a good starting point for a medium to long-term goal. The blend of different assets with a good fund manager should give you good results.”

He says his worst fi nancial moment stands out as the African Bank Investments Limited (ABIL) matter.

“However both good and bad moments came out of this. Our team at STANLIB came up with the concept of retention funds. ABIL was a bad time for our investors and we were obviously upset that they had to go through this process.

“The highlight was that we very quickly came up with a way of dealing with this with the approval of the Financial Services Board, who I think responded brilliantly in a very short space of time, allowing us to create retention funds to hold the ABIL assets.

“This enabled us to deal with ABIL in an orderly fashion, allowing our investors with their remaining funds to carry on having access to their investing in an orderly manner.”

Katakuzinos adds that he teaches his children to respect money. “It’s not easy to come by, it takes hard work therefore they should use it wisely. I have started a culture of saving with them, like my parents did with me.”

Allan Gray has announced the appointment of former SA Minister of Finance, Nhlanhla Nene, to its board as a non-executive director. “We are very happy to have someone of Mr Nene’s experience on our board, and we are grateful that he chose to accept the appointment. We are looking forward to his strategic and leadership contribution to the board,” Allan Gray said. Nene has extensive experience in the fi nancial services and public sector.

Absa Insurance Company (AIC) has entered into an agreement to sell its intermediated commercial short-term insurance business to Santam. This will see AIC’s intermediated commercial short-term insurance policies transferred to Santam. Absa says it has taken every measure to ensure minimum impact to staff, fi nancial advisers and customers when implementing changes and will engage with them in more detail as and when the deal progresses.

Atlantic Leaf Properties Ltd, the Mauritian domiciled property company with secondary listing on the AltX in Johannesburg, released its full-year results last month, announcing a weighted average earnings per share for the year of 8.7 pence per share – which equates to a yield on Net Asset Value Per Share of 8.2% (on an historic basis) – and a fi nal dividend of 4 pence per share. The company was recently in the news, subsequent to raising R1.14bn to expand its property portfolio. Total property assets at year-end stood at £196 million (2015: £13.6 million) and have grown further since then to £264 million as a result of the acquisition of an additional four properties since year-end.

Founder and executive chairman of African Rainbow Minerals, Patrice Motsepe (below), has offi cially launched a money management company called African Rainbow Capital (ARC). Sanlam Investments CEO Johan van der Merwe and former Sanlam CEO Johan van Zyl are joint CEOs of ARC while Motsepe is ARC’s Chairperson. The new company will focus on fi nancial services and private equity.

Anthony Katakuzinos, COO, STANLIB Retail

VERY BRIEFLY...

Independent fi nancial services group PSG Konsult reported 20% growth in recurring headline earnings to R409 million for the year to end February, up from R341 million for the same period last year.

“This is consistent with the group’s long-term growth track record,” the group said.

All divisions achieved good organic topline revenue growth, with PSG Wealth remaining the strongest and most stable revenue driver.

“This division increasinglybenefi ts from economies of scale,

as both the wealth platform business and adviser network grow.”

PSG Asset Management weathered a tough year in equity markets and consequently earned less in performance fees.

“The division nevertheless experienced encouraging net infl ows and gained

market share, mainly due to its competitive long-term investment track record and support from its marketing and sales team initiatives,” the group said.

531 May 2016

NEWS &OPINIONCash is a not a risk-free asset class

People often use the phrase ‘cash is king’ in times of uncertainty when

the best perceived strategy is to sit on your cash until uncertainty fades.

According to Daryll Owen, Deputy Chief Investment Offi cer at Foord Asset Management, cash plays a pivotal role in the effective management of an investment portfolio.

“In investment speak, cash broadly refers to money placed on short-term, variable rate deposit with reputable banks that it is readily available for use. Because banks face their own liquidity risks and may ultimately fail, cash is a not a risk-free asset class,” says Owen. “However, it can be considered to be low risk because it is free from

most other investment risks.” “Risk is generally defi ned

as the permanent loss of capital and we strive to grow investors’ real wealth in the long-term. A meaningful cash allocation can help with both of these goals at different times in the investment cycle, while providing utility in other areas as well.”

Owen says that we all experience the natural tendency to defer purchases (spending in general) and to hoard our cash when we are feeling nervous about the future. “In much the same way, portfolio managers faced with increased risks or uncertainty are able to increase a portfolio’s cash component to levels they feel appropriate in the prevailing circumstances.”

The Nobel Prize-winning

economist Harry Markowitz once called diversifi cation the only ‘free lunch’ available to investors. In other words, diversifi cation can deliver benefi ts over time at no additional opportunity cost. “Cash has proven to be the best diversifi er of stock market risk relative to other defensive assets and this fi rst benefi t alone justifi es its inclusion in any portfolio – the more conviction you have, the less diversifi cation you need. Accordingly, the cash weighting in a portfolio comes down to the portfolio manager’s judgement.”

“Next,” says Owen, “consider the role of cash in combating the effects of infl ation. Infl ation corrodes investor wealth over time and epitomises an ever-present and meaningful investment

risk. The cash that is held in your portfolio earns interest at the prevailing rate and the yield that you earn will typically track upwards as interest rates rise in response to rising infl ation. In the medium to long-term, cash will never provide a meaningful infl ation-beating return on its own but it should work to maintain the purchasing power of one’s capital.”

Studies show that investors often sell part or all of their investments after a strong market correction and are slow to reinvest after markets have bottomed. These early periods of market recoveries often deliver the best investment returns and missing out on these periods can impair long-term performance.

According to Owen, to participate in the upside of a market recovery, one needs additional cash. Excluding leverage, holding cash in your portfolio through the cycle will provide the liquidity needed to invest in growth assets at the bottom of the cycle, when the risks are lowest. The cash exposure would also moderate the volatility experienced by the investor by mitigating the extent of the market corrections on growth assets such as shares and listed property.

OPINIONCash is a not a risk-free asset class

economist Harry Markowitz once called diversifi cation

risk. The cash that is held risk. The cash that is held in your portfolio earns

The role of cash in your investment portfolio

IT DIDN’T TAKE 3 DAYS

IT TOOK 8 YEARS

TO GET APOLLO 11 TO THE MOON

On July 16, 1969, the astronauts aboard Apollo 11

set off to become the fi rst human beings to walk

on the moon. For 76 hours, millions of people from

all over the world watched what became a historic

giant leap for mankind. What many people didn’t

see were the eight years of unwavering commitment

that made this momentous feat possible. At Allan

Gray we value this kind of commitment. It’s the same

philosophy we apply to investing and it has worked

well for our clients over the last 41 years.

Call Allan Gray on 0860 000 654 or your fi nancial

adviser, or visit www.allangray.co.za

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89570-AG NEW 155x220 89570 - CORPORATE - FEE- Apollo 11 Commitment Print.indd 1 2016/04/13 5:21 PM

6 31 May 2016

REGULATION FEATURE Costs of doing business have inevitably crept up

Has the work of fi nancial advisers been overregulated as some say?Some advisers and industry commentators do indeed lament the fact that the advisory environment has become over-regulated and as a result thereof, has stifl ed businesses, as in theory, advisers are unable to see clients due to the amount of form fi lling, etc. that must be completed.

I do not necessarily agree as over the years I have seen a plethora of practices survive and thrive in the regulated environment, provided they are managed as a business rather than a sales drive, with key people having the correct attitude towards compliance as an enabler rather than a hindrance.

How diffi cult has it been for advisers to cope with the Financial Advisory and Intermediary Services (FAIS) Act? The FAIS Act was, and remains, a wide-ranging piece of legislation that requires some thought and preparation to ensure that you are discharging your obligations and rendering services to your clients utilising the correct business fl ows and related documentation. I have no doubt that for many advisors, compliance with the FAIS Act was indeed challenging, and sadly proved too much for some.

How do fi nancial advisers handle higher compliance and operating costs? I think it is fair to say that the hardest hit were the small one-man bands who were effectively owner-operators and did not have the luxury of internal compliance knowledge, or indeed access to compliance expertise, unless they were prepared to engage with a compliance provider to guide them through what was no

doubt a maze of regulation. Additionally, there was initial unhappiness caused by the cost of regulatory exams. Although the rationale and the higher goal of the exercise was worthwhile, it is just one example of where advisers had to carry unbudgeted costs.

What does the current environment mean for smaller fi nancial advice companies? The current state of the economy and the wider world economy means that we are all living in pressured times and most businesses are operating on thinner margins and having to run faster to generate a reasonable return. Financial advisers are no exception to this and as the costs of doing business have inevitably crept up, not just through compliance and

MoneyMarketing asked Richard Rattue, Managing Director of Compli-Serve to update readers on the latest regulation and legislation environment

regulation, but via electricity, services and other below-the-line costs; it has shaken many small advisers and forced them to consider what comes next. They may look at turning the business into a cost-effective and profi table operation, or opting to join a larger company – and we have seen a growth in such acquisitions over the last two years that I suspect may continue.

In what direction is the RDR moving? I cannot recall a process that has generated more debate than RDR. I think the primary concerns of industry relate to the plight of the adviser population, specifi cally the restructuring of commissions and banning of upfront fees in certain products, which will result in increased barriers to entry into the

industry, accelerate the number of practices that are sold into larger organisations, and make it more diffi cult for individuals to receive fi nancial advice. I have no doubt that the Regulator is aware of concerns such as the potential advice gap – where advice may become unaffordable for some – an issue that affected other jurisdictions where RDR has occurred, such as the UK. The Regulator’s engagement to date has been positive and one can only hope that steps are taken to ensure the independent advisory industry continues to remain a key part of the fi nancial services landscape.

What should the FSB do next, bearing in mind that the UK Regulators are already reconsidering certain of their RDR decisions?One of the benefi ts of not being on the bleeding edge is that you can watch those who take the initiative, and where they get it wrong, you can learn from their mistakes. Recently, the UK acknowledged the existence of an advice gap and the fact that certain products are simply not sold by advisers as it is uneconomic to do so – think medical aid in our local jurisdiction as a similar case. The UK has therefore recently commenced with a fi nancial services review programme to ascertain the impact of the RDR on the industry and of course, the end consumer, with a focus on the advice gap and how best to resolve to the benefi t of all parties. There is talk of reintroducing some commissions, for example. I think it is important that we do not let pride get in the way, and where Regulators see that matters have gone astray, they take steps to ensure the market is re-corrected to equilibrium, and that advisers are able to make a reasonable living, rather than being forced to cut corners and align themselves with products that pay reasonable fees, instead of the products that act out in the clients’ best interest.

The UK has therefore recently commenced with a fi nancial services review programme to ascertain the impact of the RDR on the industry

Compliance as an enabler rather than a hindrance

REGULATION FEATURE

RICHARD RATTUEManaging Director, Compli-Serve SA

731 May 2016

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Coronation is an authorised fi nancial services provider and approved manager of collective investment schemes. Trust is Earned™.

No doubt you’ve made some sacrifi ces for work. Chances are you’ve pulled all-nighters, missed family dinners, perhaps even given up the odd public holiday. You work hard for your money. If you’re thinking of investing, visit becauseitsyourmoney.com

Easy money. What’s that?

