NFB Sensible Finance Magazine Issue 21

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Issue 21 July 2012

PERSONAL FINANCE Magazine

UNDRESSED, A RETIREMENT ANNUITY PROVES ATTRACTIVE Evolving from an ugly duckling to a sophisticated swan A LOOK AT NFB'S RANGE OF MODEL PORTFOLIOS Discussing the origins, purpose, and mechanics of these models

BBBEE NEWS The Government's Preferential Procurement Policy Framework is now in place private wealth management

“The best way of preparing for the future is to take good care of the present, because we know that if the present is made up of the past, then the future will be made up of the present.

Only the present is within our reach. To care for the present is to care for the future.�

- Buddha

private wealth management

Providing quality retirement, investment and risk planning advice since 1985. fortune favours the well-advised contact one of NFB's private wealth managers: East London tel no: (043) 735-2000 or e-mail: nfb@nfbel.co.za Port Elizabeth tel no: (041) 582-3990 or email: nfb@nfbpe.co.za Johannesburg tel no: (011) 895-8000 or email: nfb@nfb.co.za Web: www.nfbec.co.za NFB is an authorised Financial Services Provider

sensible finance

ED’SLETTER

editor Brendan Connellan bconnellan@nfbel.co.za

Contributors Mikayla Collins (NFB East London), Shaun Murphy (Klinkradt & Assoc.), Michelle Wolmarans (NFB Insurance Brokers), Samkelo

a sensible read

Zwane (Glacier by Sanlam), Andrew Duvenage (NFB Gauteng), Philip Bartlett (NFB East London), Grant Berndt (Abdo & Abdo), Debi Godwin (IE&T), Robyne Moore (NFB East London), René Grobler (Investec Asset Management), Robert McIntyre (NVest Securities), Travis McClure (NFB East London).

Advertising Robyne Moore rmoore@nfbel.co.za

layout and design Jacky Horn TA Willow Design jacky@e-mailer.co.za

Address

Photos used in this magazine BigStockPhoto.com

NFB Private Wealth Management East London Office NFB House, 42 Beach Road Nahoon, East London, 5241 Tel: (043) 735-2000 Fax: (043) 735-2001 E-mail: nfb@nfbel.co.za Web: www.nfbec.co.za

The views expressed in articles by external columnists are the views of the relevant authors and do not necessarily reflect the views of the editor or the NFB Private Wealth Management. ©2012 All Rights Reserved.

No part of this publication may be reproduced in any form or medium without prior written consent from the Editor.

I

was fortunate enough to literally experience a life changing experience recently when I was invited by Rotary International on what is known as a Global Study Exchange Programme where a team of young (relatively speaking) professionals are invited overseas to meet with people in similar vocations to themselves as well as to do presentations on South Africa and experience a cultural exchange.

Over a period of about 4 weeks, our team travelled mainly around Vermont and New Hampshire in the USA as well as Quebec in Canada doing presentations, visiting many different towns, staying in the homes of some wonderful American and Canadian Rotarians, meeting countless numbers of people and doing vocational visits to a number of different organisations. And all of us took back with us some very similar lessons.

Firstly, Americans are not the cold, materialistic and ignorant people that the media often makes them out to be – at least certainly not the ones that we met - quite the opposite in fact. We met incredibly kind, generous, interesting and interested warm people. What was heart warming was the genuine interest in South Africa and the desire to see our country. Even more heart warming were the extremely positive comments from many who had already visited South Africa.

Secondly, I believe that we can learn from the respectful way that Americans treat each other as well as the way that they treat foreigners (residents and foreigners). After visiting a refugee centre, I couldn't help but think that from what I had seen that day, Americans treat their refugees better than we treat our own citizens.

And thirdly, we can give ourselves a pat on the back in terms of our legislation, our private sector and the professional way business is conducted (and our excellent restaurants)! Although all of the above operate efficiently and professionally in the USA, when comparing NFB to a number of similar operations that I visited, we are a world class organisation offering world class service and employing world class individuals!

I left a better person, having experienced wonderful warmth, but also very pleased to return back to a country I spent a month bragging about! And rightfully so.

Brendan Connellan - Editor and Director of NFB Email your full name to nfb@nfbel.co.za to subscribe to NFB's free economic electronic newsletters. another aspect of our comprehensive service

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Photo BigStockPhoto.com

SENSIBLE CONTENTS

nfb sensible finance

July 2012

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4 A NEW BENEFIT TO PROVIDE FOR LONG TERM FRAIL CARE A look at Altrisk's new product. By Mikayla Collins, Private Wealth Manager - NFB Cape Town.

6 BBBEE NEWS The Government's Preferential Procurement Policy Framework is now in place. By Shaun Murphy, CA (SA), Partner - Klinkradt & Associates.

8 PRODUCTS LIABILITY COVER AND THE CONSUMER PROTECTION ACT What are the implications for business owners? By Michelle Wolmarans, Manager NFB Insurance Brokers (Border).

9 GREATER RETURNS, LESS DISTRESS A solution enabling access to growth assets, while employing a strategy to cushion against extreme downside volatility. By Samkelo Zwane, Investment product specialist at Glacier by Sanlam.

11 A LOOK AT NFB'S RANGE OF MODEL PORTFOLIOS Discussing the origins, purpose, and mechanics of these models. By Andrew Duvenage, Director/Private Wealth Manager - NFB Gauteng,.

12 UNDRESSED, A RETIREMENT ANNUITY PROVES ATTRACTIVE Evolving from an ugly duckling to a sophisticated swan. By Philip Bartlett, Private Wealth Manger - NFB East London.

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14 RIGHTS TO A LIFE POLICY The importance of ensuring that provisos are built into the nomination of beneficiaries. By Grandt Berndt - Abdo & Abdo.

16 WHAT IS A TESTAMENTARY TRUST? A closer look at the testamentary trust. By Debi Godwin, Director - Independent Executor & Trust.

17 YOUR FINANCIAL ADVISOR – IS HE/SHE “FIT & PROPER”?

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Some of the stringent requirements imposed on Financial Advisors. By Robyne Moore - NFB East London.

21 CURRENT ENVIRONMENT DEMANDS THAT RETIREES ADOPT WIDER PERSPECTIVE The need for diversity and flexibility. By René Grobler, Sales Director - Investec Asset Management.

22 INCOME IS IMPORTANT TO A LISTED SECURITIES PORTFOLIO Building your investment portfolio around your specific investment needs. By Rob McIntyre, Portfolio Manager - NVest Securities.

24 Q &A You ask. We answer. Advice column answering your investment, personal finance, life and/or risk insurance questions with Travis McClure, Private Wealth Manager NFB East London.

