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Investment Indicators - 22 January 2018 |
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Paul Kruger
Author/Editor |
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Wisdom is knowing what path to take next…Integrity is taking it.
– M H McKee |
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Distributed to 50,079 subscribers.
To advertise with us
click here |
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An authorised Financial Services Provider FSP no. 731 |
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| Rates Review |
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1. Secured Investment Rates |
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Please note that (G) indicates a Guaranteed and (L) a Linked product. In order to understand the difference between guaranteed and linked rates,
kindly click here for an explanation. |
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Company |
This Week |
Last Week |
| 1 |
Clientéle Life (L) |
6.760% |
6.900% |
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2 |
1Life (L) |
6.710% |
6.880% |
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3 |
Absa (L) |
6.576% |
6.753% |
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Company |
This Week |
Last Week |
| 1 |
Clientéle Life (L) |
6.860% |
7.000% |
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2 |
1Life (L) |
6.710% |
6.880% |
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3 |
Assupol (G) |
6.680% |
6.860% |
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2. Money Market Funds |
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Please bear in mind that our figures, though based on the actual quotations that you also use, are for information purposes only,
and can never replace the official quotation from the product house. In terms of the guarantees, you are requested
to clarify the exact extent of such guarantees with the product house prior to advising clients. |
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From the Crow's Nest |
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Draft Determination on Equivalence of Reward |
The sustainability of independent financial advice was always a key
aspect in the Registrar’s approach to the Retail Distribution
Review.
Board Notice 181 of 2017, published on 10 November last year, aims
to level the playing field as far as tied agents and independent
advisers are concerned.
The publication of this draft Determination follows RDR Proposal RR,
which proposed that specific standards be set to clarify and
strengthen the principle of "equivalence of reward" as the basis on
which long-term insurers may remunerate their tied advisers.
In response to industry comments received in respect of the above
proposal, the FSB subsequently confirmed that full implementation of
RDR Proposal "RR" will be deferred until broader RDR proposals
dealing with the future remuneration model for long-term insurance
are closer to finality. The FSB did however highlight that, despite
this deferral, it remained concerned that a number of current
practices in relation to tied adviser remuneration give rise to
inappropriate distortions in the advice market, posing risk of
unintended levels of migration from independent to tied models.
Accordingly, the FSB advised that, as an interim measure, pending
full implementation of Proposal RR, it intends to clarify certain
practices that the Registrar regards as inconsistent with the
principle of equivalence of reward.
Key provisions of the draft determination
The determination identifies two specific forms of remuneration or
considerations that would enable an insurer to provide its
representatives with potentially significant financial advantages
that it is not able to provide to independent intermediaries.
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The provision to a representative of various forms of credit or
access to credit on terms that are more favourable than those
available on an arms' length basis; and
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Arrangements whereby an insurer in effect "buys the
representative's book of business" from that representative when the
representative's intermediary agreement with the insurer comes to an
end. The policyholders contained in the "book" are already customers
of the insurer concerned by virtue of its agency relationship with
the representative, and the insurer is already obliged to ensure
appropriate ongoing service to such policyholders, regardless of
whether or not the intermediary agreement with the representative
remains in place. Accordingly, the rationale for the insurer
remunerating the representative for, in effect, retaining access to
its own customers is unclear.
In addition to addressing the above specific remuneration
arrangements, the determination includes a more general limitation
providing, in effect, that remuneration arrangements where more than
15% of a representative's overall remuneration comprises benefits
that are not generally provided to all of the insurer's
representatives (or all representatives of a particular type), do
not comply with the principle of equivalence of reward.
This provision is intended to address other remuneration
arrangements (over and above those specifically identified above)
through which insurers could provide benefits to selected
representatives that it would not be permitted to offer to
independent intermediaries. The provision also seeks to ensure a
reasonable degree of equivalence with the requirement in Part 3A
that an independent intermediary may only be remunerated through
"commission in monetary form", while recognising that Part 3A
contemplates that a representative may be remunerated "in cash or in
kind".
The provision seeks to clarify that, in order for remuneration "in
kind" to be consistent with the principle of equivalence of reward,
it should largely comprise benefits typically available to the
insurer's representatives generally in the normal course of their
employment/tied agency relationship with the insurer, rather than
including a significant proportion of non-standard benefits that are
available only to select representatives'.