8 31 May 2016

NEWS &OPINION Advisers aim to stick to their area of specialisationREGULATION

FEATURE

Regulation can be benefi cial to clients and advisers

Regulation and legislation is very much part of the fi nancial services

industry. While the industry is now more regulated than ever before and there are always extra costs associated to complying with regulations, the industry should not be considered overregulated. There is still a thriving future ahead for fi nancial services in the country and globally South Africa is one of the leaders when it comes to fi nancial services.

Regulation is usually implemented with the aim to benefi t the end-consumer and will evidently benefi t the industry as a whole as the industry becomes more professionalised. The FAIS Act ensures that the industry

remains fi t, proper and honest and provides a framework for advisers to provide quality advice to individuals. Advisers are now on a path to align their services and standing at a level that is equal to any other professional occupation.

When the FAIS Act was enforced in 2004, it was initially hard for many advisers to adapt to the legislation. Now that we have been operating under the FAIS Act for more than a decade, it is simply a part of how business is conducted.

Financial advisers have been handling increasing regulation in a number of ways. When it comes to business functions such as compliance, many advisers opt to outsource this service to experts instead of appointing

a full-time compliance manager. Advisers aim to stick to their area of specialisation to provide adequate advice and, as they are not legal experts, choose to outsource this function.

When it comes to operational costs, recently advisers are spending more time and money on client segmentation and gaining a better understanding of individual client profi tability. Up until now, many advisers have not had a good understanding of where exactly their earnings come from. A new trend for advisers is also to utilise the services of consultants to research and determine exactly how they can align the services they provide to the potential earnings from clients. This

is extremely important, especially for small advisory fi rms, to remain viable in an environment of increased regulatory costs and lower potential upfront earnings.

In terms of the Financial Service Board’s (FSB) Retail Distribution Review (RDR), it can be expected that there will be serious consequences if most of the proposals are applied at the same time. When one considers each proposal individually, one can easily understand the thinking and reasoning behind the proposed regulation and agree with most of it, however it does become concerning when one studies all the proposals in a collective view.

It is also important to note that RDR in the

UK only focussed on investment products and not on insurance products. In South Africa, the RDR proposals cover a much broader spectrum. While the intention to implement these regulations, in a stand-alone basis, are good and supported by industry players, the timing and combination of the proposal will have a great impact on the fi nancial services community.

It is therefore critical that the engagements between the regulator and industry participants continue to ensure that all the proposed outcomes of RDR are achieved, including the principle of “supporting sustainable business models for fi nancial advice to deliver fair outcomes over the long term”.

REGULATION FEATURE

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931 May 2016

COMPLIANCEThe consumer can lay a complaint with the Ombud

BRANDON ZIETSMANCEO and Head of Investments, PortfolioMetrix

The consumer can lay a complaint with the Ombud

COMPLIANCE CORNER

RICHARD RATTUEManaging Director, Compli-Serve SA

The consumer can lay a complaint with the Ombud

Performance fees – friend or foe?Managing money is

a tough business and is not for the fainthearted.

With investing, simply being good or qualifi ed doesn’t cut the mustard; you need to be better than the rest.

For every winner there has to be a loser and, let’s face it, asset managers are up against some seriously stiff competition.

This is an environment that is fi ercely meritocratic and unforgiving of losers. It seems natural then that managers should share in the spoils of victory and feel the client’s pain when they don’t deliver the goods. Intuitively, performance-based fees seem to align the interests of asset managers and investors.

Only paying for performance that is actually delivered seems to be a no-brainer. Why, surely it is just a case of managers putting their money where their mouth is? Or is it?

If the rationale for performance fees is supportable, we need to be clear-minded and answer some basic questions:• Am I likely to pay more or less

over time?• Will I generate better returns?• How do I know that the fees are

equitable? Let’s deal with these one

by one. Investment managers (should) understand risk. To value a share, one needs to form expectations about the size and timing of future earnings as well as the likelihood (certainty) that they will actually happen. The less certain one is, the greater the discount that needs to be applied and the lower the value that should be placed on those earnings. Performance fees are the same. Flat fees carry a high level of earnings stability whilst performance fees may be highly variable.

For it to make commercial sense, an asset manager needs to expect materially higher fees over time to make up for this uncertainty. If your manager doesn’t get this bit (or denies it) move your money quickly! So, it’s fair to say that, on average,

investors are expected to pay more over time for performance-based fees than fl at fees.

If that is the case, what am I getting in return for (probably) coughing up higher fees? Will the manager try harder, put in extra effort or focus more? If valid, what would this say about the manager and their values – does it mean they wouldn’t give it their best shot if they were taking your money without the extra incentive? Good managers that perform consistently attract and retain assets, period. Good individual managers get big bonuses at the end of the year. The truth is that it has always been the case that success results in reward whilst poor performance is punished harshly as clients move funds elsewhere.

So, if my manager is a good guy that has my interests at heart, I should also expect that my gross performance should be the same regardless of what fee structure is offered. If my gross performance is expected to be the same, but I expect to pay more in fees, then logic dictates that my net performance should be worse than under a fl at fee scenario over time.

This leaves us with some very BIG questions – if I am going to pay for performance, can I be sure that the fi eld is level and that the scales are not tipped against me? Will I actually be paying for performance that ends up in my pocket? Has the performance hurdle rate been set at a level that genuinely rewards skill or simply performance that the market would have delivered anyway? The frightening truth is that answers are, put politely, more often than not uncompelling!

Each of these questions requires a fully-fl edged investigation in its own right and can be quantitatively tested, something that your average investor is poorly equipped to do. One thing is for sure though: the prima facie assertion that performance fees automatically align the interests of managers and investors needs to be thoroughly challenged.

Should advisers ‘pay back the money’?The phrase ‘pay

back the money’ has become deeply ingrained in the

South African psyche, having dominated headlines in our parliament over the last year or so.

The question as to whether an adviser should pay back any commission earned on products that subsequently turn out to be a fraudulent scheme or an otherwise bad investment, needs further examination. One must look both at the strictly legal position and take a principles-based approach as well.

Let us fi rst examine the legal position whereby one must fi rst look at the main pieces of legislation that cover the activities of fi nancial advisers, and of course one can arrive quite quickly at the Financial Advisory and Intermediary Services Act, better known by its acronym FAIS, which was enabled in 2002 with the primary aim of regulating the provision of fi nancial advice and ancillary services.

In broad terms, the Act requires anyone who wishes to render fi nancial advice and/or intermediary services to register as such and gain the necessary approval from the Financial Services Board. Once approved, any advice rendered and/or product/investment recommendations made, must only be done once adequate assessment of

the client’s needs has been undertaken to ensure that any recommendations made to the client are appropriate for their particular needs and circumstances. To the best of my knowledge, the FAIS legislation does not include any specifi c provision refl ecting a requirement requiring advisers to pay back any commission or fees earned in the event that the client loses out on an investment that was placed as a result of advice/guidance received from their fi nancial adviser.

There is, however, legal recourse through the offi ce of the FAIS Ombud. The aggrieved consumer can lay a complaint with the Ombud (provided the amount is less than R800 000). The Ombud will review the conduct and paperwork supplied by the adviser and then may make an order that the adviser must repay the amount of the investment in full, together with interest that would have accrued had the investment not been made in the fi rst place. The amount that must be repaid is the full investment, which would therefore include any commission or fees that were deducted by the adviser and/or product provider before the investment was actually placed.

If one looks at a more principles-based approach, then one must apply a principle of fairness to the situation. This could mean that in the event an adviser

discharges their legal obligations correctly, i.e. did the necessary assessment, a thorough due diligence of any

product structures that they were going to advise their clients to place hard-earned funds into, and still the product structure disintegrates for reasons beyond reasonable control of the advisers - should the adviser then share the client’s ‘pain’ and refund a portion of their commission? I would motivate not in such instances, but would be less forgiving if the adviser had not done the necessary homework.

I am aware of at least one instance of a product supplier who shall remain nameless, that undertook to cover costs incurred by their clients as a result of an inherited product structure that they did not directly have control over, yet they made an offer to make good, and indeed lived up to their word. As I was a client of said fi rm, I can confi rm that this resulted in signifi cant upside in the relationship and resulted in further funds being placed with them. I doubt whether too many companies would follow their lead, however, I could well be wrong and indeed hope I am.

There is no doubt we are moving towards an era where we are going to have to do more than just tick the box, and this will impact a number of areas of fi nancial services.

In the future we may be in a situation where, despite clients having signed on the line and having no strict legal claim to refunds of fees, or a portion thereof, we see principles of fairness being applied.

Only time will tell.

There is no doubt we are moving towards an era where we are going to have to do more than just tick the box

10 31 May 2016

NEWS &OPINION The argument for offshore investing is not newPRACTICE MANAGEMENTPRACTICE MANAGEMENT

Should you be investing offshore while the elephants are in the room?INSIDER

CHRONICLES

MARK KITCHINGManaging Director, Warwick Private Clients

Achieving infl ation-beating returns is increasingly diffi cult – and not as

simple as during the period 2003-2012, when the JSE ALSI experienced annualised returns of 18%.

Surprisingly, the JSE ALSI returned 16.4% annualised returns when measured in US Dollars over the same period.

Where should a South African invest?The argument for offshore investing is not new. The norm in any balanced portfolio would see you exposing capital to approximately 20 - 25% offshore, a view of most local asset managers. The reasons for normally investing offshore have not changed – the major reason being that SA contributes less than 0.5% to global GDP.

Would you put all your eggs in one basket accounting for less than 0.5% of world production? SA listed companies are mostly well run, but have little exposure to many global sectors of world markets that are developing (pharmaceutical sciences and digitisation) or recent newcomers (online apps and gaming).

The gaming industry in the US has overtaken the Hollywood fi lm industry comparing total revenue for 2015, with the gap predicted

The reasons for normally investing offshore have not changed

to increase. Medical technology is predicted to be high growth as rapid advances are made. Investing offshore means gaining access to sectors such as these, that are unavailable locally, or in the case of online gambling, sometimes not even legal in SA.

Historically, over the last 10 -15 years, the rand has lost on average 6% p.a. to the USD; 2015 was an outlier shock providing 30% depreciation. Many market commentators expect this depreciation is likely to continue in 2016/17 due to the lack of SA growth, Government debt and borrowing, and the drag created by state owned enterprises. These imbalances, lack of confi dence and the big elephant called political risk cannot be ignored. Not much needs to be written regarding the political elephant, except there are a number of elephants in the room and they are having a bigger and bigger impact!

Three elephants are Standard & Poor’s, Fitch and Moody’s! You have to account for the potential junk status downgrade and the impacts these elephants will have whilst we keep them in the rooms due to poor leadership and policies!

So, what are your options when deciding to invest offshore?One option is to take your money offshore, following the exchange control process, and opening up an offshore bank account into a currency of your choice. Generally, most choose US dollars.

A second option is investing into rand-denominated investments, where the investment and currency exposure is foreign, however you invest in SA rand and get paid out in SA rand utilising the asset swap mechanism. Your money does not physically leave South Africa. The funds are more liquid, and you get quicker access to your capital. However, you are still exposed to SA sovereign risk.