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SENSIBLE BENEFIT

A NEW BENEFIT TO PROVIDE FOR

LONG TERM FRAIL CARE A look at Altrisk's new product. By Mikayla Collins, Private Wealth Manager NFB Cape Town.

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ost people intend to rely on their pension, provident and retirement annuity savings as well as their medical scheme to cover their financial needs in retirement.

In most cases, there is no plan in place to provide for the extensive costs of frail care, and should the need arise, it can become a costly and restrictive problem that is emotionally draining for those concerned as well as their families.

The current state of frail care in South Africa is dire due to the deterioration of public facilities and escalating costs of private care which render it unaffordable for the majority of the country's elderly. In 2010, Old Mutual estimated the costs for staying in a retirement home at between R4 500 and R16 000 a month. The alternative of employing a private caregiver in your home for at least R300 a day, an additional R300 per night and double this on Sundays, will cost around R20 000 per month.

Reportedly only 13% of persons 65 and older have access to a medical aid fund and even then, it is unlikely that a medical aid will pay for all related costs. While your medical aid may cover some of the cost of frail care, these are likely to be limited to particular health events or severe illnesses. If you become frail and incapable of living independently as a result of old-age then you are unlikely to enjoy medical scheme cover for the type of assistance you will need, as individual schemes cannot afford to offer rich benefits for this kind of predicable, long-term, low-grade care.

The burden then falls on loved ones or family

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members and makes a difficult time that much worse.

To provide for this need, Altrisk have created a benefit to protect you against this eventuality. The benefit is called the “Long Term Care Benefit� and provides that if you require frail care after you reach the age of 65, you will receive a monthly income intended to cover the resulting costs.

The income will be set at the level you require, with the maximum being the lower of 100% of your previous earnings or R 30 000 per month.

If you are unable to perform three or more of the seven defined activities of daily living then you would meet the definition of the long term care benefit and qualify to begin receiving your income.

Once you are admitted to a registered frail care, hospice or nursing home facility or require such care from a registered medical professional, Altrisk will apply a one month waiting period and begin paying benefits thereafter.

This type of cover can be a useful addition to planning for your own future needs or those of your parents in the case where you would become responsible for the payment of their frail care expenses.

Possibly the most valuable advantage of this cover is the peace-of-mind in knowing that your financial needs will be provided for at the time when you can no longer provide for yourself, and you will be able to afford the best possible care, which, when needed, will be invaluable.

SENSIBLE ADVICE

BBBEE News The Government's Preferential Procurement Policy Framework is now in place. By Shaun Murphy, CA (SA), Partner - Klinkradt & Associates.

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ith effect from the 7 December 2011, the new procurement policy of government is in place and the following has become applicable.

Every organ of state / public entity must take into account and, as far as is reasonably possible, apply any relevant Code of Good Practice issued in terms of the B-BBEE Act in: l Determining qualification criteria for the issuing of licences, concessions or other authorisation in terms of any law l Developing and implementing a preferential procurement policy l Determining qualification criteria for the sale of state-owned enterprises and l Developing criteria for entering into partnerships with the private sector.

The new basis of allocation of points for Government procurement / tender purposes is as follows: 1. If the value of the contract is between R30 000 and R1 million (inclusive of all applicable taxes), the tender will be scored based on an allocation of 80 points for price and 20 points for the tenderers BBBEE scorecard level.

2. If the value of the contract is above R1 million (inclusive of all applicable taxes), the tender will be scored based on an allocation of 90 points for price and 10 points for the tenderers B-BBEE scorecard level.

It is important to note from this that the only basis on which a tender is to be decided, in terms of the policy, is based on your B-BBEE level. This now makes it even more important for businesses of all sizes who transact with Governmental organisations or organs of state and other public entities to have a valid B-BBEE certificate in place.

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Property Sector Code – effective 1 June 2012 The new property sector codes have been gazetted with affect from 1 June 2012 and whilst we will not deal with the detail behind the sector code we have extracted some of the main highlights that may interest persons directly or indirectly involved in the property industry. l There are now 8 elements to be scored on with the introduction of Economic Development as the 8th component and thus the new scorecard is out of a higher number of points; l The new total scorecard points is 107, but is not applicable to the whole sector, seemingly only investors and developers; l Estate agents are measured on a scorecard with a total of 92 points; l Property owners/ landlords are measured on a scorecard with a total of 77 points; l Exempted Micro Enterprise levels for Estate agents and property brokers is set at R1,5 million; l Estate Agents and property brokers have a new QSE (Qualifying Small Entity) turnover threshold level of between R2,5 million and R35 million; l The QSE target for all other sector categories has remained as contained in the standard codes at between R5 million and R35 million.

It seems as though the powers that be are on a mission to complicate the business sectors lives with on-going compliance and new targets arriving continuously. There are now numerous sector charters in place and quite a few more in the pipeline.

For any additional information and all B-BBEE related queries please feel free to contact me on shaun@kliwal.co.za

SENSIBLE RIGHTS

PRODUCTS LIABILITY COVER AND THE CONSUMER PROTECTION ACT What are the implications for business owners? By Michelle Wolmarans, Manager - NFB Insurance Brokers (Border).

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onsumers have always been able to take action and seek remedy against the manufacturer of a defective product in terms of common law. However, common law requires that the complainant must establish a causal link between the defective product and its negligent manufacture and the harm that was suffered as a result of the negligent conduct. This is often impossible to prove, and if it is possible to prove, that a causal link exists; the cost to obtaining this evidence is often prohibitive.

This situation changed dramatically on the 01 April 2011 when the Consumer Protection Act no 68 of 2008 came into effect. The purpose of the Act is “to promote and advance the social and economic welfare of consumers in South Africa” (Section 3(1)). The Act introduces the following consumer rights with regards to the purchasing of products: l Disclosure and information l Fair and honest dealing l Fair value, good quality and safe products l Suppliers need to be accountable to customers l Consumers have a right to be heard and receive compensation if treated unfairly or harmed by defective products.

What are the implications for business owners?

The Act introduced the concept of “strict” liability on the supplier of goods. Essentially, this means that the consumer need only prove a causal link between the defective product and harm suffered.

The need to establish and prove negligence on the part of the supplier is no longer required. The Act has also simplified the redress process. Any person in the supply chain – producer, importer, distributor or retailer - is jointly and severally liable. The consumer no longer has to establish who in the supply chain was liable for causing the defect and as a result can hold any party responsible.

A business that does not comply with the Act can suffer financial losses brought about by

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excessive legal defence costs, compensation to consumers and even fines as large as 10% of annual turnover. Statistics reflect that call centre complaints to the National Consumer Commission have exceeded 28 000 per month which is a 250% increase in activity in the last four months. This reflects that consumers are becoming increasingly more aware of their rights.

