NFB Sensible Finance Magazine issue 13

TOO MUCH, TOO SOONIt pays to take good care of the

present, in order to prepare

for the future

RISK PLANNING

consider all the

possibilities and

be prepared

IT'S CHRISTMAS!

some useful money

saving tips

WIN A WEEKEND

AWAY IN KNYSNA

see inside for

details

PERSONAL FINANCE

a FREE publicationdistributed by NFB Financial Services

f i n a n c i a l s e r v i c e s g r o u p

issue 13November 2009

NFB

PERSONAL FINANCEMagazine

Eastern Cape's Community...

TOO MUCH, TOO SOON

RISK PLANNING

IT'S CHRISTMAS!

It pays to take good care of the

present, in order to prepare

for the future

consider all the

possibilities and

be prepared

some useful money

saving tips

see inside for

details

WIN A WEEKEND

AWAY IN KNYSNA

guide the wayguide the wayL e t u s

retirement?are you forpreparedfinanciallyhow


At NFB, we take planning for your

retirement seriously. And so we

should living in an era where your

retirement years may be even

longer than your working life and in

a country where only 6%

NFB have 22 years experience in

retirement and investment planning

for both individuals and corporate

groups. The company has

developed an exceptional client-

centric culture with commitment to

unrivalled product innovation and

optimising investment results

within client specific risk

tolerances. Positioned as an

independent and therefore

unbiased financial services

provider, NFB have three times

been nominated as one of SA's Top

20 Unlisted Companies and were

recently nominated as one of SA's

Top 8 Best Practices of the Year!

Give one of NFB’s financial advisors

a call and allow us the opportunity

to assist in getting your retirement

plan on track.

of the

population retire financially

independent. Yet, so few people

give their retirement planning the

necessary due consideration until it

is too late, often also failing to

provide the ongoing effective

investment management required

of living annuities beyond the date

of retirement.

L e t u s

retirement?are you forpreparedfinanciallyhow

East London OfficeTel: (043) 735-2000Email: [email protected]

Johannesburg OfficeTel: (011) 895-8000Email: [email protected]

NFB is an authorised Financial Services Provider www.nfb.co.za

While researching news over the months from one edition to

the next, it never ceases to amaze me just how much

changes in short spaces of time. Unfortunately though, the

positives do seem outweighed by the negatives over the last few

months.

On the bright side, East Londoners have been treated with

Hemingways mega mall's opening and will finally have more

shopping and dining variety than ever before; the Loaves and Fishes

Network (refer to the follow-up article in this magazine) were thrown

a lifeline by Premier Kiviet to keep the organisation alive for another

year and the Currie Cup has provided us with much-needed

escapism.

But, on the not so bright side, we have, despite the recession,

seen government Ministers spending obscene amounts on new cars

(not to mention the Police Minister's hotel bill or the bountiful perks

our Ministers receive), MTN and Bharti Airtel's failed merger, plans of

the platinum smelter in Coega being cancelled (ala Eskom), the

continued Jackie Selebi debacle, Bafana Bafana coach Joel

Santana being fired only months before the World Cup, Caster

Semenya's dreams dashed, the untimely deaths of Michael Jackson

and Patrick Swayze, more tsunamis and whispers of 40%+ per annum

rate hikes in electricity prices for the next three years!

Now how to tie all that back to one common personal finance

theme I'm not exactly sure, except to say that we're still certainly in a

negative environment which must have negative impacts on our

economy. Although there are signs that the end of the recession is

nearing, being cautious may still be a prudent strategy to follow.

Diversify your assets and investments, keep debt to a minimum,

spend sensibly this Christmas and plan for the unexpected!

With that, NFB and the entire NVest Financial Holdings Group

(including NVest Securities, Independent Executor and Trust and the

various NFB divisions and branches), would like to thank our clients

and partners for their support throughout an exciting year in our

history. We look forward to further improving our service offering in

the future.

May you have a safe and enjoyable festive season.

Brendan Connellan - Editor and Director of NFB

editor

advertising

layout and design

address

contributors

Brendan Connellan

[email protected]

Duncan Wilson (NFB), Travis

McClure (NFB), Chris Lemmon

(NVest), Shaun Murphy (Klinkradt &

Assoc.), Grant Berndt (Abdo &

Abdo), Kathleen Lee (Harvey

World Travel), Natalie Dillon (Old

Mutual), Verusha Ramlakhan

(Glacier by Sanlam), Debi Godwin

(IE&T), Jonathan Goldberg (Global

Business Solutions), Robyne Moore

(NFB) Paul Marais (NFBAM),

Brendan Connellan (NFB)

Robyne Moore

[email protected]

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 Financial Services

Group.

©2009 All Rights Reserved.

No part of this publication may be

reproduced in any form or

medium without prior written

consent from the Editor.

Jacky Horn Design

[email protected]

NFB Financial Services Group

East London Office

NFB House, 42 Beach Road

Nahoon, East London, 5241

Tel: (043) 735-2000

Fax: (043) 735-2001

E-mail: [email protected]

Web: www.nfb.co.za

a sensible read

sensible finance ED’SLETTER

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Email your full name to [email protected] to subscribe to

NFB's free economic electronic newsletters.

another aspect of our comprehensive service

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sensible finance nov09

CONTENTSSENSIBLE

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THE LOAVES AND FISHES NETWORK

STRUCTURING SALARIES

TEACHING YOUR CHILDREN TO SAVE AND INVEST

MORE THAN JUST A RIGHT TO A VIEW

HOLD A DIRECT SHARE PORTFOLIO THROUGH YOUR RETIREMENT FUND!H

MEDICAL SCHEMES AND ICD-10 CODES

HAVE YOU INCLUDED RISK PLANNING AS PART OF YOUR OVERALLFINANCIAL PLAN?

TIPS TO KEEP IN MIND WHILE TRAVELLING ABROAD

TOO MUCH, TOO SOON

URBAN LEGENDS AND MISCONCEPTIONS DISPELLED

CHRISTMAS MONEY SAVING TIPS

SO WHAT IF YOU HAVE CONTROL OVER TRUST ASSETS?

THE FINAL PIECE OF THE BBBEE PUZZLE

FOCUS ON SA FUND MANAGERS

MAKING A CASE FOR STRONG DIVIDEND PAYERS

MONETARY FIGURES OF SPEECH

Q&A.

WIN A WEEKEND GETAWAY TO KNYSNA

NFB touching lives in our community...you too can make a difference!

Very little room to move for basic salaried employees.

Wish you had started investing earlier? Help your children start off in the right direction.

The right to object is not limited to the objector's right to a view.

ow to increase the earning potential of your retirement savings.

Why your claim may be rejected.

Consider the possibilities and be prepared.

Information for a stress-free, successful trip.

It pays to take good care of the present, in order to prepare for the future.

Clarifying a few misconceptions associated with Wills and Estates.

There is no need to cancel Christmas this year!

Be certain that your last will and testament allows for no grey areas.

