NFB Sensible Finance Magazine Issue 20

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Issue 20 March 2012

PERSONAL FINANCE Magazine

RETIREMENT How much do I need to retire in comfort?

A SNAPSHOT OF THE 2012/2013 BUDGET SPEECH How will this impact you?

GAMBLERS BEWARE! A tax on gambling winnings is imminent

private wealth management

“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.

Only the present is within our reach. To care for the present is to care for the future.�

- Buddha

private wealth management

Providing quality retirement, investment and risk planning advice since 1985. fortune favours the well-advised contact one of NFB's private wealth managers: East London tel no: (043) 735-2000 or e-mail: nfb@nfbel.co.za Port Elizabeth tel no: (041) 582-3990 or email: nfb@nfbpe.co.za Johannesburg tel no: (011) 895-8000 or email: nfb@nfb.co.za Web: www.nfbec.co.za NFB is an authorised Financial Services Provider

sensible finance

ED’SLETTER

editor Brendan Connellan bconnellan@nfbel.co.za

Contributors Laurie Wiid (NFB Gauteng), Travis McClure (NFB East London), Emmanuella Fernandez (NFB Gauteng), Shaun Murphy

a sensible read

(Klinkradt & Assoc.), Grant Berndt (Abdo & Abdo), Sheldon Holdsworth (OMI), Cilma Heyns (Glacier by Sanlam), Michelle Wolmarans (NFB Insurance Brokers), Natalie Dillion (Old Mutual), Robert McIntyre (NVest Securities), Evan Walker (Momentum Investments).

Advertising Robyne Moore rmoore@nfbel.co.za

layout and design Jacky Horn TA Willow Design jacky@e-mailer.co.za

Address

Photos used in this magazine BigStockPhoto.com

NFB Private Wealth Management East London Office NFB House, 42 Beach Road Nahoon, East London, 5241 Tel: (043) 735-2000 Fax: (043) 735-2001 E-mail: nfb@nfbel.co.za Web: www.nfbec.co.za

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 Private Wealth Management. ©2012 All Rights Reserved.

No part of this publication may be reproduced in any form or medium without prior written

T

he Greek debt crisis is an all too familiar topic right now as decisions are being made on Greece's future in the Eurozone and austerity measures to try keep the country from defaulting and the problem as contained to Greece as possible. But what is important to understand is what led to the problem escalating to such a degree and how can we, as individuals, learn from this expensive lesson.

Essentially the reason for the crisis was decades of overspending and poor fiscal management, coupled with failing to record billions of Dollars of expenditure to appear compliant with budget deficit requirements of the Maastricht Treaty. In addition, Greece then manipulated the EU into lending them money for years and instead of using the funds to generate real returns back into the world economy, they used the funds to ensure that Greeks lived well beyond their means, confident that the IMF or EU would rescue them if need be when time came to repay.

And some of the results of such irresponsible governance are forced cuts in wages, losses of jobs, reductions in pensions and bond holders taking huge losses on government bonds. Furthermore, Greece will need to spend many years repaying the EU for the bailout amount borrowed and is unlikely to see any economic growth for around the next decade, deepening an already five year old recession.

And that is the crux of it. Just as a country cannot live beyond its means for any extended length of time, neither can individuals! And if one does try to do so, the results can be devastating and take years to recover from. It is simply not worth the gamble. So if you are someone with a heavy bond that you are still trying to pay off or if you have various accounts that are adding up, think twice before you decide to upgrade your car or redo your house! And even if you do have some extra disposable income at hand, you may want to consider investing it for that rainy day – something that I am sure most Greeks wish they'd done when they had the opportunity!

Brendan Connellan - Editor and Director of NFB

Email your full name to nfb@nfbel.co.za to subscribe to NFB's free economic electronic newsletters. another aspect of our comprehensive service

consent from the Editor. sensible finance march12

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Photo BigStockPhoto.com

SENSIBLE CONTENTS

nfb sensible finance

March 2012

4 GAMBLERS BEWARE! A tax on all gambling winnings is imminent. By Grandt Berndt, Abdo & Abdo.

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6 PROTECTION THAT PAYS - DIRECTORS AND OFFICERS LIABILITY COVER Minimize your company's risk by ensuring you have the correct policies in place.

By Michelle Wolmarans, Manager - NFB Insurance Brokers (Border).

7 INTRODUCING OLD MUTUAL INTERNATIONAL INVESTMENT PORTFOLIO

By Sheldon Holdsworth, Regional Manager – Offshore Distribution, Old Mutual International.

10 IS YOUR FINANCIAL PLANNING IN ORDER? A checklist to ensure you're on the right track. By Julie McDonald, Paraplanner NFB Private Wealth Management.

12 RETIREMENT - HOW MUCH DO I NEED TO RETIRE IN COMFORT? The answer seems to be a moving target. By Laurie Wiid, Director / Private Wealth Manager - NFB Gauteng.

16 DEFERRED COMPENSATION SCHEMES AND THE NEW TAX LAWS The changes are effective March 2012. By Natalie Dillon, Senior Legal Advisor - Old Mutual Broker Division.

17 SOUTH AFRICANS NEED DISABILITY COVER

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Has your cover been appropriately tailored for your needs? By Emmanuella Fernandez, Paraplanner - NFB Gauteng.

18 2012 TAX RELATED BUDGET PROPOSALS A summary of the tax related budget proposals announced by the Minister of Finance on 22 February 2012. By Shaun Murphy, CA (SA), Partner - Klinkradt & Associates.

20 THE PRICE OF BEING TOO CONSERVATIVE Be wary of the “safe” cash option. By Henry van Deventer, financial planning coach at acsis. Source: www.fanews.co.za.

21 MOMENTUM SMALL/MID-CAP FUND WINS A TOP OUTRIGHT PERFORMER AWARD FOR THE FOURTH CONSECUTIVE YEAR AT THE 2012 RAGING BULL AWARDS

By Evan Walker, Portfolio Manager - Momentum Investments.