This increased awareness could result in many more claims being made against business owners.

A recent court case in Munich, Germany, where the Higher Regional Court rejected the appeal and upheld the ruling of the court of first instance highlights the implications of “strict” liability that have now been incorporated into our law. The circumstances were that a school headmaster presented a bottle of wine to a teacher. The bottle exploded as he handed it over and a shard of glass flew into the teacher's right eye. The court ruled in favour of the plaintiff against the defendants being the end-producer, bottle filler and bottle manufacturer despite the fact that micro fractures which caused the explosion could occur in several ways at an atomic level and are not identifiable even with the use of a microscope.

The plaintiff did not have to prove negligence, but merely had to prove that the product failed to offer the safety standards that could reasonably be expected and she could choose to hold numerous players in the supply chain liable.

In order to minimise their risk business owners that fall within the ambit of the supply chain need to ensure that they have adequate products liability cover in place. If you require advice or quotations in respect of products liability, please contact Richard Clarke or Steve Pope at our short term division for assistance.

insurance brokers (border)(pty)ltd.

SENSIBLE RETURNS

Greater returns, less distress A solution enabling access to growth assets, while employing a strategy to cushion against extreme downside volatility. By Samkelo Zwane, Investment product specialist at Glacier by Sanlam

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very investor would like to maximise his return with very little volatility. However, the fact is that asset classes which have a higher return tend to also have higher volatility, so the higher the return you expect from an asset, the higher the volatility you should be prepared to accept.

Equities, which have the highest expected return over the long term compared to other asset classes, also have the highest volatility. Cash on the other hand, which has the lowest volatility, has the lowest expected return over the long term.

Looking at the asset allocation of investors who are investing for the long term, a disturbing trend is observed: although investors in retirement annuities are investing over a time frame of 20 to 30 years, as much as 44% of these investors have less than 50% allocated to equities.

A shocking 40% of persons under the age of 40 saving through a retirement annuity also have less than 50% allocated to equities. Surely an investor who is 20 years from reaching his retirement goal should have a greater proportion in equities.

The trend gets worse post-retirement: about 70% of these investors (in the 55 to 65 age group) have a smaller than 50% allocated to equities.

Taking into account that the life expectancy of an investor aged 60 is about 25 years, and that of an investor aged 70, 17 years, this investment situation is not ideal. Investors in investment linked living annuities (ILLAs) - a post-retirement product - are in a de-cumulation stage, which means that their income comes from accumulated funds, which in this case is their ILLA. About 54% of the investors aged between 60 and 70 are withdrawing more than 8% p.a. from their ILLAs as an income. A low allocation to equities coupled with such a high withdrawal rate spells trouble for these annuitants.

The fact is investors are averse to volatility.

There are a few reasons for this, but we will only focus on two: the first is that investors use their salary to invest for the long term, but their salary is

not guaranteed. They suffer a reduction in their salary due to ill health, demotion, an economic recession or even retrenchment. Secondly, investors' expenditure is very variable. Investors spend most of their money repaying mortgages and car loans, purchasing food, and paying for children's education and medical aid. All these factors result in investors being risk averse. This results in investors avoiding very volatile investments, but then also forfeiting the alpha associated with more volatile assets.

Glacier by Sanlam has created a solution which enables clients to access growth assets such as equities, while employing a strategy to cushion their portfolio against extreme downside volatility.

This essentially means that clients will benefit from the expected higher return of volatile investments and at the same time reduce the risk of sudden sharp drawdowns associated with volatile investments. More importantly, the strategy is personalised according to an investor's risk profile.

Using the Glacier P² (Personalised Preservation) Strategies, an investor will be able to limit losses when the markets are falling and benefit from the participation when markets are rallying.

This is good news for investors in retirement annuities, who can now afford to allocate more to equities (subject to the limits of Regulation 28) in their portfolio without the fear of losing accumulated funds due to sudden market falls. The investor can expect higher returns in the long run than the returns he would have received investing in bonds or cash. For investors in ILLAs it also means that they can now afford to maintain their withdrawal rate without the fear of eating into capital.

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Image credit: 123RF Stock Photo

SENSIBLE PORTFOLIO

A look at NFB’s range of Model Portfolios In Oct 2011, NFB in conjunction with NFB Asset Management, launched a range of model portfolio solutions for its clients. We thought that it would be opportune to spend some time discussing the origins, purpose, and mechanics of these models.

By Andrew Duvenage, Director/Private Wealth Manager - NFB Gauteng.

The background to the fund: investors' dilemma Selecting from South Africa's ever-expanding universe of unit trust funds and then blending these funds together in a way that is sensitive to investor's needs as well as current market conditions has become an increasingly difficult challenge. To contextualise this, there are currently around 750 unit trust funds available in South Africa, despite the fact that there are only around 350 shares on the JSE (of which around 100 are actually large enough and liquid enough to be used in unit trust type portfolios). This massive amount of choice that investors are faced with is problematic in that there are funds that have produced excellent results, while some have had less than satisfactory outcomes. Selecting and blending the top performing asset managers is a significant challenge. Furthermore, the challenge for investors is to ensure that the selection and blend of funds used is blended favourably, and proactively managed over time to produce optimal long term performance and results. Ensuring that these solutions remain administratively and cost efficient makes the challenge that much harder.

The response: Model Portfolio solutions In response to this, NFB together with NFB Asset Management, have created a range of riskprofiled investment solutions that blend together the country's leading portfolio managers and

administration systems.

NFB advisors aim to provide you with holistic personalized financial planning services, part of which is focused at evaluating your appetite for risk and determining your overall investment objective in an effort to determine the most appropriate Model Portfolio or combination of Model Portfolios for you.

NFB Asset Management, within a rigorous Investment Philosophy, will be providing portfolio management expertise, most notably asset allocation, fund selection and portfolio construction to the Model Portfolios.

The elements of a model portfolio =

Asset Allocation is conducted within a robust framework that seeks to identify over- and undervalued asset classes and then to under- or overweight these depending on market conditions and the benchmark of the Portfolio. = Fund Selection seeks to identify the country's best fund managers from the country's best fund management houses through quantitative and qualitative screening tools and then to do so on an ongoing basis. = Portfolio Construction blends asset allocation and fund selection for a given set of Portfolio objectives and requirements.

The Range Of Model Portfolios =

The Cautious Portfolio is a low risk solution with the objective of providing investors with ...continued on page 20 sensible finance july12

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Undressed, a retirement annuity proves attractive The naked retirement annuity - evolving from an ugly duckling to a sophisticated swan. By Philip Bartlett, NFB East London, Private Wealth Manager

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t is often that I witness the gun shy response to the words “retirement annuity”. The pain of a product sold for profit by a commission hungry salesperson, subject to terms and escalation with few, if any, asset class options, and the tale of woe handed down from father to child, only to be blindly upheld as the “trick” to miss.