An integrated approach to BBBEE which can now finally be implemented.

Aligning your financial manager's skill set to objectives.

Keep a watch for keenly priced investment opportunities.

Although we use them everyday, do you know what they mean?

You ask. We answer. Advice column answering your investment, personal finance, life and/or risk insurancequestions

Stand in line to win a weekend away for two, compliments of the House of Travel, East London

your

By Shaun Murphy,CA (SA), Partner - Klinkradt & Associates

By Grandt Berndt - Abdo & Abdo

By Brendan Connellan, Director - NFB

By Verusha Ramlakhan, Product Manager - Glacier by Sanlam

By Kathleen Lee, Marketing Executive - Harvey World Travel

By Duncan Wilson, Financial Advisor - NFB

By Debi Godwin,Director - Independent Executor & Trust

By Robyne Moore - NFB

By Natalie Dillon,Legal Advisor - Old Mutual

By Jonathan Goldberg - Global Business Solutions

By Paul Marais, Director - NFBAM

By Chris Lemmon,Director/Portfolio Manager - NVest

with Travis McClure, Financial Advisor - NFB

SENSIBLE RESPONSIBILITY

In the July edition of our magazine we highlighted

the plight of the Loaves and Fishes Network

whose entire government funding, which they

had greatly relied upon, had been completely

withdrawn.

Over the past few months, due to media

coverage and the dedicated networking of staff,

volunteers and friends of the LAFN, many more

people in East London (and even overseas) have

been alerted to their crisis. And donations of food,

clothing, toys, equipment, furniture and even a

brand new mini bus has come pouring in. In July,

according to the balance sheets, the LAFN would

in all likelihood have had to close it’s doors at the

end of September, but now currently has enough

funds to see them through to the end of February

2010!

Because of the fantastic and generous support

from the East London community and businesses, it

has been possible for the LAFN to continue assisting

in the following ways:

keep delivering monthly grocery parcels of R204

each to more than 400 children;

help starving and destitute children to negotiate

the administration of Home Affairs and social

workers to receive grants;

get a desperately sick woman into hospital and

find safe and caring homes for her children and,

when she was discharged, an RDP home for the

family to move into;

distribute mattresses and blankets to children

shivering in bare hovels;

arrange uniforms and stationary for child-

headed households and gas stoves to cook their

food rations on.

Losing their government funding has

highlighted to the LAFN that they need to diversify

their funding. One of the avenues they are using in

order to achieve this is by going on a major debit

order drive. The aim is to build up a reliable funding

base on which they can count when the going

gets tough. If just 1,000 East Londoners each signed

a debit order for R50, this would assist in covering

the organizations’ monthly administrative costs.

That time of the year for spending with

friends and family; a time of giving,

festivities, gifts and feasting.

Please spare a thought for those

who have no family, no home

and who may not even have

anything to eat at this special

time. LAFN will be distributing

gifts and hosting parties for the little

ones. Should you wish to contribute in

any way, please contact them at the

numbers below.�

�

�

�

�

For further reading or information:

www.loavesandfishes.co.za

LAFN contact details:

9A Dyer Street, Arcadia, 5241

P O Box 19640, Tecoma, 5214

Tel/fax: 043 – 722 0010 Cell: 082 306 5823

Should you wish to sign a debit order form in

order to make a monthly contribution to assist

in the sustainability of this very worthwhile

organisation, kindly contact Robyne at NFB on

043 735 2000 or [email protected]

IT’S CHRISTMAS TIME!!!

Touching lives inour community –

you too canmake a

difference!

3

Loaves & FishesNetwork

Loaves & FishesNetwork


in proud association with


As part of NFB's social responsibility

programme, we support the Loaves and Fishes

Network, a wonderful organisation that is

making a huge impact on the lives of those

who need it most in and around East London.

STRUCTURINGSALARIES

4

A very common question posed to us in

practice is: “How can I reduce my monthly

taxation or improve my salary structure to become more

tax efficient?” Well, this is one place where, in my opinion,

Trevor Manuel and SARS have been very CLEVER in their approach to

allowable deductions for the salary earner. By Shaun Murphy CA (SA),

Partner - Klinkradt & Associates

Basic salary structured packages in today's

world encompass basic salaries, travel

allowances, motor vehicle fringe benefits

and then some form of company and employee

contribution to pension and/or provident funds. It is

important to note that there is a difference in the

treatment for tax purposes of pension fund and

provident fund contributions. Simplistically, pension

fund contributions come from taxable income

earned by the employee and provident fund

contributions fall outside this, and as a result are not

deductible on a monthly basis.

Provident funds are generally regarded as

salary sacrifices i.e. the amount of taxable income

contained in the Cost to Company package is

reduced by the contributions towards the

provident fund on a monthly basis. The pension and

provident fund scheme with employers further

creates issues with additional retirement annuity

contributions that you may or may not have at the

time and the prospective deductions that you may

be thinking is on the way. It is important to

remember that if you have a pension or provident

fund contribution that is based on a percentage

contribution, that income is deemed to be gross

retirement funding income, and this amount is

excluded from the equation when determining the

15% of taxable income that is to be utilized for

retirement annuity deduction purposes.

Travel allowances are rapidly being clamped

down on by SARS and in a short while only

legitimate log books will be accepted. This is one

area where individuals are being caught more and

more often with the shift in private mileage

increasing each year under the deeming provision,

now sitting at 18,000 km out of a total of 32,000 km

of travel per year leaving only 43% of the annual

km's for business.

, and when I say

detailed, I do not mean mileage whenever you fill

your car up, which is a common mistake - that is

known as a fuel log!!

An important point for the recipient of a motor

vehicle fringe benefit, (where the employer

provides a vehicle for use in terms of the package)

is that in certain instances where the tax payer can

prove that the vehicle was used predominantly for

business purposes with reference to a logbook, the

commissioner (SARS) may reduce the amount

subject to tax in the ratio of business versus private

mileage.

In short, there is very little that is afforded to

straight salary earners that wish to have elaborate

schemes in place to reduce and or postpone the

taxation that is levied in terms of the PAYE tables.

, it is far more advisable to have the

above on a re-imbursement allowance basis,

which is generally speaking non-taxable.

In the next issue I will touch on commission

earners who have a far better tax platform to play

with.

As a result, it is becoming more

and more important for travel allowance recipients

to maintain detailed logbooks

Not many individuals are aware that if you

have the use of a company vehicle solely, that a

logbook may result in a tax saving.

Cell phone allowances, entertainment allowances,

subsistence allowances are all best left off as no

deduction is permitted against these allowances

any more

Should you have any queries please feel free to

e-mail me on [email protected]

SENSIBLE TAX


Teaching your childrento save and invest

Teaching your childrento save and invest

6

How many times have you looked back on life and

wished that you had started investing earlier? Teaching

your children, or grandchildren, a few simple lessons

about saving and investing can start them off in the right

direction toward a secure financial future, and can be as

easy as 1, 2, 3.

