Blue Chip Journal - October 2019 edition

Issue 73 • September/October 2019 

www.bluechipjournal.co.za 

The South African Journal of Financial Planning 

Food for thought 

Is your client’s financial 

plan sustainable? 

Digital innovation 

For succession planning and 

improved customer experience 

Professionalism 

and growth 

FPI Financial Planner of the Year 2019 

Hardi Swart & FPI CEO Lelané Bezuidenhout

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Blue Chip - Print Ad.pdf 1 29/10/2018 12:43:10 PM 

CONTENTS 

2 SPRING HAS SPRUNG AT THE FPI 

4 RETIRING SUSTAINABLY 

Issue 73 • September/October 2019 


6 ON THE MONEY 

News for investors 

7 LOCAL ASSETS STILL TOPS 

SA offering better value 

ARE THE FUNDS 

YOU INVEST IN 

INDEPENDENTLY 

9 POSITIVE NARRATIVES 

RATED? 

The beginning, middle and end of storytelling in financial services 

10 EXPAND YOUR FOCUS 

Build a thriving sustainable practice in uncertain times 

FUND RESEARCH 

BESPOKE MODEL PORTFOLIOS 

OFFICES IN SA AND THE UK 

www.fundhouse.co.za 




Is your client’s financial 

plan sustainable? 

Digital innovation 

For succession planning and 

improved customer experience 


and growth 

FPI Financial Planner of the Year 2019 

Hardi Swart & FPI CEO Lelané Bezuidenhout 

12 PROFESSIONALISM AND PERSONAL GROWTH 

Meet the FPI Planner of the Year 2019 

Fundhouse Investment Advisors (Pty) Ltd is an authorised 

financial services provider. FSP 43960 

ISSN 1682-8666 

16 FOOD FOR THOUGHT 

How sustainable are your client’s financial plans? 

18 THE IMADIBA PROJECT 

Satrix takes Madiba’s "circle of dialogue" to the JSE 

Issue 73 

Sept/Oct 2019 

19 AVOID VALUE DESTRUCTION 

Living annuities: why you might be giving up important growth 

24 THE CREED OF WEALTH CREATION 

Uplifting women through financial planning 

26 VERIFIED SUBSTANCE 

Guernsey offers “flight to quality” 

No article or any part of any article may be reproduced without the prior written 

permission of the publishers. The information provided and opinions expressed 

in this publication are provided in good faith, but do not necessarily represent 

the opinions of this publication, the publisher or the editor. Neither this 

magazine, the publisher or the editor can be held legally liable in any way for 

damages of any kind whatsoever arising directly or indirectly from any facts or 

information provided or omitted in these pages or from any statements made 

or withheld by this publication. The publishers would like to express thanks to 

those who support this publication by their submission of articles and with their 

advertising. All rights reserved. 

30 CLIENTS ARE FOR LIFE 

Behavioural financial advice is not a soft skill 

32 STRATEGIC DECUMULATION 

Retirement means working with what you’ve got 

Pages for paid-for material are 

labelled ‘advertorial’, ‘profile’ 

or ‘cover profile’ 

34 SMOOTH TRANSITION 

Technology and succession planning 

Head Office: 

Cape Media House, 28 Main Road, 

Rondebosch 7700 Cape Town 

Tel: +27 (0) 21 681 7000 

Fax: +27 (0) 21 685 4448 

info@capemedia.co.za 

www.bluechipjournal.co.za

FOREWORD 

A new direction for the FPI 

As the days get longer and the leaves return to the trees, the FPI is experiencing a spring 

of its own. With groundbreaking new initiatives, fresh staff appointments and new 

events, it’s an exciting time for the Institute. 

Adele and Roxanne show the way forward 

We’re very pleased to announce the appointment of two awe-inspiring women to senior positions 

at the FPI. Adele Whyte has been given the great responsibility of heading up our Membership 

Hub while Roxanne van Blerk CFP® is our Head of Certification and Standards. 

Adele joined the FPI in 2011, after 28 years in the insurance industry. In 2012 she was charged 

with setting up the Centre of Professional Development – a task she performed with aplomb. She 

takes her new role as Head of the Membership Hub very seriously and feels privileged to get a 

chance to bring CFP® professionals in Southern Africa together. 

Roxanne joins us from academia. Her overriding objective as Head of Certification and 

Standards is to create awareness of the transformative value of sound financial advice and the 

significant impact it can have on clients’ quality of life. One of her immediate challenges is to 

heighten community awareness of the value of the CFP® certification and to raise the academic 

bar required to enter the profession. 

As CEO, it gives me great pleasure to reward and promote women who have proved to be 

worth their weight in gold to the FPI. They both have momentous tasks ahead of them, and I’m 

here to support them every step of the way. 

Promoting the financial planning industry on campus 

We recently hosted a very successful presentation to commerce undergraduate students at the 

University of Stellenbosch, with a view to encouraging students to become financial planners 

2 www.bluechipjournal.co.za

FOREWORD 

and thus assist in transforming the industry. Janet Hugo CFP® (Financial Planner of the Year 2018) discussed 

the difference between financial planning and investment management, while Hardi Swart 

CFP® (Financial Planner of the Year 2019) spoke about how to become a professional influencer. We 

hope to give similar presentations to all South African universities soon and, ultimately, to extend the 

programme to high schools. 

Using our members to reach all South Africans 

Realising that our members are our biggest asset, we’re implementing a programme whereby an 

increased number of CFP® brand ambassadors will regularly contribute to the media. The programme 

will have a particular focus on fostering financial literacy among lower-income earners and promoting 

a healthy savings culture in South Africa. 

Two important events 

The recent Leaderex conference hosted more than 350 sessions across a range of topics. The Financial 

Planning roster was stacked with addresses by FPI members. Highlights included a session on finding 

investment value in the current economy by Gugu Sidaki CFP® and another on the unique challenges 

faced by women when planning for retirement by Kim Potgieter CFP®. Financial Planner of the Year, 

Hardi Swart CFP® spoke about taking the emotions out of investment. 

Last, but certainly not least, World Financial Planning Day was celebrated on 2 October. I hope you 

will join me in actively promoting the value of financial planning and the CFP accreditation on this 

significant day in our calendar. 

That’s it from me. Enjoy the warmer weather... and the rest of this mag. 

Lelané Bezuidenhout, CEO, FPI 


3

ED'S NOTE 

Gregory Penfold, Editor 

Retiring sustainably 

For a long time, the world of financial planning 

revolved around the same set of client goals: 

the ability to retire securely and leave a legacy. 

These goals have not changed, but the environment 

in which they may be achieved has changed 

beyond all recognition. However, a lot of people still 

behave as though the world around them is the same 

as the world they grew up in. Ironically, this inability to 

see change could jeopardise those goals. 

As I write this note, thousands of people in South 

Africa, and millions more around the world, are taking 

part in some form of climate strike. Workers are not 

turning up to work and children are not showing up for 

school. Climate activist Greta Thunberg has succeeded 

in calling the bluff of the cynical political class in the 

USA by using the tool of integrity to upstage a Senator 

devoid of anything resembling an ethical principle. The 

idea is to send a loud and unequivocal message that it 

is time for those with the power to make a difference 

to use that power seriously and with integrity. 

What does this have to do with financial planning? 

Well, it makes a big difference where a client's assets 

are located. Funds that have performed well for you 

in the past may be deep into oil and coal. Considering 

that the effects of climate change may threaten not 

only the wellbeing of your clients' offspring but also, at 

a time when people can expect to live another 30 years 

after retirement, the wellbeing of your clients themselves. 

Imagine in a secure retirement village while the 

world around it is on fire. See Rob Macdonald's article 

on sustainability for some reflections on this theme. 

On a different tack, the lack of diversity in financial 

planning in South Africa has long been a bone of contention. 

Go to any financial planning conference and 

the demographics are much the same. However, a different 

force is driving transformation in the industry: 

the client base itself is transforming, and it is largely 

thanks to the efforts of black women. For this we have 

to thank "black tax", or family responsibility, a deeply 

entrenched aspect of the culture of the majority 

of South Africans. For the first time, the women on 

whose shoulders falls the burden of looking after the 

extended family have enough wealth to invest. This 

is changing the financial planning game from the 

bottom up. For more on this topic, see our interview 

with Wealth Creed's Gugu Sidaki. 

A prosperous Spring to all our readers. 

Editor: Greg Penfold 

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On the money 

Making waves this quarter 

Dealing with disruption 

Mazars launches financial services entity to offer skills on demand 

Global audit and advisory firm Mazars has launched a practice to offer 

skills and consulting services to businesses in the financial sector. Mazars 

Financial Services Africa is geared towards assisting companies to meet the 

challenges of an evolving market. 

Headed by Riaan Eksteen and George Ellis, industry veterans with 

20 years’ financial services experience each, Mazars Financial Services 

Africa will offer senior professional skills on-demand to financial services 

companies. 

Mazars Co-CEO Anoop Ninan explains that financial services companies 

are changing the way they operate. “Business has progressed from longrange 

planning and static workforce requirements to quick implementation 

of projects and a dynamic, agile workforce.” 

This is particularly true for South African financial services companies 

who need to manage digital disruption. According to the Digital Vortex 

2019 study, financial services is one of the five industries that are most vulnerable 

to digital disruption. This means that companies in this sector need 

to respond rapidly to change and work quickly to implement new ideas. 

“Projects undertaken by businesses in the financial services sector typically 

require specific skills for their duration. While companies recognise that 

they need to have the right skills for each 

project, finding people with the required 

expertise isn’t easy,” Ninan comments. 

He adds that skills shortages and the 

war for talent are more than buzzwords. 

“They are very real and many companies in 

the financial sector are finding it difficult to 

hire the right professionals when and where 

they need them,” Ninan says. 

Appetite for investment 

Kingson Fund Two gets a boost 

Kingson Fund Two, a dynamic High-Growth Tech and Black-Owned SME 

Fund, launched in the first quarter of 2019 at R 400 million (c. $30 million), 

has been revised to $100 million. The reason behind increasing this up to 

$100 million is due to the enthusiastic investment appetite and committed 

capital from international investors. 

Recognising the importance of connecting South African startups to 

international markets and creating a viable venture capital ecosystem in 

South Africa, Kingson has been building investor networks into the US, and 

as a result, has garnered US investment support for its Fund Two. 

Kingson also pleased announced that to anchor its Fund Two, Stat Zero 

and its investors has committed a multi million-dollar (USD) investment 

into South Africa to enable Africa to become a global hub for tech innovation. 

Stat Zero is a digital investment platform aimed at aligning global 

entrepreneurship, government and venture capital to broaden opportunity 

and transform communities and global economies. 

"We are committed to bringing together innovation and emerging 

technology, with impact, to enact global change", says Marquis Cabrera, 

CEO and Co-Founder of Stat Zero. "Our investment into Kingson's Fund 

Two reinforces this mission to evoke change for the better on a significant 

scale, which will 

help increase South 

Africa’s GDP by enabling 

global market 

access to Silicon Valley, 

California and U.S. 

markets and capital to 

grow and scale SMMEs 

in South Africa." 

Preservation and diversification 

Laurium Income Prescient Fund yielding 8.43% gross of fees as at 30 September 2019 

Fixed Income investments play a vital role as a source of income, for capital preservation, total return and diversification benefits. 

Having traditionally been a more equity-focused house, with the hire of Jean-Pierre Du Plessis in January this year, Laurium Capital launched 

the Laurium Income Prescient Fund (“The Fund”) on 1 March 2019. 

The Fund has a primary target of generating inflation +3% returns, and a secondary objective of avoiding drawdowns over a rolling three-month 

period. This fund is for investors who want to obtain real returns, but with low volatility. It is focused on compounding real returns over time while 

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assets and currency. 

The fund is currently yielding 8.43% with a duration of 0.31 years. Credit spreads continue to be tight versus where they have been historically, 

and as such, Laurium has positioned the fund conservatively with 1.43 years of credit duration but has been taking advantage of the higher spreads 

in SA credit offshore. 