One would have to concede the point that an industry previously measured by unregulated sales has probably been responsible for an entire generation of investors being conditioned to run for the hills when hearing the words “retirement annuity”.

However, it is not the structure of the product that gave birth to the cynicism, but rather the contractual terms, escalating premiums, penalties, limited fund choice, and failure on part of the advisor to marry the client's investment objective with an appropriate solution.

In the “good old days”, the product providers paid their sellers an upfront commission based on the term of the investment - the longer the term the bigger the commission. The longer the term, the more likely a default on contributions became. A default would result in breach of contract, and lo and behold, a breach would give rise to a penalty. Importantly, these costs are attributed to the contract one entered into with the product provider and are not born out of any complexities associated with the retirement annuity structure.

The truth of the matter is that investment planning involves a strategy required to accommodate the journey of the investor's life. The need for flexibility must be considered and catered for. What with the continued evolution of financial products, and prices, it would be naive to take and hold a position from any one point in time to retirement.

Remove the contractual terms and the naked

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retirement annuity evolves from ugly duckling to sophisticated swan, challenging the greatest cynic to review his stance and offering significant advantages when it comes to tax and estate planning.

What isn't to like about an investment that is = Protected from creditors, = Allows for tax deductible contributions up to 15% of

non pensionable income, = Gives you the flexibility of making single and/or

regular investments, and allows one to stop, start, or vary your contributions at any time without penalty, = Allows for tax free growth on all capital within the structure – that means no CGT, no dividends tax, and no income tax. In today's fiscal context, the latter is very significant, = On the death of the investor, lump sums received by beneficiaries are exempt from estate duty, = Beneficiaries can also take advantage of tax free amounts in the event that contributions had previously been disallowed (this will become clear by way of later example).

OK, so where's the catch? = Well you can't retire from the investment until the

minimum age of 55 years = And you are limited to withdrawing 1/3 of the

capital, which is subject to specific tax tables (as per below), and utilising the remaining 2/3 for income by way of compulsory or living annuity.

Retirement Benefit Taxable Portion Taxable income Rate of Tax R0 - R315,000 0% of taxable income R315, 001 - R630,000 18% R630, 001 - R945,000 R56, 700 plus 27% over R630,000 R945, 001 & above R141, 750 plus 36% over R945, 000

SENSIBLE INVESTOR Is the restriction on liquidity a real show stopper?

The underlying question must be: why would you want to access all the funds? What are you going to do with this money? Retirement is about the generation of income off a growing capital base, right? Why then would you withdraw all your capital, erode it by paying tax, and then invest it in a fully taxable investment in a bid to effect growth and generate income, pay CGT, dividends tax and income tax, die and then pay estate duty and executors fees!! It seems self defeating.

Although dictated by legislation, the restriction to liquidity actually prescribes the path you ought to follow anyway, which is to preserve the tax free status of your capital by transferring to a living annuity, prevent the eroding effects of CGT and dividends tax, limit income tax and avoid paying estate duty where legitimately possible.

So restricted or not, one ought not to withdraw the capital anyway.

Further, the myth that retirement annuities can only invest in old school, non-transparent portfolios can also be put to bed. It is now possible to have your retirement annuity invested entirely into a managed share portfolio, and actively participate in the management thereof. Besides actual bricks and mortar and other private interests, there are very few investment assets that can't be accessed through a retirement annuity.

Retirement Annuities as an Effective Estate Planning Tool There are many administratively onerous and complex strategies offered to counter the eroding effects of estate duty, be it an inter vivos trust, the use of a usufruct, donations or a Section 4q – spouse nomination. A retirement annuity offers a very simple and very effective tool in this regard. The full value is paid out on death and is free of any estate duty. Add the benefit of disallowed tax deductible contributions being paid out free of tax to the beneficiary, and one can literally calculate the savings.

By way of example: Mr A has a vast estate and wishes to reduce his estate duty liability. He donates R3 million to a retirement annuity, R450 000 is deductable (assumed) and the balance is not allowed as a tax deduction. He dies two years later, with a retirement annuity value of R3 600 000. The estate implications for his contribution are as follows: = The full amount plus untaxed growth will pay out directly to his beneficiaries, assumed value of R3 600 000; = There is no Estate Duty of 20%; = There are no Executor's fees of up to 4%; = Net saving of up to R864 000 for the estate;

= The tax-free portion of the payout to the

beneficiaries is R315 000 plus any disallowed taxdeductible contribution. The tax-free portion is therefore R315 000 + (R3 000 000 - R450 000) = R2 865 000; = The taxable portion of R735 000 will be taxed in accordance to the tax tables above = R179 550; = The amount realised by beneficiaries would therefore be R2 865 000 + (R735 000-R179 550)= R3 420 450 Had Mr A not contributed to the retirement annuity, the following would be realised by his beneficiaries: = The growth from R3 000 000 to R3 600 000 would be taxed. Let's assume a conservative 20% over the 2 years = R120 000; = Less Estate Duty at 20% = R696 000; = Less Executors Fee at 4% = R144 000; = The amount realised by beneficiaries would therefore be R2 640 000 In this example, the beneficiaries, through the use of the retirement annuity come out R780 450 better off.

Retirement Annuities as Effective Investment Planning Vehicles for Business Owners Most small business owners earn non-retirement funding income i.e. they are not salaried and paying into a pension or provident fund. Hence, 15% of their gross earnings is allowed as a tax-deduction if contributed to a retirement annuity. A business owner who generated an annual income of R1 000 000 could contribute a taxfree annual amount of R150 000 into a portfolio that will grow tax free. There is indeed a tax at withdrawal, but at a reduced rate when compared to the normal income tax tables. If the investor's tax-deductible contributions amounted to a value of R2 835 000 at retirement, he could withdraw the R945 000 and pay only 15% tax (see above tax tables) on the income, as opposed to up to 40% paid by the upper income bracket. That being said, he could avoid paying tax entirely by transferring the full amount to a living annuity. Apart from the huge tax savings available, the funds are also protected against insolvency, allowing the business owner further security.

Taking the above into consideration, it can't be denied that the retirement annuity structure offers an investor a very effective vehicle to avoid the depletion of retirement capital by way of taxes and estate duty.

The compounded savings is indeed significant, if you take the time to do the numbers. The bad reputation may well have been warranted against the dressed up retirement annuity tarts of the past, but in its naked form, the modern retirement annuity proves to be quite a catch!