Step 1: The value of savings

Step 2: The value of investing

Step 3: Stay involved in the process

Last, but not least, practice whatyou preach.

Teaching your children about saving money for a

specific purpose is key to instilling good investment

habits for the future. The lesson is a simple one - if

you want something, you have to save for it. Talk to

your children to find out what it is that they want

(chances are they've already told you this during

your last trip to the shopping mall). Once you know

what it is and how much it will cost, work with your

children on how they can save for it by using their

allowance or pocket money. Give your children

options for reaching their goals, such as saving all

of their allowance for a certain number of weeks

vs. saving half of their allowance for twice as long.

This teaches your children to view their options and

make informed decisions about how to manage

their money.

Once your children have learned how to save

money to achieve their goals, it's time to teach

them how to earn money through interest

accumulation. Learning about the benefits of

compound interest is important to encourage your

children to invest their money in income producing

investments.

It's now time to put principle into practice. A

good first step in moving from the piggy bank to

the stock market is a simple savings account. As

your children's savings grow with money from

waitering, baby sitting, or other first jobs, you may

want to introduce them to other investment

vehicles, such as Unit Trusts. It is important to

educate your children that there is market risk

involved when investing in Unit Trusts, including

possible loss of capital.

Most children look to their parents as a primary

source of financial information. This makes it

important for you to stay involved with your

children throughout their learning experience with

investments. Take the time to go over your

children's bank or Unit Trust statements with them. If

they are investing in a Unit Trust account, show

them how to look up the value of their funds in the

newspaper or on the Internet. Get your children

interested in their investments at an early age, and

it will stick with them for life.

You can talk to your children about investing until

you're blue in the face, but chances are good that

they will not pay close attention to the subject

unless they see that you are following your own

advice.

For further information on how to start your

investment journey, contact Marc Schroeder, one

of NFB's Financial Advisors, on 043-735 2000 or

[email protected].

Hint: A good way to encourage smaller

children to start saving is to provide them with a

"piggy" bank.

Hint: A great way to encourage your children

to invest more of their savings is through a

“matching program”, where for every rand

they invest, you match it with a rand of your

own.

SENSIBLE LESSONSPhoto BigStockPhoto.com


In a previous edition we dealt with the right to a view. The issue has againbeen dealt with by our Courts, this time highlighting the fact that the right to

object is not limited to the objector's right to a view.By Grant Berndt - Abdo & Abdo

MORE THANJUST

A RIGHT TOA VIEW

8 sensible finance march09

LEGALSENSIBLY

The basic facts dealt with, were that a structure

was being added to the eastern side of a

residential home, 2 ½ storeys in height with

windows running along that side of the structure.

The objector maintained that a person standing in

this newly constructed room would have an

unobstructed view into the interior of the western

side of his home and into his recreational area, that

the alteration would block out direct sunlight, the

building line had been encroached on and the

construction was unsightly.

The major issue dealt with the National Building

Regulations and Building Standards Act of 1977.

The relevant section states that if a local authority,

having considered an application (ie. the approval

of a building plan) and is satisfied the plans comply

with the Act, it is to grant approval. However, if the

local authority is satisfied that the building to which

the application relates, is to be erected in a

manner or will be of such a nature or appearance

that:

1. The area in which it is to be erected will probably

or in fact be disfigured;

2. Will probably or in fact be unsightly or

objectionable; or

3. Will probably or in fact diminish the value of

adjoining or neighbouring properties, then the local

authority is to refuse the application and give

written reasons for the refusal.

The Court held that the refusal of an

application is mandatory not only when the local

authority is satisfied that the plans do not comply,

but also when the local authority is in doubt about

their compliance. An example would be where

plans submitted do not clearly indicate the

proposed height above the natural ground level if

there are height restrictions affecting the particular

residential area.

The Court held further that the local authority

must be satisfied that the undesirable outcome was

certain, and that if it was satisfied that the building

would probably have a detrimental effect as set

out in the Act, that it has to refuse the application.

The local authority would have to make this

judgement. Thus, if the local authority was not

satisfied that the requirements of the Act had been

met, it has to refuse the application for approval of

the building plans.

In the case in question, however, the court

found that the local authority had applied its mind

to the objections raised, and had not been

satisfied that a reduction in the value of the

adjoining property would result and was thus

obliged to approve the plans, which it had done.

The local authority must therefore, not merely

rubberstamp applications, but ensure that they

comply with the Act. The Court also stated that the

appeal procedure against an approval, as

provided for in the Act, must first be followed

before one approaches the court.

So once again, each case must be treated on

its own merits, but in terms of the National Building

Regulations and Building Standards Act, the right to

object is not limited to the loss of a view.

SENSIBLE RETIREMENT

What is the ICD-10 code?

International Classification of

Diseases and related health problems.

Medical Schemes use these codes to

accurately identify the conditions for which

members receive medical care and also to

reimburse the healthcare providers correctly for the

services rendered.

Medical scheme members can ensure that

claims are properly assessed and paid for correctly

by their medical scheme, by checking that an ICD-

10 code appears on the account before it gets

submitted to the medical scheme for

reimbursement.

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�

�

From 1 January 2005, it is a legal requirement for

all South African healthcare providers to include

diagnostic information in the form of an ICD-10

code on claims or accounts.

ICD-10 stands for

It is a coding system developed by the World

Health Organisation that translates the written

description of medical and health information into

codes in a standard format. For example, J45.9 is

the ICD-10 code for Asthma, unspecified.

It becomes very important if you have a PMB

(Prescribed Minimum Benefit) condition as these

can only be accurately identified by the correct

ICD-10 codes. If the correct diagnosis information is

not provided your PMB-related services might be

paid from the incorrect benefit e.g from the

medical savings account instead of the risk benefit.

It may even be rejected altogether because you

have exhausted your day-to-day benefits or

belong to a benefit option that has no day-to-day

benefits.

Should you have any medical aid related queries,

contact Leonie Schoeman, our Accredited

Healthcare Intermediary, at NFB on 043-735 2000 or

[email protected]

3sensible finance nov09

Why do medical schemes reject healthcare related

claims because it does not contain an ICD-10 code?

Most of us spend our working lives striving to

be financially secure at retirement. Some

are fortunate enough to reach this goal

and the rest are left wishing they'd made better

investment, career or study choices. Our role at NFB

may not be to steer you in your career path, but

we certainly can help guide you when it comes to

making the best financial decisions.

Investors often make the mistake of not

investing enough of their retirement savings in

shares for fear of the higher risk associated with

stock market investing. However, research has

consistently shown that the risk of investing in the

stock market diminishes substantially the longer one

is invested in it! In fact, an investor is probably

putting their retirement savings at greater risk

investing in low risk, low yielding assets when they

still had the time to benefit from the long term

growth potential of shares!