For more information visit www.lauriumcapital.com

INVESTMENT OUTLOOK 

Local assets still tops 

SA offering better value 

The global macroeconomic environment 

is treacherous at the moment. 

The shift to populism and the 

resultant risks have brought politics 

front and centre. This is inherently unpredictable. 

Extreme monetary policy action 

has de-emphasised the standard cycle. In 

this world, it is prudent to focus more on 

valuation (price) and to hold macro views 

lightly, while focusing on building well-diversified 

portfolios. 

As part of our investment process, we 

develop a set of evolving themes that take 

the macroeconomic environment into 

consideration. The theme that influenced 

our latest portfolio construction is that 

the US will underperform and, as such, our 

portfolios are underweight US equities. This 

is based off very high profits, high valuations 

and a strong US dollar, making it difficult 

for things to improve. Globally, we expect 

a low-return world, which will force money 

to search for yield in an environment of 

ultra-low global interest rates. This has the 

potential to support SA assets, which are 

offering better value. 

In terms of SA, we maintain our 

"winds of change" theme. This theme 

recognises that things are by no means 

easy, but at the margin we expect 

improvement – with lower interest 

rates and faster economic growth. The 

risk to this is that government does not 

act decisively on the parastatals, particularly 

Eskom. If government does not 

take swift corrective action, we will be 

downgraded to junk status. 

Our expected returns across SA assets 

have generally been revised up, while 

global bonds have once again deteriorated 

and are now expensive. On a relative 

basis, the investment case is pushing 

harder towards SA and away from global 

assets. SA assets have de-rated; in other 

words, they’ve become cheaper and 

are now offering better value. To this 

end, we have increased our longer-term 

expected returns for SA equity and property 

and have maintained our outlook 

for SA bonds. 

Peter Brooke, Head of MacroSolutions at 

Old Mutual Investment Group 

WHY YOUR INVESTMENT 

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The following entities are licensed Financial Services Providers (FSPs) within Old Mutual Investment Group (Pty) Ltd Holdings approved by the Financial Sector Conduct Authority (www.fsca.co.za) to provide advisory 

and/or intermediary services in terms of the Financial Advisory and Intermediary Services Act 37 of 2002. These entities are wholly owned subsidiaries of Old Mutual Investment Group Holdings (Pty) Ltd and are 

members of the Old Mutual Investment Group. Old Mutual Investment Group (Pty) Ltd (Reg No 1993/003023/07), FSP No:604. | Old Mutual Alternative Investments (Pty) Ltd (Reg No 2013/113833/07), FSP No:45255. | 

African Infrastructure Investment Managers (Pty) Ltd (Reg No 2005/028675/07), FSP No:4307. | Futuregrowth Asset Management (Pty) Ltd (Reg No 1996/18222/07), FSP No:520. Figures as at 31 December 2018 unless 

otherwise stated. Sources: Old Mutual Alternative Investments; African Infrastructure Investment Managers (AIIM); Old Mutual Specialised Finance; Futuregrowth Asset Management.

On the money 

Making waves this quarter 

Global wealth report 

South Africa’s financial assets decline by 3.2% 

Island life 

Mauritius rolls out red carpet for foreign investors, residents 

The 10th edition of the Allianz Global Wealth Report reveals that in 2018, 

financial assets in industrial and emerging countries declined simultaneously 

for the first time; even in 2008, at the height of the financial crisis, this was 

not the case. 

Worldwide, savers were in a bind: on the one hand, the escalating trade 

conflict between the US and China, the endless "Brexit saga" and increasing 

geopolitical tensions, on the other hand, the tightening of monetary 

conditions and the (announced) normalisation of monetary policy. The 

stock markets reacted accordingly: global equity prices fell by around 12% 

in 2018. This had a direct impact on asset growth. Global gross financial 

assets of private households fell by 0.1% and remained more or less flat at 

EUR 172.5-trillion. 

In South Africa, the gross financial assets of households declined by 

3.2% in 2018, marking the first decline since the financial crisis back in 2008. 

The decline was triggered by a sharp fall in insurance and pensions (-2.0%) 

and other assets (-9.5%). Bank deposits, on the other hand, were growing 

relatively healthily, clocking a rate of 7.8% (but account for only 15% of 

all financial assets). Growth in liabilities accelerated to 6.9%, the fastest 

increase in six years. As a result, the debt ratio of households etched up to 44.3% 

at the end of 2018, well above the average of emerging markets of 40.3% – but 

still 10 percentage points below the pre-crisis peak. 

As result of declining assets and rising liabilities, net financial assets in 

South Africa fell by 6.4% in 2018. With net financial assets per capita of 6 470 

euros, South Africa remained at the 38th place in the ranking of the richest 

countries (financial assets per capita), just ahead of Brazil (39). At the top, 

the USA replaced Switzerland again, not least thanks to the strong dollar. 

The tropical island paradise of Mauritius is an increasingly attractive 

destination for foreign investors and residents, offering an idyllic lifestyle 

and a liberal approach to regulation and taxation for South Africans looking 

to live, work, open a business or buy property on the island. 

The 2019 Sovereign Trust Mauritius Seminar will unpack the various 

options available around immigration, residency, business structuring and 

investment in Mauritius. The seminar takes place at the Houghton Golf Club 

in Johannesburg (13 November) and the Premiere Hotel in Cape Town (14 

November). Topics include: 

• The business opportunities offered by the new company regime 

• SA tax considerations when setting up shop in Mauritius 

• Buying property for living, working and holidaying 

• The banking environment 

• Investing in Mauritius funds 

• Living the dream in Mauritius – pros and cons 

To register, please email ecchapman@sovereigngroup.com 

Stable and secure 

Guernsey offers “flight to quality” 

Financial services experts from Guernsey have been 

in South Africa over the autumn, promoting the 

island’s abilities in investment funds, private wealth 

and international pensions. 

Business links between the island, which is British 

but situated in the English Channel near France, and 

South Africa are well established. A number of wellestablished 

names in the wealth and funds sector 

have a presence in Guernsey, and in recent years 

business flows to the island have strengthened in 

all three sectors. 

James Crawford, Business Development Director 

at Guernsey Finance, the promotional agency for 

the island’s finance industry, says the delegations 

to Johannesburg and Cape Town have been well 

received. 

“Guernsey is well-positioned to do business 

with South Africa in private wealth, pensions and 

investment funds, and I’m delighted to be able to 

promote the island in a place I know well,” he said. 

“The journey to Guernsey is the ‘flight to quality’ 

and our message to this market is that we are secure, 

specialist, safe, stable, and have verified ‘substance’ 

in all our dealings. We are hearing from the South 

African market that they recognise the importance 

of real substance and so are looking to consolidate 

offshore structures to a single, credible offshore 

jurisdiction.” 

Guernsey Finance will be back in South Africa at 

least twice in 2020. For more information email 

jcrawford@weareguernsey.com or visit www. 

weareguernsey.com

MARKETING 

Positive narratives 

The beginning, middle and end of storytelling in financial services 

Putting together a book of financial 

advisors’ stories has reminded us 

– once again – of the immutable 

power of storytelling in financial 

marketing. Read on for the lowdown. 

I’m nearing the end of quite an incredible 

project that will eventually culminate in a 

book containing the personal and business 

development stories of a group of very successful 

financial advisors in South Africa. 

When I agreed to the task, I had no idea of 

what I was in for! 

It’s been a mammoth undertaking, but 

now – after endless flights around the 

country and intense two- to three-hour 

interviews with the advisors – I’m reassured 

of the irresistible value of storytelling. It 

isn’t just an excellent marketing tool; it is 

also an enriching conduit for deep personal 

development. 

Storytelling is science 

One of the most significant challenges 

in financial planning is to change 

how people behave around money. 

Fortunately, the solution to this complex 

conundrum is surprisingly simple. 

Neuroscience proves that storytelling has 

a significant effect on behaviour. Scientists 

have observed that a convincing tale with 

a dramatic narrative arc prompts a strong 

neurological response as our levels of 

the "feel-good" hormone oxytocin rise. 

When we engage with a compelling story 

that captures our imagination and holds 

our attention, we feel like we’re actually 

taking part in proceedings. It doesn’t take 

a neuroscientist to figure out that this 

empathy leads to action. 

Facts tell, stories sell 

Mention the words "financial services" to 

a random stranger and the chances are 

they’ll harp on about complexity and distrust. 

There are no two ways about it. Our 

industry is heavy on data and metrics that 

are meaningless to most clients – which 

is why we, more than almost any other 

industry, desperately need to make use of 

storytelling in marketing. Emotional narratives 

connect with people and differentiate 

businesses from each other. Storytelling 

is key to helping financial services move 

beyond data, to humanise our offerings 

and instil a sense of trust. 

Gems are polished by friction 

The financial advisors that I’ve interviewed 

for the book have much in common. Most 

notably, they’ve all overcome adversity 

in their personal and/or business lives. 

Adversity is humbling and it teaches us 

to empathise with others – an absolute 

must in financial services. Listeners (read 

clients) identify closely with adversity and 

form a connection with the storyteller (read 

advisor) by wondering how they would 

have behaved in similar circumstances. 

Mirror, mirror on the wall 

Storytelling is all about reflection – which 

is always beneficial if it’s brutally honest. 

Scientists have shown that accurate reflection 

enhances our cognitive ability and 

allows us to truly learn. Deep reflection 

prompts us to fundamentally change the 

way we process information and, thus, to 

profit from past experiences. As advisors, 

changing our clients’ financial behaviour 

starts with telling meaningful stories that 

cause them to reflect. 

Stories make the world go round 

The need for a strong social media presence 

in financial services goes without 

saying. Currently, there’s a marked shift on 

all platforms towards businesses engaging 

with their customers in a more personal 

manner. Facebook’s own Chief Product 

Officer, Chris Cox, has noted that stories 

stand to surpass feeds as the primary way 

people share things with their friends 

within the next year. 

What’s your story? 

It should, by now, have dawned on you how 

valuable your personal and business stories 

are and how much others will respect you 

for sharing them. The next time you need 

to come up with a marketing strategy, why 

not do the simplest thing in the world and 

get together with clients and colleagues to 

TELL YOUR STORY? • 

Need some assistance telling your story? 

FinCommunications is on a mission to 

humanise the South African financial 

services industry and would love to help. 

Drop Linda Graham a line on 

linda@fincommunications.com 

Linda Graham, CFP® 


9

PRACTICE MANAGEMENT 

Expand your focus 

Build a thriving sustainable practice in uncertain times 

Conventional wisdoms in advising 

and guiding investors are being 

challenged and found wanting. 

The information arbitrage 

between client and advisor is disappearing. 

Clients are overloaded with information. 

The media isn’t helping to curb negative 

sentiment. Clients are dissatisfied with 

the outcomes of their investments and 

according to the Dalbar report they have 

reason to be. 

If an advisor’s value proposition was 

defined as fund selection and fund performance, 

then that advisor is locked into a 

performance trap. The advisor has no control 

over market performance. 

Many financial plans rely too heavily on 

the market’s contribution to a client’s retirement 

as opposed to relying on the client’s 

efforts. If the advice narrative was based 

on market performance or an over-reliance 

on market performance, then some clients 

tend to hold the advisor responsible for the 

lack of market performance. 

To break from the market performance 

trap, an advisor must change their narrative 

away from market performance and fund 

picking. 

The three keys to build 

These three keys are foundational to the 

success of an advisory business: 

• Goal-based planning; 

• Co-planning; and 

• Enabling technology. 

A definition of goal-based planning 

At Allegiance our definition of goal-based 

financial planning is as follows: “A process 

of financial life planning for both shortand 

long-term goals to achieve the client’s 

goals and dreams in the context of the client’s 

personal economy including assets, 

liabilities, income and expenses; by managing 

and optimising the client’s resources 

to enable the client’s financial goals; and 

to manage risks that could frustrate the 

achievement of their goals. 

This includes the ability to identify and 

plan for the implications of: 

• Foreseen and unforeseen events in the 

short and long term; 

• The acquisition of assets now and in the 

future; 

• The disposals of assets now and in the 

future; 

• Managing debt; 

• Saving and investing; and 

• Planning for retirement.” 

