July 2021
Etienne de Waal, Chief Executive Officer: PSG Wealth
In this edition of The Wealth Perspective, Chief Investment Officer Adriaan Pask explores the pivotal role a financial adviser can play in helping you reach your financial goals. Head of Sales, Nirdev Desai, reiterates the added value a financial planner can offer an investor. Then Madelein Steenkamp, Legal Specialist in Technical Advisory Support, explains the process of winding up a deceased estate. With retirement on the horizon for some, our Head of Actuarial and Product, Jan van der Merwe, provides a handy guide to annuity products and their suitability. Finally, Technical Legal Adviser, Marguerite Marais tackles the realities of retrenchment and what options are available to you.
“ We need to continue cultivating a culture of saving to break the cycle of inter-generational debt ”
The average South African was already struggling to manage their finances before the Covid-19 pandemic. We entered the pandemic with household savings being discouragingly low and many people didn’t even have an emergency fund – often relying on credit to cover unforeseen cases. The outbreak of Covid 19, its associated lockdowns, and the related economic downturn have since exacerbated financial pressures for many, forcing them to draw from their retirement savings and investments prematurely. With July being National Savings Month, this is an opportune time to review your finances, build up a sufficient emergency fund and save for other important goals in your life.
Saving in the time of Covid-19
Unable to spend on holidays, socialising and commuting costs, our finances are also on lockdown, and we have become forced savers. Some were purely motivated by fear, limiting their spending due to concerns about the growing threat of economic recession and the impact on their job security. The SARB Financial Stability Review published in May 2021 shows an overall increased rate of savings for households in recent quarters. As a ratio of household income, savings reached a decade high in the third quarter of 2020 (1.4%) before moderating to 0.5% in the fourth quarter. The plus side to people’s lives being turned upside down is that, for many, their finances have become (forcibly) healthier. It seems there is nothing like a global pandemic to knock your finances back into shape.
A pandemic-proof wealth plan?
Despite the progress made under pressure over the last year, South Africa still has one of the lowest household savings ratios in the world (see Adriaan’s article). We need to continue cultivating a culture of saving to break the cycle of inter-generational debt. The first step to building this savings culture is better financial literacy. Knowledge will ultimately translate to better decision making and more sustainable approaches to creating and preserving wealth. If we change our attitude to saving going forward, many of us will not be caught vulnerable and unprepared when the crisis hits.
Get expert advice
Whatever investment environment you find yourself in, getting expert financial advice will help you understand and manage risk, and ultimately make good investment choices. I encourage you to meet with a skilled wealth manager to discuss your investment and savings objectives. From there, you can create a wealth plan that can help you achieve your short-, medium- and long-term financial goals.
Please read the rest of the Wealth Perspective here
A word from our Chief Investment Officer
Using a skilled financial adviser will deliver better savings outcomes
Adriaan Pask
CIO, PSG Wealth
Industry Views
Is a financial planner worth paying for?
Nirdev Desai
Head of Sales, PSG Wealth
Estate Matters
Winding up a deceased estate
Madelein Steenkamp
CFP®, Legal Specialist, PSG Wealth
Quarterly Insight
Retiring soon? Here is what you should know about annuities
Jan van der Merwe
Head of Actuarial and Product, PSG Wealth
Employee Benefits Insight
Retrenched? Where to from here?
Marguerite Marais
CFP®, Technical Legal Adviser, PSG Wealth
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Read moreWhen the winter arrives properly in Cape Town, it inevitably brings a few storms. It will rain, there will be some flooding, the wind will howl, and it will be cold. This is one of the times that Joburg dwellers really crow about their climate. Capetonians do not however fundamentally change their lives as a result – rather those who are able to, adapt around the edges, developing their own enjoyable coping strategies that are part of our local culture. Fireplaces, red wine (provided you have stocked up before lockdown) and some lovely winter stews come to mind as examples. We might check gutters and drains, do some much-needed roof repairs, and invest in a good quality winter coat. The point is, despite dark and wet mornings, we do not change our life plans because of (predictably) poor weather conditions. Rather, we understand this is just a season, and that things will change again soon.
Read moreStay Informed
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