Warwick Wealth provides both of these options, offering direct offshore share portfolio solutions, as well as local rand-denominated unit trust funds. We have seen the need for not only increasing our clients’ offshore exposure more so than most others, but also providing direct offshore actively managed investment products.

If political risk is your primary concern, you need to consider investing your capital directly offshore.

Investing this way means you never have to repatriate or convert the investment back into rand unless this is your choice and you will be fully protected against any form of sovereign risk.

If you don’t have a large lump sum to invest (or if most of your capital is tied up in retirement funds and constrained by Regulation 28), but still want a rand hedge investment option, then the second option is the way to go. You can always save into a discretionary investment and then start moving capital offshore.

Whatever your concern, as a South African serious about your fi nancial wellbeing, you need to consider a signifi cant portion of your total portfolio being invested offshore. And always remember, stock market investing is a long-term process (5 - 7 years minimum). You will destroy more wealth by making hasty investment decisions, especially driven by the recent SA political issues and currency impacts! At Warwick, we employ professional Wealth

Specialists that can assess your current needs and goals and put together an investment portfolio to satisfy these needs, whether your need is local or offshore investment exposure.

Beware of those elephants!

1131 May 2016

S&P Dow Jones Indices (S&P DJI) has released year-end 2015 results for the

South Africa S&P Indices Versus Active Funds (SPIVA®) Scorecard. The report, issued semi-annually, tracks the performance of South African domiciled actively managed funds against their relevant benchmarks. Data is as of 31 December 2015.

The South Africa SPIVA®

Scorecard is part of the S&P Dow Jones Indices’ SPIVA® Scorecard series. The US SPIVA® Scorecard has been running for over 10 years, and S&P DJI has versions in Canada, Europe, Australia, Japan, India and Latin America.

The South Africa SPIVA®

Scorecard year-end 2015 highlights include:

1 Equities South African equity markets experienced another turbulent year as a result of the continued fall in commodity prices, the country’s biggest export. A high proportion of

SA equity fund managers struggle to beat benchmarks: report

South African equity funds invested in both the domestic and international equity markets did not keep up with their respective benchmarks over the one-year period. • 50% of actively managed

South African Equity funds underperformed the S&P South Africa DSW over a one-year period. 75% of actively managed global equity funds underperformed the S&P Global 1200

• Over a fi ve-year period, 74% of domestic equity funds and 96% of global funds trailed the S&P South Africa DSW and S&P Global 1200 respective.

2 BondsActive managers beat their respective benchmarks in both the short- and long-term bond categories.• 37% of actively managed

Short Term Bonds funds underperformed the SteFI Composite Index over a one-year period. Over a 3- and 5-year period 42% and 21% underperformed the benchmark respectively

• For the diversifi ed / aggregate bond actively managed funds, 8% underperformed the JSE/ASSA ALBI Index over a one-year period. Over a 3- and 5-year period these numbers were 9% and 42% respectively.

INVESTINGLonger-term investors are rewarded for this risk

Recently, diversifi ed ‘enhanced income’-type funds that aim to deliver

returns better than cash or a typical money market fund, with a return target of cash +1%-2%, have underperformed their targets.

However, this can be expected in the short term in a rising interest rate cycle.Investors should weather the temporary weakness and resist the temptation to switch out of these funds and into shorter-term alternatives like money market funds and bank deposits.

Funds that aim to deliver a high level of regular income that beats cash must invest in a combination of assets that

give you both a steady income stream and some capital growth over time. Therefore they need to include a high level of income assets like cash and bonds, as well as a smaller proportion of growth assets like listed property and even some equity.

For example, Prudential’s Enhanced Income Fund is holding 42% in SA cash, 31% in SA bonds, 5.3% in infl ation-linked bonds, 4% in listed property, 16% in foreign bonds, and 1.2% in SA and foreign equity.

Over the past year or so, we’ve seen that most asset classes have produced relatively low or negative returns, including bonds. This has reduced the returns

delivered by income-targeting funds. For example, in 2015 South African bonds lost 3.9%, while South African equities returned 5.1% and listed property 8.0% - all very low returns compared to those of recent years.

One of the reasons for negative bond returns has been the rising interest rate cycle in South Africa: higher interest rates erode the capital value of fi xed-rate bonds. Historically it has been shown that when the SA Reserve bank is hiking interest rates, bond returns decline over the short term before improving again as interest rates stabilise and eventually fall.

Partly because of their high bond holdings, returns

from enhanced income funds refl ect the interest rate cycle. They do comfortably outperform money market and cash returns over periods of two to three years and longer, but there are shorter-term periods (one year or less) in which they are expected to underperform, and do so. Longer-term investors are rewarded for this risk.

It is for this reason that we believe it is important for enhanced income investors to have an investment horizon of between one and three years. We view this timeframe as essential in achieving the additional returns over cash.

During periods of temporary underperformance, we have seen investors make

the mistake of switching away from their enhanced income fund to money market funds or a one or two-year bank deposit offering slightly higher future returns. There are two risks with this strategy: fi rst, investors lock in the short-term underperformance. Second, when the bank deposit reaches maturity after one or two years, the interest rate cycle will have turned so that rates will be falling – the investor will have missed out on potential gains from the enhanced income fund and will be forced to move out of the bank deposit and reinvest at lower rates. This ‘reinvestment risk’ needs to be taken into consideration.

Stick with enhanced income funds through the cycle

Longer-term investors are rewarded for this risk

PIETER HUGOManaging Director, Prudential Unit Trusts

12 31 May 2016

INVESTING Low allocation to private equity in SA

Private equity investments have not been embraced by South African

retirement funds which have less than 1% of their portfolios invested in private equity. This is according to Paul Boynton, Chief Executive of Old Mutual Alternative Investments (OMAI) who says that the low investment in private equity comes despite its four to fi ve per cent outperformance of equity investments and its ability to catalyse and develop new businesses and expand existing ones, while investing in schools, housing and power, all of which contribute to the South African economy.

“A few large funds – generally parastatals, some industry funds and the PIC have made signifi cant allocations to private equity, but most other retirement funds have not,” says Boynton, who recently debated this topic at the Southern African Venture Capital and Private Equity Association (Savca) in Stellenbosch. “This is in contrast to the rest of the world that has seen steadily increasing allocations to private equity.”

Retirement fund allocationsGlobally, retirement fund allocations amount to between 5% and 7% of their total allocation while, in more developed markets, allocations are far higher. US public pension fund CalPERS, for instance, has an allocation to private equity of 10% and a further allocation to infrastructure of 1%. Yale University’s Endowment, which has had an extraordinary performance track record, has a current target allocation to private equity of 31% and a 10-year outperformance by private equity of the overall portfolio of 4.4%.

“The low allocation to private equity in South Africa means that underweight funds provide a forgone return over time,” Boynton says. “A low allocation also means that transformational capital in housing, education and power is not being deployed. Infrastructure investment has a direct impact

on economic growth while power generation assets and transport infrastructure such as roads, rail and airports is critical to growth – all sectors in which private equity makes signifi cant investments.”

Renewable energyBoynton points out how Government’s recent renewable energy programme illustrates how private equity investors are able to create jobs, empower local communities and generate much needed power for the national grid by allocating investors’ capital to renewable energy opportunities. To date, through four bid windows, government has procured 6 300 MW of renewable energy through around 90 successful projects. These projects will, in aggregate, cost a little over R200 billion to implement. Government has also indicated that, in an extended Round 4 window, they will allocate a further 1 800 MW.

Private equity has been a signifi cant contributor to the equity raised domestically for the fi rst four bid windows, says Boynton. A typical project would be funded 25% equity and 75% debt with the equity cheque generally more diffi cult to procure. By providing the equity portion of these projects, private equity has mobilised capital to drive this much needed investment.

“In the late 1990s, we ventured into infrastructure because of the long-dated nature of the assets as well as the potential they had to provide above–average returns. We also saw the merit in investing in assets that had a positive economic spinoff; improving infrastructure should help boost GDP growth,” Boynton says. “We later became a more active player in traditional leveraged buyouts and growth capital private equity, predicated on the belief that high investment returns would be achieved. More recently, we have been attracted to renewable energy projects, including wind, hydro and solar developments. Old Mutual has R8 billion invested in 20 of the 90 odd renewable energy projects procured to date.”

Default regulationsIn addition, to low investment by South Africa’s retirement funds, he points out that the industry is also concerned about draft regulation for default pension funds which very appropriately has a focus on passive investment, but care should be taken around potentially unintended consequences such as the focus on investing in liquid listed assets. Further, the admirable aim of reducing costs for retirement funds may inadvertently exclude higher returning assets such as private equity. Managing unlisted assets such as private equity or infrastructure is an inherently costly exercise as it employs highly skilled people.

Furthermore, the economies of scale available in the asset management business are generally not accessible in unlisted assets as each portfolio position requires intensive care by several team members, so a high cost burden is something inherent in the asset class regardless of scale. Also germane to the asset class is the alignment investors achieve with the manager through compulsory coin vestment and carried interest.“The default regulations’ intention to ban performance fees in default portfolios would potentially play havoc with the carried interest model,” explains Boynton. “Hopefully, as this draft regulation proceeds to implementation, the industry will be able to infl uence it productively to ensure the benefi ts of investing in alternative assets are retained for retirement fund benefi ciaries.”

Boynton believes that although private equity is considered an illiquid asset class because of the length of time it takes to realise returns, the signifi cant return premium is more than suffi cient compensation. “So too is private equity’s ability to drive the development of projects and business which allows it to become a major contributor to transformation and development in the local economy,” he adds.

This is in contrast to the rest of the world that has seen steadily increasing allocations to private equity

Local investors lose out on private equity returns

1331 May 2016

www.oldmutualinvest.com/asinvested

SA Multi-Asset High Equity Category. Source : Morningstar as at 30 September 2015. Inception Date : 1 March 1994 Old Mutual Investment Group (Pty) Limited (Reg No 1993/003023/07) is a licensed financial services provider, FSP 604, approved by the Registrar of Financial Services Providers (www.fsb.co.za) to provide intermediary services and advice in terms of the Financial Advisory and Intermediary Services Act 37 of 2002. Old Mutual Unit Trust Managers (RF)(Pty)Ltd (OMUT) is a registered manager in terms of the Collective Investment Schemes Control Act 45 of 2002. The fund fees and costs that we charge for managing your investment are accessible on the fund’s Minimum Disclosure Document (MDD) or Table of fees and charges, both available on our public website, or from our contact centre. Some funds hold assets in foreign countries and therefore may have risks regarding liquidity, the repatriation of funds, political and macro-economic situations, foreign exchange, tax, settlement, and the availability of information. Please contact us for risks specific to each country. The Net Asset Value to Net Asset Value figures are used for the performance calculations. The performance quoted is for a lump sum investment and in respect of the Old Mutual Balanced fund. The performance includes income distributions prior to the deduction of taxes and distributions are reinvested on the ex-dividend date. Actual performance may differ as a result of actual initial fees, the actual investment date, the date of reinvestment and dividend withholding tax. Past performance is not a guide to future performance. Annualised returns are the weighted average compound growth rate over the performance period measured. The actual highest, average and lowest 12-month return figures since inception to 30 September 2015 are 45.5% (highest), 14.3% (average) and -23.2% (lowest). Old Mutual is a member of the Association of Savings & Investment South Africa (ASISA). Market fluctuations and changes in rates of exchange or taxation may have an effect on the value, price or income of investments. Since the performance of financial markets fluctuates, an investor may not get back the full amount invested.

