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Blue Chip Issue 86

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Blue Chip Journal 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. Visit Blue Chip Digital:

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Welcome to Blue Chip 2023 In A focus on the future of investing, Jeanette Marais, CEO of Momentum Investments, discusses the complexity and rapid change that shapes the sector (page 26). She questions whether we understand how to disrupt our own value propositions. The volatility in today’s world ensures that none of us truly knows what our future has in store for us, so Marais advises that we disrupt ourselves rather than be disrupted. “With increasing complexity, we need to focus on our speciality and niche and find the right partners to journey towards success with,” she says. Is a discretionary fund manager the right partner for success? Bennie Crous from Equilibrium says that partnering with a DFM will ensure that an investor’s distinctive financial needs are met. South Africa has world-class investment managers who are specialists that rarely speak to an investor’s unique financial requirements (page 48). A DFM, however, understands the intricacies thereof. Marais concurs: “Partnering with a DFM frees up your capacity to focus on your value adds.” In 2022, Discovery Group announced the launch of South Africa’s first “truly global” DFM with the ambition of significantly enhancing the business of wealth creation in the country. Speaking at the launch, Discovery CEO Adrian Gore contextualised the rationale for the new business by describing two trends transforming the global and local investment industries. Find out more on page 19. The disruptive ideas and societal changes in our world today create opportunities alongside them. Eugene Botha from Momentum Investments says, “Technological innovations, demographic and social trends, urbanisation and environmental challenges are here to stay, and the importance thereof is continuously being forced into the spotlight.” These developments converge into larger themes that endure over the longer term and create investment opportunities that will persist as disruptive ideas and technological advancements reshape our environment. Uncover the art of identifying these opportunities, called thematic investing, on page 31. Rob Macdonald speaks about technology being the lifeblood of the new world of work. He asks that if financial advisors still have a role to play in people’s lives, what is that role and how will it impact on client engagement in the context of rising dependence on technology? (Page 50) Well, turn to page 56 for insights into financial advisors’ relationships with tech from the Linktank technology survey. According to the survey, financial advisors’ greatest challenges are “still topped by integration options, the industry remains frustratingly paper-based, and there’s an unbudging gap in the perception of value vs cost of technology”. Kobus Kleyn says that as financial professionals in a noble profession, we must change people’s lives for the better (page 18). And one person who will be changing people’s lives for the better is Palesa Dube, CFP®, director at Wealth Creed, and the current FPI Financial Planner of the Year. Dube believes that finances are a very personal matter and with the inclusion of female professionals in the financial services industry, diversity and inclusion will help the profession develop products and solutions that truly speak to the needs of the growing segment of females in the profession in a manner they want to be addressed. Enjoy this issue! Alexis Knipe, Editor 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 7 500 copies of the publication are distributed directly to every CERTIFIED FINANCIAL PLANNER® (CFP®) in the country, while the monthly 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 86 | JAN/FEB/MARCH 2023 BLUE CHIP Publisher: Chris Whales Editor: Alexis Knipe Online editor: Christoff Scholtz Digital Manager: Charl Daniels Designer: Tyra Martin Production: Yonella Ngaba Ad sales: Sam Oliver Gavin van der Merwe 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 Tel: +27 21 657 6200 Email: Website: 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.

INVESTMENT | Offshore Glacier International: moving towards a seamless global investment portfolio By Andrew Brotchie, Managing Director of Glacier International The case for offshore investing has been increasing over many years, as local investors look for diversification, an increased opportunity set, as well as hedging against political and economic risk. Exchange control relaxation The reasons for offshore investing have traditionally been facilitated by increases in the discretionary allowances. Currently, South African investors can take out R11-million per year per person. We believe that regulatory relaxation in the institutional space locally will drive the next wave of offshore inclusion for South African investors. A big change announced in February 2022, in the institutional space, is that pension fund investors can now have up to 45% invested offshore with no minimum or maximum allocation to Africa. Another point to note is that there is no longer a 5% to 10% difference (which there was previously) between what local collective investment schemes (CIS) could invest offshore versus what was allowed for retirement funds. This has now been harmonised and is significant for the reasons discussed below. Significant impact on the wealth advice landscape 1. A management company (or CIS) will, at certain times, use the full 45% offshore allowance in its retirement funds, which would BLUE CHIP then leave it no capacity to offer feeder funds. This will lead to a gradual decline in the availability of feeder funds in the South African market, and an additional R400-billion to R600-billion offshore investment flows from South Africa. 2. Traditionally, local and offshore investment portfolios have been quite separate. Going forward, we expect clients to start looking at their investment portfolio holistically. Previously, an offshore allocation in pension funds of 30% was typically allocated to global equities. Now that the offshore allocation is at 45% – almost half of the portfolio – the guidance will be more nuanced. The emphasis going forward will be on looking at the local and international portfolios as one whole, to see how they’ll complement each other. This will, in turn, see the investment process and portfolio construction process change in future. Glacier International’s solution set Investment platforms will also need to adapt to these changes. Glacier International’s solution set has been steadily evolving and offers a diverse range of options. Uncertainty in the markets is expected to prevail for the foreseeable future. A well-diversified, long-term investment strategy remains key. Glacier International is a division of Sanlam Life Insurance Limited, a Licensed Life Insurer, Financial Services, and Registered Credit Provider (NCRCP43). That’s what a single access point to the widest range of investment funds feels like. Glacier by Sanlam’s investment platform offers you the widest choice of local and global funds, from different fund managers, that you can mix and match, all in one place. With Glacier, you are at the centre of all investment recommendations. Your adviser will work with you to customise your selection for the ultimate personalisation and ease. IMAGINE THIS IS YOUR INVESTMENT PLAYGROUND AND YOU CAN EXPLORE AS FAR AS YOU WISH Ours is an ocean of limitless possibility. What could be better than that? Ask your financial adviser why you’re not with Glacier. Visit for more information THINK WORLD CLASS Glacier Financial Solutions (Pty) Ltd is a licensed financial services provider.

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