According to Kobus Barnard, CEO of 

Allegiance Consulting, goal-based planning 

expands your focus into all aspects of 

your client’s financial life and eliminates the 

product-only focus. 

“From a financial planning perspective, 

we traditionally siloed a client’s 

financial goals into a disconnected 

discussion about a specific need and 

a specific solution to that need.” 

It was disconnected from the client’s 

personal circumstances and the mere 

disconnect from the client’s personal circumstances 

meant that it became product 

focussed. 

Co-planning 

Co-planning is allowing the client to 

become the author of their own financial 

destiny with the financial guidance 

or coaching of their advisor. If the client 

becomes the author of their own plan, it 

becomes their plan. 

Traditionally, after a client consultation, 

advisors drew up a financial plan and presented 

a document reflecting the client’s 

initial thoughts. 

Changes to the plan were cumbersome, 

because it normally required the advisor to 

go back to the office, change the document 

and return with an updated plan. 

Co-planning is the financial planning discipline 

of allowing the client to co-create their 

plan in real time. This means they become 

the authors of their financial journey. 

The mere fact that it becomes their plan 

triggers what is called in behaviour economics, 

the endowment effect or ownership 

effect. People are more likely to value 

their financial plan because it is their own. 

The final key: enabling technology 

Advisors underestimate how important 

a system can be to enable their business. 

Production is directly related to the planning 

components of the system. If the planning 

components enable co-planning, life 

planning and can go into deep financial 

engineering then the advisor is enabled to 

do the following: 

• build an advice-driven practice; 

• compete, especially in the high value 

markets; and 

• realistically manage client expectations, 

and consequently advice risk. • 

If you would like to see what a true goalbased 

planning system can do for you, come 

and have a look at Avalon. Contact Johan 

van der Vyver or Charlene van Staden at 012 

360 0040 for a cappuccino and a demo. 

Kobus Barnard, CEO of 

Allegiance Consulting 


Avalon can be the small change that can 

change your future. 

DOING NOTHING AT ALL 

(1.00) 365 = 1.00 

VS 

SMALL CONSISTENT ACTION 

(1.01) 365 = 37.7 

Small disciplines repeated with consistency lead 

to great achievements gained over time 

WWW.AVALON.CO.ZA

FPI FINANCIAL PLANNER OF THE YEAR 2019 


and personal growth 

Meet the FPI Planner of the Year 2019 

Hardi Swart, CFP®, Managing Director of 

Autus Private Clients and Family Office 

FPI Financial Planner of the Year 

Hardi Swart’s financial planning 

journey started at a very young 

age. Brought up on a farm near 

Naboomspruit in Limpopo, he was only 16 

when his entrepreneur father passed away 

as the result of a car accident. 

“My brother, my mom and I managed the 

family business for a couple of years. Then 

when I was in matric my mom got a great 

work opportunity in Cape Town. After matric 

I got a bursary at Stellenbosch and moved 

down here too. We flew to Johannesburg 

and went to the farm twice a month, and 

everything went well until our farm foreman 

passed away and we decided to sell the 

business lock, stock and barrel,” Swart 

relates. 

The family received a good offer for the 

farm and turned to a broker who was an 

old family friend for investment advice. 

“He invested the bulk of our assets into a 

property syndication, and let’s just say it 

didn’t turn out well for us,” says Swart. 

Fortunately, Swart and his brother had 

a bit of money left, which another broker 

invested in an endowment on their behalf. 

During his post-graduate studies, Swart 

met his future wife, who introduced him to 

her father, whose impressive track record in 

finance included a stint as a senior portfolio 

manager at Sanlam Investments. Inevitably, 

the conversation turned to finance. 

“I recall him asking me and my brother 

to come for an appointment. He had a look 

at our portfolios and pointed out that our 

endowments were inappropriate vehicles 

for our age – we were actually losing out,” 

recalls Swart. 

Shortly thereafter, Swart’s father-in-law 

invited him to join Autus Private Clients, the 

family wealth and investment advisory firm. 

Ten years later, he is managing director. He 

also serves on numerous industry bodies 

and is a member of the Investec Academy 

and the Allan Gray National Advisor Forum. 

On the private client side, Autus has 

some 700 clients in three categories – 

family office clients, wealth clients and 

prestige clients – grouped into 250 touch 

points. “A family with a father, mother, two 

children and a trust is actually five clients, 

but we see it as one engagement point, 

one person we can meet with and we will 

do the planning for the family,” says Swart. 

Every client offering is different. “Our 

main focus is higher-net-worth South 

African families, but we also have clients 

that are young professionals and clients 

where we take a longer-term approach. 

Where necessary, we will go out of our way 

to help – it’s not only about the money,” 

says Swart. 

Ten years at Autus have enabled Swart 

to grow “immensely”. “When I started my 

professional practice, I worked through 

every facet of financial planning. I attended 

a lot of training seminars. 

"In the beginning, there was never a 

permanent position where I had to sell a 

service or a product. I learned how to work 

with clients. A lot of young people come 

to the industry and immediately start 

working for the insurance houses where 

they become product salesmen from 

day one – they’re forced into a position 

where they have targets and have to sell 

products instead of creating great service,” 

says Swart. 

For Swart, becoming Financial Planner 

of the Year Award is the culmination of 

years of effort. “I first entered in 2015 and 

came in the top 10. Then we had our first 

daughter and another two daughters, 

twins, after that, so I waited until 2018 to 

enter a second time, when I came in the 

top three.” 

In Swart’s view, the process of 

participating in the FPI Financial Planner of 

the Year awards is above all an invaluable 

learning opportunity. 

“Every time you enter, the FPI gives 

you great feedback that you can then 

use to improve your business even if you 

don’t win. As my father used to say, ‘You 

don’t know what you don’t know’ – the 

awards process helps you find out where 


FPI FINANCIAL PLANNER OF THE YEAR 2019 

the missing pieces of the puzzle are and 

improve on that,” he explains. 

As this year’s FPI Ambassador, Swart 

is hoping to create a lot of awareness to 

improve the public perception of the financial 

planning industry. “Unfortunately it hasn’t 

always had the best reputation because 

there are a lot of people that sell themselves 

as financial planners but are actually policy 

salesmen. It isn’t necessarily their fault, it is 

just the industry as a whole. I’m hoping to 

carry the message that financial planning 

is actually a very professional occupation – 

that having a really good financial planner 

can actually add tremendous value to your 

portfolio as well to your life. The Certified 

Financial Planner qualification is an important 

part of that.” 

When Swart looks to the future, he sees 

opportunity. “Our industry is dominated by 

males, so I think there is a big opportunity 

for females and up-and-coming young 

professionals. Back in the day, you could be a 

part-time broker as well as being a preacher, 

a pastor, a builder or whoever – nowadays 

we’re getting people with Honours degrees 

and Master's degrees who are providing 

a comprehensive service. It’s about really 

adding value to your clients’ lives.” 

A passionate advocate of continuous 

professional development, Swart considers 

the FSCA’s requirement that financial 

planners be CPD compliant a step in the 

right direction. 

“Continuous professional development 

is a part of all professional occupations. 

It’s about constantly improving yourself 

and staying on top of what is happening 

in your industry. It does create a bit of red 

tape, which could be potentially a struggle, 

but I think in general it’s a positive thing. 

“It’s something we at Autus have 

incorporated into our practice for a long 

time. We’re constantly doing training 

programmes for the staff. For the industry 

as a whole, it is extremely positive and it 

is something that I am going to convey 

when I talk to people in my capacity as FPI 

Ambassador.” • 

Johan Swart, CFP® 

Johan joined the financial planning 

industry in 2006 and completed his 

Post Graduate Diploma in Financial 

Planning at the University of the Free 

State in 2014. 

He joined as a member of the 

Financial Planning Institute (FPI) 

in 2015 and attained the Certified 

Financial Planner® designation in 

the same year. 

Johan has a passion for enabling 

families to manage their health 

and wealth to create significant 

legacies. 

Johan is a principal and 

founding partner of PPW and 

Associates, a proud Old Mutual 

Personal Financial Advice General 

Practice, and with more than 60 

years combined experience in 

their practice, where clients can 

be sure that their advisors have 

the necessary skill and expertise 

to help them, with even the most 

challenging financial planning 

scenarios. 

They use financial insights and 

integrated wealth planning to create 

bespoke solutions for families and 

institutions alike. 

Introducing the runners-up 

Craig Turton, CFP® 

Craig believes that the key to financial 

freedom lies with Chartered Wealth 

Solutions’ Retirement Planning process. 

Retirement Planning is about 

envisaging the life you really want to 

live and then making sure you merge 

your money to that life. 

“Money, after all, should be 

your servant, not your master,” he 

says, whether you are planning 

for, nearing, or in retirement. Craig 

heads up the Wealth Creation Team 

and looks after clients who are not 

yet ready to retire and are still in the 

process of building their wealth for 

their Retirement. 

Craig obtained his Post-Graduate 

Diploma in Financial Planning and 

is a Certified Financial Planner® 

professional. 

He has been in the financial planning 

industry since 2010 and is a 

member of the Financial Planning 

Institute. Craig is tenacious, sincere 

and competitive. He is passionate 

about holistic financial planning, 

sport and his family. 

He is married to Lientjie and 

they have two children, Tristan and 

Kaylee. 

Greg Penfold 


13

ADVERTORIAL 

Applied financial planning 

USB offers financial planners a pathway to a 

successful career – students across South Africa 

can now attend lectures from anywhere 

Mike Savva, Dr Lee-Ann Steenkamp and Dilshaad Samsodien 

The University of Stellenbosch Business 

School’s (USB) Post-Graduate Diploma 

in Financial Planning is a well-established 

and highly regarded programme 

with a long pedigree. Blue Chip spoke to 

USB’s Dr Lee-Ann Steenkamp as well as two 

recent graduates, Mike Savva and Dilshaad 

Samsodien, to find out more about the 

benefits this programme has to offer. 

Accredited by the Financial Planning Institute 

of Southern Africa (FPI), the programme 

is geared towards preparing students for 

the FPI’s professional competency exam, or 

Board Exam, so it follows the FPI’s syllabus. To 

date, some 700 graduates have gone through 

the programme since its inception in 2005. 

One successful alumnus is Hardi Swart, FPI 

Financial Planner of the Year for 2019. 

“The duration of the programme is one 

year, although students can opt to do it 

over two. The lectures are in the evenings 

after hours, because nearly all of our students 

are working individuals. Those that 

do it over two years might have family 

or work commitments, so we are a bit 

flexible in that regard. From next year, 

we will offer even greater flexibility by 

operating the programme on USB's successful 

blended learning platform. The 

evening lectures will be live-streamed 

so that students can attend from anywhere 

in the country – indeed from anywhere 

in the world!” says Steenkamp. 

“The course comprises four compulsory 

modules, each roughly three months in 

duration, so there are six weeks of lectures, 

every Tuesday and Thursday evening 

–quite a demanding time commitment. At 

the end of each module, students write 

assessments and continue with the next 

module. The final module concludes in the 

format of a case study that simulates the 

FPI’s Board Exam case studies,” Steenkamp 

explains. 

To facilitate the learning process, students 

receive a great deal of hands-on 

support. “Being a residential-based programme, 

we don’t operate in the distance- 

or online-learning sphere, which 

means that we have contact sessions: 

students come to campus and get a lot 

of face time with the lecturers. Just as 

importantly, they get ample opportunity 

for peer-to-peer collaboration learning, 

which we also facilitate by providing 

breakaway rooms for students to form 


ADVERTORIAL 

study groups if they want to. We also 

have tutors that students can make use 

of,” says Steenkamp. 

In addition to the formal contact sessions, 

students can attend supplementary 

Saturday workshops to bridge any knowledge 

gaps they might have. “The programme 

modules cover various aspects 

of law and commerce, so if you find that 

your background is not as solid in financial 

calculations, for example, you can 

then attend a Saturday workshop just to 

bring you up to par with your classmates,” 

Steenkamp clarifies. 