INVEST WHERE THE FUND MANAGERS INVEST

They’ve got dreams and aspirations, and they want to grow their wealth. They do this by investing their own money alongside yours into the funds they manage. Funds like the Old Mutual Balanced Fund, which has delivered returns of 6.8% above inflation over the past 20 years.

Speak to an Old Mutual financial adviser or your broker about investing alongside our fund managers, or call 0860 INVEST (468378).

FCB10018164JB/E

At Old Mutual Investment Group, our fund managers have a lot in common with you.

10018164 OM-Balance Fund 330x245.indd 1 2015/11/06 1:39 PM

14 31 May 2016

UNIT TRUSTSFEATURE Returns do not come in a straight line

Bringing a unit trust to market is an intensive process, says Michael Summerton, Product

Development Manager at Allan Gray.

“Like any other new product, it pays to do some market research to fi gure out if what you can offer will distinguish your fund from what is already in the market, as well as being

something that will add value for investors.

“Once you’ve done your homework, you need

Bringing a unit trust to market ‘an intensive process’

Every unit trust has a long-term performance target – the extent to which the fund is

expected to outperform its benchmark given the fund’s mandate. This is according to Jaco van Tonder, Director of Advisory Services, Investec Asset Management.

“Simply put, when you take into account the asset allocation, risk profi le and mandate of a particular fund, you should have a fairly good understanding of what the return of that product should be relative to the benchmark through a typical fi ve to eight-year investment cycle.”

He adds that it is important that these long-term performance expectations – what returns can be expected at what levels of risk over the

long term – are set out in the fund Minimum Disclosure Documents (MDD).

Adviser community“In addition to this, we as unit trust management companies also have a responsibility in our engagement with the adviser community and end investors – whether in writing, presentations or face to face – to provide guidance on short-term performance expectations.

“For example, at the current point in the cycle we’re telling clients not to expect double-digit returns from equities, as valuations are stretched.”

Van Tonder says any performance metric for a fund should be calculated over a period that is consistent with the mandate of the fund.

“For example, if you would like to measure the performance of a general equity fund, you need to use a long enough period to cover an entire market

cycle, so ideally more than fi ve years. If you’re looking at a fund with a lower risk profi le in the fi xed income space, a shorter period should suffi ce.”

Fund performanceThere are many different risk-adjusted methodologies you can use to compare fund performance, but unfortunately they are not always that readily available to the average investor, he adds.

“Some of these methodologies also depend on critical assumptions, which can often invalidate a result. In most cases, a good way to assess how a fund is performing is to compare a fund on a risk-return scatterplot over a number of periods against competitor funds and suitable benchmarks, especially over longer periods like fi ve years.”

Many fund managers now provide these risk-return scatterplots in their marketing material.

Van Tonder explains that intensive research goes into

delivering a unit trust fund.“Unit trusts management

companies are required, under the FSB’s Treating Customers Fairly principles, to give due consideration to the likely impact of all their funds on investors. When launching a product you not only have to take into account the market dynamics and demand for a specifi c product, but you must also have a clear understanding of the target client profi le.

“The company should understand for whom the product is developed and how it will best serve the needs of that investor.

“For example is it targeting an individual investor in retirement or is the product aimed at a multi-manager, and how are the requirements for each different?”

Tax free savingsHe says it’s a good idea to use unit trusts for tax free savings.

“By defi nition a unit trust provides a well-diversifi ed, professionally managed

long-term portfolio in a well-regulated environment.

“They are liquid, fl exible and offer a very wide choice across asset classes and risk profi les, both domestically and internationally.”

He adds that one of the simplest ways to utilise the fl exibility offered by unit trusts is to access your TFSA via an investment platform, such as through Investec IMS.

“By using an investment platform you are not bound to a single fund, or only the funds of one asset management company and you can switch between underlying funds without incurring penalties.

“In addition, given the fee pressure on platforms over the last decade, investors no longer pay a premium when purchasing a unit trust fund via an investment platform.

“In many cases nowadays, investors actually pay less when accessing unit trust funds via an investment platform compared to buying the funds directly from the fund manager.

The company should understand for whom the product is developed

Unit trusts and investors’ expectations

to put in place your fund’s mandate and objectives, which will dictate how you will manage it. The mandate is spelt out in the fund’s trust deed. The deed is a comprehensive document which includes the fund’s return objectives, performance benchmarks, liquidity requirements, fees and specifi c investment parameters with which the fund managers must comply.”

Summerton says investment parameters consist of guidelines and restrictions imposed either by the client, by regulations, or the asset manager’s own internal investment rules. For example, a parameter would be the limit on the amount of equities that may be held in a fund.

He adds that the fi nancial services industry makes sure that unit trusts stick to their objectives by enforcing the

provisions of the Collective Investment Schemes Control Act 2002 (CISCA).

“This Act requires all unit trusts to appoint an

independent trustee, usually

a bank, to ensure that the unit trust adheres to its investment objectives and acts in investors’ best interests.”

Once the fund and the trustees are in place, the fund’s mandate must be approved by the Financial Services Board, a bank account must be set up and seed capital provided to the investment managers so they can begin their investment process.

“The manager also needs to apply to the Association for Savings and Investment SA (ASISA) to be classifi ed in terms of the ASISA Standard of Fund Classifi cation for South African Regulated Collective Investment Portfolios.”

Summerton adds that the more rigorous the due diligence at the outset, the better the chances that the fund will stand out in a cluttered market as fulfi lling an unmet need.

He says investors’ expectations should be managed by clearly outlining the fund objectives and suitability on the

fund factsheet. “Investors also need to be

educated that they should use the fund’s objective and mandate as a guide to what they can expect. So if, for example, they are after stable, steady returns they should not invest in an equity fund.”

A good unit trust should ‘do what it says on the tin’ over time, and should not surprise investors who have chosen to invest in the fund based on its objective.

Summerton says the fi rst quarter of the year was ‘particularly volatile’, with substantial price moves in almost all asset classes, and many large companies experiencing moves of over 100% between their low and high prices for the period.

“While this may present buying opportunities for a professional investment manager, it can also lead to a rocky ride for the average equity investor. An asset

allocation fund, like a balanced fund, where the manager has the mandate to vary exposure to asset classes depending on where they see opportunity, is a good bet for most investors who want some exposure to equities, but want a smoother ride than they would get from an equity-only unit trust.”

On how the risk of a unit trust fund should be assessed, he says different investment managers and investors defi ne risk in different ways.

“At Allan Gray we defi ne risk as the risk of permanently losing money. When assessing fund returns we suggest looking at how much return has been achieved over time, and how much risk was taken to achieve that return. Remember that returns do not come in a straight line.”

something that will add value for investors.

“Once you’ve done your homework, you need

fund managers must comply.”Summerton says investment

parameters consist of guidelines and restrictions imposed either by the client, by regulations, or the asset manager’s own internal investment rules. For example, a parameter would be the limit on the amount of equities that may be held in a fund.

He adds that the fi nancial services industry makes sure that unit trusts stick to their objectives by enforcing the

provisions of the Collective Investment Schemes Control Act 2002 (CISCA).

“This Act requires all unit trusts to appoint an

independent trustee, usually

“Investors also need to be

Bringing a unit trust to market Bringing a unit trust to market Bringing a unit trust to market

Returns do not come in a straight line Returns do not come in a straight line

31 May 2016

Michael Summerton

1531 May 2016

The biggest challenge facing anyone who wants to retire is knowing how long

they are going to live. This unknown creates a very unique immeasurable challenge for retirees. If you don’t know how many years you will need to live on your retirement savings, how can you determine whether you have saved enough capital?

In South Africa, “early retirement” is defi ned as retiring from the age of 55. Age 60 is “normal” retiring age, while age 65 is termed “compulsory” retirement when most full-time employees will be mandated by their company to retire.

Anyone living to the age of 80 and retiring at the normal age of 60 will need an income that can cover their living and medical costs for 20 years. Perhaps you are healthy, fi t and a young 60-year old. You could quite easily live to the age of 90, while needing enough capital to last you for the next 30 years.

The amount of capital you have built up over the years determines how much income you can draw. You don’t want to deplete your capital too quickly so you want to be conservative in the beginning around how much income you take. Drawing between 2.5% and

5% of your capital as a yearly income is an appropriate conservative approach for most retirees.

The fi rst fi ve to eight years of retirement are the most critical in terms of ensuring that you don’t draw an income that is too high. If you deplete your saved capital by drawing between 10% and 15% early on, it is impossible to make that back. Ideally, you want

Investors looking to make the most of their retirement savings should complement their income with steady investment growth

INCOME & CAPITAL GROWTH FEATUREYou don’t want to deplete your capital too quickly

to be earning an investment return of between 6% and 9% per annum, while drawing an income of around 2.5% per annum.

Now you need to ensure that your capital is working as hard as it could be. Many retirees make the mistake of believing that they should have most of their capital in cash when they retire to avoid losing it through market volatility. While it’s important to get the balance

between growth and preservation right, it is also important to ensure that your capital is not losing ground to infl ation.

Simply put, if infl ation is increasing at 6% year-on-year and your investment returns are 5% per

annum, your capital is not keeping pace with infl ation, which means that you are losing purchasing power.

One way for retirees to consider their investment options at retirement is to divide their total capital into separate buckets. The fi rst bucket is your income-providing capital for the fi rst fi ve to seven years of retirement. This is your preservation bucket. You

want it to be a stable and conservative portfolio. You can’t take too much risk with this bucket because you need it to provide you with an income so you would typically invest into fi xed interest or a conservative portfolio.

The next portion of your capital can be structured into a medium-term bucket where you can aim for an element of growth but with a reasonable amount of stability in terms of capital fl uctuations. A low-risk growth investment, such as a balanced fund or similar portfolio is typically an option to consider. This bucket is aimed at providing your income for the period, to 12 years.

Your remaining capital can be structured into more aggressive assets that provide higher growth (high-growth balanced funds, for example) for the long-term. One way for retirees to consider these options is to divide their portfolio into one-third conservative assets, one-third low-risk growth assets, and one-third more aggressive high equity-type asset allocation. Every two to three years, the portfolio will need to be re-examined and rebalanced according

to changing economic conditions and your income and growth needs.

A reasonable level of growth to achieve in the medium to long term, while still drawing an income, is in the region of CPI plus 2% to 3% (this equates to around 8% or 9% growth on your portfolio per annum in today’s infl ation environment).

Dividing that return across the three buckets equates to a return of around CPI plus 5% on your high growth equity-type assets (the long-term bucket), CPI plus 3% on your medium-term bucket (low-risk growth assets), and a return in line with interest rates on your short-term income bucket. This would roughly give you overall

growth of CPI plus 3%, while initially drawing between 3% and 5% in income.

The idea is that later in your retirement your income will grow to between 5% and 8% of your capital as time goes on. It is also key to have growth assets in your portfolio so your annual draw down (before changing the percentage drawdown) will keep up with infl ation.

Summary points:• Retirees want to

preserve their capital but also need to ensure they achieve growth to fund their income over the long term.