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SENSIBLY LEGAL

RIGHTS TO A LIFE POLICY The importance of ensuring that provisos are built into the nomination of beneficiaries.

By Grandt Berndt - Abdo & Abdo.

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he rights of a beneficiary to a life policy has recently been considered by the Supreme Court of Appeal.

As is the norm, the policy holder or insured, insures his / her life under the policy with a third party named as beneficiary to receive the benefit on the death of the policy holder.

In the case before the Supreme Court of Appeal, the policy holder had nominated her mother as beneficiary in the event of her death, but reserved the right to change or cancel the nomination at any time. A beneficiary nominated is usually capable of being cancelled or amended by written notice to the insurance company. The mother (beneficiary) died on 26 May 2007 and the policy holder (daughter) died on 12 August 2007, at which date the proceeds of the policy then fell due, but without the daughter having nominated another beneficiary. The Executor in the estate of the mother claimed the proceeds of the policy and took the matter to the High Court.

The High Court (one judge) rejected the claim and ordered that the proceeds of the policy form part of the daughter's estate. The judge held that upon the mother's death, her nomination and right as beneficiary ceased to exist.

This was then taken on appeal to the full High Court (three judges) who took a different view.

They held that once the beneficiary accepted nomination and the insurance company recorded this nomination that a binding agreement between the beneficiary (mother) and the insurance company came into effect. They then held that the executor of the mother's estate was entitled to accept the benefit of the insurance policy, as her nomination as beneficiary had not been cancelled

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by her daughter before her death. Thus the court reasoned there remained a valid agreement between the mother, as beneficiary, and the insurance company.

This judgment was then in turn taken on appeal to the Supreme Court of Appeal, where the court agreed that the beneficiary does not acquire any right to the proceeds of the policy during the lifetime of the policy holder and that it is only on the policyholder's death that the beneficiary is entitled to accept the benefit of the policy, with the insurance company then being obliged to pay the proceeds. Until the death of the policy holder, the beneficiary only has a hope or expectation of receiving the proceeds and has no right to any benefit.

Therefore if the beneficiary predeceases the policy holder, he/she would lose his/her rights to any benefit from the policy. Simply put, when the mother died, her hope to receive the proceeds died with her. The court held that the policy holder had the right to change the beneficiary, but until the death of the policy holder, the beneficiary has no claim. The fact that the policy holder did not change the beneficiary was irrelevant, as the beneficiary's hope or expectation expired at the time of her death. Thus the proceeds of the policy were payable into the estate of the policy holder (daughter).

It is thus important to ensure that provisos are built into the nomination of beneficiaries or the nomination takes into account simultaneous death, or death within a close period of time, of both beneficiary and policy holder, as failure to do so could result in an inequitable and unanticipated distribution of one's assets.

SENSIBLE PROTECTION

What is a Testamentary Trust?

A closer look at the testamentary trust. By Debi Godwin, Director Independent Executor & Trust.

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testamentary trust (sometimes referred to as a will trust) is a trust which arises upon the death of the testator, and which is specified in his will (testamentary trust literally means a trust in a will). A will may contain more than one testamentary trust, and may address all or any portion of the estate. In simple terms, testamentary trusts are most often formed for young adult children or minor children to help administer funds should the parents die. These funds may come from the sale of the estate, life insurance policies, or the sale of other valuable assets.

Is this the same as a Family Trust?

No; testamentary trusts are very different from inter vivos or family trusts, which are created during one's lifetime. A testamentary trust is a legal entity created as specified in a person's will. In practical terms, testamentary trusts tend to be driven more by the needs of the beneficiaries (particularly minor beneficiaries) rather than by tax considerations, which is often the case with inter vivos trusts.

What four parties are involved in a testamentary trust? l The Testator i.e. the person who specifies that the trust be created, in his/her will; l the trustee, whose duty is to carry out the terms of the trust; l the beneficiary(ies), who will receive the benefits of the trust; l although not a party to the trust itself, the Master of the High Court is a necessary component of the trust's activity. It oversees the trustee's handling of the trust.

What is a Trustee?

A trustee's duty is to look after the trust for a certain

period of time. As the name implies you need to be able to trust your trustees. Normally, the trustee relationship is in effect until the minor reaches a certain age or has finalised his/her tertiary education. These terms, however, can be flexible and customized to meet the parent's wishes. In addition to providing for minors, a testamentary trust can also be used to provide for those who have disabilities or are unable to provide for themselves.

It should be noted that with a testamentary trust the trustee administers the assets until the conditions for disbursement are met. Until that time, the trustee has a great amount of control and power over the assets and how they are disbursed.

The court will only oversee the administration of the process, which means it is important to make sure the person appointed as the trustee is someone who can be trusted for the long term.

The Trustee must act with all the care, diligence and skill that can reasonably be expected of a person who manages the affairs of another. He must avoid conflict between his interests and those of the trust beneficiaries and must keep the trusts assets separate from his own.

What are the advantages of a testamentary trust? l A testamentary trust provides a way for assets

devolving to minor children to be protected until the children are capable of fending for themselves. l A testamentary trust has low upfront costs, usually only the cost of preparing the will. l A testamentary trust not only protects assets it also protects beneficiaries. A beneficiary with say, for example, a gambling or addiction problem would not have direct access to the capital of the Trust, and the Trustees are then in a position to monitor the income paid to the beneficiary.

At Independent Executor & Trust we are committed to personalized service and individual attention. With combined experience of 65 years, we specialize in the Drafting of Wills, Administration of Estates & Testamentary Trusts.

49 Beach Road, Nahoon, East London, 5241 | PO Box 8081, Nahoon, 5210 Telephone: (043) 735 4633 Fax: 086 693 3356 / (043) 735 3942 | e-mail: iet@iet.co.za

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sensible finance july12

SENSIBLE ADVICE

YOUR FINANCIAL ADVISOR

IS HE/SHE “FIT & PROPER”?

Some of the stringent requirements imposed on Financial Advisors. By Robyne Moore - NFB East London.

C

onsumers are frequently reminded to only deal with financial advisors who comply with the regulatory requirements as set out by the Financial Services Board (FSB), and who conduct themselves in a professional manner. This issue has been highlighted once again with the recent collapse of a property syndication, in which a financial advisor has been ordered by the Ombud for Financial Services Providers, Noluntu Bam, to compensate his client for the loss. There have been a number of such cases since June last year.

With the introduction of more stringent “Fit and Proper” requirements in terms of the FAIS Act in 2008, the bar was raised for any individual wanting to operate as a Financial Advisor.

As one of the largest, independent brokers in South Africa, NFB not only strives to be fully compliant at all times with all regulatory requirements, but also aims to service our clients with the utmost professionalism.

So is your financial advisor “Fit and Proper”?