The determination contains additional provisions confirming that
non-compliance with the principle of equivalence of reward extends,
in summary, to arrangements that —
These provisions no doubt stem from practices like “sign-on
bonuses”, and are aimed at preventing the industry from using clever
terminology to bypass regulations.
Implications of Equivalence of Reward
Cynics may view this as a case of robbing Peter and not paying Paul.
Many fiercely independent financial advisers managed to avert the
temptation of monetary reward, access to cheap bonds and car
instalments, subsidized pension funding, free medical aid and other
benefits. Taking such benefits away from tied agents will do nothing
for independent advisers, except maybe making it easier to say no.
The real threat, in my view, will come from the onerous compliance
obligations currently being layered on the industry. Product
providers will not be allowed to offer assistance to top producers
in conflict with regulations aimed at curbing conflict of interest.
This may very well lead to independents throwing in the towel and
joining the tied agency ranks, where support in terms of compliance
is provided, amongst other obligations which the non-tied agent is
responsible for. This will put paid to the intended good intentions
of sustaining independent financial advice.
At the same time, clients who rely on independent advice will be the
biggest losers, which is exactly contrary to why we are seeing the
introduction of all the new legislation in the first place. |
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Receive 10% additional income with Discovery Invest
To celebrate Discovery Invest’s 10th anniversary, the company
is offering clients 10% additional income for three years on the
Discovery Fixed Retirement Income Plan. This is in addition to your
quoted annuity income amount before tax, and will be applied for the
first three years of the policy. For single-life annuities, the 10%
additional income stops after three years or when the client dies. For
joint-life annuities, the 10% additional income is only applied to the
current amount in payment and stops after three years or when both
annuitants have died.
Disclaimer
Nothing contained herein should be construed as financial advice and is
meant for information purposes only.
Discovery Life Investment Services (Pty) Ltd branded as Discovery Invest
is an authorised financial services provider. Registration number
2007/005969/07.
Product Rules and Terms and Conditions Apply.
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| Your Practice Made Perfect |
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National Credit Regulator Fee Guideline |
We published an article on 16 November 2017 titled
Insurer Obligations
re Credit Reports which dealt with the National Credit Regulator’s (NCR)
guideline for the submission of credit information and indicated that a
fee structure would be published in December 2017.
NCR have now published its fee guideline and schedules relating to the
above for comment.
The Fee Guideline is of specific significance to Category 1 to 5 Credit
Providers (where the total principal debt is equal to or greater than R5 million) as these credit providers are required to be onboarded at the
South African Credit and Risk Reporting Association (SACRRA) by 30 November 2018. All other categories of credit providers (where the total
principal debt is less than R5 million), will only commence with the SACRRA onboarding process in 2019.
Please note that all interested parties have 30 days from 12 January 2018 to provide the NCR with their comments on the guideline, by
emailing it to
compliance@ncr.org.za.
The proposed onboarding fees are as follows:
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Credit provider category |
Proposed fee |
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1 |
R37 000 |
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2 |
R35 000 |
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3 |
R33 000 |
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4 |
R33 000 |
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5 |
R10 000 |
The NCR advised that the annual maintenance fees will be published
during December 2018.
Please click here to download a copy of the Fee Guideline.
Moonstone employed an NCA Specialist to render NCA compliance services
to its clients and prospective clients. As part of these services, we
are able to assist you with your data access and submission practices in
compliance with the NCA. Should you have any queries, please contact
Gerrit Viviers on 021 883 8000 or by email to
gviviers@moonstonecompliance.co.za. |
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Professional Principal Executive Officer Qualification
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Registration is now open for candidates who want to enrol for the
first intake on 26 February 2018.
The Professional Principal Executive Officer Qualification is a
much-needed stimulus for the professionalisation of the role of the
Principal Officer which has historically been unstructured and
undefined. It will also support the very important transformation
imperative as it enables learners to obtain a qualification which
may have been inaccessible to working individuals, as well as those
unable to satisfy traditional Higher Education access criteria.
Moonstone Business School of Excellence (MBSE) is the first duly
accredited training provider to offer this qualification.
Given the very important role played by Principal Executive Officers
within the governance structure of a retirement fund, it is surprising
that, up to now, very little was available in the form of a duly
recognised NQF level 7 qualification for those performing this function,
or those aspiring towards it.
This occupational qualification will form the apex of the retirement
functionary learning path and will be linked to the Principal Officer
Association (POA) professional designations.
Who should register?
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Current Principal Officers, trustees and retirement fund
functionaries.