• Divide your capital into three buckets – for income up to year seven, medium-term conservative growth, and long-term high growth.

• Aim to achieve a total return of CPI plus 3% on your portfolio.

• Review your portfolio every two to three years and rebalance accordingly.

ANTHONY KATAKUZINOSChief Operating Offi cer, STANLIB Retail

Taking a balanced approach to retirement

The amount of capital you have built up over the years determines how much income you can draw

Dividing that return across the three buckets equates to a return of around CPI plus 5% on your high growth equity-type assets (the long-term bucket), CPI plus 3% on your medium-term bucket (low-risk growth assets), and a return in line with interest rates on your short-term income bucket. This would roughly give you overall

Anthony Katakuzinos

16 31 May 2016

INVESTING Retail hedge funds are coming to SA

Know your hedge fund managerRetail hedge funds are

coming to SA. Paving the way for this is regulation that has

been in place since April 2015, bringing hedge funds into the ambit of collective investment schemes. The regulation, driven by National Treasury, is overseen by the Financial Services Board (FSB).

Hedge funds are a new alternative for many investors and advisers. They offer diversifi cation benefi ts, and should provide some downside protection – a real advantage in 2016’s rocky market conditions. Allocating a portion of your investment to hedge funds can enhance the overall returns and should be considered as one of the building blocks of a well-diversifi ed investment portfolio.

Before including hedge funds in a portfolio, you need to be sure that your manager can deliver on their investment objective. Kim Hubner, Head of business development at Laurium Capital, discusses how to evaluate your hedge fund manager.

Defi ne your universeGlobally the hedge fund industry is around USD3 trillion and funds use a number of different strategies. Locally, hedge funds hold R62 billion in assets and the majority of funds are equity long/short funds (61%), fi xed income funds (14%) and market neutral funds (9%)*. Compare this to the local long only unit trust industry with about R2 trillion in assets and

over 1 000 funds.The smaller universe of

hedge funds makes it easier to narrow down the companies that you would potentially look to include. Hubner suggests you can do this by fi rst screening fund and team size, track record and experience. “That should give a manageable number that you can properly analyse, and it would give more than enough diversifi cation.”

As you would a long only manager, you need to look at the investment team and determine if they are qualifi ed and have the necessary experience. This should be backed by a disciplined, robust investment process. Hedge fund managers tend to operate in the boutique management space – but no matter how small, the company must be run with an institutional mind-set. “Look at the structure of the company and operations to make sure they are strong and sustainable,” says Hubner. Ask if the manager has international investors. “These investors are very thorough with their due diligences,” she comments.

Ideally you want a track record of longer than seven years to assess performance in different market cycles. “Many hedge fund managers experienced the 2008/9 crisis,” says Hubner. “You can see how they performed in this time and evaluate their skill and ability.”

Hedge fund managers are not typically asset gatherers and the size of the market can constrain the size of assets under management. “One

of the biggest risks in hedge funds is liquidity, especially in short positons,” says Hubner, “and this limits the size of assets that managers choose to manage, resulting in funds being closed at a certain point.” Laurium Capital manages this risk carefully by ensuring that any short position can be liquidated in one day and has already closed one of its three hedge funds.

Can you go a fund of funds route? In South Africa 57.3%* of hedge fund assets are housed in funds of funds. A fund of hedge funds is similar to a fund of unit trust funds – an expert does the due diligence and fund selection – but it costs investors a bit more for this peace of mind.

When you have selected the managers you want more information on, you can ask the more specifi c questions.

What is your skills set?Long-only fund managers analyse stocks, make decisions to buy, sell or hold; and make sure their funds are compliant with mandates and regulations. Hedge fund managers need to be able to do this well – and more. Hubner points out that hedge funds can use leverage, and other strategies such as shorting for example. To assess these skills you need to dig deeper than you would for a long only manager.

“Managing hedge funds can be more complex than long only funds, and so requires a different skill set.”

Have the fund managers and owners invested their own money in the funds? You want a manager who has skin in the game and is prepared to invest a large proportion of their investable assets in their own funds – it shows they believe the fund can deliver on its objective and aligns their interests closely with that of their clients.

Is the manager transparent?How willing is the manager to share information on attribution for instance? You should choose a manager that communicates well with their clients, to ensure that their clients are well informed and understand the risks of their investment.

How are the hedge fund managers incentivised? Incentivisation is key to attracting top talent and ensuring a stable, committed team. Not only are fi nancial incentives important, but the non-fi nancial elements, like work environment, should be fostered to create a close-knit, performance-orientated team.

Questions about fees remain – keep in mind that your hedge fund performance will not benefi t from more assets in the fund. “Low fees force you to become an asset gatherer,” Hubner comments. That’s not what makes a good hedge fund and investors should compare investment alternatives on an after fee basis. *Novare 2015 Hedge Fund Survey

1731 May 2016

PROOF THAT CONSISTENCY

THRIVES IN TIMES OF CHAOS

Source: Morningstar data for periods ending 31 March 2016. Prudential Portfolio Managers Unit Trusts Ltd (Registration number: 1999/0524/06) is an approved CISCA management company (#29). Assets are managed by Prudential Investment Managers (South Africa) (Pty) Ltd, which is an approved discretionary Financial Services Provider (#45199). Collective Investment Schemes (unit trusts) are generally medium to long-term investments. The value of participatory interest (units) may go down as well as up. Past performance is not necessarily a guide to the future and the manager provides no capital or return guarantees. Unit trust prices are calculated on a net asset value basis, which is the total book value of all assets in the portfolio divided by the number of units in issue. Fluctuations or movements in exchange rates may also be the cause of the value of underlying international investments going up or down. Unit trusts can engage in borrowing and scrip lending. Unit trusts are traded at ruling prices. All of the unit trusts may be capped at any time in order for them to be managed in accordance with their mandates. Commissions and incentives may be paid and, if so, would be included in the overall costs. Different classes of units apply to the Prudential Collective Investment Scheme Funds and are subject to different fees and charges. A Collective Investment Schemes (CIS) summary with all fees and maximum initial and ongoing adviser fees is available on our website. One can also obtain additional information on Prudential products on the Prudential website. Performance fi gures are based on lump sum investments using NAV prices with gross income reinvested. This information is not intended to constitute the basis for any specifi c investment decision. Investors are advised to familiarise themselves with the unique risks pertaining to their investment choices and should seek the advice of a properly qualifi ed fi nancial consultant or adviser before investing.

Source: Morningstar

Prudential Global High Yield Bond FoF

Prudential Dividend Maximiser Fund

Prudential Enhanced SA Property Tracker Fund

Prudential Equity Fund

Prudential Infl ation Plus Fund

Prudential Balanced Fund

THESE FUNDS ARE ALL TOP QUARTILE PERFORMERS OVER 10 YEARS

If you aren’t already investing with us, contact our Client Services team on 0860 105 775 or visit:

prudential.co.za

Consistency is the only currency that matters.

1775

0

18 31 May 2016

When it comes to investing, more often than not

the conversation starts with ‘investment related’ topics, like domestic versus offshore and the value of the rand, active versus passive investing and fees or comparisons of investment manager performance. Tax implications are not generally afforded the same level of air time.

Fortunately there is hope – this is precisely the area where a good fi nancial adviser can add tremendous value.

In the interest of raising some awareness about this topic, let’s shed some light on the general options pertaining to South African investors and tax.

In the context of optimising tax effi ciency, there are three main areas to consider:

Compulsory savingsFormal retirement savings via an approved retirement vehicle should be the fi rst port of call for all long-term savers. Here, the vehicle, being pension, provident and retirement annuity funds, determines the tax effi ciency.

Benefi ts include the tax deductibility of contributions from taxable income into these vehicles, tax free investment returns during the build-up phase and tax benefi ts on taking a lump sum at retirement, or upon death.

Within the ambit of the current retirement fund reform initiatives, tax harmonisation has simplifi ed retirement structures by aligning the tax benefi ts

INVESTING South African investors and tax

Meyer Coetzee, Head of Retail at Prescient Investment Management, looks at key aspects of taxation that investors need to consider

available from pension and provident funds. Since 1 March 2016, contributions qualify for a deduction of up to 27.5% of taxable income, up to a maximum of R350 000 p.a. Not only has the quantum of tax deductibility been increased, but it has also been aligned between vehicles for simplicity.

Although the underlying investments of retirement funds need to comply with exposure limits prescribed under Regulation 28 of the Pension Funds Act, broadly stipulating a maximum exposure to equities of 75% and 25% to offshore assets, the actual choice of investment portfolio does not have any direct tax implications as assets build up tax free.

However, lower asset management fees throughout the build-up phase will result in a signifi cant increase in retirement benefi ts – all things being equal. In this regard, the Prescient Balanced Fund, a passive Regulation 28 compliant fund that was launched in June 2014, targets signifi cant long-term real

returns with an annual asset management fee of only 0.30%.

Voluntary savingsLike retirement vehicles, Tax Free Savings Accounts (TFSA) offer tremendous tax benefi ts to those who have either exhausted the available retirement fund contribution deductions or those saving for other needs like their children’s education. One of the primary differences to retirement funds is that the accumulated savings are easily accessible at any time, for example in the case of an emergency. With TFSA, there is no up- front tax deductibility of contributions, however investment returns during the investment period are tax free and all proceeds are paid out tax free. These TFSA are limited to R30 000 a year with a life time cap of R500 000 per individual.

Because there are no exposure limits like Regulation 28 to comply with, there is much more freedom of choice where the underlying investment funds are concerned. That being said, there are restrictions which include not being able

to invest in funds that charge performance fees.

Property funds are especially attractive in the context of tax free savings accounts. The property companies invested in by property funds are generally taxed on their retained earnings, which provide an incentive to pay out the maximum income as dividends.

Individuals investing directly in property unit trusts are liable for dividend withholding tax on distributions, but holding the trusts via tax free savings accounts means the tax does not apply.

Launched in May 2007, the Prescient Property Equity Fund has returned 14.2% p.a. after fees, against the total annual return of the JSE All Share Index of 10.1% p.a. and infl ation of 6.2% p.a.

Tax effi cient fundsWhere other forms of voluntary savings are concerned, the investor’s returns in the form of income and capital gains are fully taxed in the individual’s hands.

The individual has complete fl exibility in so far as fund choice is concerned,

while benefi tting from the interest and capital gains exemptions permitted by tax legislation.

The interest exemption is currently R23 800 for individuals under 65, and R34 500 for those over 65. This means that, in the case of individuals under 65, the fi rst R23 800 of interest earned is tax free. Similarly, the capital gains exemption is R30 000 on all realised gains. All returns above these levels are fully taxable.

Many investors hold liquid assets as part of their portfolio, or emergency cash. For those below 65 and with cash investments of around R300 000, or those 65 and older with R500 000, all interest earned should be exempt from income tax. For all others, including companies with large cash holdings, tax on interest might be of concern.

Fortunately there is hope. Launched in March 2016, the Prescient Optimised Income Fund is a ‘dividend income fund’ but it is priced like a money market fund where the price stays constant at 100 cents with daily ‘interest’ declarations. The fund targets a return of approximately 85% of cash, as measured by the short-term money market call rate (STeFI), after tax and fees. Capital is guaranteed by the big fi ve banks.