Access to shares can occur in two ways; direct

access (e.g. through a stock broker) or indirect

access (e.g. via unit trusts). Both have their place

and suit different types of investors. However, for

investors in retirement investment vehicles

(retirement annuities, preservation funds, living

annuities etc), the ability to access shares directly

was not, until recently, an option. Flexible

retirement investments are now available that

combine the use of unit trusts or life funds with the

ability to hold a portion of the underlying

investment in an

Our ability to do this makes various benefits

available to the investor such as the ability to “lock

in” to dividend yields (income) without these

distributions being affected by other investors

moving in and out of fund structures, and complete

transparency and control in respect of the

underlying investment portfolio. Various risk-profiled

models are also available.

individually tailored share

portfolio.

If you would like more information as to how you

can maximise your retirement nest-egg by investing

directly into the stock market, contact an NFB

financial advisor on 043-735-2000 or email

[email protected]

Hold a direct share portfolio through your retirement fund!

How to increase the earning potential of your retirementsavings. By Brendan Connellan, Director, NFB

Why your claim may be rejected

SENSIBLE HEALTHCARE

10 sensible finance nov09

HAVE YOUINCLUDED RISK

PLANNING AS PARTOF YOUR OVERALLFINANCIAL PLAN?

When you go on holiday, you start preparing and planning monthsbeforehand to make sure that your holiday will go smoothly. And yet manypeople fail to put a similar amount of effort into preparing a financial plan.

Written by Verusha Ramlakhan, product manager - Glacier by Sanlam

To develop a sound financial plan, you need

to draw up a budget and identify your

financial and lifestyle objectives. When you

are developing a framework for a financial plan,

you need to recognise the fact that you will always

live according to your value system. Values are the

things that define you or that are most important to

you - for example, possessions, status, relationships

or even the freedom to travel the world.

A sound financial plan consists of:

Proper estate planning will ensure that there is

sufficient liquidity in your estate to prevent the

forced sale of assets to cover any outstanding

debts.

Investment planning encompasses capital growth,

saving for - and receiving income during –

retirement. In addition to supplementing savings in

a pension or provident fund, contributions to a

retirement annuity are tax-deductible up to the

limits set by legislation.

Risk cover means insuring oneself against the

unforeseen - accidents or violent crime, serious

illness and unexpected death. In other words, you

take out insurance against misfortune. Insurance

companies use the term “risk cover” as a collective

term for life insurance, disability cover, functional

impairment cover, dread disease cover and

accident cover.

You will need to work out how much money

your dependants will need to maintain their

standard of living when you're no longer here. This

process requires the advice of a qualified financial

planner who can assist you to plan right down to

the last cent. For example, there should be a lump

sum in the estate to eliminate existing debt,

replace the family car and pay for the children's

education. Risk cover can be a good way to cover

any shortfall in the amount that the family may

require after all assets have been taken into

consideration.

Each person is unique - with his/her own

circumstances and needs. And personal

circumstances and needs are the things that count

when it comes to taking out risk cover. To start

planning, you should consider the following:

Could I lose everything

I've accumulated in an instant? What if I become

ill – will my family be taken care of? Am I covered if

I have an accident?

What would

happen if I become a victim of violent crime? Am I

protected against unforeseen and unexpected

events? Could any of these unexpected events

change my life forever? Do I have enough saved

up to take care of the family? Will we be able to

maintain our standard of living?

Could I become a financial burden to others? Do I

have sufficient risk cover? Do I have the right type

of risk cover for my needs?

A qualified financial planner will be able to assist

you to determine the needs of both yourself and

your family and to ensure that you have a sound

financial plan.

Estate planning

Investment or retirement planning

Risk planning

Will it ever happen to me?

What kind of accident could I have?

What happens when the savings are used up?

INCOMESENSIBLE

SENSIBLE TRAVEL

Let's begin by stating the obvious: one can

never have too much information! This is

never more true than when travelling.

Little did we know that there is little to no available

parking in Rome and Florence, and the part of

Venice we were staying in had no parking

whatsoever.

Italy has

an incredibly efficient public transport system,

therefore, my advice: use it!

the rail

system; it is safe, quick and painless.

Roma Pass is a tourist tool

This is a practical tool, as not

only is it worth every cent

always ensure your passport is still valid

have travel insurance which ensures monetary

and medical cover

have funds easily available for an emergency

stay within walking distance of a transport system

unless you have hotel transfers or are willing to pay

astronomical costs for taxis

keep in mind the lugging of baggage and try to

pack as light as possible.

My last tip would be to stress less, and simply enjoy

it!

Information is key to a successful trip, as it will give

you the tools to save time and money, and may

get you out of a sticky situation. Having recently

vacationed in Italy, I will share some of the

valuable information that ensured our trip was a

success. Whilst this knowledge was gained whilst

researching and touring Italy, I would imagine that

it is valid in most other European and/or other

major cities.

Our Italian experience was made up of

residing in and travelling between Venice, Florence

and Rome. The first mistake we nearly made was

hiring a car to use as our primary transport. This

seemed like a wonderful idea as one would have

freedom of movement, and we assumed it would

be a good way to see some of the countryside.

Not only is parking a nightmare, but

the roads are often congested and, other than

Tuscany, the main routes are not scenic.

To get from one city

to another, a more than viable option is

The second suggestion I would make is to find

out about tourist passes that can be used in the

city of interest; an example of such is a Roma Pass.

A , and provides free

access to two tourist attractions, the metro system

and buses in Rome.

and more in

transportation alone, but it saves you time too as

you get to skip the queue at the tourist attractions.

A couple of other quick tips would be:

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Kathleen Lee, Marketing Executive

at Harvey World Travel

in East London.

Tips to keep in mind whiletravelling abroad

Information for a stress-free, successful trip. By Kathleen Lee,Marketing Executive – Harvey World Travel, East London


12

The infamous demise of Lehmans and the

ensuing crises in world markets, should have

taught us humans that the bursting of one

bubble should not allow for the inflation of another.

As Lehmans capitulated, the U.S. Government

wagged their finger at other institutions believing

that any anaemic ties that other institutions had

with Lehmans, had all been severed. They were so

wrong.

The market was not convinced, world indices

sold off and the streets turned red as the premiere

for The Great Depression 2 bore malevolently down

on us. The government support that followed

seemed to only reinforce to major market players

that they could take whatever they wanted, and

when the market crashed, they could get to keep

it.

Outside of the now famous Ponzi Schemer's,

Bernie Madoff and Allen Stanford, a far greater

number of people were in fact jailed after the junk

bond collapse in the 1980's. Estimates indicate that

the final tally of government spending that would

have been thrown at the problem, will be close to

$10 trillion. The irony is that quantitative easing

(monetary expansion) that is not part of an overall

program to reform, regulate and renew the system

is flawed. The inability to change and correct the

very elements that caused the crisis in the first

place, is nothing more than a Ponzi scheme itself.