Regulatory requirements include the following: l Honesty and integrity: your financial advisor's

personal characteristics become critical factors when considering to hand over your financial dealings to him/her. As a client, you expect your financial advisor to advise you honestly and openly with regard to financial services and products.

According to the Fit and Proper requirements an FSP (Financial Services Provider) may not appoint a representative if they have been found guilty by a court of law, a regulatory or supervisory body of dishonesty, negligence, fraud, acting unprofessionally or dishonourably, or in breach of their fiduciary duty. Honesty and integrity is an ongoing process and financial advisors currently have to declare on a quarterly basis to the FSP, that their status has not changed. l Competency requirements: before a financial advisor is appointed by an FSP, they are required to satisfy specific competencies; the minimum experience and qualifications a representative must meet are prescribed by the Fit and Proper requirements. In order to standardise the minimum

competency requirements in the financial services industry, it is now a requirement of the FSB, that every representative pass the Regulatory 1 and 2 examinations. The RE1 exam will test the representative's factual knowledge and understanding of relevant legislation and the SA regulatory framework eg. Code of Conduct, FAIS Act and FIC Act. The RE2 exam will test the knowledge financial advisors have of specific financial products in which they provide advice.

Once financial advisors have passed the relevant RE exams, they would need to take part in Continuous Professional Development (CPD) in order to develop and maintain a certain standard of professional competence. They are at all times required to act with due skill and diligence, and in the best interest of the client. l Operational ability requirements: this requirement applies to all categories of Financial Services Providers. There are a number of requirements/conditions which need to be in place at all times in order for an FSP to remain operational and to fulfil the responsibilities imposed on them by the FAIS Act. l Financial soundness: this requirement is applicable to the FSP itself and not the financial advisors. The FSP must at all times be holding assets which exceed their liabilities, and depending on the category of the FSP, they must maintain liquid assets at a set level.

At NFB we pride ourselves on our strong compliance focus, and in the professional, expert manner in which our financial advisors deal with their clients. Not only do we ensure that our financial advisors meet the minimum competency requirements as laid out by the Financial Services Board, but most of our advisors have well exceeded those requirements – most new advisors appointed have postgraduate degrees, undergo a one year internal development programme and are required to write and pass their Postgraduate Diploma in Financial Planning in order to obtain the well respected Certified Financial Planner certification. We are committed to keeping abreast of any and all changes within the financial services industry, thereby constantly offering you, our client, our best attention at all times. sensible finance july12

17

SENSIBLE PORTFOLIO

A look at NFB’s range of Model Portfolios...continued from page 11 conservative capital growth. The maximum equity exposure is 40%. = The Balanced Portfolio is a moderate risk solution with the objective of providing investors with moderate capital growth. The maximum equity exposure is 75%, with a long-term neutral allocation of 60%. = The Flexible Portfolio is a moderate to high risk solution with the objective of providing investors with long-term capital growth. The maximum equity exposure is 75%, with a long-term neutral allocation of 70%, and with a larger risk budget is a more aggressive implementation of our asset allocation process. = The Income Portfolio is a low risk solution with the objective of providing investors with a high potential level of risk-adjusted income. The maximum equity exposure is 20%.

the long term. That is to say that the use of multiple fund managers is aimed at producing higher levels of return for the client, at lower levels of risk, than what is typically offered by competitive propositions in each risk category. While the models have only been in existence for 6 months, it is possible to back test the results of the portfolio construction process in order to see how well the process works. Both solutions have provided superior growth to their sector averages over time.

When looking at returns though, it is necessary to understand the risks that have been taken in order to generate the returns. In both instances, the risk reward profile for both the Cautious and Balanced Model Portfolio indicate that the solutions historically produced higher levels of return at lower levels of risk than those of respective sector averages.

The composition of the model portfolios

Benefits Associated with the use of Model Portfolios

The fund composition of the model portfolios is derived from a house view that NFB AM creates based on a comprehensive and on-going due diligence process. That is to say that NFB AM is continually striving to identify the best fund managers in South Africa through the use of an ongoing quantitative and qualitative review process. Based on this process funds may be added and removed from the house view, and consequently the composition of the models may change over time. The aim of this process is to ensure that the fund allocation is dynamic and changes based on prevailing market conditions and fund manager characteristics. This ensures that these solutions stay relevant and up to date through proactive management.

As an example, the current composition of the Balanced and Cautious Model Portfolios are Illustrated below:

=

Cautious Model Portfolio Weighting Coronation Balanced Defensive Fund 33% Nedgroup Stable Fund 34% NFB Cautious Fund of Funds 33% Balanced Model Portfolio Investec Opportunity Fund Coronation Balanced Plus Fund NFB Balanced Fund of Funds

Weighting 34% 33% 34%

The aim of the Model Portfolios The ultimate aim of any investment solution is to provide superior risk adjusted returns to clients in

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sensible finance july12

=

=

=

=

=

Fee transparency = All underlying fees are accurately disclosed. = NFB AM charges no fees on NFB Funds within the models.

The benefits of scale = As the size of the model portfolios grow, NFB AM is able to negotiate lower fees with the underlying fund managers in order to reduce the fee to you, the client.

Immediate and efficient underlying fund selection = Switches within the models are done across the entire model for all clients invested through the use of an investment mandate.

This means that administration is greatly simplified with real time switches.

Broad Underlying Fund Access = The models have access to almost all fund managers, funds and fee classes ensuring high quality, well-priced portfolio construction.

Access to the countries best asset allocation managers (within the Cautious and Balanced Model Portfolios) = NFB Funds are there to ensure that NFB can actively reflect its asset allocation views through to client portfolios.

Look through asset allocation = All models' asset allocation have the benefit of NFB AM's look-through portfolio management tools. = Where these tools identify views inconsistent with NFB's, changes can be made. ...continued on page 23

SENSIBLE PERSPECTIVE

CURRENT ENVIRONMENT DEMANDS THAT RETIREES ADOPT WIDER PERSPECTIVE The need for diversity and flexibility. By RenĂŠ Grobler, Sales Director - Investec Asset Management.

I

nvestors have had a lot to deal with in recent years.

Not only have they had to contend with extreme market volatility and a lacklustre economic recovery, but they have also had to get used to the 'new normal', a world in which return expectations across all asset classes have had to be adjusted downwards.

For those nearing, or already in, retirement and who require an income from their investments, the current environment is particularly challenging.

Cash is not even providing a real return, while medical advances and healthier lifestyles have meant that many retirees lead active lives that include travel, second homes and expensive hobbies.

