Blue Chip Issue 81

Blue

Blue Chip takes this opportunity to wish the FPI a happy 40th anniversary. Congratulations! Rob Macdonald, Fundhouse, writes in his first of what we hope will be many columns (page 17) that the FPI’s vision of Professional Financial Planning for All is noble but he believes that if this vision is to be achieved, financial planners need to re-imagine how they see themselves and the profession. In an exclusive interview with Lelané Bezuidenhout, CEO of the FPI, on page 20, she tells us that a big change that she would like to see in the industry within the next five years, is that financial management forms part of the South African high-school curriculum. She feels that we need to teach children from a young age how to work with money to address the poor savings culture in South Africa. Many adults are struggling with financial strain, which has been compounded by the effects of Covid in the last 18 months. Financial strain can be largely attributed to a lack of financial knowledge. Our article on consumer education (page 107) tells us that a lack of financial knowledge leads to high levels of debt, low savings rates and little to no investments. Financial literacy is the ability to make sound decisions regarding how much to save, when to invest and when (and not) to get into debt. Globally, investors are aligning their portfolios with their ESG beliefs. While South Africa has lagged this trend to some extent, ESG investing is taking hold as investors look to bolster their risk analysis processes and generate more sustainable returns over the long term. Old Mutual writes about climate science and why it is important for long-run capital allocation (page 62). Momentum Investments speaks to us about the Sustainable Development Goals (page 34) and Sonja Saunderson, CIO, Momentum Investments, gives us her take on responsible investing (page 35). Chris Rule, CoreShares, takes the passive vs active debate to a new arena on page 64. Dr Gizelle Willows, Nudging Financial Behaviour, writes about the perils of risk tolerance questionnaires. She says that understanding your client’s capacity for risk is key to advising them on a sound investment strategy. Questionnaires remain the simplest and most common method of assessing risk tolerance but take heed of Dr Willows’ sage advice on page 86 before using them. Failure to use questionnaires correctly may result in an excessively risky portfolio. On page 88, Kim Potgieter writes about helping clients through unexpected transitions. Do not miss our in-depth interviews throughout this edition of Blue Chip. Enjoy! Alexis Knipe, Editor EDITOR’S NOTE In this issue Blue Chip Journal – The official publication of FPI Blue Chip is a quarterly journal for the financial planning industry and is the official publication of the Financial Planning Institute of Southern Africa NPC (FPI), effective from the January 2020 edition. Blue Chip publishes contributions from FPI and other leading industry figures, covering all aspects of the financial planning industry. A total of 10 000 copies of the publication are distributed directly to every CERTIFIED FINANCIAL PLANNER® (CFP®) in the country, while the Blue Chip Digital e-newsletter reaches the full FPI membership base. FPI members are able to earn one non-verifiable Continuous Professional Development (CPD) hour per edition of the print journal (four per year) under the category of Professional Reading. Special advertising packages in Blue Chip are available to FPI Corporate Partners, FPI Recognised Education Providers and FPI Approved Professional Practices. blue-chip-journal ISSUE 81 | OCT/NOV/DEC 2021 Publisher: Chris Whales Editor: Alexis Knipe Online editor: Christoff Scholtz Designer: Tyra Martin Production: Aneeqah Solomon Ad sales: Sam Oliver Gavin van der Merwe Jeremy Petersen Bayanda Sikiti Venesia Fowler Vanessa Wallace Managing director: Clive During Administration & accounts: Charlene Steynberg Kathy Wootton Distribution and circulation manager: Edward MacDonald Printing: FA Print PUBLISHED BY Global Africa Network Media (Pty) Ltd Company Registration No: 2004/004982/07 Directors: Clive During, Chris Whales Physical address: 28 Main Road, Rondebosch 7700 Postal address: PO Box 292, Newlands 7701 www.bluechipdigital.co.za Tel: +27 21 657 6200 Fax: +27 21 674 6943 Email: info@gan.co.za Website: www.gan.co.za No portion of this book may be reproduced without written consent of the copyright owner. The opinions expressed are not necessarily those of Blue Chip, nor the publisher, none of whom accept liability of any nature arising out of, or in connection with, the contents of this book. The publishers would like to express thanks to those who support this publication by their submission of articles and with their advertising. All rights reserved.