The basic qualification to enter the 

course is a relevant bachelor degree such 

as an LLB or a BCom, but there is some 

flexibility in this regard. “Interestingly, 

we do get BA students every so often. 

We had a financial journalist who was 

admitted to the programme based on 

work experience, so even if you do not 

have a relevant bachelor degree, if your 

work experience is such that you are on 

par, you would also be allowed into the 

programme,” says Steenkamp. 

The content of the course is constantly 

being adapted to keep up with changes 

in the financial planning profession. “We 

have to adhere to the FPI syllabus to 

keep our accreditation, so whenever the 

FPI changes something we follow suit. 

When they changed the format of their 

case study exam, we changed our format. 

We are also in the process of an extensive 

curriculum renewal taking the latest fintech 

developments like robo advice into 

account.” 

Lecturers play a tremendously important 

role in keeping the programme up to 

date in terms of current industry practice. 

“Most of our lecturers are practitioners: 

some might be in the full-time employment 

of a financial services firm, others 

might have their own business, and then 

there are a couple of full-time academics 

like me. As a result we have a nice blend 

of academics and practitioners; everyone 

brings something important to the table,” 

says Steenkamp. 

“We don’t want students to learn 

things by rote, so we have a very strong 

focus on application, which all comes 

together nicely in the last module. It’s 

difficult to bring a whole year’s work 

together into one case study, so the 

lecturers also go through past exam 

papers from the FPI and help students to 

approach the questions in the right way. 

This focus on exam technique extends to 

real-life practice because then you know 

what questions to ask. It can be difficult 

to get information out of a client – they 

don’t know what they don’t know – so 

this programme helps you to know what 

to ask and how to ask it.” 

One distinct advantage of the programme 

is that graduates are eligible to 

apply for our prestigious MBA. 

“It is very important for USB to offer a 

learning pathway to our students,” says 

Steenkamp. 

Appreciative alumni 

Dilshaad Samsodien, who works as a legal 

advisor at Sanlam Life Insurance Limited, 

finished the 2018 programme at the top 

of her class. She comments: “For me, 

what sets the University of Stellenbosch 

aside from other institutions is the fact 

that it’s not a distance-learning programme: 

there are interactive bi-weekly 

classes presented by excellent lecturers 

and additional workshops to assist students 

in preparing for the examinations 

for the various modules, as well as additional 

workshops for those students who 

go on to write the FPI exams. That definitely 

assisted me a great deal. 

“When I joined Sanlam at the end of 

2016, I was very new to the insurance 

industry and was keen on studying something 

that would give me a holistic view 

of the financial services industry. That is 

exactly what I got out of this course.” 

Samsodien affirms that the programme 

is directly applicable to professional 

practice: “Since doing the course 

I successfully passed my FPI exam in 

February, and I must say that I have been 

able to apply the knowledge that I’ve 

gained to different matters that come 

before me as a legal advisor at Sanlam 

and also in my personal life. 

“Integrating the course with my 

work-life was quite challenging. It took a 

considerable amount of time, effort, dedication 

and tears, but I put in the hours and 

it paid off in the end.” 

Fellow graduate Mike Savva offers his 

appreciation of the programme. “I come 

from a financial management background, 

which is a bit different to the financial planning 

side. I wanted to gain more knowledge, 

skills and experience in order to deal 

with clients better.” 

Savva acknowledges that the programme 

takes commitment: “You have 

to put time aside for it every day. When 

you’re not at lectures, you’re summarising 

or studying or making notes in order to 

make things easier for the exams and the 

case study at the end.” 

Savva agrees with Samsodien that the 

lecturers’ professionalism is a distinct asset. 

“It’s easy to learn and to keep up with the 

textbook, but also, since the lecturers are 

experienced people in the industry, the 

programme teaches us to how to deal with 

clients in the working world. 

“For the past five years of poor returns, 

clients have all asked why their investments 

have fallen. The programme taught 

us to deal with those situations and make 

clients realise that their investment is 

designed for the long term – short-term 

volatility is the norm. It’s one of the things 

that has actually come to good use in 

practice.” 

Savva continues: “The programme 

gave me the confidence to deal with 

any type of client, from a more established 

client to someone that is just 

starting. When you are starting out in 

the industry, you are anxious about 

seeing someone that’s going to ask you 

a lot of questions you might not know 

the answers to – especially when, like 

me, you like to know everything. The 

course really gave me the ability to be 

able to see anyone and respond to any 

questions they may have.” 

Of course, nobody can be expected 

to have an answer for everything. “The 

programme also teaches you how to deal 

with questions you can’t answer – either 

by telling the client that you will get back 

to them or referring them to someone that 

may be able to,” says Samsodien .• 


15


How sustainable are your client’s financial plans? 

Few in the know would debate that 

Jeffreys Bay has the best righthand 

break wave in the world. It is 

a surfing mecca. Pilgrims journey 

there from everywhere, all year round. It 

hosts the annual international World Surf 

League event, the J-Bay Open. My family 

are not surfers, but we appreciate the 

remarkable athleticism on display. At the 

end of a recent holiday we had a night’s 

stopover in Jeffreys Bay on our way home. 

We hoped to see some of the world’s best 

athletes preparing for the annual event. But 

just like investment markets, the surf is not 

always up. We didn’t see much surfing. 

We did manage to have a meal at 

the aptly named Kitchen Windows restaurant, 

which takes its name from the 

beach it overlooks. Local folklore has it 

that before Jeffreys Bay became a strip 

mall miraculously transplanted from 

Midwest America, local surfers would 

look out their rustic “kitchen windows” to 

see if the surf was up. Without adjusting 

our heads, we could read the menu and 

watch the surf, what little there was of 

it. It turns out this was not the only thing 

in short supply. 

Not everything on the menu was 

available that night. No line fish. In fact 

our waiter said there is seldom freshly 

caught line fish these days. And the 

calamari? It was from Patagonia. From 

our table, we could see the “chokka” 

boats out at sea fishing for calamari. 

We asked the obvious question. Why 

no local calamari? “No, that’s too tough 

and chewy. It gets exported,” our waiter 

explained. There we were, watching 

about twenty fishing boats hard at 

work, but there was only one local fish, 

hake, on a menu topped and tailed by 

Patagonian calamari and Norwegian 

salmon. 

We scratched our heads. Literally 

and figuratively. We were “haked out” 

after 10 days on the South African Wild 

Coast and wanted to spoil ourselves 

with something different on the last 

night of our trip. Little did we think 

that we would face an ethical dilemma 

in our menu choice. Behavioural guru 

Dan Ariely says that with most ethical 

dilemmas, as long as you can 


SUSTAINABILITY 

rationalise your decision you are okay. 

Our thinking exactly. The planes had 

already offloaded their CO2 to bring 

the calamari and salmon to our shores. 

My wife and I were desperate for some 

calamari, and Patagonia is closer to 

South Africa than Norway. Less damage 

done. We reassured ourselves. The 

calamari was delicious. But we did feel 

a little guilty. 

Despite what Donald Trump says, our 

world is in a climate change crisis. Polar 

caps are melting. Certain areas of India 

are becoming uninhabitable because 

of the heat. Our seas are filling up with 

plastic. Africa is increasingly water 

scarce. Human behaviour impacts every 

biological process and species. Life as we 

know it is not sustainable. 

The need for us to change 

our behaviour is irrefutable. 

Yet we ate the Patagonian 

calamari. Such a simple and 

seemingly innocent act. But 

it perpetuates the problem 

for at least one more sitting 

at Kitchen Windows. Supply 

meets demand. 

To divert my guilt, I wondered 

about the menus 

financial planners put in 

front of their clients. At its 

essence, financial planning 

is a process of helping clients 

meet their life and 

financial goals. A recent 

Harvard Business Review 

paper suggests that “leaving 

a legacy” is a key goal that 

financial planners' clients 

want to achieve. So financial 

planners are in the game of 

helping clients achieve sustainable 

financial futures. 

Now it’s not quite sustainable 

fishing, but it begs the 

question, to what extent is 

the concept of sustainability 

addressed in the menus 

offered to clients? 

Standard financial planning menus 

include items such as a financial needs 

analysis; a risk analysis and plan; an investment 

plan; an estate plan; help with budgeting 

and managing debt. The menu may 

also include life planning items, such as 

a client’s history with money, transitions 

they are facing, their life goals, and of 

course their legacy. These are all great and 

necessary. But if climate change destroys 

life as we know it, then these menus will 

be to no avail. 

Greta Thunberg, the 16-year-old climate 

change activist, refuses to fly. She 

believes the impact on the environment 

is too severe. When she spoke at Davos 

recently, she took a 32-hour train journey 

to get there. Thunberg has energised the 

global climate change movement, particularly 

among the youth. She shows 

the power of individual action. 

Financial planners work with individuals 

every day. What impact can 

they have? Profound, I think. Imagine 

a financial planning menu that had a 

section on sustainable living. How are 

you recycling at home? What measures 

are you taking to reduce your 

energy and water consumption? How 

do you travel? Perhaps if we all had 

an individual sustainability plan in 

place, we wouldn’t need to rationalise 

eating Patagonian calamari. Guilty as 

charged. 

I’m sure no financial planner wants a 

world where their own or their clients’ 

children or grandchildren can no longer 

eat fish, have enough water, heating or 

clean air. Perhaps our contribution to 

a sustainable future for the world is to 

ensure that clients plan for such a future 

on an individual basis. 

A sustainable future does not mean 

one without fun or enjoyment. I, for one, 

want to go back to Kitchen Windows and 

preferably eat locally-caught calamari. 

And definitely to have the deconstructed 

cheesecake. To coin that well-known culinary 

term, “It’s to die for.” • 

Rob Macdonald, Head of Strategic 

Advisory Services, Fundhouse 


17

FINANCIAL INCLUSION 

The iMadiba Project 

Satrix takes Madiba’s "circle of dialogue" to the JSE 

During his imprisonment on 

Robben Island, global icon 

Nelson Mandela encouraged 

honest debate, conversing in a 

circle in which every voice was heard, and 

discouraging polarisation and the elevation 

of an individual’s status above that of the rest 

of the group. It is this “circle of dialogue” that 

Satrix chose to take to the Johannesburg 

Stock Exchange. 

Satrix shares the principle 

of “access for all” 

“To the untrained eye an investment 

company is a world away from Robben 

Island but it’s the principles and the manner 

in which Mandela brought about change, 

wanting freedom and equality for all, on 

which Satrix builds to provide financial 

access for all,” says Helena Conradie, CEO of 

Satrix. Access for all and financial inclusion 

are maxims at the heart of the Satrix 

business, “and we at Satrix are proud to be 

the first corporate to sponsor and support 

Erhardt Thiel and the Nelson Mandela 

Foundation on their journey to roll out the 

iMadiba Project,” says Conradie. 

iMadiba celebrates Mandela’s 

legacy by creating safe spaces 

The iMadiba Project is a global art project that 

celebrates Nelson Mandela’s legacy through 

the promotion of conversation in safe spaces. 

To this end, three Satrix-sponsored cement 

installations echoing Nelson Mandela’s 

Robben Island cell have already been built 

at the JSE, the Iziko National Gallery in Cape 

Town and the Nelson Mandela Museum in 

Qunu. These cement structures exhibit the 

exact floor dimensions of Madiba’s Robben 

Island cell and function as interactive and 

participative art installations. 

The world’s largest museum for 

reflection and conversation 

The broad intention of the project is to create 

the world’s largest museum for reflection 

and conversation in Mandela’s honour by 

building micro museums throughout South 

Africa and the world. 

The iMadiba Project was conceptualised 

and created by Stellenbosch-based 

photographer and artist Erhardt Thiel. It was 

built in partnership with and in support of the 

Nelson Mandela Foundation. One of the aims 

of the project is to assist the foundation in its 

objectives of honouring Madiba’s legacy. It has 

been made possible through the support of 

sponsors, and the ongoing need is to find more 

sponsors as the project grows. The project also 

produces income for the foundation. 