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People working in a claims or employee benefits and compensation
environment who have access to a retirement fund.
Successful learners will be linked to the professional designations
offered by Batseta, the professional body for the profession. The
learning pathway will include the Retirement Fund Trustee qualification.
Registration
You are welcome to speak to Frans Petrus Zeelie at 087 702 6429 who will
gladly assist.
To register, click
here, then on
Enrol today and finally on the
Professional Principal Executive Officer button.
For more information, please click
here. You can also email us on at
learning@mbse.ac.za. |
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Regulatory Examinations |
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2018 Schedules updated |
Please note: Registration cut-off is 11 working days before date of exam.
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Important Regulatory Exam
Information |
In terms of our mandate from the FSB, we are not allowed to
promote or endorse any training service provider, hence I am
unable to disclose details of the author of the very important
information below.
We have now received revised and updated Fit and Proper
Requirements from the Registrar of the FSB with the publication
of Board Notice 194 of 2017 on 15 December 2017, with variable
implementation dates.
This draws to an end a period of nearly three years of public
and corporate-wide consultation which our Regulator engaged in.
Included in this review and consultative process was a careful
and thorough review of the Qualifying Criteria (content
requirements) upon which our Regulatory Exams for key
Individuals (RE1) and Representatives (RE5) are based.
The review process has now provided us with a more in-depth but
less repetitive set of Qualifying Criteria. There are still 16
Tasks or sections for the RE1 exam and 8 for the RE5 exam, but
there are a significant number of new Qualifying Criteria and of
course the updated FICA legislation is now incorporated, where
applicable.
This has led to important changes to the Regulatory Exam
requirements and therefore, of course the Regulatory Exams, the
study material and bank of MCQ questions.
Common sense suggests that taking the exams before 1 April 2018
will be wise and I do recommend and encourage those who need to
complete these exams to do so sooner rather than later i.e.
before 1 April 2018.
With the benefit of hindsight we can also suggest that you
leave yourself sufficient time to rewrite in the event that you
not pass at the first attempt. Seats are filling up very fast,
so please make sure you register in time.
Frequently Asked RE Questions
– Answers to questions on REs and preparation material
DOFA - Do's and Don'ts
Email enquiries should be addressed to
faisexam@moonstoneinfo.co.za. You can phone us on
021 883 8000 - select option 2 to speak to one of our
consultants. |
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Careers Platform
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Are you hiring? Advertise your position on Moonstone’s Career Platform
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The Moonstone website -
www.moonstone.co.za
- enjoys an average of 20 000 visits and approximately 39 000 page views per month. |
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Moonstone boasts an exclusive newsletter mailing list of over 49000
dedicated financial decision makers who receive 2 newsletters per week. |
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Our audience is relevant and industry specific: individual and corporate advisors and brokers in the following financial sectors:
iInvestment, Risk, Healthcare, Banking, Retirement, and Insurance. |
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Featured Positions |
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Insurance Field Sales
Reps:
Quantum Invest, Nationwide - We are looking for field Reps
nationwide. RE5 qualification is recommended. We offer a
competitive commission structure.
Read More
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Financial Advisor:
Kaizen Solutions, Gauteng - We are currently recruiting an unlimited
number of individuals aged 25 to 35 who are sales driven, motivated,
ethical and dedicated.
Read More
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Senior Credit Controller:
CIA Building Insurance, Bedfordview, is currently looking for an
experienced credit controller to join our finance team.
Read More
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Short Term Insurance
Underwriter:
JFA Shortterm Brokers CC, Milnerton, Cape Town -
If you have a minimum of 3 years experience and, live in the vicinity of
the brokerage, then
Read More
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In Lighter Wyn |
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Tel: +27 21 883 8000 | Fax: +27 21 883 8005
info@moonstoneinfo.com
www.moonstone.co.za
P.O. Box 12662, Die Boord, Stellenbosch, 7613, Republic of South Africa
Disclaimer:
Services and products advertised by external product suppliers in
this newsletter are paid for by the respective suppliers. Moonstone
does not endorse any opinions, conclusions, data, products, services
or other information contained in this e-mail which is unrelated to
the official business of Moonstone and furthermore accepts no
liability in respect of the unauthorised use of its e-mail facility
or the sending of e-mail communications for other than strictly
business purposes.
The complete disclaimer can be accessed
here. |
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©2015 Moonstone. All rights reserved. |
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