Importantly an investor needs to take a considered holistic view of their retirement and investment planning (in conjunction with an appropriately qualifi ed fi nancial planner), to ensure their fi nancial actions are in line with their fi nancial and personal goals. The above solutions slot into a comprehensive fi nancial plan to assist investors in achieving their fi nancial aspirations.

What about tax effi ciency?

INVESTING

MEYER COETZEE Head of Retail, Prescient Investment Management

Importantly an investor needs to take a considered holistic view of their retirement and investment planning

1931 May 2016

Increase in savings for fi rst time in 10 years EMPLOYEE BENEFITS

Sanlam BENCHMARK survey launchedThe 2016 Sanlam BENCHMARK survey was released this month.

Now in its 35th year, the survey polled hundreds of pensioner, trustees and employers participating in umbrella funds. This year’s surveying process also included qualitative studies of retirement fund members and fi nancial advisors.

These are some of the survey’s fi ndings:

LACK OF INFORMATIONRisk & insurance• Employee benefi ts

aren’t top of mind• Members couldn’t recall

what benefi ts they had through an employer fund and the value thereof

Fund structure• 52% of pensioners were

unsure of whether fund has been through a DB to DC conversion

PERSPECTIVES ON THE FUTUREHow concerned are you about the current political and economic landscape in South Africa and the impact on future retirement years?

DO YOU BELIEVE YOU HAVE SUFFICIENT CAPITAL TO LAST THE REST OF YOUR LIFETIME?

% of respondents N = 151

Not concerned

1.3%

29% 2014

2015

25%

To some extent

40.4%

POOR OUTCOMESHow many members will be able to maintain their standard of living in retirement?

Very concerned

57%

Don’t know

22.5%

Current life expectancy

~50

Formal savings

No

42.4%

Yes

35.1%

2016 20%

Fund at 60R1m

Delay retirement by 6 years

Salary infl ation

7%

Return8%

Contribution 13%

SalaryR300 000

23%

13%

$2.5 billion

researching aging per annum

2015 2014

11%

64%

8%

11%

68%

20%

Informal savings

Save at home

Not saving

An increase in savings is noted for the fi rst time in10 years

Medical technology

Medical practices

Better pharmaceuticals

Healthier lifestyles

Retirement nest egg

doubles

Would be ~70 if not for HIV/AIDS*

*ARVs can prolong life to within 86% of HIV negative person

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INSUFFICIENT UNDERSTANDING

Only 68.9% of retirees received advice about

their retirement options 20% received retirement

advice for the fi rst time only at time

of retirement

LONGEVITY

THE TIDE IS TURNING

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20 31 May 2016

South African organisations are concerned about their employees’

understanding of their compensation and benefi ts package. While 91% of companies communicate each individual’s compensation and benefi ts package to their employees, a staggering 65% of companies rate the understanding of these packages as low.

Aon Employee Benefi ts has released the fi ndings of its EMEA Benefi ts Communication Survey for 2016. The survey collected responses from 905 organisations across 28 countries, including South Africa, to provide an overview of trends in benefi ts communication across the APAC/EMEA region, demonstrating the importance that benefi ts play in attracting and retaining quality people.

The 2016 results show that 91% of organisations in South Africa were communicating on compensation and benefi ts packages, with the main goal of developing engagement and retaining talent. This is a marked increase from the 70% recorded in 2015 of

Companies anticipate continuing to use employee handbooksEMPLOYEE BENEFITS

Low understanding of benefi ts and compensationAon survey shows trends and key practices in communicating benefi ts and compensation

companies that communicate to their employees on the topic. The real shift, however, is in the manner and effi cacy of such communications, which are receiving more focus and attention than before.

“We fi nd ourselves in an economy that is under great pressure with limited available skill pools, making it absolutely essential that organisations get their communication right and that their employees are fully aware of what their remuneration packages comprise of,” says Ndivhuwo Manyonga, Executive Head of Aon Employee Benefi ts South Africa.

Two primary factors have positively infl uenced the state of benefi ts communications in South Africa – the ‘cost to company’ remuneration approach and concerns about low levels of retirement savings.

Many companies in SA are adopting a ‘total cost to company’ remuneration approach in an effort to manage costs. “It allows a fi rm to budget and control its payroll costs much more effectively, without the risk of benefi t costs spiralling upward, meaning that the cost is borne by the employee,” explains Manyonga. “While this approach may be benefi cial to the organisation, the

trend increases the need for organisations to communicate and educate their employees around benefi ts,” she adds.

“Tools such as personalised Total Rewards Statements provide an overview of the full value of their compensation and benefi ts package, including seemingly hidden ones such as special leave, study benefi ts, wellness programmes and such; enabling employees to make informed decisions when it comes to optimising their compensation and benefi ts package,” says Manyonga.

Within South Africa, low levels of retirement savings are also an area of concern. “The new legislations effected on 1 March 2016, among other things, aim to incentivise increased retirement savings. These are important changes that employers need to take heed of and which need to be actively communicated to employees in order to ensure their understanding of the implications of these changes,” she adds.

“It is essential that companies engage a diversity of communication channels from traditional print media and one-on-one engagements, through to multimedia channels and digital platforms, to have maximum impact and cater for different employees.”

South Africa’s survey results

found the following:• 91% of employers across

South Africa currently communicate their employee compensation and benefi ts packages

• 65% of surveyed companies consider their employees’ understanding of its compensation and benefi ts policy to be low

• 52% of organisations communicate several times a year, showing a marked increase on the previous year, when 29% said the same thing

• Last year the main objective was to respond to legal requirements, while this

year companies declare they communicate to manage costs to the company and/or benefi ts fl exibility

• 42% of organisations use digital platforms as their preferred communication channel

• 26% of surveyed companies will use total reward statements as their method of communication in future, with 22% using the employee handbook and 22% utilising face to face presentations in future

• In future, companies anticipate continuing to use employee handbooks, while supplementing these with email communications and online benefi ts portals

• 70% noted that they do not have a dedicated budget devoted annually to their employee benefi ts communications

Mirroring views expressed globally throughout EMEA, most companies in South Africa do not use an external provider to communicate their benefi ts package, with 71% of South African organisations’ managing benefi ts and compensation communications in-house.

To communicate effectively, Manyonga suggests that organisations provide their employees with a comprehensive view of all their compensation and benefits. “Frequently use simple, straight forward and easy-to-use communication across all media channels such as print, e-mail and digital platforms. Your communication strategy needs to provide a clear explanation of complex topics and needs to be aimed at helping employees to understand their options and make the right decisions. A personalised approach is always helpful in addition to providing employees with the means to put the knowledge that they derive from your communication into action,” she explains.

“Corporate South Africa spends billions of rands on employee benefi ts each year that can add anywhere from 25% to 50% to an employee’s annual cash compensation. It is critical that benefi ts communication is effective, or you risk employees disregarding the ‘hidden value’ in their salary,” says Manyonga.

91% of employers across SA currently communicate their employee compensation and benefi ts packages

Ndivhuwo Manyonga

2131 May 2016

EMPLOYEE BENEFITS

Insurers and administrators lack incentive to trace benefi ciaries and pay

out unclaimed benefi ts, as they are then unable to continue claiming admin fees and accruing interest, says FedGroup’s legislative advisor, Carmen Schubert.

The Financial Services Board (FSB) is very aware of the issue of the unclaimed benefi t’s ‘black hole’, and, says Schubert, is in the process of enacting new legislation to quantify the ‘depth’ of the issue and also enforce better best practice through enforced compliance.

“Tackling the issue of unclaimed benefi ts is imperative,” says Schubert, “and FedGroup fully agrees

The industry needs to work with the FSB to fi nd a solution to the issues facing the unclaimed benefi ts market

with the ethos and principle behind the changes the FSB has proposed. Essentially, the organisation is trying to protect the interests of fund members, and this regulation will go a long way to tightening up the market.”

However, it is critical to view the fl ip side of the coin in an objective and constructive manner. “There are costs associated with this new approach that will negatively impact unclaimed benefi t fund members and benefi ciaries.”

She believes there are numerous ways in which cost savings can be achieved.

“If actuaries are kept on retainer and appointed as a valuator on all the funds under administration, the valuator would be paid a set fee to fulfi l the statutory requirements of each fund instead of a fee for issuing each Section 14 certifi cate, which can often be in the region of R2 000 - R4 000 per certifi cate,” suggests Schubert. Additionally, should administrators conduct a single transfer per fund or participating employer per year to an unclaimed benefi t fund, instead of transferring when the member’s benefi t

becomes ‘unclaimed’, the costs, including FSB and actuarial costs, of multiple transfers would be eliminated.

“In the interim, the benefi t should remain invested in the occupational fund earning investment returns, and marked as a paid-up or as an inactive member. Paid-up members in an active fund would generally be charged lower fees,” she continues.

Similarly, maximise the time and input of fund trustees. “Waiting for scheduled trustee meetings to get signatures can reduce costs, as administrators can include the signing of documents into the fees charged by trustees for attending such meetings

Cleaning up the unclaimed benefi ts industry

rather than having to pay additional hourly-based fees for trustees to sign documents.”

Lastly, large administrators can also consider in-sourcing a tracing department.

“There are, however, two stumbling blocks to this approach: the cost of accessing these databases requires the right economies of scale to make it viable; the Protection of Personal Information (POPI) Act may affect an administrator’s ability to obtain the relevant personal information. Greater clarity in terms of the POPI Act is required to determine what degree of access an administrator will have in obtaining and processing member

information without active and informed consent – an impossibility due to the nature of an unclaimed benefi t.

“The industry needs to work with the FSB to fi nd a solution to the issues facing the unclaimed benefi ts market, and we can do this by working smarter to keep costs down so that administrators can do their job and meet the FSB’s proposed new administrative requirements without eroding the benefi ts of members,” she concludes.

Tackling the issue of unclaimed benefi ts is imperative

Carmen Schubert

WealthAsset Management Insure

That’s why we see every investor as a life-long partner.

Seeing the bigger picture gives you the advantage.

For more information contact your financial adviser, call 0800 600 168, email assetmanagement@psg.co.za or visit psg.co.za/asset-management

PUB

LIC

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950/

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PSG Asset Management (Pty) Ltd is an authorised financial services provider. FSP 29524

9950 PSG AM Long-term Partner 100x220.indd 1 2016/04/29 12:08 PM

22 31 May 2016

Medical malpractice claims in excess of R5 million have increased by 900%

since 2009 and on average, one in every fi ve claims are in excess of R1 million, representing a 550% increase in the last decade.

A few landmark claims have topped the R25 million mark. The Gauteng Department of Health is facing negligence claims amounting to R1.28 billion alone for the 2012/2013 financial year. The bulk of medical malpractice claims arise from high risk specialties including orthopaedics, neurology and obstetrics.

As discussed by Samantha Baleson, Legal Risk Advisor, Aon South Africa (which offers specialist medical malpractice insurance cover), “Medical malpractice claims in South Africa are soaring, as South Africa becomes an increasingly litigious society. Awareness of rights is growing in addition to a growing number of legal professionals who are marketing medical malpractice litigation services.”