100 micro museums in 

Mandela’s 100th year 

The project has gained great momentum. 

To date, there are artist copies at several 

venues in Stellenbosch. Thiel used these 

sculptures, together with a similar one 

which was burnt in the Tankwa Karoo at 

AfrikaBurn, to test the final design. The 

next sculptures were built at Mthatha 

and Qunu in the Eastern Cape. Further 

sculptures can be viewed at the V&A 

Waterfront, Nelson Mandela Square in 

Sandton and in the grounds of St Stithians 

College in Johannesburg. Thiel hopes to 

expand the project to all schools in South 

Africa and erect at least 100 installations 

in Madiba’s centenary year, both locally 

and globally. In total 21 iMadiba sites have 

already been built, sponsored by various 

corporates, schools and individuals, each 

encouraging others to join a conversation 

for change close to their heart. Plans are 

currently underway for three more sites in 

South Africa, three in the US, two in South 

America, one in the UK and one in Berlin. 

From an oppressive, inhumane 

system to open conversation 

The micro museums are artistic recreations 

of Madiba’s Robben Island cell with bars 

and an open doorway signifying that the 

space is always open for conversation and 

reflection. People are invited to engage 

with the installations as the cold concrete, 

bars and cramped dimensions of the 

micro museum bring home the oppressive 

conditions which Madiba endured for so 

many years. Through this engagement, we 

will be reminded of the inhumane system 

that was in place, the work done in moving 

forward, and the work still to come. 

Satrix welcomes the conversation 

around financial inclusion 

“It is the spirit of listening and acceptance 

which has enabled Satrix to become The 

People’s Choice (SALTA 2018 and 2019), 

spreading the news that investing is for all 

and that everyone can invest. As the first 

corporate sponsor of the iMadiba Project 

we are pleased to have secured space at 

the Johannesburg Stock Exchange to erect 

a micro museum. To us, as a business, this 

represents an opportunity to continue the 

conversation of financial inclusion and 

access that is at the very heart of the financial 

system. We’d like to start a conversation here 

so that everyone knows that they too can 

own the market,” says Conradie. • 


LIVING ANNUITIES 

Avoid value destruction 

Living annuities: why you might be giving up important growth 

For many South Africans, retirement 

comes without warning. Only then 

do they realise they have not saved 

enough to live the rest of their lives 

in peace and comfort. For those choosing 

a living annuity, the consequence is that 

investors scrutinise every percentage point of 

investment returns even more closely. 

When returns from the ASISA low equity 

sector fall below that of the income sector as 

we’ve experienced recently (see chart below), 

it is unsurprising to see large flows of capital 

into the income sector, both in terms of new 

money invested as well as transfers away from 

the low equity category. 

The chart shows the difference in rolling 

three-year returns of low equity versus 

income. As can be seen, in recent times 

the income category has dramatically outperformed. 

Although this has happened 

before and is bound to happen again, we 

would urge investors to consult a qualified 

financial planner to ensure their choices are 

consistent with their longer-term risk tolerance 

and investment goals. Over the past 15 

years, for example, the average low equity 

fund has outperformed income, which has 

in turn outperformed the money market. 

As shown in the cumulative return chart 

above, the average low equity fund trumps 

its lower risk peers quite easily over the long 

term. So, is it a simple choice to just go out 

and invest in the highest risk product that you 

can find? Our previously published research 

shows that living annuity investors have 

historically stacked the odds in their favour 

when choosing higher risk funds. In other 

words, on average your capital has tended 

to last longer, or you would have been able to 

sustain a higher drawdown over the course of 

your retirement. The caveat, however, is that 

many investors are unable to emotionally 

withstand the volatility of returns that comes 

with taking more risk. 

While we view risk as the permanent loss of 

capital and not meeting your planned outcomes, 

it is also difficult to see your market 

values fall, no matter how small the quantum 

of the loss turns out to be. What is quite reassuring 

is that by extending your time horizon 

for performance measurement, you can minimise 

the chances of suffering loss. 

light green) versus the typical income fund 

(in darker green) for various time periods all 

the way up to 10 years. Our research confirms 

that income funds usually have a narrower 

range of returns than their low equity 

counterparts; however, they are also characterised 

by lower expected returns overall. 

In other words, income funds can usually 

provide better protection from short-term 

losses, but investors pay for that protection 

through lower long-term returns and 

should therefore be aware of the potential 

consequences of any switching decisions. 

Investors who initially made the wrong 

decision to invest in low equity and are now 

switching to income are likely making the 

correct decision for their needs. On the other 

hand, some investors could switch based on 

recent past performance which will no doubt 

be value destructive. While short-term returns 

are not at all predictable in advance, over time 

investors have typically received appropriately 

higher rewards for investing in riskier assets. 

Whether you choose to invest for your 

living annuity in an income fund or a low 

equity fund, it is important to carefully 

consider the reasons for your choice and how 

the expected risk and return profile fits into 

your emotional tolerance bands and longterm 

financial planning goals so as to avoid 

the enormous value destruction caused by 

ill-timed switching decisions. • 

The “funnel graph” above displays the range 

of returns for the typical low equity fund (in 

Anil Jugmohan, Senior Investment Analyst 

at Nedgroup Investments 


19

INTERVIEW 

Putting clients 

and advisors first 

PPS Investments leads in multi-channel digital innovation 

Digital servicing has been a core focus of PPS 

Investments’ service offering since the investment 

management services provider of the PPS Group 

was launched in 2007. With a secure site and a 

self-service app for clients, PPS was at the head of the digital 

pack. Over the years, PPS built on this advantage and 

now offers a multi-channel approach based on the secure 

site, self-service app, and PPS Horizon, the web-based financial 

planning tool. Blue Chip spoke to James Fraser, Chief 

Operating Officer at PPS Investments, for more insight into 

the new developments. 

James Fraser, Chief Operating Officer, PPS Investments 

Bird’s-eye view 

A tremendously useful and empowering feature built into 

the new secure site is a flexible reporting system that enables 

financial advisors to draw book reports on their practice. 

“It enables you to see your client base as a whole, from 

an investments perspective, and then segment that and slice 

and dice it in many different ways. You can see an overview of 

your book, drill down into certain aspects and then see who 

your younger clients are, who your older clients are, who is in 

a medium risk investment, who is in a high risk investment, 

and so on. You start understanding your book and your clients 

better so you can identify which clients need more support 

or have gaps in certain places, or which technologies or 

functionalities could assist those clients,” says Fraser. 

Another exciting feature is a robo-advice platform with 

a very different proposition from the average robo-advisor. 

“Generally the robo-advisor is seen as direct to client. 

When we entered the robo-advice space, we found that 

many companies were struggling to get clients to try the 

tool. Interaction with financial advisors was very much 

still seen as a benefit and a requirement in the process. 

Consequently, the industry started turning to a hybrid 

model. A special feature of our hybrid robo-tool is an 

advisor module that allows our financial advisors to drive 

their own robo-advisor,” says Fraser. 


INTERVIEW 

Essentially, PPS has built a platform that 

advisors can use for the benefit of their 

clients, moving away from a direct-toclient 

proposition while dispelling the 

fear of dis-intermediation – the widespread 

fear that robots are coming to 

take people’s jobs. 

“PPS Horizon, our robo-tool, is integrated 

with our secure site, and the 

advisor can offer it to clients in whichever 

way he wants to take that forward. 

One use that springs to mind would be to 

address wealth-accumulation clients. It’s 

not profitable to see them face to face, but 

you want to maintain the relationship. This 

is specifically appropriate in the PPS world 

where you’re trying to build a membership 

or client base from graduation through to 

retirement and beyond. 

“So we see this as a tool that advisors 

can use to build and develop that relationship 

with Millennials and digitally savvy 

graduates, to help them and partner with 

them through their lives.” 

PPS Horizon tool 

The genius of the PPS Horizon financial 

planning tool is the functionality for 

advisor and client to work through the tool 

together in different locations, obviating 

the need for anyone to travel. This opens up 

a genuinely empowering two-way learning 

and communication process. 

“As a client moves through the tool, at 

any point in time they can ask for advice. 

The advisor will be notified that this specific 

client has reached a particular stage 

and provided with the information they’ve 

produced so far. The advisor can then 

assist the client to move forward from 

that point. 

“In turn, the tool allows the advisor 

to create a proposal for the client. Then 

it allows the advisor to create a financial 

plan, which includes the product wrapper 

and the underlying investments. The plan 

can be implemented directly at the click 

of a button.” 

There is also a unique link for each 

advisor who enrols for the tool. 

“Whenever a client clicks on the 

link, the tool will identify which advisor’s 

client it is, enabling the advisor to 

create campaigns targeting existing or 

new clients with that specific link. When 

the potential or existing investor clicks 

on the link, the tool is automatically 

pre-populated with all the information 

that exists, saving time for the client,” 

says Fraser. 

Creating a campaign entails a client 

base segmentation process to identify 

appropriate targets for the tool, such as 

wealth-accumulating clients or group 

advice. 

“In the graduate space, an advisor can 

give advice to a group of graduates who 

have brought their personal devices and 

who will end up being bespoke for that 

advisor because they’re putting their own 

information into this tool,” Fraser points 

out. 

Advisors who are trying to move from 

the risk space into an investment space 

can be reassured that their FAIS compliance 

requirements are met. 

Less admin, more value 

The whole aim of the multi-channel 

approach is to reduce the advisor’s 

administrative burden in favour of more 

value-adding activities such as finding new 

clients and providing better support. 

“By way of example, the PPS Horizon 

tool has a digital signature feature that 

allows both the client and the advisor 

to sign via their phones. The tool allows 

you to convert a proposal into an online 

application form at the click of a button. 

Once signed, it goes straight through into 

processing.” 

The result is a reduction in administration 

and an increase in speed and 

accuracy. This, in turn, translates into 

greater trust. Fraser expands: “When I 

first got into financial services, at induction, 

the CEO said that clients come 

along and give you their life savings, and 

all you give them in return is a piece of 

paper – their statement. If there is anything 

wrong with that piece of paper, 

the trust is broken immediately. That’s 

why the focus on accuracy, great service 

and good feedback is so critical in this 

space. 

“It’s really helpful as a financial advisor 

to be able to look at your information, to 

be able to get educational material so you 

can upskill yourself, understand what the 

offering is, and explain the products and 

services to a client.” 


21

INTERVIEW 

Positive feedback loop 

To ensure maximum relevance, the new 

features were developed using Agile project 

management methodology. 

“We focus on short blocks of work, roll 

them out and get feedback from clients 

and advisors. Then we update based on 

that and get guidance on what the next 

important thing is to build. We believe this 

approach has helped us build a platform 

that represents what clients and advisors 

actually want rather than what we think 

they want,” says Fraser. 

Feedback has been very positive across 

each of the channels. 

“The new secure site has had excellent 

feedback. The app has had great feedback 

from a usability perspective and 

quick access to your information. The PPS 

Horizon tool has had excellent feedback 

from those who understand how to use it 

in their businesses. 

“Our focus for the next period is to 

build case studies of people who have 

used the tool successfully and take that 

as a roadmap that we can roll out to 

other financial advisors. This will help 

them understand and build the tools 

and analysis to enable segmentation 

of their clients and run their own 

campaigns.” 

Ultimately, the aim is to create a 

member- and advisor-level view of the 

PPS Group as a whole with a true omnichannel 

approach to match. 

“The app, the website and the PPS 

Horizon tool are separate at the moment, so 

you can basically engage with us on multiple 

channels,” says Fraser. “What doesn’t happen 

is if you’re halfway through PPS Horizon and 

you want to pick it up again on the website 

– that link isn’t there yet. 

“However, we will soon be launching 

a PPS Group secure site that will enable 

members and advisors to log in and see 

their holistic offering in the group, from 

short-term insurance to life insurance, 

investments and medical aid. As part of 

that development going forward, we’re 

looking more and more at an omnichannel 

experience.” 

Touch and engage 

Being ahead of the game has its own 

challenges – especially in the traditionally 

conservative space of financial 

services. 

