First for the professional personal financial adviser
30 NOVEMBER 2024 R69.95 INCL VAT
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WHAT’S INSIDE YOUR NOVEMBER ISSUE: RETIREMENT Two-pot has upended the retirement fund industry forever. We look at some of the misconceptions still baffling consumers, as well as some interesting new products available. Pg 12-15
CRYPTOCURRENCY Like it or not, cryptocurrency is on the rise, and advisers can’t afford to be left behind. We take a look at the latest happenings in the industry, including regulations, rules and investment opportunities.
The changing nature of financial advice
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hat’s keeping financial advisers up at night? At a recent Morningstar Conference, Stephanie Ferreira, Financial Planning Specialist at Chartered Wealth Solutions, Bronson Friedman, founder and Managing Director at Legacy Family Wealth, and Quinton Ralph, Managing Director, founder and Private Wealth Manager at Resolute Wealth Management, gave their views on surviving in a tough climate, and discussed the main challenges and opportunities facing the industry today.
Is now a good time to be a financial adviser? Ralph: There are lots of opportunities for financial advisers, but I think the challenge is, from a South African perspective, how do we get more people to save money? Most of us are managing a lot of old money, but how are we going to get the younger generation and Pg 16-23 the greater population to start saving? We’re probably going to end up with more, but smaller, clients but that takes up time and will be a cost for the future. INCOME PROTECTION Ferreira: I think it’s currently a more difficult Income protection is often environment because as financial planners we must undervalued in a person’s insurance have knowledge in so many different areas, whether portfolio. It’s a safety net that offers it’s tax or offshore. It’s not just about investing a peace of mind, allowing individuals client’s money anymore. However, there’s an incredible to focus on recovery without amount of opportunity, especially for the younger FAs, financial stress. We look at some because of the transfer of wealth to people that sit in claims statsMoneymarketing from the past year. Hedge October 2024.pdf 1 2024/10/22 17:11:24 similar age groups. Pg 24-25
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Friedman: It’s not an easy environment to operate in. If we look at compliance alone, the burden put on small practices is becoming astronomical. There’s now IT infrastructure coming into play, so what’s happening is we’ve had to employ more staff, including internal and external compliance officers. It’s become more expensive to run a practice. There’s also a consolidation of IFA practices, and I think that’s a big threat to the true IFA industry. The bigger corporates are growing, and as we’re trying to remain an independent practice, we can’t pay the same multiples. However, if independence is important to a client, that’s what we’re trying to focus on. How do you manage intergenerational wealth and succession? Ferreira: With more families becoming global citizens, the complexities around offshore products and tax are growing. These dynamics make offshore products and tax considerations more intricate, as families navigate financial planning across multiple jurisdictions. We’ve got a sister company in Mauritius and technically the equivalent of an advice business there. That helps us to leverage skills and intellectual capital. Internally, we’ve also got a tax business and we have our own product committee, and their primary job is to understand exactly what products are out there because that space is also changing hugely. Friedman: We are a younger business, so we spend a lot of time with not just parents but their children at the same time. We are trying to build a generational strategy. The difficulty is that many of these children are studying overseas and it’s not easy to get everyone together. We’ve tried to focus on creating a structure with an unlimited lifespan. If clients utilise offshore trusts, for example, it makes that conversation a little easier. Ultimately, we’re dealing with the trustees and not the kids or parents. Continued on next page
TIME TO EXPAND YOUR INVESTMENT TOOLBOX WITH OUR HEDGE FUNDS
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