22 YOUR RA HAS MORE ADVANTAGES THAN YOU THINK More than just an opportunity to add to your retirement. By Cilma Heyns, Business Development Officer - Glacier by Sanlam.

23 SASOL MAKES FOR A GREAT INVESTMENT A further look at the core holdings in NVest's general equity portfolios. By Rob McIntyre, Portfolio Manager - NVest Securities.

24 Q &A You ask. We answer. Advice column answering your investment, personal finance, life and/or risk insurance questions with Travis McClure, Private Wealth Manager NFB East London.

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SENSIBLY LEGAL

GAMBLER'S BEWARE! A tax on all gambling winnings is imminent. By Grandt Berndt - Abdo & Abdo

T

he threat of a tax on all gambling winnings, whether at a Casino, through the lottery or at the horses appears to be imminent.

In the 2011 budget speech, the Minister of Finance stated that as from April 2012 all winnings above R25 000.00 will become liable to a final 15% withholding tax. Needless to say the gaming industry is none too pleased with this proposed tax.

A withholding tax, by definition, means that an amount of money must be deducted from the income and paid directly to SARS. The difference between the proposed gaming tax and other withholding taxes is the use of the word "final" by the Minister of Finance. Most withholding taxes are imposed on non-residents to obtain taxes from them. For instance, if a non-South African resident sells immovable property of a value exceeding R2 000 000.00 then the purchaser, the estate agent and conveyancing attorney must ensure that a percentage of the sales price is withheld from the seller until such time as SARS have calculated the Capital Gains Tax due. The seller is then refunded any excess amount withheld.

However, with the proposed gaming tax, it is imposed on all winnings in South Africa, whether of South African residents or not and is a final tax. In other words, irrespective of whether the gaming winner is a recreational or a professional gambler or whether the recreational gambler pays an average income tax of 10% or pays income tax at the marginal rate of 40%, they will all pay a "final" tax of 15%.

When Capital Gains Tax ("CGT") was introduced on 1 October 2001, the calculated capital gain was added to ones taxable income for the year of sale of that asset. For example, if the capital gain was R500 000.00, 25% of this gain is

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added to the taxable income for the individual in the year of sale. So if the individual is paying an average rate of 20% income tax, the effective CGT payable would be calculated as follows: R500 000.00 x 25% = R125 000.00 x 20% = R25 000.00 (or 5% of the full capital gain) However, if the individual was paying an average income tax of 40%, the effective CGT payable would be: R500 000.00 x 25% = R125 000.00 x 40% = R50 000.00 (or 10% of the full capital gain) Our tax system initially only taxed gross income being what was commonly known as "income" or "revenue". However, with the introduction of CGT, certain accruals of a capital nature also became taxable. With CGT the tax payer can, however, offset certain expenses such as the cost of the asset and any improvements effected, thus ensuring that he pays a maximum of 10% of the actual capital gain (if the tax payer is at the marginal rate of tax). With the proposed final withholding gaming tax, there is no differentiation between the professional and recreational gambler, nor as between recreational gamblers, their levels of income, as there is with CGT. The gaming winner also cannot offset the losses incurred in trying to hit the jackpot from any winnings. The further question arises whether the professional gambler will now no longer have to submit a tax return to SARS. The implementation of this tax will place onerous obligations on gaming institutions who are consulting with government in this regard and it is thus anticipated that the implementation of this tax will be delayed, but the one thing we can be certain of, is that it is coming.

PROTECTION THAT PAYS DIRECTORS AND OFFICERS LIABILITY COVER

Minimize your company's risk by ensuring you have the correct policies in place. By Michelle Wolmarans, NFB Insurance Brokers, Manager

G

overnments worldwide are implementing and developing new legislation pertaining to the regulation of companies in order to prevent the reckless corporate behaviour that we have witnessed in recent years. A director, board committee member or any person who controls or manages a significant portion of a company can be sued for any perceived breach of duty by shareholders, employees, customers, competitors, creditors, investors, suppliers and regulators. In South Africa the new Companies Act, The Consumer Protection Act and the King III Code of Governance have resulted in the codification of directors' common law fiduciary duties and responsibilities and introduced statutory liability for these individuals in their personal capacity.

The general public's heighted awareness of their rights and the recourse they have against negligent parties has significantly increased the risk of litigation. A judgement against a director could result in huge financial losses, and in the event that judgement is not made, the legal cost of defence can in itself be crippling. In order to manage and minimise this risk it is imperative that both private and public companies have a Directors and Officers Liability Policy.

What does this policy cover?

The policy pays for defence costs and financial losses in the event of a claim. It also extends to cover costs incurred in the course of investigations by regulators and public relations expenses.

Who does the policy cover?

The policy provides cover for past, present and future directors, officers of a company and employees in a managerial or supervisory capacity. In addition the policy extends to protect spouses, administrators and executors of an insured's estate.

What are key exclusions in the policy?

The policy will not pay for defence costs or compensate for financial losses resulting from dishonest and fraudulent acts, illegal remuneration or personal profit, existing or known claims or circumstances, property damage and/or bodily injury.

Examples of claims Shareholder claim: A small shareholder in a

private company took action against the directors alleging that over a period of several years, the directors had abused their positions by paying themselves excessive salaries, but paying low dividends to the shareholders. The shareholder applied to the High Court for a review of the directors' actions and demanded that they repay over R11 million to the company.

Employee claim: A female employee accused her superior of sexual harassment and denial of promotion. The employee sued the superior and the company and sought millions in compensation.

Regulatory claim: Directors were prosecuted by local authorities after persistently failing to comply with fire regulations.

Breach of Companies Act: An action of breach was brought against a director following the release of an employee's medical records.

Creditor claim: The plaintiff filed a complaint against the directors of a company alleging that they conspired to use the plaintiff's services to furnish, install and repair company equipment knowing it was insolvent and were planning to file for bankruptcy protection.