“Getting buy-in can be an issue. People 

are used to apps like AirBnB and Uber but 

from a financial services perspective it’s 

not always as clear. Banking is one thing 

– you’re spending money on your card 

or bank account every day, so there’s 

something to go and look at – but from 

an investments perspective it’s a longer 

term horizon: you don’t really need to 

look at your investments every day. Part 

of the challenge going forward is how 

to engage with investors – also from an 

insurance perspective. In this space, the 

touch points are even more infrequent 

– generally the member engages when 

they take out their insurance and when 

they need to claim,” says Fraser. 

However, the primary objective of digital 

technology is to help investors behave 

less emotionally and stick to their longterm 

goals. 

“A lot has been written around 

investors not achieving the same 

performance as the markets because 

they’re buying at the wrong times. 

That’s often driven by media 

speculation, short-term focus or feardriven 

decisions,” says Fraser. 

“The ability to access instant valuation 

of your investment could 

encourage you to look at it too shortterm. 

A typical knee jerk reaction is a 

client thinking, 'my investment fell by 

5% yesterday so I must sell.' Tomorrow 

the investment could come back up by 

5%. That’s where technology will help. 

We are investigating machine learning 

and artificial intelligence and using 

them to nudge and guide our investors. 

What we hope to see in the next 

5 years of this journey, is that when an 

investor logs in and there’s been some 

event in the markets, we can drive a 

message into our digital platforms, 

whether it be the app or our online 

site, to say ‘don’t worry, speak to your 

financial advisor and look to the longterm, 

you are still on track for your 

long-term goals’. 

“We believe this is the next step in our 

journey. We need to create that touch 

point, to have that level of engagement 

and communication with our investors. 

It should not only be about the performance 

of my investment but whether 

I am on track to achieve my goals,” Fraser 

concludes. • 


WOMEN IN FINANCE 

The creed of 

wealth creation 

Uplifting women 

through financial planning 

From being a stockbroker in a 

boutique stockbroking firm in 

Johannesburg 10 years ago, Gugu 

Sidaki has soared to the heights 

of wealth management, servicing high 

net-worth individuals and ultimately, 

with Palesa Dube, founding Wealth 

Creed, where she serves as director and 

wealth manager. Sidaki has an impressive 

string of qualifications behind her name, 

including a BCom Economics degree from 

the University of Pretoria, BCom Honours 

degree in Investments Management from 

the University of Johannesburg and a Post- 

Graduate Diploma in Financial Planning 

from the University of the Free State. She is 

also a member of the FPI. We spoke to her 

about her passionate journey as a black 

woman in financial services and the ongoing 

transformation of the industry itself. 

Sidaki entered wealth management at the 

suggestion of one of the women running 

the wealth management team in the 

boutique firm where she was working as a 

stockbroker. “She thought I would fit in well. 

I hadn’t considered wealth management 

until that point. I made the transition and 

literally have been doing that ever since,” 

says Sidaki. 

When the business was bought out 

by FirstRand, Sidaki became a wealth 

manager for RMB, where she stayed until 

founding Wealth Creed in 2017. Reflecting 

on her experience as a woman in a maledominated 

industry, she says, “For the vast 

majority of my time as a wealth manager 

there have been fewer female financial 

advisors compared to male. It really makes 

a difference because if you have a lot of 

the same group of individuals within the 

Gugu Sidaki, Wealth Manager and 

Co-Founder of Wealth Creed 

business, that’s what sets the tone. It’s 

neither a good or a bad thing, but you 

do need a good mix of different kinds of 

individuals to bring in different kinds of 

skills sets.” 

For Sidaki, lack of diversity can affect 

performance. “It manifests in so many 

different ways that we cannot deny that it 

does not affect us. For example, not being a 

male and being a mom in particular means 

I am not going to be joining the boys every 

other night when they take out clients for 

drinks or whatever the case is, because it 

would be impractical, and if I miss out on 

that, I miss out on a very good opportunity 

to bond with team members.” 

The same holds true from a client 

perspective. “I have found myself bonding 

a lot deeper with certain clients because 

I brought what they needed. Women are 

better listeners, not to say that men don’t 

listen, but women have a better way to 

connect with individuals. Of course there are 

clients who really couldn’t care less what your 

gender and what your race is as long as you 

get the job done, but in certain instances I 

know that I have progressed more with 

specific clients because of my femininity, 

because I am a woman, because I bring a 

different skills set to the table,” shares Sidaki. 

Adding another layer is the fact of race. 

“Not only are there few female wealth 

managers, but there are even fewer black 

females or black advisors in general, which 

creates a whole different dimension. I have 

not been victimised or treated differently 

because for being black and female – 

on the contrary, I have been privileged 

and fortunate enough to work for an 

organisation that has been quite progressive 

in treating individuals such as myself – but 

whenever I go to industry functions or 

events, I am always one of two or three black 

females in that room. Ultimately it does get 

a little exhausting to have to over-extend 

myself in a particular way to get people to 

understand me a little bit more because of 

my background,” Sidaki says. 

Transformation from the ground up 

Given that wealth has been largely in white 

male hands historically, it makes sense 

why the industry looks the way it does. 

Nonetheless, says Sidaki, the industry is 

changing: “I have been seeing a lot more 

people needing advice who are not male, 

who are not white, and who have extensive 

wealth. To a large extent, that is going to 

drive the change in the industry.” 

Sidaki elaborates: “Our primary (but not 

exclusive) target is black females. The more 


WOMEN IN FINANCE 

interaction we have with black women, the 

more we understand that they too require 

people like us to join the industry. We get 

to delve deeper into issues that affect black 

women in particular that they normally 

ordinarily struggle to get across with other 

advisors. It’s not to say that these kind 

of clients are literally and only requiring 

individuals that look like me, but the fact 

that they now have access to people who 

look like me enables them to expand more 

on issues that they hadn’t necessarily been 

able to in the past. A recurrent topic is the 

issue of so-called black tax – we prefer 

'family responsibility' – and how to navigate 

it if you’re wanting the best for not just 

immediate but also extended family and 

you have the financial ability to do so.” 

Family responsibility opens up new 

financial planning pathways. “We are 

facilitating family meetings, for example, 

where we chat to clients about how to 

navigate their family responsibility and 

chat to extended family members about 

the limitations and the resources that are 

available. It’s about women learning how to 

tell extended family members that there is 

somebody to help, but it doesn’t mean that 

it is an unlimited resource – they too need 

to come to the party and be responsible on 

their end when they’re receiving income. 

It can get touchy. On one occasion I told 

a client that a couple of the people they 

support will have to try a little harder to 

look for employment to help out with the 

situation. Sometimes you do come across 

as quite cold. However, it’s a conversation 

that needs to happen, and it’s quite fruitful 

when we start having those engagements,” 

says Sidaki. 

These encounters entail a lot a financial 

coaching. 

“Often it’s a client’s first encounter with 

a financial advisor, so we’re having to do a 

lot of financial educational programmes 

covering the basics. We are constantly trying 

to direct behaviour. We want individuals 

to not only get invested but stay invested 

too. We are encouraging clients to consider 

opening investment accounts for extended 

family members too,” says Sidaki. 

Financial belief system 

Wealth Creed’s financial planning 

interventions are helping to relieve the 

stress experienced by women who support 

extended families. “All of a sudden they are 

not dealing with ad hoc requests. If you are 

able to build a kitty for that specific purpose 

and that kitty is invested in a clever way, the 

stress or the burden is released or lessened 

to a large extent. Our role is to devise 

strategies to help individuals manage family 

responsibility.” 

Women to whom financial planning was 

quite alien are now embracing it with a will. 

Sidaki refers to an illustrative case: “One 

particular client I had to deal with has two 

siblings who are working but the biggest 

responsibility of funding the rest of the 

family lies with her. When I spoke to her, I 

said, the request is coming – you know you 

will have to fork out some money for your 

parents at some point, whether it’s to fix a 

leaking roof or whatever the case is. Why 

don’t we get your siblings around the table 

to let everyone contribute to a kitty in a way 

that they are able to match? Suddenly the 

entire family got involved proactively and 

her burden was greatly reduced.” 

Financial planning as a tool for social 

transformation and empowerment is 

integral to Wealth Creed’s approach. 

Sidaki explains: “Our logo is the Tree of 

Life, representing the individuals that we 

are advising: the breadwinners footing the 

lion’s share of family responsibility. The 

‘creed’ is the belief system we are creating 

for our clients. Previously ignored by the 

financial services sector, these individuals 

are now coming into money – we want to 

help them manage it and build a legacy for 

their loved ones.” 

In this regard, education is key. “Financial 

literacy initiatives are what can change 

this industry in order to bring everybody 

into the fold, if you will – to include as 

many people as possible in the process of 

financial planning. Everyone deserves a 

financial planner, whether you make R500 

a month or whether you make a million. 

There is definitely huge scope for many 

more financial advisors.” 

For women and anyone else interested 

in furthering their careers in the industry, 

Sidaki advises: “Reach out to people who are 

already doing what you are doing. People 

are always willing to share information. 

When my business partner and I embarked 

on this journey, every time we knocked on 

a door for information or help, people were 

willing. We often reciprocate in turn. You 

would be surprised what help is at hand 

when you actually ask.” 

Sidaki enthusiastically recommends the 

FPI as the go-to forum for people wanting 

more information about the industry. She 

is also an active member of the Women in 

Finance Network:“Kim Potgieter started it 

a few years ago because she also felt the 

need to bring women in the finance sector 

together. We meet every quarter to talk 

about the challenges that women are facing 

in a male-dominated environment and to 

create a safe space for women to share and 

understand what it takes to succeed as a 

woman.” • 

Greg Penfold 


25

PROFILE 

A flight to quality 

Guernsey is a secure and stable financial centre for advisors and clients 

Trading links between South Africa and 

Guernsey go back many years, with a 

number of the country’s big finance 

houses having a presence in the 

island, which is perfectly positioned between 

England and France. That relationship is certainly 

strengthening again as Guernsey is 

seen as a secure and stable financial centre 

for financial advisors and clients seeking that 

comfort in politically turbulent times. 

I have been privileged to visit your country 

in August and September, promoting 

Guernsey’s strengths in international pension 

provision and private wealth services, 

and again most recently to discuss the structuring 

of investment funds. 

I used to be a regular visitor to South 

Africa a decade ago in a previous private 

wealth role. The message has not changed 

greatly – Guernsey is still in the vanguard of 

private wealth solutions for those wanting 

to invest outside of their home country. 

However, I could discern a much stronger 

interest in our message at this time, and 

our delegation was well received in both 

Johannesburg and Cape Town. 

Feedback we regularly received was 

that those already experienced in investing 

outside South Africa were often frustrated 

by poor performance and spiralling costs 

in other jurisdictions. By contrast Guernsey 

meets the need for a well-regulated, secure 

jurisdiction, offering a quality, bespoke service 

with a solid reputation, with a stable and 

sensible cost base. 

The “flight to quality” became the motto 

for our private wealth trip, as it seemed to 

describe perfectly the solution that the 

clients and advisors which we met were 

looking for. 

The search for a reputable tax environment, 

based on economic substance and 

modern standards of transparency, has been 

a big issue in the offshore industry over the 

past two years. Some jurisdictions have taken 

the process more seriously than others, and 

confirmation of Guernsey’s position of compliance 

in these areas, supported by the 

endorsement of international bodies such as 

the OECD and the EU, is a significant selling 

point for us as a jurisdiction. 

The island has certainly benefited recently 

from migrations of structures and companies 

to Guernsey. An industry-wide drive 

to find cost-effective security and stability 

is leading clients to consolidate offshore 

structuring to a single, credible jurisdiction 

such as Guernsey, where existing local regulations 

provide a strong economic substance 

framework set to withstand the ebb and flow 

of the new international substance tide for 

years to come. 

Investment managers in South Africa 

continue to be attracted by the opportunity 

not only to invest outside of the country, but 

also to attract capital from overseas institutions 

and high net worth individuals into 

the country, and are finding that Guernsey 

investment funds are the perfect structures 

to facilitate these ambitions. 