Most would estimate that yet another equity

bubble has been inadvertently engineered by the

Fed in the US, and to a lesser extent globally. It is

the fairly simple idea of monetary expansion, which

was initially intended to address the problem, but

which failed miserably through a lack of reform of

the underlying issues. This monetary injection from

the Fed, and others, has not found its way into the

real economy and has instead been directed at

far riskier assets. We should also remember that it

makes for bad politics to impose heavy reforms on

capital markets.

The reality is that global markets have

recovered well, despite having come off a very

low base, and being bullish is back in vogue. It has

never paid to be a bear, nor a realist for that

matter. If bears are proven wrong they are

ostracised, but if their utterances are proven right

they merely suffer with everyone else. One must

It pays to take good care of thepresent, in order to prepare for thefuture. By Duncan Wilson, Financial

Advisor - NFB


“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. All we need to be

responsible for is the present

moment. Only the present is within

our reach. To care for the present is to

care for the future.” Buddha

13

SENSIBLE INVESTORSENSIBLE INVESTOR

also realise that major financial centres have been

built on the ability to peddle hope over reality.

does not support the resurgence

that we have seen thus far and some go so far as

to equate the major financial institutions with 3rd

World despots, hijacking the incoming aid to

finance warlords, with little or nothing reaching the

masses. Unconstrained credit in gluttonous volumes

is dire as we have so discovered, but an adequate

supply of it is vital.

currently sits at a record high of

$1064 an ounce. Most would argue that the Gold

price rises due to inflation concerns (from the sheer

increase in money supply), but in fact Gold is not

nearly as good an inflation hedge as previously

thought. Gold is a far greater measure of

uncertainty in the market.

but particularly the US, have

moved quickly from a state of “cautiously

optimistic” to “cautiously pessimistic”. The proof of

the company earnings will be in their true tally.

depicts this overvaluation in the form

of the S&P 500's current price earnings ratio,

indicating a current state of overvaluation from a

not so distant undervaluation.

– The man dubbed Dr. Doom,

and widely credited with accurately predicting the

previous crisis, sees anything but a convincing

recovery. He has gone as far as saying that the US

government has already planted the seeds for the

next financial crisis.

, although deeply scarred, is still

a force to be reckoned with, but is shopped out,

heavily burdened with debt and having to cut

back on consumption. Let us not forget that

unemployment in the States is at an historic high.

– The

difficulty in judging the lag associated with a

monetary policy response such as a cut in interest

rates, combined with the fear of future inflationary

pressures, has a number of experts worried that a

knee jerk hike in interest rates will only add to the

recovery problems.

So what can be done to avoid further pain?

Implementing a US exit strategy, from the

massive monetary easing of the past year.

Proper calculation of asset prices and the risk of

asset bubbles.

Supervising and regulating the financial system

more effectively.

The risks are apparent and the underlying

regulatory problems remain unaddressed. This

government sponsored wall of liquidity is clearly

chasing certain assets, and many

have been criticised for remaining

overly cautious or for having been

out of the markets completely.

There is, however, a growing

disparity between asset prices and

the real economy. Stock markets

are notoriously bad leading

indicators. You can't fool the

masses all of the time, but if

enough of them are delusional for

a spell, bubbles can continue to

inflate. It seems as though the age

old teachings of Buddha ring true

to this day - if only it pays to be a

realist.

1. Credit growth

2. The Gold Price

3. Global markets,

4. Nouriel Roubini

5. The US Consumer

6. A Premature Monetary Policy Response

The

graph below

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The fact remains that fundamentals have

not been adequately tended to and many

equate much of the recent market push to

that of a structure built on sand.

The burning question is

whether this will be done?

Points to Consider

Dissipating ensuing trouble

sensible finance nov09 13sensible finance nov09

SENSIBLE PLANNING

Urban legends are the often hilarious, always

engaging, occasionally bizarre, and almost-

always-with-a-moral stories that we've all

heard, known, and shared as part of our daily lives.

They run through a range of simple ghost stories

told around a campfire or slumber parties, to

rumours of industrial and governmental

conspiracies and cover-ups. Here are some of the

urban legends and misconceptions (a mistaken

thought, idea, or notion; a misunderstanding)

associated with Wills and estates.

NO. The state seldom receives assets from

deceased estates. If there is no Will, the law

determines who the closest relatives are and they

will then inherit.

NO. Only an inheritance that is written in a Will is

valid.

YES and NO. If you were married in community of

property to the deceased person, access to cash

can take some time. Your account may have to be

frozen by the executor until he is sure that the

estate is solvent. Cash from the estate itself may be

advanced to you once the executor is confident

that he can do so (and once funds have been

received by the estate).

NO. The executor will only sell assets if the Will

directs this, or if the beneficiaries agree to sell

assets. In some cases, the executor may have to

sell an asset in order to generate sufficient cash to

meet debts, but this can be avoided if the

beneficiaries contribute cash into the estate to

cover any such shortfall.

NO. However, if he does so, it is in his personal

capacity. Only funeral costs and the cost of a

gravestone are permissible claims against the

estate. Other costs, for example telephone and

travelling costs and the cost of refreshments,

cannot be claimed unless authorised in the will.

NO. Only the executor may, once he has been

appointed by the Master, withdraw funds and sign

documents.

NO. There is only one rate for the administration of

estates and different rates are not charged for

easy or difficult estates.

NO. In order for the Will to be valid it must be

properly signed and witnessed.

If I Die Intestate (Without A Will) The State Gets All

The Assets.

A Verbal Promise Of An Inheritance Is Valid.

The Estate Is Frozen Until It Has Been Finalised –

There Will Be No Cash Available For Living

Expenses

The Executor Will Sell Everything.

It Is The Duty Of An Executor To Make Funeral

Arrangements.

Signing Powers And Power Of Attorney Continue

After Death.

The Longer It Takes To Administer An Estate, The

Higher The Executor's Fee.

I Have A Valid Will If I Have A Printed Will That Is Not

Yet Signed

.

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

e-mail: [email protected]: (043) 735 4633 Fax: 086 693 3356 / (043) 735 3942 |

Clarifying a few misconceptions associated with Wills and Estates.By , Director - Independent Executor & TrustDebi Godwin

URBAN LEGENDS MISCONCEPTIONS –&DISPELLED



IT'S CHRISTMAS TIME!!! –SOME MONEYSAVING TIPS

There is no need to cancel Christmasthis year! By Robyne Moore - NFB

Yes, that time of the year is almost once

again upon us. Christmas is a time to spend

some precious time with family and friends;

a time of religious celebration; a time for resting,

reflecting, festivities and feasting. It is also a time for

giving and receiving. The credit crunch has made

this a tough year for many and this year, more than

most, the saying “it's the thought that counts” is

going to be uppermost in most minds, when doing

the rounds of the malls and ticking off the gifts on

your Christmas shopping list. Just bear in mind that

there is no need to go into debt to finance your

Christmas festivities.

There are some people out there who are

fortunate enough not to have to put any monetary

ceiling on their Christmas budget, but for most of

us, strictly sticking to our budgets will prevent us

from going into debt to fund our holidays. As we

get closer to Christmas, now is the perfect time to

gather your thoughts, get ideas and put your

budget into place, rather than leaving things to the

last minute and carelessly pulling out your debit or

credit card in desperation to complete your gift list.