Getting the appropriate advice from your short term insurance advisor and putting in place a Directors and Officers Liability Policy will ensure access to quality attorneys whilst protecting a company's cash flow. Defence costs are covered by the policy, protecting a director's personal wealth, and allowing management to focus on running the business effectively rather than managing protracted litigation which is not only costly in monetary terms, but is also mentally taxing and takes up a huge amount of time that could be invested in the company.

If you are a director of any company, do not delay in contacting Richard Clarke or Steven Pope to arrange an appointment to discuss putting a Directors and Officers Liability Policy in place for your business.

Sources of information: Cover magazine November 2011; Chartis Insurance Company

insurance brokers (border)(pty)ltd.

SENSIBLE INVESTMENT

Introducing Old Mutual International Investment Portfolio

By Sheldon Holdsworth, Regional Manager – Offshore Distribution, Old Mutual International

O

ld Mutual International has launched a new investment product for the sophisticated investor which can accommodate their R4 million direct offshore investment and R1 million discretionary offshore investment allowance and also allows investors to transfer their existing offshore assets (including asset swaps) into their Investment Portfolio at the outset, subject to certain acceptance criteria.

The Old Mutual International Investment Portfolio is issued by Old Mutual Isle of Man, a branch of Old Mutual Life Assurance Company (South Africa) Limited, a registered long-term insurer and licensed Financial Services Provider.

Designed specifically to allow you, the investor, to hold, consolidate and manage your international investment holdings in one place, the Old Mutual International Investment Portfolio, provides you with access to a range of international assets via a tax-efficient life wrapper.

Due to the relationship between Old Mutual Life Assurance Company (South Africa) (Pty) Ltd and our Reinsurance company, there is no tax in South Africa in respect of returns earned. In essence, any returns on the Investment Portfolio accumulate tax free.

It is possible that withholding tax may be deducted from some of the dividends at their country of origin. However, once the dividend is received, its reinvestment can accumulate tax free inside the Investment Portfolio.

Buying and selling assets within the Investment Portfolio will attract no liability to capital gains tax.

The Investment Portfolio provides you freedom of choice through access to an array of international assets. These include collective

investments, bank accounts and stocks and shares quoted on recognised stock exchanges, fixedinterest securities, multi-currency deposits, hedge fund of funds, structured notes, exchange-traded funds and other alternative investments.

Specifically excluded are investments in any Old Mutual or Skandia Group Company.

The Investment Portfolio may be denominated in euros, UK pounds, Australian dollars, Swiss francs and US dollars, in recognition that investors may hold existing funds in a variety of currencies. The minimum initial investment is ÂŁ100 000 or 150,000 in other currencies.

The Investment Portfolio is structured in such a way that the underlying assets are held in safe custody by an authorised custodian. Initially, Old Mutual International has agreed to terms with Savoy International Investment Service, amongst others. We will continue to add to the list of custodians/offshore stockbrokers, such as Investec, Fairbairn Private Bank etc.

In the event of death, you can choose to have the contract transferred to a nominated beneficiary rather than to your estate, subject to there being no surviving contract holders. This avoids probate, reduces delay and costs, and gives you the reassurance of knowing what will happen to the Investment Portfolio after death.

You may also appoint secondary beneficiaries in the event that the appointed beneficiaries predecease you.

For more information, please contact Sheldon Holdsworth on 041 5024244, or 0824544836 or visit www.oldmutualinternational.com

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SENSIBLE PLAN

Is your Financial Plan in order?

A checklist to ensure you're on the right track.

By Julie McDonald, Paraplanner - NFB Private Wealth Management.

“Yes”, you may say, “I have a provident fund at work for my retirement savings, some life cover and a small investment portfolio”. But is that all that needs to be considered?

Do you have your own business? Are you protected against loss of your income due to disability? Do you have children and need to provide for their future educational needs? Is your will in order?

All of these need to be considered when checking through your financial plan.

Go through the items below and see if you have considered these to make sure your financial planning is on the right track.

Risk Planning: = Life cover This makes provision for dependants who will be responsible to settle outstanding debt, estate duty and many other expenses and liabilities on behalf of the deceased, as well as enables those that are left behind to maintain a similar lifestyle to that which they have become accustomed. This is the most important risk to be covered against, especially for asset owners. The costs arising from a deceased estate, assuming the estate to be greater than R3.5 million, may be significant and there may be liquidity issues. = Lump sum Disability & Income protection In the event that you become disabled through an accident or illness, would you need a lump sum to make adjustments to your lifestyle? Would your

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income decrease due to an inability to work or your capacity to work becoming limited? If any of the above applies to you, then you would need to review your disability cover and determine whether it would be sufficient to provide for the above needs. = Severe Illness This cover compensates for lifestyle adjustments, the cost of treatment and possible loss of income as a result of a severe illness such as a heart attack, cancer or a stroke.

In addition, most employed people have a medical aid nowadays, but your medical scheme may not cover all the costs associated with a severe illness. You will, therefore, need money to pay for additional medical accounts, treatment in a recuperation clinic or professional medical care at home. Other basic expenses such as a home or car loan repayments, childcare expenses or the cost of having to take long leave or possibly travel for treatment will also need to be covered. Severe illness cover is meant to help account for such additional expenses.

Business Assurance Planning: = Buy and Sell Agreements = Are you a partner in a business? Have you

considered if you have enough funds to purchase the shares of the other partners in the business should they die? Would you be happy if the person who inherited your business partner's shares decides that they want a say in the business? You

continued on page 15...

RETIREMENT How much do I need to retire in comfort?

By Laurie Wiid, NFB Gauteng, Director/Private Wealth Manager

T

his question is asked by all of us, many times over and the answer seems to be a moving target. The problem, of course, largely due to the influence of a 1% or 2% change in the variables used by the financial model to determine this magical capital amount that you require. A few other reasons that will influence the capital required at retirement, include: = The real inflation that you and I experience in our budgets is greater than expected.