Many financial planners suggest that households should plan to retire on 75% of their income at retirement. New research suggests an entirely different approach. Megan Butler, Research Actuary at Alexander Forbes and lecturer at the University of the Witwatersrand, considered the income and expenditure profiles of almost 3000 South African households and found that contrary to popular belief, South African retirees do not necessarily lead a more frugal lifestyle compared with their younger counterparts.

In South Africa, the amount with which an investor should preferably retire is typically measured by a replacement ratio, which gives the income in the year after retirement as a percentage of the income in the year before retirement. Most prospective retirees use targets of between 70% and 79%. The research found that, for an income replacement ratio target of 79% (gross of tax) only half of couples would find the target sufficient to avoid a consumption drop at retirement. These results have important implications for individuals, retirement funds and financial planners.

Against this backdrop and taking into account the market environment, it is imperative that investors, including those already in retirement, adopt a wider perspective. Not only do they need to diversify more thoroughly, they also require flexibility. To make the most of their investments they will have to balance the risks and make choices that may look uncertain over the short term, but which will bring them a step closer to enjoying the retirement they deserve.

We believe a multi-asset fund like the Investec Cautious Managed Fund is ideally placed to offer investors a conservative investment vehicle that still has the potential to substantially beat inflation and take advantage of rising markets. Managed by award-winning portfolio manager Clyde Rossouw, the fund doesn't chase relative outperformance, but rather focuses on providing a modest income and stable real returns.

The fund has a high allocation to incomegenerating assets such as fixed interest assets, which are less volatile than equities. Given that bonds offer a real yield of approximately 3%, Rossouw has increased bond exposure materially over the last seven months and reduced the fund's cash holdings.

He also recognises that picking the right shares, which can comprise up to 40% of the portfolio, can make a material contribution to generating real income for investors. He does not necessarily select high-dividend paying stocks, but focuses on quality shares with attractive dividend yields.

Consistent dividend growth over time is important and he favours companies with a performance track record and dividend history of more than 10 years.

sensible finance july12

21

SENSIBLE INCOME

INCOME IS IMPORTANT TO A LISTED SECURITIES PORTFOLIO

Building your investment portfolio around your specific investment needs.

By Rob McIntyre, Portfolio Manager - NVest Securities.

I

n today's article we take a breather from discussing the core holdings in our general equity portfolio to focus on the importance of the income that you receive from your investment portfolio.

At NVest Securities we build your investment portfolio around your specific investment needs, which means that your portfolio, whilst drawn from model portfolios that we have constructed based on a rigorous quantitative analysis, is tailored around your particular circumstances. There are two ways in which you receive a return on your portfolio, one being longer term capital growth and the other being income received on your underlying investments.

This income typically takes the form of dividends on listed equities and distributions from listed properties. From 1 April 2012 dividends are taxed in your hands at a fixed 15% withholding rate, while property distributions are taxed in full at your marginal tax rate (maximum of 40%). You also enjoy the annual interest exemption of R22 800 (R33 000 if you are over 65 years of age) per individual against the property distributions as these are deemed to be interest for income tax purposes. The dividend withholding tax is reduced by the phasing out of the secondary tax on companies credits, where applicable, and no dividend withholding tax is withheld in retirement fund structures and where the investor is a company or close corporation.

The interplay between income and growth typically means that investors who require a higher income include more listed properties and higher yielding listed equities in their portfolios, while investors whose income needs are zero or very modest in the shorter to medium term can include more growth companies that have lower dividend yields in their portfolios.

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sensible finance july12

If you take a typical investor who requires an annual 5% income draw, net of costs, on his portfolio, then you could construct a portfolio that comprises about 62% listed properties and 38% listed equities that will produce a gross forward yield of 7% (all estimates as at June 2012), thereby providing a gross return in excess of 5% to provide a 2% buffer for costs and to build in a safety margin.

We recommend that an investor not take an income in excess of 5% as that would be unsustainable. Such a portfolio has a primary focus on a stable and predictable income that should grow over time to protect against inflation. This means that the investor has the peace of mind that his income is reasonably secure and that he should not need to sell any of his underlying investments to fund this income. This becomes very important when the stock markets are volatile, as has been the case recently, because the investor knows that except for a cataclysmic event, his income is secure and will be paid out regardless of the shorter term market movements and that he will not be forced to sell out any of his underlying investments at temporarily depressed prices (a position from which he may never recover as he has consumed his capital). In the longer term, as the income grows, so the capital values should also grow, which means that investing becomes all about the income and that the capital value over time takes care of itself by protecting the investor against inflation.

In such a portfolio, our top five holdings would include listed property companies such as Capital (7.50% yield), Redefine (7.79% yield), Emira (8.88% yield), Growthpoint (6.93% yield) and SA Corporate (8.97% yield) and listed equities such as British American Tobacco (4.30% yield), MomentumMetropolitan Investments (6.70% yield), Woolworths (4.10%), Tiger Brands (3.30% yield), and Sasol (5.40% ...continued on page 23

SENSIBLE PORTFOLIO

A look at NFB’s range of Model Portfolios...continued from page 20 The cost of Model Portfolio solutions The use of an asset management solution does introduce an additional layer of cost in order to run the asset management and administration functions of the model portfolios. This cost is, however, mitigated by the fact that through the volume of assets managed within the portfolios, NFB Asset management is able to negotiate reduced fees from the fund managers within the portfolios. NFB AM will continually renegotiate fund manager fees with the view of reducing fees on the basis of cumulative volume within the solutions (which currently stand at approximately R200 million). Furthermore, should any NFB funds be used in the model portfolios (as is the case within the Cautious and Balanced Model Portfolio), NFB AM does not levy any fund management charges on these funds.

As a working example, the fund fees of the Balanced Model compared to a blend of funds held directly (please note that this analyses looks purely at the underlying fund fees and excludes advisor fees and platform fees that may be applicable). The analysis assumes 1/3 allocation to

each fund:

NFB Balanced FOF Coronation Balanced Plus Fund Investec Opportunity Fund Model Portfolio fees Total Fund fees

Balanced Directly Model Portfolio held funds 0.72% 1.00% 0.97%

0.97%

1.14% 0.40% 1.34%

2.28% 0% 1.41%

Within the model portfolio, it is thus possible to provide a proactively managed solution that is derived from a comprehensive and continuous due diligence process at virtually the same cost as a static solution with no such proactive support.

Issues that need to be considered While there are certainly numerous benefits associated with the use of the model portfolios, investors need to discuss the impact of CGT on switches into the portfolio for discretionary portfolios. Talk to your NFB advisor to discuss the appropriate Model Portfolio solution for you.

SENSIBLE INCOME Income is important to a listed securities portfolio...continued from page 22 yield). These are twelve month estimated (or forward yields). Each of the companies that we include in the complete portfolio has been selected for their size, trading liquidity and predictability of income. Sector spread is monitored, but is of secondary importance.