Here are a few pointers to assist you (and your

Christmas elves) in getting your Christmas stockings

all filled and lined up:

, as you won't be “forced” into buying

something just because you are running out of

time. And don't forget to use the internet – some

sites also do free gift-wrapping.

Other people need to understand

that times are tough and you just may not be able

to afford it. If you need to, you may have to explain

the situation to them.

of all the people you need to buy

gifts for and then set a limit on the amount you will

spend on each.

,

as this will cause you to spend more than you

budgeted.

. For example, give someone a

babysitting “voucher” (redeemable when they

next need time out); massages, baking or any other

“spoil” will always go down well with loved-ones.

because you

think you have to. Speak to them and explain that

money is tight and you just cannot afford that

specific gift at the moment.

Christmas is always

associated with heavily laden tables and other

delectable goodies which we don't normally eat

during the year. The racks and shelves are stocked

with awesome and delicious foods which we

recklessly pile into our trolleys. After Christmas day,

we usually find we didn't really need all that food or

didn't need six packets of the same product when

two would have done just fine.

Instead of buying a gift just for the sake of

having something wrapped under the Christmas

tree, chat to the people you are buying for and

. They may

surprise you and want something simple and

inexpensive, and not the fancy gadget which you

had imagined.

stay within the

limits set by your budget and spend only what you

can comfortably afford. Don't go into debt in order

to have a flashy Christmas; this money will have to

be paid back at some stage and why put pressure

on yourself by starting the New Year in the red.

Just because you are counting your pennies

there is no need to cancel Christmas all together; if

you stick to your budget and shop sensibly you and

your family can still have an awesome time.

However, there is no reason to put Christmas on

hold just because we have had to tighten our belts.

Shop around for your gifts. Starting early will help

with this one

Don't feel “guilt-tripped” into buying an

expensive gift.

Make a list

Once you have bought the present for a specific

person, don't feel you need to add “a little extra”

Sometimes gifts of your time or talents can save

you huge amounts

Don't overspend on your children

Watch your grocery bill!

ask them directly what they would like

Be realistic with your spending;

If you

stay smart and use your imagination, you can still

enjoy the spirit of Christmas and have a great

holiday!

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SAVINGSENSIBLEPhoto BigStockPhoto.com

At death, all the worldwide assets of the

deceased, form part of the deceased's

estate. Despite not being owned by the

deceased at date of death, certain assets will be

deemed as assets of the estate. Deemed assets

include any assets which the deceased had

control of at date of death – assets which the

deceased was competent to dispose of for his

benefit or for the benefit of his estate.

A person is deemed to be “competent to dispose

of” any property:-

(i) if he had power that would have enabled

him to dispose of such property as he saw fit

(whether exercisable by will or any other manner)

(ii) if, under any deed of donation, settlement

or trust, or any other disposition made by him, he

retained the power to revoke or vary any provisions

relating to such property.

A trust is set up to hold assets for the benefit of the

beneficiaries of the trust. The assets are managed

by the trustees of the trust and they have a

fiduciary responsibility to manage the assets in such

a way that the best interests of the trust

beneficiaries are protected.

Assets that are placed in a trust (there are

various ways of transferring assets to a trust, but

that falls beyond the scope of the current

discussion) are placed under the total control of

the trustees and the donor relinquishes all rights of

control over the trust assets. Since the donor has no

control over the assets in the trust, they cannot be

included in his estate for purposes of estate duty.

If, however, the donor is deemed to have

control over any assets held in trust (i.e. competent

to dispose of the assets for the benefit of his

estate), such asset may very well be included in

the donor's dutiable estate at death. SARS will

regard the trust as a sham and any estate planning

advantages that the deceased's estate was

expecting from having placed assets in a trust,

could be lost.

The most common problem with a trust deed,

relating to the issue of control, is where the trust has

only two trustees - normally a husband and a wife,

and the beneficiaries of the trust include these two

trustees. Other examples include inter alia the

donor having a right to veto any decisions made

by the trust or acting on his own on behalf of the

trust without the necessary resolutions being passed

by the trustees authorising him to represent the

trust.

The circumstances in which a deceased will be

deemed competent to dispose of an asset are

very widely framed and it is thus critical that there is

absolute certainty that a person's last will and

testament and any trust deeds which they are

party to, are structured in such a way that the

question of whether they have control or not, can

never be raised.

What is meant by “competent to dispose of”?

TECHNICALLY SENSIBLE

Be certain that your last willand testament allows for no

grey areas. GETTINGTECHNICAL with Natalie Dillon,

Senior Legal Advisor - OldMutual Broker Distribution

So what if I havecontrol over the

assets in myfamily trust?



Implementation of Broad Based Black Economic

Empowerment in South Africa has been a slow

process. The Commission for Broad Based Black

Economic Empowerment (“BBBEE”) convened in

2001 which finally resulted in legislation being

enacted in 2004 called the Broad Based Black

Economic Empowerment Act (“the Act”). The Act

was a skeleton document which did not contain

actual implementation mechanisms. These

mechanisms were subsequently set out in the BBBEE

Codes of Good Practice. These Codes took from

2004 to 9 February 2007 to draft and finalise. It is

only after the finalization of these Codes of Good

Practice that enterprises had the necessary clarity

and direction to embrace the implementation of

BBBEE.

The next challenge centred on issues of

verification of BBBEE implementation and scores.

The verification agencies established to do

accredited assessments of enterprise's scores was

still not approved by the Department of Trade and

Industry. This took another two years for the first

draft of verification agencies to be approved by

the Department of Trade and Industry.

The co-ordination and dovetailing of the

various BBBEE legislation and the supporting Codes

of Good Practice has been a further hurdle,

specifically the alignment of the current

Preferential Procurement Policy Framework Act

and the Broad Based Black Economic

Empowerment Act. The Preferential Procurement

Policy Framework Act still dictates that tenders for

Government and Quasi Government work will be

issued on the basis of what we define narrowly as

Black Economic Empowerment. The system is

based on an 80/20 split for tenders below R500 000

and a 90/10 split for tenders above R500 000.

What this means is that either 10% or 20% -

depending on the value of the tender - can be

utilized in respect of adjudication of points for

BBBEE. Up to now, this calculation is based on the

measurement criteria of ownership and

management control of such enterprises. The

Preferential Procurement Policy Framework Act has

still not been aligned to the Broad Based Black

Economic Empowerment Act and its

corresponding Codes, creating huge confusion in

tender and tender adjudication processes for

Government and Quasi Government, as well as the

enterprises bidding for the work concerned.

Draft regulations have now been published by

Treasury which are designed to align these laws

and regulations into a more holistic and integrated

framework. This is the final piece of the long running

legal and regulatory jigsaw required to give real

meaning and impetus to BBBEE. The integrated

approach to BBBEE does not only look at

ownership and management control, but looks at

a seven element scorecard including ownership,

management control, employment equity, skills

development, preferential procurement, enterprise

development and socio-economic development.