The inflation rate used in the scenario cannot be the official CPI statistic as we typically experience higher increases in electricity, fuel, medical aid contributions and food. = The real growth that we achieve can be lower than forecasted.

Be careful not to be over optimistic with your return forecast.

Higher returns normally require higher risk investments. = A major stock market collapse can take several years to recover the losses sustained and makeup the returns that should have been achieved over this period.

This is evident from the equity market collapse of 2008; resulting in the average equity fund only yielding 7% p.a. over the past 5 years.

The longer you are invested in the stock market, the less vulnerable you are to such volatility or under-performance. = New expenses arise that were not budgeted for, for example: More and more families have loved ones that have emigrated and as a pensioner the cost of international travel can be significant.

A spouse suffers from a severe illness and

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requires specialised care that is not fully covered by the medical aid. = A financial setback.

Retrenchment or early retirement can affect your ability to save the required monthly amount for your retirement.

You may lose a large capital sum due to a poor investment decision or being forced to help a family member.

Your business fails to realise the capital sum that you expected or you file for bankruptcy. = A collapse in your marriage requiring the division of your assets.

With the high divorce rate in South Africa, the division of assets can destroy significant wealth for both parties who must now rebuild their financial security.

Three Retirement Scenarios Three friends start work at the age of 25 and earn a salary of R7,500 p.m. Their career paths are similar with similar earning patterns. The following scenarios unfold: = Salary increases at 6% p.a. with promotion increases along the way resulting in an average salary increase of 9.20% p.a. = A savings rate of 15% of their salary is recommended by their financial advisors = John follows this advice and his portfolio performs at 12% p.a. average for the 40 years = Simon follows this advice and his portfolio performs at 10% p.a. average for the 40 years = Justin only starts to save at age 41 and his portfolio performs at 12% p.a. for the remaining 25 years

SENSIBLE INVESTOR

Age 25 30 35 40 45 50 55 60 65

Salary R7,500 R13,224 R27,980 R59,200 R79,223 R106,019 R141,877 R189,863 R254,080

Savings R1,125 R1,984 R4,197 R8,880 R11,884 R15,903 R21,282 R28,480 R38,112

John 12% return Capital R14,268 R153,365 R538,610 R1,490,474 R3,562,495 R7,615,830 R15,366,393 R29,964,549 R57,177,817

Simon 10% return Capital R14,136 R144,725 R485,925 R1,287,826 R2,931,188 R5,909,771 R11,178,133 R20,338,244 R36,067,901

At age 65 the three friends turn to their financial advisor to structure an income for their retirement.

The requirement is to provide an income of 75% of their final salary (i.e. R190,560 p.m.) with an inflation increase of 8% p.a. on the basis that the investment return will be 10% p.a. In other words a real growth of 2% is attained.

John's capital base will provide this income with ease and continue to grow to age 93 before the capital starts to decline. Simon's capital will be depleted at the age of 87 while Justin's capital will be depleted at the age of 81. The graph below illustrates the capital values of these three scenarios.

Given longevity and modern medical care, let us assume that each of the friends project their life expectancy to be age 90. What is the maximum monthly income that they can expect to draw when they retire? = John R 190,560 p.m. = Simon R 164,207 p.m. (14% less than John) = Justin R 126,036 p.m. (34% less than John) Because John was a disciplined saver, he had

Justin 12% return Capital RRRRR854,757 R2,696,691 R6,429,808 R13,729,486 R27,683,631

amassed a capital sum of R1,490,474 by the time Justin started saving at the age of 41. The compound effect on this capital sum is what gives John 34% more income in his retirement years.

The Rule of Thumb

We all have different earnings capacities, monthly budgets and circumstances that will influence our ability to save. So, is there a general Rule of Thumb? In the days of higher returns, investors were said to require 10 times their annual pension as a capital base. Given lower investment returns and higher inflation figures, this multiple has risen to 15 times the annual pension required – only to secure income for just over 20 years. Unfortunately this is still not adequate for comfortable retirement with today's longevity. The multiple is now closer to 19 times the annual pension required.

Steps to secure your retirement plan 1. Start saving as soon as possible 2. Save 15% of your earnings 3. Don't use long term savings for short term needs 4. Constantly review your retirement plan – actual vs target 5. Ensure that under-performing assets are identified early 6. Protect your capital from “scamsters” 7. Take advantage of tax breaks afforded by Retirement Annuities 8. Diversify your investments across investment classes and a variety of products Those of us that are formally employed normally have the luxury of a company Pension or Provident Fund. The combined savings rate can vary between 10% 20% of pensionable salary. Provided this is well managed and you avoid early withdrawal or retrenchment, this will go a long way in securing your financial independence in your retirement years. Further voluntary savings and the benefit of a husband and wife both saving for retirement should secure you an adequate retirement.

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SENSIBLE PLAN

Is your financial plan in order? continued from page 10...

Your Will:

may need to consider a Buy and Sell policy. = Keyperson assurance Is there someone in your business that is vital to the running of the business? If they had to pass away, would the business and the future of the business be affected? Do you have the additional funds to recruit a new person for the position? Can you cope with the loss of revenue due to loss of a key person? If you answered yes to any of these, key person insurance is probably suitable to your business.

Retirement Planning: Pre-retirement: Are you contributing enough to a pension fund, provident fund or a retirement annuity to make sure you have enough to retire on? Are you taking full advantage of the tax deductibility of retirement fund contributions? Will you have sufficient funds saved to maintain your standard of living when you retire? Be careful with this answer - most people are very unpleasantly surprised when they properly investigate the correct answer here.

Post –retirement: Is your income level on your living annuity sustainable or are you depleting capital and running the risk of exhausting your funds during your lifetime?