Depending on the particular circumstances of the investor, there is merit in holding such a portfolio through a living annuity structure on a Linked Investment Service Provider (LISP) platform such as Glacier by Sanlam that invests all the funds in a Personalised Share Portfolio (PSP) directly with a stockbroker like NVest Securities. This option became available a few years ago as part of the retirement fund liberalisation in South Africa. What this means is that your investment portfolio with NVest Securities can be wrapped into a living annuity structure on which you will take your 5% income per annum. Any income received in this structure (e.g. property distributions) and capital

gains are not subject to tax and neither is dividends withholdings tax deducted from any dividends received. However, the income that you draw from the annuity (in this case the 5% per annum) remains subject to tax in your hands at your marginal tax rate.

Capital volatility becomes less relevant with the emphasis on income security. Such an income growth portfolio is ideal for investors who need to achieve a sustainable, inflation-adjusted income during retirement. The portfolio is ideally suited to investors who need income on a regular basis and who are prepared to accept some capital volatility.

What this means is that you can have a direct portfolio of JSE listed securities suitable to your requirements that yields an income that is better than the money market and that gives you the benefit of protecting both your income and capital against inflation over the longer term.

sensible finance july12

23

SENSIBLE FINANCE QUESTIONS & ANSWERS

“Sensible Finance - Questions and Answers� is an advice column that will allow our readers the opportunity to write to a professional and experienced financial advisor for advice regarding investments, personal finance, life and/or risk cover.

Travis McClure will be answering any questions that you may have.

Travis McClure

Q: There are a wide variety of unit trusts on the market, most of which are managed on LISP platforms. Can you explain what a LISP is and the advantage of having your portfolio managed on these platforms?

A: A LISP stands for Linked Investment Service Provider. Basically the LISP is an administration

restrictions regarding access to capital and income. Depending on the product chosen, the tax is either deducted by the LISP or the tax certificate is issued. The portfolio values are updated daily and one can now get reports reflecting returns and comparisons to various indices and funds.

Recent developments have seen the

platform that provides a structure that allows the

introduction of direct stock market portfolios. This

investor to enjoy the full benefit from the growth of

allows the investor to invest directly into stocks listed

an investment into the Unit Trust market and at the

on the JSE. So you can now have a Retirement

same time facilitates complete flexibility for monies

Annuity that can invest in some balanced unit trust

to be switched from one unit trust fund into

funds along with holding some blue chip equities

another. In addition, the client has access to a

such as Anglos, Sasol, MTN, SAB etc.

wide variety of equity, property, gilt and Money

There is no fixed or contracted term to the

Market funds, thus creating an environment

investment and the fee structures are generally

conducive to active management of funds.

very competitive. The LISP companies charge

The LISP provides the administration support

around 0.50% for their administration. Although this

and can therefore facilitate instructions such as

is an extra cost over and above the underlying unit

withdrawals and additions. Consolidated reports

trusts management fee, the advantage the

are sent to the client on a quarterly basis (clients

platform offers makes it worthwhile. In most cases

can also have online access) giving feedback on

this extra cost is negated by the fact that the unit

current values and allocations within the portfolio.

trust manager has reduced their management fee

As an investor it allows you to have a diversified

in order to be on the platform.

portfolio under one administration umbrella. This

In summary, the LISP offers investors a gateway

means that reporting is clear, and flexibility within

to various funds from different asset managers

the product is efficient.

(Allan Gray, Investec, Coronation, Prudential etc).

The LISP platform not only offers a unit trust

This allows investors and their advisors to efficiently

portfolio, but is also able to provide administration

consolidate and transact between different

for Retirement Annuities, Preservation Funds and

investments within a single portfolio, using a highly

Living Annuities. Although these products are

efficient administration platform.

governed by the likes of the Pension Funds Act it still allows you the same access to the underlying unit

Please address all Questions to: Travis McClure,

trust funds. The only difference being the way these

NFB Sensible Finance Q&A, Box 8132, Nahoon,

funds are taxed and certain pension fund

5210 or email: nfb@nfbel.co.za

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sensible finance july12

The Eastern Cape's first home-grown

STOCK BROKERAGE

NVest Securities (Pty) Ltd NFB House, 42 Beach Road, Nahoon East London 5241 PO Box 8041, Nahoon 5210 Tel: (043) 735-1270, Fax: (043) 735-1337 Email: nvest@nvestsecurities.co.za

www.nvestsecurities.co.za

NFB have a STRONG, REPUTABLE TEAM OF ADVISORS with a WEALTH OF EXPERIENCE between them: Anthony Godwin (RFP™, MIFM) - Managing Director and Private Wealth Manager, 23 years experience; Gavin Ramsay (BCom, MIFM) - Executive Director and Private Wealth Manager, 18 years experience; Andrew Kent (MIFM) - Executive Director and Share Portfolio Manager, 16 years experience; Walter Lowrie - Private Wealth Manager, 26 years experience; Robert Masters (AFP™, MIFM) - Private Wealth Manager, 26 years experience; Bryan Lones (AFP™, MIFM) - Private Wealth Manager, 20 years experience; Travis McClure (BCom, CFP®) - Private Wealth Manager, 12 years experience; Marc Schroeder (BCom Hons(Ecos), CFP®) Private Wealth Manager, 7 years experience;

Phillip Bartlett (BA LLB, CFP®) - Private Wealth Manager, 9 years experience; Gordon Brown (CFP®) - Regional Manager – PE, 6 years experience; Mikayla Collins (BCom (Hons), CFP®) - Private Wealth Manager, 2 years experience; Glen Wattrus (B.Juris LL.B CFP®) – Private Wealth Manager, 14 years experience; Leona Trollip (RFP™) - Employee Benefits Divisional Manager and Advisor, 35 years experience; Leonie Schoeman (RFP™) - Healthcare Divisional Manager and Advisor, 14 years experience; NFB has a separate specialist Short Term Insurance Division, as well as now offering specialist group companies in the fields of stock broking, wills and the administration of deceased estates.

sensible finance july12

25

“It requires a great deal of boldness and a great deal of caution to make a great fortune...but when you have got it, it requires 10 times as much wit to keep it” Nathan Rothschild, 1834

You’ve worked hard for your money... now let NFB make your money work for you. fortune favours the well advised contact one of NFB’s financial advisors East London • tel no: (043) 735-2000 or e-mail: nfb@nfbel.co.za Port Elizabeth • tel no: (041) 582 3990 or e-mail: nfb@nfbpe.co.za Johannesburg • tel no: (011) 895-8000 or e-mail: nfb@nfb.co.za Web: www.nfbec.co.za

private wealth management

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