We have discovered on previous trips to 

the country that EU UCITS funds are something 

of a default, but South African clients 

should be aware that there is no need to use 

those structures compared to a Guernsey 

“Class B scheme”, which is quicker and more 

cost-efficient to launch, and offers managers 

far more flexibility and control, without 

the burden of European regulation and 

compliance. 

The value of a Guernsey platform is 

already well known to a number of established 

South African managers, and more are 

picking up on the opportunities offered all 

the time as word spreads 

www.weareguernsey.com 

James Crawford, Business Development 

Director, Guernsey Finance 


INSURANCE INVESTMENT FUNDS TRUST & COMPANY PENSIONS INVESTMENT MANAGEMENT BANKING 

WE ARE SAFEGUARDING 

YOUR FUTURE 

In rising and falling tides, Guernsey’s bathing 

pools have provided families with a safe place 

to bathe for more than 150 years. 

weareguernsey.com 

Similarly our private wealth specialists provide a 

safe, secure, and well-supervised environment 

for you and your assets.

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HUMANS UNDER MANAGEMENT 

Clients are for life 

Behavioural financial advice is not a soft skill 

With artificial intelligence and 

robo-advice expected to 

become a permanent feature 

of the financial planning 

landscape in the future, financial planners 

are going to have to offer clients skills that 

technology doesn’t have. 

The good news is that humans will always be 

able to establish an emotional connection 

that artificial intelligence would be hardpressed 

to achieve. Thus, financial planners 

need to begin redefining their roles to exploit 

their competitive advantage. 

That’s where behavioural finance-based 

advice comes into play. But what is that, you 

may ask? Behavioural finance-based advice 

relies on an understanding of a client’s motivations, 

expectations and, ultimately, behaviour 

in finance and investing. This requires the 

financial planner to extend his ambit into the 

realm of psychology and people skills. 

Incorporating behavioural finance 

insights into financial planning was the topic 

of the Humans Under Management (HUM) 

conference held in Cape Town in September. 

During the day, speakers and attendees 

engaged on how to build on the work that 

great advisors are doing in developing their 

behavioural finance practices. 

Kim Potgieter, director at Chartered 

Wealth Solutions, spoke on why financial 

planning should not be an event, 

but, rather, a relationship full of courage, 

empathy and true connection. While some 

financial planners may dismiss these emotional 

attributes as nice-to-haves and not 

core to what they do when planning for the 

clients’ future, Potgieter highlighted how 

important these will be in setting clients 

up for future financial success. 

She said that they will be needed even 

more going forward and that before a 

financial planner puts a plan together, they 

will need to understand how the client got 

to where they are and understand their 

principles and values. “We need to look at 

a client’s goals and dreams and work out 

how we enable them to have a life with 

more meaning.” 

Potgieter said it takes courage to embrace 

the softer skills needed to become a successful 

financial planner of the future. These 

include vulnerability, empathy and connection. 

She explained that vulnerability is an 

emotion that the client experiences during 

times of risk and financial exposure. Often 

there is shame attached to money, she added. 

The ability to empathise is a critical skill that 

financial planners will need to have, namely 


HUMANS UNDER MANAGEMENT 

the ability to show the client they are available 

to help their client process emotions 

and help them not to feel alone. 

The emotional support extended to clients 

will enable financial planners to foster 

deep connections with their clients and give 

the financial planner the information they 

need to put a financial plan together that 

the client is asking for rather than the one 

the planner thinks they need. 

Abraham Okusanya, Founder and Director 

of Finalytq and Timeline, shared his views on 

how to become an indispensable advisor 

in the face of a mounting global retirement 

challenge. He highlighted that the average 

person in 2019 will outlive their savings by 10 

years. “If left to their own devices, on the current 

trajectory, the overwhelming majority 

are heading for a financial shortfall.” 

He notes that most clients don’t understand 

the difference between risk and volatility 

– a problem most speakers highlighted 

on the day, including the founder of the HUM 

conference, Andy Hart. 

Volatility is the day-to-day fluctuations in 

asset prices, which clients with a short-term 

focus or anxiety about their investments 

interpret as risk. On that basis, they consider 

equities to be high risk and cash low risk. 

However, as Hart pointed out, true risk 

is more difficult for clients to understand. 

If they avoid investing in equities because 

“they don’t want any risk in their portfolio”, 

they could well outlast their money 

because, as both Okusanya and Hart 

pointed out, equities are the asset class 

that give clients the best chance of meeting 

their retirement goals. 

Cash or money market assets, on the 

other hand, may seem risk-free but they 

expose investors to the risk of losing 

their purchasing power over time. 

Hart noted: “There are various flavours 

of risk your client needs to know they are 

dancing with: loss of capital, which is the 

most dangerous flavour of risk; inflation, 

which undermines your purchasing power, 

and volatility, which is the friend of the 

financially literate but the enemy of the 

nervous investor.” 

Okusanya pointed out that there are 400 

known human biases that need to be managed 

and summed up the role of the financial 

advisor as: “Your job is not to manage 

the market but to manage your investor.” He 

advised finding a way to get investors more 

comfortable with volatility so that they can 

calmly get their minds back on the goals. 

All the presentations at the HUM conference 

had one thing in common: the 

soft skills are undoubtedly going to 

be the hard skills in the future. As Rob 

Macdonald, Head of Strategic Advisory 

Services at Fundhouse and co-organiser 

of HUM SA, pointed out in his presentation, 

financial planners who embrace 

these skills, and incorporate a coaching 

way of being into what they do, will help 

clients avoid making costly financial 

decisions when they are fearful about 

declining markets or going through difficult 

life transitions. 

Financial planners who successfully do 

this will have clients for life. • 

Pierre Taljaard, Independent Financial 

Advisor and Consultant and Co-organiser of 

Humans Under Management Conference, 

South Africa 


31

RETIREMENT 

Strategic decumulation 

Retirement means working with what you’ve got 

Discussions around retirement 

typically revolve around having 

the required funds to live comfortably 

once a person stops 

working. This “income for retirement” is 

what most of us save up for during the bulk 

of our lives. 

But what happens when it comes 

time to decumulate that wealth? 

Arthur Case, Brand Marketing Director at 

Evergreen Retirement Holdings, believes 

more must be done to highlight investment 

strategies around this critical aspect. 

Decumulation refers to the stage in your 

life when you start drawing retirement 

income from your portfolio. But one of the 

key concerns for any person approaching 

retirement is whether there is enough 

saved especially given how life expectancy 

has increased over the years. 

So, instead of spending 10 or 15 years in 

retirement this could easily translate to 20 

or 25 years. This puts an enormous amount 

of pressure to ensure people’s funds still 

work for them when they are no longer 

able to or want to. 

“Of course, this is not only a challenge 

in South Africa but globally as well. Many 

who fall into the baby boomer generation 

category still think they will be able to pull 

a rabbit out of their hat during the last 

few years of their working life. With this 

being unlikely, they need to wise up as to 

how to work with the capital they do have 

available,” says Case. 

Perhaps the most concerning aspect 

is that financial advisors often disappear 

during the decumulation phase of one’s 

life. With advisors generously compensated 

for growing assets during the investment 

cycle, they don’t seem to be available 

to offer advice when those funds start 

eroding or need to be spent on buying a 

retirement property. 

“In fact, one of the most pertinent questions 

retirees are asking themselves is 

where they are going to see out their twilight 

years. The where and how they are 

going to live become significant questions 

that will fundamentally impact the rest of 

their lives. Things like whether they want 

to live in the same home or look at downsizing 

to an apartment, or perhaps residential 

or retirement estate are all burning 

questions that they need to work through.” 

Too often, when people are concerned 

about their future, they put their heads in 

the sand and hope it will miraculously work 

out for the best. Sadly, the reality does not 

always work that way. 

When it comes to property, there are 

several models to consider. On the one 

hand, there is the traditional approach 

of buying a sectional title or a freehold 

property in a retirement village. On the 

other, is the increasingly popular life 

rights model. 

“This sees a person buying the right 

to occupy a property for the rest of their 

life. Typically, this is done via a once-off 

payment with the original capital returning 

to the estate of the life right holder when 

they pass away. In other words, the person 

has the security of guaranteed lifetime 

occupation of a property.” 

One of the ways this is different to the 

traditional concept of buying property 

is that the developer of the estate stays 

involved even after the building stops. It is 

all about building a long-term relationship 

with residents. 

In contrast, with the traditional 

model, once an estate has been built, the 

developer packs up and goes on to the new 

project. However, in the case of life rights, 

the developer continues to invest in the 

village to keep it pristine. 

“So, the developer stays involved 

and provides all the services and care 

required, taking out most of the cost and 

risk involved in managing your property. 

Going the traditional route sees the need 

to form a body corporate with residents as 

members that need to manage everything 

themselves. Even if they opt to get a 

professional firm in to assist, the thirdparty 

will rarely be as committed as a life 

rights developer to ensure the success of 

the village.” 

Furthermore, given the importance of 

a long-term decumulation strategy, there 

are flexible pricing models available when 

it comes to life rights. 

“The standard strategy would be to 

pay the purchase price for the unit that 

is aligned to the market value. However, 

if this is unaffordable, then the developer 

can reduce the purchase price and is then 

compensated by reducing the capital paid 

back at the end, so the person’s estate 

might only get back 60% to 80% of the 

original capital. This is certainly proving 

to be a boon for people concerned about 

what will happen to them during the 

decumulation stage of their lives,” he 

concludes. • 

Arthur Case 


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TECHNOLOGY 

Smooth 

transition 

Technology and succession planning 

Whether you are passing on an existing 

business to new blood in the practice or 

selling the business to another financial 

advisor who can take it over easily and 

keep the existing client base from jumping ship, technology 

plays a crucial role in getting your business in 

a position where you can pass it on to your successor 

confidently. 

Two reasons for this are: 

• You need to get the intellectual property and history 

of financial advisor/ client relationships out of 

an advisor’s or the owner’s head and into a form that 

is enduring and can ensure ease-of-transition during 

succession handovers. 

• You need to have reliable and accurate business 

intelligence data that enables the successor to 

understand your clients and your business and to 

ultimately measure the value of your business. 

Centurion Market Makers, an Australian-based specialist 

in succession planning, asked the following 

question: “What do you find to be the hardest thing 

about buying a business?” It elicited the following 

response: “Inadequate preparation of the right information 

by sellers is one of the most common mistakes 

we see when transactions are taking place. It is also the 

number one reason why practice owners fail to maximise 

value, minimise transaction risk and transact in 

less than six months.” 

So the crux of preparing a smooth success plan is 

“How do I access the correct information about my 

business, in my business?” 

Let’s look at some of the common hurdles: 

• How do you demonstrate that you have a technologically 

enabled business if you are using multiple 

tools, but each tool is poorly implemented, and 

manual processes still abound? 

• Multiple tools themselves create the following 

challenges: 

1. Difficulties in understanding your client base and 

how to communicate and transition them 

2. Lack of structured, clean client, investment and revenue 

data to help you understand your business 

3. Absence of intelligent insights provided by this data 

in order to form the basis for a valuation 

4. Lack of a documented, systemised client service 

model that will provide continuity in your absence. 

• How do you formulate strategic decisions in the business 

without informing those decisions with facts, i.e. 

quantifiable data from your practice? 


TECHNOLOGY 

• Is it enough to simply know what is 

going through your bank account? 

• How do you show who your clients are 

and how they rank in terms of AUM and 

income? 

• How do you prove the value of your business 

if you can’t access accurate information 

about your clients and revenue? 

• How do you understand the real cost of 

lack of operational efficiencies in your 

business and how this impacts your 

bottom line? 

As an illustration of what is currently happening 

in many advisory practices, one 

of the selected highlights from our 2018 

independent advisor survey contained 

a question about whether practices use 

proper revenue reconciliation tools. The 

survey answers revealed that very few FSPs 

properly track revenue and fewer still can 

connect revenue with income for management 

information purposes: 

The same survey highlighted some of 

the typical causes of frustration for financial 

services providers relating to data 

management: 

• Poorly maintained client data integrity 

and centralisation 

• Inability to obtain complete and reliable 

management information. 