Investment Planning: Do you have an investment set up to save for your children's future educational needs? Have you invested in a little 'nest egg' either by investing into direct shares or unit trusts locally or offshore? Are your investments appropriately risk profiled?

Do you have a Will? Do you know where it is kept? Is it up to date with your correct beneficiaries? Was it drafted specifically with you in mind or was it a generic one that may result in complications or unnecessary Estate Duty at a later stage? Have you nominated an executor and is that executor capable and aware of the complexities and drawn out time-frames surrounding his or her responsibility? Have you considered appointing an independent executor who has experience in that regard?

Medical Schemes: Do you have a medical aid? Do you know if it is totally appropriate for you and your needs? Do you understand the limits and exclusions of your medical plan or your scheme's pay-out rate?

Employee benefits: Do you have a business and would you like to provide your employees with a provident or pension fund or look at options for Group cover to help improve their sense of security?

Short term insurance: Are you covered for your short term insurance needs? Have you ever had a detailed assessment done on your car, business, household or building insurances? Do you understand excesses and various options that are available to you?

NFB and its affiliated group companies are able to assist you regarding all of the above issues. We all need a little guidance sometimes and NFB would be pleased to help point you in the right direction.

Contact us on 043 735 2000 or nfb@nfbel.co.za and we will put you in touch with the appropriate person or persons in our company to assist you.

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SENSIBLE ADVICE

Deferred Compensation Schemes and the NEW tax laws The changes are effective March 2012. By Natalie Dillon, Senior Legal Advisor Old Mutual Broker Division.

E

arly last year, I wrote about how changes to Income Tax legislation were brought into effect since SARS had for a long time frowned on the use of Deferred Compensation (DC) schemes as a way for employees to benefit from not paying tax /receiving preferential tax treatment on a benefit that they were receiving from their employer.

The new legislation caused much confusion and it extended unintended restrictions to all company owned policies such as Keyman and Contingent liability policies. It also created confusion for employers and employees regarding whether to continue with their existing DC schemes.

The recently enacted Taxation Laws Amendment Act of 2011 provides us with clarity on how the premiums and the proceeds of DC policies will be taxed. The 'new' changes come into effect from 1 March 2012 and are briefly explained below. For the tax regime that came into effect on 1 January 2011 and applied until 10 January 2012, please refer to my previous article.

To recap on the DC structure: the employer takes out a policy on the employee's life and contributes a premium to the policy which accumulates in value over time. The employer and employee enter into a service agreement in terms of which the employer is obligated to pay the policy proceeds to the employee at a determined future date. The purpose of the scheme is to incentivise the employee to remain employed at the company until that future date.

With effect from 1 March 2012, any employer paid premiums in respect of a policy where the

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proceeds are for the benefit of the employee / his/her spouse /dependants is subject to fringe benefits tax in the employee's hands.

The proceeds of the employer owned policies will be taxed in the hands of the ultimate recipient.

Where the employer is the ultimate recipient, the employer will be taxed, and where the employee/his estate is the ultimate recipient, the employee/his estate will be taxed.

If the employer elects to terminate the DC scheme, the employee can elect to take cession of the policy (i.e. the employee becomes owner of the policy) in which case the cession will attract income tax in the employee's hands. The ultimate proceeds, however, will pay out tax-free.

Where the employer's pension /provident fund allows it, the employee may elect to have the DC policy ceded to the pension/provident fund. In this case, the cession will attract income tax in the employee's hands and when the proceeds pay out, the proceeds will be taxed according to the lump sum retirement tables.

After a year of much confusion regarding the options available to members of a DC scheme, there is now clarity on the tax implications of either continuing or terminating the scheme.

Remember that DC schemes, in most instances, formed part of the employee's retirement planning. It is as such, still necessary to seek expert advice from your financial advisor as to whether one continues with or terminates the scheme; the impact on the member's retirement planning must also be reviewed.

SOUTH AFRICANS NEED

DISABILITY COVER

South Africans, unfortunately, live in a very violent society and have one of the highest disability claim statistics. It is therefore vital that our clients review the adequacy of their disability cover.

By Emmanuella Fernandes, NFB Gauteng, Paraplanner

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he Life Insurance Industry provides us with two solutions: a) Monthly Income Replacement Cover or b) Lumpsum Disability Cover. In determining a solution your financial planner will compare the appropriateness of these two benefits, taking into account the following: = Premium affordability = Waiting periods for Income replacement = Permanent vs Temporary Disability Cover = Industry maximums for Income replacement – limited to 75% of Income = Consideration to existing Group Life Benefits = Specified occupation = Smoker status and other risk factors = Own Occupation vs reasonable alternative occupation = Comprehensive Disability cover vs Functional Impairment cover A comprehensive analysis is required to determine the most appropriately tailored solution.

The solution normally would include a combination of these two products.

Income Replacement Cover Clients that are seeking a guaranteed Income solution who don't wish to manage the capital lumpsum will elect the Income Replacement option for all or part of their income needs. Income Replacement benefits are designed to replace any loss of income an individual suffers due to disability such that they are unable to perform their occupation. Income Replacement benefits can be paid for both temporary and permanent disability.

It is imperative to ensure that your income is reviewed and that the benefits are regularly updated. Similarly, you need to ensure that an “in claim” escalation is selected on your policy. These payments are guaranteed up until retirement age or your selected term. Certain Life Companies have “top up” products that can increase your benefit to 100% of your salary in the event of permanent disability.

The premiums for Permanent Income Replacement Cover are tax deductible and the Income received will be taxable. Temporary Income Replacement Benefits or Sickness Benefits are usually tax free for a limited period and these premiums are not tax deductible.

Lumpsum Disability Cover Clients that prefer a lumpsum payment in the event of a disability have the freedom to invest the proceeds to generate an income. The impacts of inflation, the ability to achieve the required return, the capital and market risk of the investment will all have a major impact in determining the adequacy of the required lumpsum amount. Poor investment performance or loss of capital could imply that the income does not increase with inflation, or worse – it could decrease.

