What you need to know about pensions offered by retirement funds

The Default Regulations, which become effective for all retirement funds from March next year, require every retirement fund to develop a trustee-endorsed annuity strategy.

By using their scale and bargaining power, bigger retirement funds can potentially offer more cost-effective annuity solutions to retiring members than currently available retail annuity products, although the differences are expected to narrow as providers adapt to the changing retirement landscape.

Proceed to Source : IOL

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Alex Forbes snags Sanlam exec as new CEO

Alexander Forbes has appointed Dawie de Villiers as its new CEO, less than a week after announcing the the termination of former CEO Andrew Darfoor’s contract.

He will assume the position of group CEO and as a director of the company from November 1, 2018 as well as director of a number of the company’s subsidiary boards, it said in a Sens announcement.

Proceed to Source : MoneyWeb

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Combining retirement income options can balance capital preservation, growth

The future of retirement income is not a single product – either guaranteed or living annuities – but a combination, according to Glacier by Sanlam.

Investment-linked living annuities (ILLAs) are the preferred choice of retirees as they can choose their income level, control their exposure to risk and nominate beneficiaries to inherit the proceeds.

But on average, retirees need to draw 1% to 2% more income than the guideline recommendations from their living annuities, putting them at some risk if they live to an old age, which could result in them not having enough to live on and leaving little, nothing – or even debt – to beneficiaries.

Proceed to Source : MoneyWeb

Rocco Carr, business development manager at Glacier by Sanlam, says Glacier believes that “retirement solutions will in future be a combination of products in which short-term capital preservation for inheritance (should both spouses pass away early in retirement) can be balanced with longer-term income protection against longevity, or the risk of outliving one’s money.”

The challenge isn’t the client with enough money, who needs an income of less than 4% of their capital, but the average client who needs to draw more. A solution is to combine living annuities and life annuities.

Carr says many people made the decision to go into living annuities at a time when guaranteed products gave a guaranteed return of around 5%, while living annuities were getting significantly higher returns.

“But things have changed, and we are looking at guarantees from a different perspective. In balanced funds, many living annuity investments are only getting 4% to 6% while guaranteed rates have picked up and are available with an inflation adjustment as well.

“We noticed some years ago that with people living longer, capital preservation is not a given anymore, and we developed a product to try and address this.”

In the past, a lump sum of R5 million, for example, could be split into two products, say R2 million and R3 million, with one of the two (due to legislation) needing to give at least R150 000 income per annum – making it unviable to split the lump sum.

Now, with changes to regulations, a lump sum can be easily split into three or four possible products, ensuring retirees get the best of both worlds.

“Our view was that instead of buying a single living annuity, a client should buy more than one living annuity, and if need be, at some stage in the future, the client can switch one of them to a life annuity. The client should split the R5 million – and, as an example, buy a guaranteed annuity with R2 million and a living annuity with R3 million – to collectively get a better outcome.”

Carr says many people shy away from life annuities because they don’t accommodate inheritances to beneficiaries. “Our opinion is that retirement money is for retirement, not inheritance, which is a bonus.”

Living annuities allow for income fluctuation, and a few years into retirement, clients can buy a guaranteed product at a better rate than they could earlier.

“There is no specific solution for all clients. We use all the possible tools available and build solutions for each client’s individual needs. By combining and splitting we are more able to project the outcome and manage clients’ expectations while protecting them against the continued income requirements associated with living longer.

“Living annuities offer good opportunities, but they are not the only opportunity,” he adds.

Combining products can ensure that retirees’ month-to-month income requirement is catered for, sustainably. According to Glacier by Sanlam, to guarantee as much of the month-to-month income as possible should be the main priority of every investor and financial planner.

Brought to you by Glacier by Sanlam.

Online insurance company connects with younger generation

Reaching millennials has turned into one of the insurance industry’s biggest challenges, says Peter Castleden, CEO of Indie, a division started by Sanlam Life Insurance in 2016.

This is because about 90% of the industry’s business model is built on a single-channel service, via intermediaries, he says.

“Intermediaries generally only connect with clients within a ten-year range of their own age group. The problem here is that the average age of financial brokers, for various reasons, has been increasing for quite some time now, resulting in fewer players with which younger generations can connect.”

Proceed to Source : Fin24

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How much money South Africans put towards retirement vs how much is enough

South Africans are not prepared for retirement, with several studies and surveys showing that we need to save more – and start sooner – if we want to maintain a decent standard of living in our later years.

BusinessTech has run two polls looking at how South Africans are preparing for retirement – specifically focusing on the age that people start saving for retirement and how much of their monthly salary they put away.

The results of both polls, which drew a combined 10,000 responses, echoed several research documents which have shown that South Africans are severely under-prepared for their golden years.

Proceed to Source : BusinessTech

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Sygnia overtakes Satrix as second largest ETF player

The JSE’s number of exchange-traded funds (ETFs) has grown by 12 so far in 2018, taking the total to 74.

Sygnia has overtaken Sanlam — which owns the Satrix range of ETFs — as the second largest player in the local exchange-traded product market, and is rapidly gaining on Absa’s lead, etfSA.co.za MD Mike Brown said in an industry update e-mailed on Wednesday.

The number of exchange-traded notes (ETNs) trading on the JSE has remained constant at 20 this year. Exchange-traded products is an umbrella term for ETFs and ETNs. The two differ in that ETFs have to own the underlying commodities, share portfolios or whatever they represent, whereas ETNs do not.

Proceed to Source : BusinessLive

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Sanlam Investments slashes reporting time with PPM tool, PPO

Sanlam Investments, one of SA’s largest investment management companies, is using Project Portfolio Office’s (PPO) simple to use, cost-effective project portfolio management (PPM) tool for improved reporting and greater collaboration across the organisation.

Sanlam Investments offers a range of local and offshore investment products to end-investors, financial planners and institutions, including passively and actively managed unit trusts, hedge funds and segregated and pooled retirement funds.

Proceed to Source : ITWEB

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10 tips to beat July’s price hikes – and help you save more than a R1000 a month

The petrol price broke the R16 per litre mark this month.

Combined with the fact that the rand is now 8.6% weaker against the dollar since the beginning of June, and a number of rates increases, it’s understandable that your wallet will likely feel a lot lighter at the end of the month.

While there’s usually no such thing as a quick fiscal fix, there are some smart financial ‘hacks’ that may just make a huge difference, says Madri Jacobs, a senior financial planner at Sanlam.

Below Jacobs outlined some of the tips she often shares with clients to immediately start turning their financial situations around.

Proceed to Source : BusinessTech

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The balanced solution that’s far from passive

By Kingsley Williams, CIO of Satrix

As investors we’re all looking for the same thing: a certain outcome and a smooth ride to that destination. On top of that, we also want maximum returns with minimum risk. Sounds impossible? Over the short term perhaps. But over the medium to long term it’s not that far-fetched. The key remains: sufficient equity exposure; diversification; low fees and low correlation between funds in a multi-managed solution.

Proceed to Source : Sanlam Investments

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