Informed consent Staying up-to-date and informed on the various doctrines and legal concepts that are related to human rights is crucial in the health care sector. One such aspect that is often overlooked by medical professionals is the concept of informed consent. It is a process of communication between a patient and physician or doctor that results in the patient’s agreement and authorisation to undergo a specifi c medical intervention. Informed consent emphasises a patient’s right to be fully informed of any treatment or procedure offered. Only once provided with all the necessary information regarding their condition, the possible treatments, the risks involved in those treatments and the possible consequences and costs, can a patient make an informed decision as to whether or not they wish

RISKSHORT–TERM Practitioners face an increasingly litigious society

to undergo the prescribed medical intervention.

“This means that a treating medical practitioner carries an additional legal responsibility to ensure that the patient has been thoroughly informed and fully understands the information provided and the associated risks. We’re increasingly seeing medical malpractice claims premised on the basis that patients believe their rights in terms of ‘informed consent’ were transgressed,” she adds.

Under normal circumstances, a person who infl icts intentional physical harm on another person can be charged with assault and, therefore, sued and held liable in civil law for damages. However, when a patient consults with a doctor and consents to the

performing of a medical procedure, the doctor could use the defence of volenti non fi t injuria. Directly translated from Latin, this means ‘to him who consents, no harm is done’.

“This is premised on the basis that one cannot be held liable for injuries infl icted on an individual who has given consent to the action that gave rise to the injury, barring negligence on the part of the doctor. This defence is based on the concept that the effected party consents to a specifi c act with full knowledge that such an act could be potentially harmful and carries certain risks,” explains Baleson.

In order for volenti non fi t injuria to be utilised by a medical professional, fi ve elements must be complied with:

• The patient must have the legal capacity to consent

• The patient must have an appreciation of the risk of harm

• Consent must have been given freely and voluntarily

• Consent cannot be given for illegal purposes (such as euthanasia)

• Consent must not have been revoked.

Emergency decisions“Although a patient has the right to informed consent, in exceptional circumstances, a medical practitioner may decide to treat a patient’s condition which falls outside the scope of that right, such as when a patient is unconscious. Should this occur, the treating doctor must inform the patient of such action as soon as he/she is conscious enough to understand. Essentially this means that while patient autonomy must be respected, the medical practitioner is allowed to make an emergency decision to ensure the patient’s best interests are protected where the

patient’s condition or life is in jeopardy,” explains Baleson.

The National Health Act provides that health care providers (this includes health care practitioners) must inform patients of the following:

• The user’s health status, except in circumstances where there is substantial evidence that the disclosure of the user’s health status would be contrary to the best interests of the patient

• The range of diagnostic procedures and treatment options generally available to the patient

• The benefi ts, risks costs and consequences generally associated with each option

• The user’s right to refuse health services and explain the implications, risks and obligations of such refusal. Medical professionals

should therefore always ensure that they secure the proper informed consent from each and every patient,” Baleson concludes.

Medical malpractice claims in excess of R5m up 900% since 2009

Medical malpractice claims are soaring, as SA becomes an increasingly litigious society

2331 May 2016

IS THE WORLD OUT TO GET YOU? It’s not easy having to navigate through life’s uncertainties, but it’s not all doom and gloom, writes Momentum Short-term Insurance Chief Commercial Officer, Etienne Du Toit.

By definition, emotion is a mental state that arises spontaneously, rather than through conscious effort and is often accompanied by physiological changes. Simply put, emotions are what drive us – and what also drive us astray. While feeling safe is not an emotion in itself, it is the result of a range of thoughts, beliefs and actions that we humans feel without consciously knowing it. The topic of safety – and whether or not one feels safe – has become an openly-discussed topic in recent times. Studies of a psychological nature show that feeling safe means having the freedom to go about your daily routine without the fear of something beyond your control happening to you, and that feeling unsafe is emotionally and physically debilitating. In South Africa, safety - or the lack thereof - is both a feeling and a reality. South Africans experience challenges to their personal safety on a daily basis. Not only do we face

crime rates that are high when compared to other countries, but road safety in South Africa is also a concern.Momentum Short-term Insurance’s purpose is to enhance the financial wellness and safety of individuals, their families, businesses and communities; this purpose is not limited to clients and also extends to all South Africans. We offer safety products that are available to both clients and non-clients to help them stay safer. Our mobile app, ShorTerm Client – available for free on iOS and Android platforms in consumers’ app stores – features a range of safety offerings to empower consumers and to help them better manage their risk. One such feature, Vehicle Accident Assistant, helps you to stay in control when faced with dealing with a vehicle accident – it gives step-by-step instructions on what to do and, if the consumer is a Momentum Short-term Insurance client, also allows the policyholder to submit their claim via the app immediately. The Momentum Safety Score is an online safety questionnaire designed to help measure one’s personal, car, and home and environment safety status. It rewards clients financially for taking measures to stay safer and also offers recommendations to help them do so. Our in-product feature, Momentum Assist, is an emergency assistance service. Momentum Assist offers roadside assistance, home assistance as well as medical, trauma, HIV and legal assistance. Momentum Assist comes standard with a Momentum Short-term Insurance personal policy at no additional charge, and is aimed at helping consumers to prevent and recover from certain unforeseen events, should the need ever arise. We believe that a sense of security is fundamental to physical and emotional wellness, which is why the general safety of all South Africans is so important to us. Being safe means that South Africans will be able to live their lives without the emotional burden of uncertainty. By helping people to be safer, we help them to avoid some of the pitfalls that life may throw at them, which in turn has a direct positive effect on their financial wellbeing - it is really about avoiding unplanned financial shocks.

It’s not easy having to navigate through life’s uncertainties, which can surely take their toll on one’s emotional wellbeing. Every day, we are exposed to news of horrific suffering in our country and around the world; and having to go through life feeling fearful of what might be around the corner is an unnecessary evil. If you are confronted with situations which cause you to think you are a part of a medieval war series, then it’s easy to think that staying safe has become an everyday challenge. But it’s not all doom and gloom. Etienne Du Toit, Chief Commercial Officer at Momentum Short-term Insurance, delves into factors which play a part in making a person feel unsafe and the associated psychological effects thereof, and also offers some peace of mind.

Etienne Du Toit, Chief Commercial Officer at Momentum Short-term Insurance

24 31 May 2016

RISKLONG–TERM Cancer remains the largest cause for claims

Liberty pays out over R3.5 billion in valid claimsInsurer Liberty has paid

out R3.57 billion in valid claims for the 2015 fi nancial year.

Cancer remains the largest cause for claims with a total of 24.9%, followed by cardiac and cardiovascular conditions at 22.1% of all claims, according to Liberty’s Director for Risk Product Innovation, Nicholas van der Nest. “This result is consistent with prior years where cancer also recorded the largest number of claims,” says van der Nest.

However, there has been a shift in the types of cover linked to cancer, says Liberty’s Chief Medical Offi cer, Dr Philippa Peil.

“With medical advancements such as better screening programmes and more awareness around

health and lifestyle, cancers are being diagnosed earlier and at younger ages. The split between cancer payments under critical illness and deaths due to cancer are therefore shifting, with more and more customers qualifying for critical illness payments and surviving longer after diagnosis.”

Top claims and types of coverThe vast majority of all Liberty payments, R2.48 billion or 57% of the total claims paid, were for death claims. At least R678 million was paid in respect of critical illness, which provides payment to help customers make the lifestyle adjustments required following diagnosis. A total of R407 million was paid for income protection,

including both lump sum and monthly income claims.

“The split of claims paid by benefi t type is infl uenced by the types of benefi t that our customers bought. A new inclusion in this year’s report is therefore a breakdown of last year’s sales, which also provides insight to potential customers who are weighing up their insurance needs.”

Segmentation of claims The report on the claim statistics is by segment groups rather than product type or age – which was the case in previous years. Liberty segmented its customers into young achievers, young parents, established providers and empty nesters.

“Although the top fi ve claims causes are responsible

for 64.9% of all claims paid, the more interesting fi ndings are in respect of what our segments have claimed for,” says van der Nest.

Young achievers claimed mainly for income protection benefi ts, with retrenchments being the main cause of claim.

Retrenchment claims accounted for 15.9%, cancer 12.3% and motor vehicle accidents (the main cause of claim for young men) 11.9% of total claims for the segment.

Cancer was the main cause for claim for all other segments at 22.5% (young parents), 26.9% (established providers) and 25.6% (for empty nesters) of claims respectively. Female breast cancer and male prostate cancer drove these results to a differing extent for each of the segments.

Similarly, cardiovascular causes were the second most common cause for claims in all three segments at 14.5% (young parents), 21.1% (established providers) and 25.3% (empty nesters) of paid claims respectively. Cardiovascular causes were also responsible for the majority of claims paid in respect of men last year.

Strokes or central nervous system disorders also contributed signifi cantly to total claims paid and were responsible for 8% of young parents claims paid and 8.7% of established providers claims paid. As expected for empty nesters, who are generally somewhat older, respiratory diseases and disorders were responsible for 7.9% of paid claims.claims causes are responsible each of the segments. paid claims.

2531 May 2016

home • car • business • life • investments

Hollard Life Assurance Company Limited ( Reg.No. 1993/001405/06 ) is a registered Long Term Insurer and an Authorised Financial Services Provider.

If your clients don’t drink and they turn up their noses at the thought of smoking. If they only drive while the sun is up and have the BMI of a triathlete – we’ll insure them. And if they’re none of these things, we’ll insure them too. Because perfect means something different to everyone, especially us. That’s why our life insurance policies have the least exclusions in the industry. We’ll actively find reasons to insure your clients, rather than excuses why we can’t. Chat to your Hollard consultant or visit www.hollardbrokers.co.za for more info.

We’re here to insure perfection.

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RISKLONG–TERM This type of fraud has the potential to ruin people’s lives

Ways to protect yourself against life or funeral insurance fraudDespite its damaging

consequences, life or funeral insurance fraud remains a

relatively low-key subject in society. However, this type of fraud has the potential to ruin people’s lives and negatively impact the viability of insurance providers.

Lee Bromfi eld, CEO of FNB Life, says identity theft is the predominant cause of life or funeral insurance fraud – where criminals steal the identities of unsuspecting individuals to defraud life or funeral insurance providers, disguised as policyholders or benefi ciaries.

“This can ruin innocent lives because identities used to commit fraud are fl agged with industry bodies and law enforcement. Importantly, clearing your name as a victim will not only cost you time and money – it could cost you job opportunities and derail your future plans. This is why is it important to be vigilant when it comes to protecting personal information.”

Bromfi eld says paying attention to the following suggestions could go a long way to helping people to stay vigilant and not fall victim to life or funeral insurance fraudsters:

“Like most systematic crimes, insurance fraud evolves, but a lot of it can be stopped by following basic safety principles such as denying fraudsters access to personal information. As an insurance administrator, we encourage clients to guard against negligence which could be exploited to advance illegal activities,” says Bromfi eld.

Accepting cash in exchange for your identity• No matter how desperate

you are for money, never accept any offer which includes compromising your identity. A reputable lender will not ask you to do such a thing as it is illegal

• Only take life or funeral insurance from a reputable provider

• Ensure that you take up insurance with a licensed insurance provider. You could lose a lot of money should you mistakenly take up life or funeral insurance with a bogus provider.