The premiums on lumpsum disability cover are not tax deductible and therefore the proceeds are tax free.

Example Let's take a look at the following Income Replacement Quote: Client Mr Smith Age 40 Salary R80,000 p.m. (before tax) Insured salary R60,000 p.m. (75% of salary) Net Payment after an aver. tax rate of 30% R42,000 p.m.

Claims escalation CPI (estimated at 6%) Term of cover Age 65 Monthly premium R1,300 (approximately) Tax deductible For the same premium of R1,300 p.m. we can purchase a Lumpsum Disability Amount of R4,850,000. This amount would be further reduced if you utilised the after tax premium on the Income replacement product. Should Mr Smith be disabled after one month and the proceeds were invested at a 9% average yield, a monthly income of approximately R22,000 (escalating at 6%) will be generated for a period of 25 years. This illustration assumes a tax efficient investment and therefore a low tax base. Clearly this income would increase should Mr Smith become disabled at a later stage.

The suitability of these two products would need to be reviewed by your NFB Financial Advisor in determining your optimal solution.

When the primary need for insurance is to compensate for loss of income, Income Replacement benefits are likely to be the most effective solution. Where the individual requires a cash lump sum, Lump Sum Disability benefits are better suited. sensible finance march12

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2012 TAX RELATED BUDGET PROPOSALS A summary of the tax related budget proposals announced by the Minister of Finance on 22 February 2012. By Shaun Murphy, CA (SA) Partner - Klinkradt & Associates

BUDGET HIGHLIGHTS The main tax proposals for 2012 include: = Increase effective capital gains tax rates to 13.3% for individuals, 18.6% for companies and 26.7% for trusts from 1 March 2012. = Dividends tax becomes effective from 1 April 2012 at a rate of 15%. = Conversion of remaining medical tax deductions to tax credits from March 2014. = From March 2014 an employer's contribution to retirement funds on behalf of an employee will be treated as a taxable fringe benefit in the hands of the employee. Individuals will from that date be allowed to deduct up to 22.5% of the higher of taxable income or employment income for contributions to pension, provident and retirement annuity funds with a minimum annual deduction of R20 000 and an annual maximum of R250 000. For individuals at least 45 years of age the deductible amounts will be up to 27.5% with a minimum annual deduction of R20 000 and an annual maximum of R300 000. = Tax preferred savings and investment vehicles for individuals are to be introduced from March 2014. = Reduction in the rates of tax on small business corporations. = Reduction in the compliance burden of micro businesses. = Additional tax on gambling from 1 April 2013 at 1% on a uniform provincial gambling tax base. = Discussion paper on carbon emissions tax to be published in 2012.

INDIVIDUALS Relief for Individuals Personal Income Tax The 2012 Budget proposes direct personal income tax relief to individuals amounting to R9.5 billion.

The tax threshold for individuals younger than 65 will be R63 556 and for individuals 65 up to 75 will be R99 056 and older than 75 will be R110 889.

Exemption for interest and dividend income remains the same (no updates from the Pocket Guide) = The annual exemption on interest earned for individuals younger than 65 years is raised from R22 300 to R22 800. = The exemption for individuals 65 years and older increases from R32 000 to R33 000. = The threshold for the tax-free portion of interest and dividends from foreign investment stays unchanged at R3 700 from the 2010 budget.

Medical Expenses As announced in the 2011 Budget, income tax deductions for medical scheme contributions for taxpayers below 65 years will be converted into credits.

Monthly tax credits will be increased from R216 to R230 for the first two beneficiaries and from R144 to R154 for each additional beneficiary with effect from 1 March 2012.

Other Tax Proposals Affecting Individuals: = Dividend Withholding Tax

The dividend withholding tax will come into effect on 1 April 2012, bringing an end to the secondary tax on companies. For equity reasons it is proposed that the dividend withholding tax come into effect at 15% – five percentage points higher than the previous secondary tax on companies' rate. Income from capital can be derived as interest income, dividends or capital gains, all of which should be taxed equitably. = Increase in Effective Capital Gains Tax Rates To enhance equity, effective capital gains tax rates will be increased. The inclusion rate for individuals and special trusts will increase to 33.3%, shifting their maximum effective capital gains tax rate to 13.3%. The inclusion rate for other entities (companies and other trusts) will increase to 66.6%, raising the effective rate for companies to 18.6% and for other trusts to 26.7%. These changes will come into effect for the disposal of assets from 1 March 2012.

The following exemptions for individual capital gains are increased from 1 March 2012: # The annual exclusion from R20 000 to R30 000 # The exclusion amount on death from R200 000 to R300 000 # The primary residence exclusion from R1.5 million to R2 million # The exclusion amount on the disposal of a small business when a person is over age 55 from R900 000 to R1.8 million # The maximum market value of assets allowed for a small business disposal for business owners over 55 years increases from R5 million to R10 million.

COMPANIES No change is proposed to corporate tax rates.

Turnover tax for micro businesses Several reforms of the turnover tax for micro businesses (with annual turnover below R1 million) were announced in 2011. Building on these reforms, micro businesses will be given the option of making payments for turnover tax, VAT and employees' tax at twice-yearly intervals from 1 March 2012. It is further envisaged that a single combined return will be filed on a twice-yearly basis from 1 March 2013.

Small business corporations To encourage the growth of small incorporated businesses, government proposes to increase the tax-free threshold for such firms from R59 750 to R63 556. Taxable income up to R300 000 is taxed at 10%; this threshold is now increased to R350 000 and the applicable rate reduced to 7%. For taxable income above R350 000, the normal corporate tax rate of 28% applies. These amendments will come into effect for years of assessment ending on or after 1 April 2012.

SENSIBLE GROWTH

The price of being too conservative Be wary of the “safe” cash option. By Henry van Deventer, financial planning coach at acsis. Source: www.fanews.co.za.