An integrated approachto BBBEE which can nowfinally be implemented.By Jonathan Goldberg,B.Comm. LLB. MBA. -Global Business Solutions

THE FINAL PIECE OF THE

BROAD BASED BLACK

ECONOMIC

EMPOWERMENT PUZZLE

SENSIBLE INVESTORSENSIBLE SOLUTIONS

Procurement and the bidding for work through

Government and Quasi Government tenders is one

of the key cornerstones of BBBEE. The significance

of this arena is illustrated by way of a case study on

Mercedes Benz South Africa (“MBSA”).

MBSA are unlikely to be fined or penalized

directly for not implementing the BBBEE Act through

the mechanics of the legislation itself. They do,

however, do business with the Government insofar

as the sale of vehicles and trucks are concerned.

They further rely on Government incentives for their

export programs. It is in this key interface of business

where the Government can and does apply the

legislation to impose direct pressure on MBSA to

comply with the provisions of BBBEE. Further down

the supply food chain a family owned consultancy

firm, for example, wanting to do business with MBSA

would have to get a positive BBBEE score to enable

MBSA to, in turn, get a good score under the

element of procurement. In this way, the legislation

is designed to become self policing in the sense

that the pressure to comply is directed at the major

enterprises to ensure that they themselves procure

from companies and organizations that have

embraced the requirements of BBBEE.

Returning to the case study in hand, a motor

manufacturer is often limited in the area of

procurement in that major procurement tends to

come from international enterprises that are not

required to comply with the codes from an

ownership perspective. This will translate into even

more pressure being imposed on those local

suppliers over which the legislation and Codes do

apply.

The above knock-on effect is illustrated by the

consultancy firm now having to get its

empowerment credentials up to speed. In so

doing, it would also be forced to look at its own

procurement. Here, it could be assumed that one

of the major expense items is business travel. The

consultancy will now put pressure on its family

owned travel agent to become BBBEE compliant.

The reality is that the alignment of this

legislation is imminent and this is excellent news for

the Government tender process. Government

should be able to simplify their tender processes

because - where issues of price and quality are

similar - adjudication should be on the basis of

verification certificates independently issued by

verification agencies. This stands to de-mystify

Government tender regulations entirely and, if

properly implemented, could make the tender

process far more transparent.

What does this mean for business? The legal

and regulatory requirements on BBBEE are being

sharpened and all enterprises – regardless of

industry and size – will be well placed to take

notice and evolve to ensure that they remain

competitive and sustainable.

FOCUS ON SAFUND MANAGERS

FOCUS ON SAFUND MANAGERS

Investing is at all times an emotional activity. At its

heart we fear that we won't be able to live in the

lifestyle to which we've become accustomed

after we retire or that our children may have

unfulfilled financial needs; so we save. And when

volatile markets threaten the sanctity we've

created through years of saving, we are that much

more anxious; that much more emotional. At such

times, investors must return to their long-term

financial plans, which if prepared properly and with

a healthy modicum of market experience thrown

in, will have at the very least considered that at

times markets are irrational, and sometimes

irrational in wholesale fashion. Returning to a well-

considered investment plan, which is updated at

regular intervals to take account of changes in

personal and, by extension, emotional

circumstances protects investors from making

inappropriate investment decisions. Selling out of a

market that has lost 30% of its value not only

crystalises losses, but also introduces the very-

difficult-to-get-right concept of timing; of just when

to expose capital back into the market.

Assuming that an investor has an appropriate

exposure to the markets, lower for investors closer

to retirement in favour of cash holdings and higher

for younger investors as a broad heuristic

simplification, it then becomes critical to evaluate

the manner in which this exposure is being

managed. It is not enough simply to allocate to the

market and rescind all investment decision making

to the manager to which such exposure is

accorded. An understanding of what said

manager is doing to protect the investor is critical.

For example, though current market conditions

have been difficult for bond, property, equity and

cash managers alike, within these managers there

have been wide dispersions of returns.

In addition, there are managers who are able

to trade their portfolios not just within equities, but

across asset classes, as well as across borders.

Much insight can be gained from understanding

which managers are able to protect their portfolios

by getting foreign currency exposure calls right. For

example: by allocating 15% of a portfolio offshore

when the rand is at 7 represents a gain of 6% for

the overall portfolio when the rand weakens to

trade at 10 to the dollar. On a relative basis this

gain could very well be larger should a

comparable manager elect to remain invested in

South African equities whilst the offshore exposure is

held in cash (if that cash was held with a bank that

didn't fold over the past year, which has proved to

be far trickier an investment call than it ordinarily

has been). To be fair, this is a massively easy

judgement call to make in hindsight, but skilful

managers – those that make these types of calls on

a regular basis – can be identified through this form

of retrospective analysis.

For

example, it is of very minimal use for an investor

approaching retirement to have a significant

portion of their portfolio exposed to a manager

whose skill set is determining just when to introduce

or eliminate foreign currency exposure. That skill set

is not commensurate with an investor who is about

to spend their savings over the next two or so

decades in South Africa.

In summation, investing is an emotional activity

made that much more so in volatile market

conditions. Investors should stick to their long-term

investment objectives which, together with a

competent financial advisor, should have been

documented as part of an overall investment plan,

which in turn would be allocated to investment

managers whose style of investing, skill set and

remuneration is commensurate with that of the

investor's objectives.

What's critical here is to identify those

managers who demonstrate a skill set that is

commensurate with an investor's objectives.

SENSIBLE OBJECTIVES

20

Aligning your financial manager'sskill set to your objectives. By Paul

Marais, Director - NFBAM



After a difficult start to 2009 the all share

index has staged a remarkable rally since

March, following global indices in a

rampant charge from the lowly depths of 18000 on

the ALSI to the lofty heights of 26000, a bounce of

approximately 44%. Following the deep pessimism

of early March, global investors have shown an

increasing appetite for risk, with a large amount of

cheap money being pumped into the system

finding its way into emerging markets. From

valuation levels which appeared cheap in March,

even with the rate of global deleveraging, the

market is now priced for a far more

accommodative outlook, with a PE of 15 reflecting

investors increasing comfort with the future

earnings outlook.

On the back of these strong moves and a still

murky outlook for the global economy into 2010, it

has become increasingly important to look for

keenly priced investment opportunities. While profit

figures can sometimes be misleading, operating

cashflows provide a good indication of the

strength of underlying trading within a company. It

is this strength that provides the backbone to

sustainable, quality earnings into the future. While

there are a number of valuation techniques that

are used to determine good value, dividend yield is

an easy metric to track, the foundation of which is

a healthy cash position in the company. Even with

a market dividend yield of 2.5%, historically below

average, there are still a number of good

investments carrying twice the forward yield of the

market. With cash returns having consistently

declined during the last 12 months, the investment

case for strong dividend payers remains compelling

at these levels.