Keep personal information safe• Fraudsters

exploit mistakes and negligence. Always keep personal information safely stored. This also applies when you are in public spaces such as shopping malls and other crowded areas.

Report life or funeral insurance fraud• Make it your responsibility to alert law

enforcement authorities about potential fraud to prevent being the next victim.1

Never lose sight of your ID or Driver’s License• In some cases, you

may be asked to produce your ID or Driver’s License as some form of verifi cation. Regardless of the circumstances, try not to lose sight of such items because you never know people’s intentions.

Identity theft is the predominant cause of life or funeral insurance fraud

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4 Pay attention to random communication or phone calls

• People tend to ignore or dismiss random calls about life or funeral policies they are said to have taken – do not make that mistake. If someone is calling you about a policy you are not aware of, follow up with the provider to ensure your identity has not been stolen.

Ways to protect yourself against life

Report life or funeral insurance fraud• Make it your responsibility to alert law

enforcement authorities about potential fraud to prevent being the next victim.

333Pay attention to random

2731 May 2016

home • car • business • life • investments

And perfect imperfection.

Some insurers expect perfection, but we’re not quite sure that it exists. What’s a glass of wine with dinner? And who has time to gym 4 times a week? Our life insurance policies have the least exclusions in the industry. No matter how perfect or perfectly imperfect your clients’ lifestyles may be, we’ll actively find reasons to insure them, rather than excuses why we can’t. Chat to your Hollard consultant or visit www.hollardbrokers.co.za for more info.

Hollard Life Assurance Company Limited ( Reg.No. 1993/001405/06 ) is a registered Long Term Insurer and an Authorised Financial Services Provider.

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28 31 May 2016

HEALTH Comprehensive medical insurance with international cover is crucial

When individuals consider moving to

another country, they must give attention to a number of fi nancial considerations. However, some of these are not always addressed during the planning stages, as they might seem secondary to the main goals: establishing the correct legal status in the new state, identifying and acquiring residential property in the country, and fi nding good schools for their children. But not getting all one’s ducks in a row in good time can result in dire consequences.

Sandra Woest, Senior Manager at Henley & Partners, a global leader in residence and citizenship

Healthcare cover crucial for people moving to other countries

planning, refers to the advice provided in the Henley Global Residence and Citizenship Handbook (GRCH) on medical insurance, when she advises individuals considering moving to other countries. Woest explains: “Many people think that this is something they can sort out once they have moved, but it’s not always the best way to go. Comprehensive medical insurance with international cover is crucial.”

She adds: “People don’t realise that they’re not likely to qualify for private health insurance if they’re over 55 or have an illness, and so it makes sense to put in place this insurance before they actually move so they can rest assured that they’ve got the necessary cover even once they’re over 55. This makes it an important element of retirement planning too, especially if the individual in question plans to retire to another country.”

Thus for individuals staying abroad frequently or with the aim of moving to another country at some point in the future on a permanent basis, putting into place insurance cover that is independent of one’s residence and travel destination is of utmost importance.

The policy that is selected should provide one with free choice of physicians and hospitals worldwide

As pressure on household incomes grows, interest rates increase and levels of discretionary income decline, more South Africans are looking at ways of trimming their monthly budgets.

One of the fi rst outlays examined is medical aid and the increasing chunk that the service is taking out of household income. Alternatives are now actively being examined and adopted, says Tetiwe Jawuna of Standard Bank Insurance Brokers.

In a recently published survey, the World Health Organisation (WHO) found that South Africans pay more for private healthcare than people living across 20 European countries. The most startling fi nding was that although the GDP in each of these European countries exceeded that of South Africa by an average 26%, private healthcare costs are 92% higher in our country.

Households, trying to cope with increased fi nancial pressures, are therefore looking to alternative ways of addressing the ‘funding gap’ experienced in their medical aid costs, says Jawuna.

“There is little wonder that, despite local controversy over schemes, hospital plans are becoming increasingly popular,” Jawuna adds.

“Locally, many younger consumers are taking the decision to self-fund their initial medical expenses and then use a hospital plan to provide support if they are hospitalised. The monetary benefi t is then used to offset costs incurred.

“Others, primarily heads of households and older consumers, are opting to downgrade to ‘entry level’ medical aid options and then supplement this with a hospital plan to cover the gaps that can occur in medical aid benefi ts.”

She says that during 2015, Standard Insurance Limited received more than 2 500 claims on hospital plans, “a fi gure which indicates that there is market demand for the product and that it is being utilised to manage costs.”

Other factors identifi ed in the WHO survey are:• The average stay in hospital after surgery for South Africans is

3.3 days. In Europe it is 4.4 days• Private spending on medical aids for 17% of the European

population equals 41.85% of all health expenditure in SA. This is six times higher than medical aid spending in other countries

• Private medical care is cheap for 10% of South Africans and is unaffordable for 90%.

“The hard truth is that supplementary hospital plans are often the only viable alternative for people seeking the best care for their families. They therefore represent a form of ‘rainy day’ savings that bring peace of mind to many consumers.”

“The fl exibility this allows for is important. As you never know what the future brings – you may need to return to your original home country at a later stage, for example; if you have global insurance cover in place, rather than medical cover that’s restricted to the place you’re living in, you’ll be suitably covered wherever you fi nd yourself,” says Woest.

The policy that is selected should provide one with free choice of physicians and hospitals worldwide. One also needs to consider the premiums for the policy – if premiums rise dramatically the older the person gets, this policy may become unaffordable. The policy should ideally also guarantee lifelong policy renewal.

The GRCH recommends that one consults an independent consultant specialising in international health insurance, so that a suitable insurer with a good reputation can be identifi ed.

“It’s really important to feel secure about your healthcare future, and so this element of your planning should receive just as much attention as the seemingly big issues,” Woest concludes.

During 2015, Standard Insurance Limited received more than 2 500 claims on hospital plans

Hospital plan uptake on the increase

2931 May 2016

When it comes to your clients’ health, we’ll make a plan.

At Bestmed, we’ve got a range of plans to suit every stage of your clients’ lives. From newlyweds planning a family to grandparents planning for retirement, and everyone in between.

What’s more, we pay 99.2% of claims in 15 days or less and charge child rates for registered students up until the age of 26. We also make it possible for families to spend less on co-payments and more on themselves. The way we look at it is, if you want to have the best o�ering, you have to make a plan. Or ten.

Contact us on 086 033 3838 or email newbusiness@bestmed.co.zawww.bestmed.co.za

© Bestmed Medical Scheme 2016Bestmed Medical Scheme is a registered medical scheme (reg. no. 1252) and an Authorised Financial Services Provider (FSP no. 44058).

Better living. Better life.

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30 31 May 2016

Scores are determined following a voting procedure

Numbers can be tricky. Particularly if you’re unfamiliar with the equations, formulas, and jargon. That’s why we keep our investments simple.

For more info, please visit fedgroupinvest.co.za.

By the way, those millions of som equate to more or less R50 000, while the nakfa would net you around R1 000 000.

Easy when you know how.

FedGroup Participation Bond Managers Pty Ltd (Reg. No. 1956/001143/07) CIS: 804Terms and conditions apply.

BOOKS ETCETERA

THE BOOK NOOK

SUDOKUEnter numbers into the blank spaces so that each row, column and 3x3 box contain the numbers 1 to 9.

The Sword and the Pen By Allister Sparks

Allister Sparks joined his fi rst newspaper at age 17 and was pitched headlong into the vortex of South Africa’s stormy politics. The Sword and the Pen is the story of how as a journalist he observed, chronicled and participated in his country’s unfolding drama for more than 66 years, covering events from the premiership of DF Malan to the presidency of Jacob Zuma, witnessing at close range the rise

and fall of apartheid and the rise and crisis of the new South Africa.

In trenchant prose, Sparks has written a remarkable account of both a life lived to its full as well as the surrounding narrative of South Africa from the birth of apartheid, the rise of political opposition, the dawn of democracy, right through to the crisis we are experiencing today.

Continental Shift: A Journey into Africa’s Changing FortunesBy Kevin Bloom & Richard Poplak

Africa is failing. Africa is succeeding. Africa is betraying its citizens. Africa is a place of starvation, corruption, disease. African

economies are soaring faster than any on earth. Africa is squandering its bountiful resources. Africa is a road map for global development. Africa is turbulent. Africa is stabilising. Africa is doomed. Africa is the future.

All of these pronouncements prove equally true and false, as South African

journalists Richard Poplak and Kevin Bloom discover on their nine-year road trip through the paradoxical continent they call home. From pillaged mines in Zimbabwe to the creation of an economic marketplace in Ethiopia; from Namibia’s middle class to the technological challenges facing Nollywood in the 21st Century; China’s investment in Botswana to the rush for resources in the Congo; and the birth of Africa’s newest country, South Sudan, to the worsening confl ict in CAR, here are eight adventures on the trail of a new Africa.

Part detective story, part report from this economic frontier, Continental Shift follows the money as it fl ows through Chinese coffers to international conglomerates, to heads of state, to ordinary African citizens, all of whom are intent on defi ning a metamorphosing continent.

For the third year running, Fedgroup has been honoured with a sought-after Professional Management

Review (PMR).africa award. In 2014, FedGroup walked away

with the Bronze Arrow award. Last year saw the fi nancial services group claim Silver. This year, FedGroup won a Golden Arrow, being rated with a mean score of 4.00 out of a possible 5.00 in the Group Life/Risk Products category.

“The PMR.africa Awards are not a competition companies can enter or apply for. Scores are determined following a voting procedure based on a random national survey conducted on local intermediaries, including independent brokers and fi nancial advisors. Because of this impartiality, they are highly coveted in the industry, and we are honoured to have been recognised with a Golden Arrow this year,” says FedGroup Life’s CEO Walter van der Merwe.

According to PMR.africa, “the awards are the culmination of a research process whereby companies and institutions are rated based on respondents’ perceptions, with a strong focus on evaluating and measuring customer service and customer satisfaction.”

FedGroup’s steady and sustainable improvement has been, says Van der Merwe, as a result of

a thorough examination of the feedback received each year. “Our staff is deeply committed to clients. Due to this, we evaluate both positive and negative feedback. This provides us with an incredibly powerful tool to determine which processes require improvement. Our ongoing reviews of the services we provide have allowed us to improve across all areas of our business.”

PMR.africa claims the awards represent competitiveness, effectiveness, excellence, leadership, and resilience, and set a benchmark in the industry.

The allocation of awards is based on a national research process where a company is rated across a range of 14 criteria that include fl exibility, innovativeness, quality and competitive pricing of products. Competence, effi ciency, and integrity are key in the voting process.

“FedGroup is an independently run company, which encourages and values independent thinking,” says Van der Merwe. “Our ethos places our members and their well-being at the centre of all that we do, and certainly ahead of the fi nancial gain of shareholders. It is this ethos that has allowed us to take on the industry giants, and being awarded a Golden Arrow Award this year is testament to the success we have achieved in doing so.”

Hat trick for FedGroup in PMR.africa Awards

3131 May 2016

Money Market_Argon press ad_330x245_v1_3 May 2016.pdf 1 03-May-16 13:35:24