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hile the volatile markets that characterised most of 2011 are most likely to continue into this year, retirement fund investors should be wary of opting for the 'safe', cash investment options, as this is often one of the greatest mistakes investors make.

Henry van Deventer, financial planning coach at acsis says that the closer investors get to retirement, the more stressful the decision becomes because the consequences of making the 'wrong' decision could seriously affect their quality of life in retirement. “Because of this concern, the natural instinct before retirement is to put money where it is 'safe'. This often means a more conservative investment strategy, and in most cases, it entails being heavily invested in cash. The reasoning is that if the market falls during the year that an individual retires, he or she should be safe. If it does not, the individual will still be able to sleep at night.”

Van Deventer says that this mistake is often made by investors who do not understand what they are potentially sacrificing by seeking safety in cash. “As a starting point, consider that, as a rule of thumb, investors can draw a monthly income of about R5 000 before tax for every million rand invested at retirement. They therefore need to give themselves the best possible chance to accumulate as much as possible before retirement with as much certainty as possible. The five years prior to retirement are especially crucial in achieving this.”

He says that investors need to know how to grow their funds before retirement age and what to expect. “For the best possible growth, investors should mainly be exposed to shares. Between 1925 and 2011, the average annual return on South African shares was approximately 14.4%. This means that a responsibly managed, share-focused strategy would have doubled roughly every five years. In cash, over the same period, the average return was approximately 6.7% per annum.

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“Therefore, by applying the above, investors with R1 million five years before retirement, a share portfolio could, on average, result in about R1.96m at retirement. A cash portfolio on the other hand could result in just over R1.38m – about two-thirds less. In terms of difference to monthly standard of living, a share portfolio would have produced about R3 000 more per month. If we apply the same argument to ten years before retirement instead of five, the difference becomes quite staggering - an additional R10 000 per month.”

Van Deventer says that one concern with the above argument is that share market returns are not guaranteed. “Investors will most probably lose some money during one of the five years before retirement, as historically, South African shares produce a negative return 32% of the time, or roughly once every three years. However, over a five-year period, they have a 95% chance of achieving a positive return.

“Over longer terms, chances of a positive return become even better. By investing in a responsibly managed and diversified share portfolio, the chances of getting a high positive return become better yet. We also need to remember that the investment term does not stop when one retires. It stops when the investors stops – which should be more than 25 years after retirement age.

He says that investors should consider that the more time they have available and the more responsible they are by not gambling on the share market (it is best to stick to a fund that will consistently follow the markets), the less the risk becomes and the better their retirement lifestyles could be. “However, investors need to remember that an objective, expert financial planner needs to play a vital role this regard. Do not be afraid to pay a fee to get sound advice – it may well turn out to be the most valuable item ever bought,” concludes Van Deventer.

SENSIBLE PORTFOLIO

Momentum Small/Mid-Cap Fund wins a top outright performer award for the fourth consecutive year at the 2012 Raging Bull Awards

By Evan Walker, Portfolio Manager - Momentum Investments.

Small/mid-cap funds are currently providing higherquality listings and Evan Walker, portfolio manager at Momentum Asset Management, gives us an overview of the company's award-winning fund.

Fund investment strategy The fund invests in small- or mid-cap shares falling outside of the ALSI 40 and has a strict structure that assists in limiting fund risk. The fund has a 50% (approximate) low risk 'blue chip' share allocation that is defensive and offers high dividend yields.

Twenty percent is allocated to medium risk funds with less earnings visibility, lower earnings and dividend yields.

Another 20% is invested in high risk counters, which include very illiquid small-cap shares, with the balance (10%) in cash. These splits vary conservatively as the manager identifies opportunities and deploys cash holdings. A significant focus on stocks that offer a margin of safety through high dividend yields also compliments the conservative bias.

Investors most suited to the fund The more aggressive investor as the fund has a low diversification to the market and general equity funds providing diversification benefits when included in a portfolio of equity unit trusts. Less risk averse investors can consider smaller portfolio allocations.

Evan Walker (BCompt (Hons), MBA) joined Momentum Asset Management in 2007, bringing with him extensive knowledge of industrial stocks from his previous role as head of industrial research at Credit Suisse Standard Securities. Evan has managed the Momentum Small/Mid-Cap Fund for five years.

Performance over 1, 3 and 5 years 1 year 3 years 29.66% Fund 21.62% 17.17% Sector average 3.12% 17.27% All Share 2.57% 17.36% Small Cap Index 1.10%

5 years 12.95% 4.79% 8.09% 8.31%

Fund fee structure The fund has an annual fee structure of 1.5%.

Fund positioning for 2012 The fund will retain its defensive portfolio of high dividend-yielding shares. The portfolio has, however, been diversified to include smaller holdings in order to take advantage of market mispricing and lessen overall fund risk.

Why choose this fund?

The fund has outperformed its peers, and the market, consistently over time and continues to be ranked as one of the top five overall unit trusts in the market. It has also ranked as best performing unit trust in South Africa for over 10 years and won four consecutive Raging Bull Awards.

While investing in only small- and mid-cap portfolios, the fund's risk may not be as high as perceived given its conservative investment philosophy. The fund also declined less than the global bear market in 2008/09.

Momentum Investments is a full-service investment house offering clients more choice. Exceeding R320 billion assets under management it holds some of the country's most respected investments players – Momentum Asset Management, Momentum Alternative Investments, Momentum Manager of Managers, Momentum Collective Investments, Momentum Investment Consulting, Momentum Global Investment Management, Momentum Properties, Momentum Wealth and Momentum Wealth International. sensible finance march12

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SENSIBLE SAVINGS

Your RA has more advantages than you think More than just an opportunity to add to your retirement. By Cilma Heyns, Business Development Officer - Glacier by Sanlam.

R

etirement Annuities (RA's) offer more than just the opportunity to make additional provision for retirement: they also offer the potential for tax and estate duty savings.