Data issues are one of the common underlying, 

unidentified denominators for advisors 

changing their technology, rather than 

issues with the system itself. 

The bottom line is you need to understand 

your data in order to understand your business 

and in order to trust what your data 

is telling you, you need to know where it’s 

coming from, where it’s stored and what 

it looks like. 

In most practices multiple software 

tools result in unconsolidated, messy 

data. Over 90% of businesses use multiple 

software tools in combination; the vast 

majority without any integration. Almost 

none have a “one-stop-shop” model. 

Why does the data get messy? Most 

practices have multiple sources of external 

and internal data being fed or manually 

captured into multiple systems: 

• External – Astute, Investment feeds, platform 

information, sometimes by clients 

via client portals 

• Internal – client data manually captured 

into internal systems or onto excel 

spreadsheets leads to errors in capturing. 

The result is that you have multiple versions 

of one client lying in different 

systems and the information and data 

attached to each version is incomplete 

and/or incorrect. Now, multiply that one 

client by 500 or 1000 and you start to 

understand the problem. 

Nina Lowes, Linktank director 

This highlights how important it is get your 

data house in order before thinking about 

succession. Steps the advisor can take to 

truly understand all the metrics of the 

business and solidify the 

practice-management 

process are assessing the 

efficiency of the technology 

and determining 

whether the data is consolidated, 

integrated and 

accurate. 

Achieving accurate 

business intelligence 

using technology and 

accessible data has 

become a cornerstone 

in measuring the success of a business 

strategy and illustrating demonstrable 

business value. The practices 

that get this right will experience a far 

smoother and successful succession, 

be it to planner within in the practice 

or a new owner. • 


35

PRODUCT NEWS 

Planning through 

technology 

Integrated software boosts profitability and the 

customer experience for financial advisors 

opportunities as well as efficiently deliver 

complete and compliant financial solutions 

to their customers.” 

Xplan from Iress offers contemporary, 

cloud-based software which covers all 

aspects of running a successful financial 

advice and wealth management practice. 

This end-to-end offering integrates: 

• Client information and relationship 

management 

• Advice development and modelling 

• Research 

• Advice recommendations and 

documents 

• Advice execution and lodgement 

• Client portfolio management 

• Client engagement and experience 

• Compliance and risk management 

• Practice management 

Richard Bell, Business Development Manager, Iress 

Financial advisors in South Africa 

are turning to technology-driven 

financial planning and wealth 

management software to improve 

the customer experience and automate 

processes as they seek to reinvent 

their businesses in an age of growing 

compliance demands, emerging digital 

channels and rising client expectations. 

“South Africa’s financial advice and 

wealth management industry is changing 

exponentially as a new generation of 

consumers, seeking a better and more 

seamless experience, embark on their 

financial services journeys,” says Richard 

Bell, the Business Development Manager 

at Iress. 

“To improve their profitability, financial 

advisors are looking for unified technology 

platforms that enable them to better 

meet compliance needs, achieve greater 

efficiency, reduce risk and improve speed to 

market. They are also looking for tools that 

help them become more customer-centric. 

”Administration across fragmented 

systems are not only a drain on the 

advisor’s time and profitability, it also has a 

negative impact on the client experience,” 

says Bell. “Shifting to integrated software 

empowers advisors to maximise business 

With the recent Xplan and Silica integration, 

Iress Funds Trading now enables fast, 

efficient and transparent trading of funds. 

Once FICA documents have been verified, 

transactions are automated. The trading 

software also provides access to new 

investments and additions, fund switching, 

client data, payments, fees and reports. 

This means financial advisors can offer 

their clients the broadest range of funds – 

from leading investment managers – at the 

lowest possible cost. Their clients will also 

have online access to their portfolios which 

meets the market demand for self-service 

options and greater transparency. 

Bell says: “Adopting integrated software 

like Xplan allows financial advisors to 

streamline their businesses and shift 

their focus from administration to adding 

value through the advice and service they 

provide their clients.” • 


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ADVERTORIAL 

Sustainable transport 

From efficient trucking to progressive public 

transport solutions, IVECO is an ESG leader 

IVECO (Industrial Vehicle Corporation) 

was born in 1975 from a 110-year-old 

journey of innovation, entrepreneurship 

and partnership that traces back to the 

very beginning of automotive engineering. 

Today IVECO is one of the foremost leaders 

in innovation for sustainable drivelines for 

commercial vehicles and the undisputed 

leader in Natural Power propulsion based 

on methane gas, either as compressed 

(CNG) or liquefied (LNG) natural gas. The 

company is also very active in electrical 

transmission and there is also much investment 

in other renewable sources of energy. 

All this adds up to a very attractive investment 

proposition from an ESG standpoint. 

Blue Chip spoke to Elvis Mutseura, IVECO 

South Africa Product Marketing Manager, 

to find out more about what’s under the 

hood at IVECO. 

“The company’s commitment to 

sustainable development is not limited to 

its products,” Mutseura points out. “CNH 

Industrial, one of the largest capital goods 

companies in the world and the group 

to which IVECO belongs, has for nine 

consecutive years been recognised as 

Industry Leader in Machinery and Electrical 

Equipment in the Dow Jones Sustainability 

Indices (DJSI) World and Europe. We 

live daily by our motto ‘Your partner for 

sustainable transport’. 

For IVECO, climate change is an inescapable 

reality that demands sustainable solutions 

now – an attitude that investors will 


ADVERTORIAL 

continue to benefit from. Moreover, IVECO 

has committed to Africa as a growth point 

for sustainable development. 

“The negative effects of climate change 

are already evident to all of us on a daily 

basis. Consequently, the focus and need 

for sustainable transport will continue 

to increase into the future and will soon 

be a non-negotiable component of any 

transport decision. IVECO is a leader in the 

development of sustainable commercial 

transport solutions and continues to invest 

Elvis Mutseura, IVECO South Africa Product 

Marketing Manager 

strongly in increasing its expertise and 

leadership in this critical area. The investor 

who joins IVECO will reap the benefits for 

a long time into the future. 

“IVECO has shown a strong commitment 

to the African market with one of the 

widest support networks and structures on 

the continent. In South Africa, as a case in 

point, IVECO took the decision to invest 

R600-million into an assembly and manufacturing 

plant because we believe in the 

potential of the African market. 

“Africa has a young and growing population 

and a great need for land transport 

solutions. Unfortunately, there is also under 

investment in rail infrastructure which 

means that road transport plays an even 

bigger role than it does in most developed 

economies. IVECO is well placed to meet 

much of this need,” says Mutseura. 

Africa’s sustainable public 

transport partner 

Recognising that the public transport 

sector is an important enabler of sustainable 

development, IVECO has developed 

the Afriway bus exclusively for the African 

market. 

“The cost and time-efficient transportation 

of commuters from home to their 

places of business and back is an incredibly 

powerful tool to unlocking economic 

activity and an engine for driving the 

same. The amount of productive time 

wasted queuing for transport and then 

again on the roads is simply criminal for a 

developing economy. When one adds the 

level of greenhouse gas emissions that are 

part and parcel of our one-person-per-car 

culture in South Africa, then the importance 

of public transport cannot be understated 

and can never be emphasised enough,” 

says Mutseura. 

“By building the entire Afriway bus 

under our control, we are able to provide 

seamless one-stop-shop support for the 

bus post sale. This is critical in a territory 

as vast as South Africa because a common 

shortcoming when a bus is built by several 

partners is that not all the support required 

is available in the same workshop. We have 

also engineered some useful features into 

our bus such as positioning the engine 

quite far back in the chassis. This has several 

benefits such as better mass distribution. 

Very importantly this position also 

protects the most important components 

of the drivetrain from impact damage in 

the event of a collision – translating into 

reduced maintenance costs. Low fuel 

consumption and the optimal mass distribution 

means that the Afriway offers the 

lowest capital cost per passenger.” 

Minibus taxis are an essential component 

of urban African mobility and an excellent 

arena for companies to practice social 

responsibility. For IVECO this translates 

into safety. 

“The Daily minibus is truly the safest 

minibus on the road today. Optimal driving 

position and comfort are ensured by the 

adjustable steering column and suspended 

driver seat that also incorporates lumbar 


39

ADVERTORIAL 

support. Best-in-class roll-over kit and 

standard fitment airbags for the driver 

and front passengers provide maximum 

protection in the event of an accident. Grab 

handles for the driver and front passengers 

help to prevent slipping while entering or 

exiting the vehicle. Standard fitment cruise 

control with speed-limiting function assists 

the driver to avoid exceeding legal speed 

limits. Driver fatigue is reduced thanks to 

the standard air conditioning, while the 

standard fitment Bluetooth radio and 

multifunction steering wheel facilitate 

hands free telephony thus ensuring that 

the driver keeps focus on the road ahead, 

even while taking a call,” says Mutseura. 

Cleaner air, cooler climate – the road 

ahead 

A lower regulatory standard for fuel 

quality means that African markets are 

unlikely in the near future to benefit from 

the stringent emissions policies that are in 

force in Europe. However, IVECO is doing 

everything it can to hasten the process. 

“In Europe and in much of the developed 

world, legislation calls for vehicles to 

conform to the Euro VI emission standard 

that sets very strict and stringent limits 

on the level of pollutants in a vehicle’s 

exhaust. Concomitant with these emission 

levels is the quality of fuel that must 

be available and be used, which for Euro 

VI diesel engines need to be refined to 

10ppm levels. In South Africa, our legislation 

sets Euro II emission standard as 

the minimum and 500ppm diesel is still 

the fuel that is supplied by local refineries 

and consequently the fuel of choice 

for trucks. A move to better fuel quality 

and stricter emission levels would usher 

in the latest diesel engine technologies 

for better fuel consumption and cleaner 

exhaust. Unfortunately, the capital investment 

required to upgrade local refineries 

to the required standard is quite high and 

we may have to wait a while before we see 

this happen. 

“Fortunately, not all is lost. There is much 

that we are already doing with our vehicles 

and there is much that the operator can do 

to reduce fuel consumption and in this way 

not only save money but also contribute 

to a cleaner environment. If we burn less 

fuel for a given transport task, we produce 

lower amounts of pollutants per unit of 

transport work done.” 

Efficiency is not only about fuel– 

engineering and design play an equally 

important role. 

“Efficiency improvements in drive – 

lines are achieved in many ways that 

encompass better electronic control of 

the combustion process and reduction of 

friction throughout the drivetrain as well 

as more responsive drivetrains in general. 

These interventions result in incremental 

improvements that we continue to deliver 

on with fuel consumption improvements of 

up to 5% from one truck generation to the 

next,” says Mutseura. 

Of course, technology can only achieve 

so much on its own – the human factor is 

of paramount importance. This is reflected 

in IVECO’s approach to training. 

“A step change in efficiency can almost 

always be achieved by better driver 

training and management. The difference 

in fuel consumption achieved by the best 

driver and average driver in a given fleet 

is easily as much as a staggering 15%. The 

worst driver in the fleet is probably costing 

an arm, a leg and several vital organs. By 

focussing on spreading best practice 

though the fleet by way of a healthy 

driving culture and even weeding out the 

drivers who just are not capable of delivering 

the required standard, the operator 

can make enormous financial savings and 

can contribute to a cleaner environment in 

ways that will broaden smiles and increase 

bottom lines. To this end we offer driver 

training solutions to demonstrate and 

teach how to get the best performance 

out of our trucks. Bad driving habits have 

a way of creeping back into the normal day 

to day and this is one of many areas where 

telematics helps to identify issues immediately 

and offer both reliable and objective 

information for training and reinforcement 

of good habits and techniques. Having 

reliable and objective driver performance 

information is also an invaluable tool for 

creating reward systems that strengthen 

the desired driving culture in the fleet,” 

Mutseura concludes. • 


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YOU INVEST IN 

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Fundhouse Investment Advisors (Pty) Ltd is an authorised 

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