MAKING A CASE FORSTRONG DIVIDEND PAYERS

Keep a watch for keenly priced investment opportunities.By Chris Lemmon, Director/Portfolio Manager - NVest.

The Eastern Cape's first

NVest Securities (Pty) Ltd:

www.nvestsecurities.co.za

NFB House 42 Beach Road, Nahoon, East London 5241

P O Box 8041 Nahoon 5210

Tel: (043) 735-1270 • Fax: (043) 735-1337

Email: [email protected]

home-grown stock brokerage…..

Monetary figures of speech we use everyday –do you know what they mean?

1. A fool and his money are soon parted

2. A good payer is master of another's purse

3. Early to bed and early to rise makes a man

healthy, wealthy, and wise

4. Health is better than wealth

5. Money doesn't grow on trees

6. Money is the root of all evil

7. Money makes money

8. Pay beforehand was never well served

9. The best things in life are free

10. Where there's muck there's brass

"A fool and his money are soon parted" suggests

that stupidity doesn't mix with

The saying "A good payer is master of another's

purse" recommends

"Early to bed and early to rise makes a man

healthy, wealthy, and wise" is a recommendation

not to go to bed

Someone who believes that "health is better than

wealth" would probably prefer to be

A parent might tell a child "money doesn't grow on

trees" when the child

"The love of money is the root of all evil" implies that

all badness comes from

If the idea that "money makes money" is true, rich

people can use their money to

If you believe the saying "Pay beforehand was

never well served", you will always try to pay

"The best things in life are free" is a saying

suggesting that

"Where there's muck there's brass" suggests that

rubbish can be used to create

Answers

a. fools

b. money

c. partners

a. paying on time

b. controlling your purse

c. controlling other people’s money

a. late

b. early

c. before getting up

a. financially healthy and physically ill

b. rich, with a heart condition

c. poor, but in good shape physically

a. keeps asking for money and spends it carelessly

b. asks where money comes from

c. wants to plant a tree

a. love

b. monetary greed

c. money

a. help the poor

b. get richer

c. mint money

a. after a job is done

b. when you sign the contract

c. before a summons is served

a. the best thing of all is freedom

b. money cannot buy life’s best things

c. you should help yourself to what you want

a. metal

b. money

c. methane gas

1. b; 2. a; 3. a; 4. c; 5. a; 6. b; 7. b; 8. a; 9. b; 10. b

Contact Philip Bartlet, one of NFB’s Financial

Advisors, on 043-735 2000 or

[email protected] for assistance in setting

up your financial plan.

SENSIBLE MEANINGS


24

“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.

SENSIBLE FINANCE QUESTIONS & ANSWERS

Q:

A:

When seeking financial advice and deciding on

a financial advisor what should I be looking for and

what questions should I be asking ?

1. Do you have a licence?

2. What are you qualifications?

3. Continuity?

4. Word of Mouth?

5. What services can you offer?

6. Who are your providers?

7. Is your advisor market related?

8. How often will we meet?

It is always important to establish credibility. After

all, you are entrusting your finances to someone. I

have highlighted below some of the questions one

should ask.

- An advisor should be

licenced with the Financial Services Board (FSB)

– Ideally your

advisor should be a certified financial planner

(CFP) which is internationally recognized.

Experience also matters, however, and should your

advisor have 20 years experience and strong

referrals this is often worth more.

– What happens if the advisor leaves

or is hit by the proverbial bus. It is better to deal

with a company and not an individual. Although

there is an individual relationship you need to

ensure that your financial planning does not fall

apart if that relationship ends.

Establish that the advisor has a

good reputation. If it is a referral, find out why the

client is happy. Is it due to his money doubling in a

month or is it more due to the fact that the advisor

has set a long term plan in place that works and

the client has seen the benefits of building a

legacy. Does the advisor give regular feedback?

Your advisor should

be able to provide you with retirement, investment

and estate planning. While it isn't necessary that

your advisor is an expert in all these areas (in fact

be wary if he says he is), he must have alliances

with other firms that can provide you with expert

advice. The role of the advisor is to bring it all

together for the client and manage the

relationship.

Make sure your advisor

has contracts with reputable firms. Your advisor

should have a deep understanding of the products

he is offering and a good relationship with that

company to ensure quality service.

You should

establish what market research he has access to. Is

he basing the decision on his own gut feel or does

he have a process and management team that

assist with market and economic decisions.

It is important to

establish when your portfolio will be reviewed. It

should be a minimum of once a year. During this

meeting your advisor should assess your plan

against the actual outcome and adjust the plan

accordingly.

We believe that at NFB we meet the above criteria.

Travis McClure

Please address all Questions to: Travis McClure,

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

5210 or email: [email protected]


Anthony Godwin

Gavin Ramsay

Andrew Kent

Walter Lowrie

Robert Masters

Bryan Lones

Travis McClure

Marc Schroeder

Phillip Bartlett

Duncan Wilson

Stuart Coates

Leona Trollip

Leonie Schoeman

(RFP, MIFM) - ManagingDirector and financial advisor, 21 yearsexperience;

(BCom, MIFM) - ExecutiveDirector and financial advisor, 15 yearsexperience;

(MIFM) - Executive Director andShare Portfolio Manager, 16 years experience;

- Financial Advisor, 23 yearsexperience;

(AFP, MIFM) - Financial Advisor,22 years experience;

(AFP, MIFM) - Financial Advisor, 18years experience;

(BCom, CFP) - Financial Advisor,11 years experience;

(BCom Hons(Ecos), CFP) -Financial Advisor, 5 years experience;

(BA LLB) - Financial Advisor, 9 yearsexperience;

(BCom Hons, CFP), 4 years experience;

(BCom) – Financial Advisor, 1 year;

(RFP) - Employee Benefits DivisionalManager and Advisor, 32 years experience;

- Healthcare DivisionalManager and Advisor, 11 years experience;

NFB has a separate specialist Short TermInsurance Division, as well as now offeringspecialist group companies in the fields of stockbroking, wills and the administration ofdeceased estates.

– FinancialAdvisor

NFB have a

with a between them:

STRONG, REPUTABLE TEAM OF ADVISORSWEALTH OF EXPERIENCE

25

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The draw will take place on 4th December 2009 and the winner will be contacted telephonically. No employees or direct family of employees ofNFB or Harvey World Travel will be eligible to win the prize.

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You’ve worked hardfor your money...

“It requires a great deal of

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caution to make a great

fortune...but when you have got

it, it requires 10 times as much wit

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Nathan Rothschild, 1834

contact one of NFB’s financial advisors

• tel no: (043) 735-2000 or e-mail: [email protected]

• tel no: (011) 895-8000 or e-mail: [email protected]

east london

johannesburg

NFB is an authorised Financial Services Provider

web: www.nfb.co.za


now let NFBmake your money

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NFB Sensible Finance Magazine issue 13

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Transcript of NFB Sensible Finance Magazine issue 13