People are living longer and retiring earlier and therefore preserving and also growing capital well into retirement is a requirement in order to maintain your standard of living. Even if you are contributing the maximum amount allowed to your company pension fund, you will in all likelihood still experience a shortfall. To retire with 75% of your final salary you will need to make additional savings. If you do not need immediate access to your savings, i.e. you have an emergency fund in place, then an RA is an ideal vehicle. With an RA you will not be able to access the funds before age 55 and the funds may also be protected from creditors.

RA's offer transparency, as well as a wide underlying fund choice. There are currently over 900 collective investment funds available to South African investors. More adventurous investors with a longer time horizon may even include a share portfolio as part of their underlying investment within the RA. Younger investors who want to invest as aggressively as possible may view the Regulation 28 legislation as a hindrance. This stipulates that no more than 75% of the RA investment may be in equities and no more than 25% in funds with foreign exposure. Your equity exposure can be maximised by combining pure equity funds with property equity funds. This is an optimal way of structuring the underlying funds while allowing for maximum growth.

New generation RA's also permit investors to make ad hoc contributions, and even to stop or reduce premiums at any time, with no penalties.

RA investors can enjoy tax relief on their

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contributions of up to 15% of the non-retirement funding income. Non-retirement funding income is that portion of your income that is not taken into account when calculating your retirement fund contributions. Because retirement contributions are done before tax, investors can afford to invest more funds before tax than after. For example, if you have R1 000 a month available to invest after tax and a 30% marginal tax rate, you would be able to invest a larger amount (R1 428-57) in an RA before tax, than you'd be able to invest in a savings plan after tax – without altering your net salary. Investing a larger amount each month, coupled with compound interest over time, will see RA investors reap rewards in years to come. In addition, returns within the RA's underlying funds are tax free.

On retirement, when the RA is transferred to an annuity (either guaranteed or investment-linked), tax will be paid on the lump sum portion taken as cash (based on a retirement sliding scale) as well as on the monthly income drawn, but not on the investment returns.

RA's can also provide opportunities for clever and efficient estate planning. All funds within the RA fall outside of the investor's personal estate for estate duty purposes. The investor, therefore, does not pay estate duty (currently 20%) on the value of the RA. There is also a saving in executor's fees.

Whether an RA is your primary retirement savings vehicle, or a supplement to your employer's pension fund, it remains an excellent way to grow your money to ensure a successful retirement.

SENSIBLE EQUITY

SASOL MAKES FOR A GREAT INVESTMENT A further look at the core holdings in NVest's general equity portfolios. By Rob McIntyre, Portfolio Manager - NVest Securities.

I

n this article we continue discussing the core holdings in the general equity portfolios that we manage and today's turn is Sasol.

South African Coal, Oil and Gas Corporation (Sasol) was formed in 1950 by the previous government as an attempt to bolster the country's self reliance and was listed in 1979 under its current guise of Sasol Limited (with the ticker SOL) on the JSE. Sasol also trades on the NYSE. The company's first MD, Etienne Rousseau, wanted to name the company South African Synthetic Oil Limited (Sasol). The name wasn't adopted, but the acronym stuck. Sasol has an interesting history closely linked to the industrial development of South Africa and its people; towns are even named after it. It pioneered the synthetic fuel industry (synthetic fuel is produced by taking coal and speeding up the natural process of creating oil from the coal by a couple of million years) and is a major contributor to the GDP of South Africa by producing oil and thereby saving the country billions in foreign exchange by limiting the need to import the oil that it produces.

Whilst the synthetic fuels business is still a dominant component of the business, Sasol today operates chemical plants across the world and is involved in Greenfield projects to convert gas and coal to liquid in some exotic countries and has recently purchased coal shale fields in Canada.

Many of the chemicals are by-products of the synthetic oil process, but there is also a genuine chemicals business that has a negative correlation to oil prices and is driven by industrial demand.

Whilst it may be hard to believe, Sasol is actually an alternative energy multinational and not a traditional oil company. This is to its great advantage as, unlike the oil majors, it is not extracting crude oil from the earth which is being depleted and needs to be replaced through expensive exploration and development. Rather, Sasol turns gas and coal to fuel.

The success of Sasol depends largely on its ability to attract and retain highly talented scientists, engineers and technical managers. Sasol therefore represents the best of South Africa and we were particularly encouraged when Sasol on 1 July 2011, in keeping with its ethos of appointing people on merit only, appointed a foreigner, David Constable, as the new CEO based in Rosebank.

The closing price of Sasol on 14 February 2012 (Valentine's day) was R401.02, which puts a market capitalisation of R258bn on the company. This puts Sasol firmly in the top ten shares on the JSE. Avior Research estimates that Sasol will earn R48.73 per share and pay a dividend of R17.77 over the coming year. This places Sasol on a forward PE of 8.2 times and a dividend yield of 4.4%. Despite the recent rise in Sasol's share price, this is not a demanding multiple and quite an attractive dividend yield in any market.

As you would expect, Sasol's earnings are highly geared to the oil price, and with oil prices trading at elevated levels, Sasol's earnings should be well supported. The Rand/Dollar exchange rate also has a great impact on reported earnings in Rand. Even the company itself has trouble getting a grip on its earnings outlook. On 2 February 2012 the company advised that its earnings for the year ended 31 December 2011 would be 80% - 90% better than the previous six months, having advised the market on 23 November 2011 of an increase of at least 45%! We expect good results to be reported next month.

It is clear that buying Sasol depends on your view of the growth in South Africa's economy (which drives the consumption of oil), the price of oil itself and the Rand/Dollar exchange rate.

Despite an uncertain outlook for all of these factors, given where we are in the global recovery, we believe that Sasol represents decent value and we include Sasol at a weighting of 7% to 8% in any general equity portfolio that we manage. sensible finance march12

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SENSIBLE FINANCE QUESTIONS & ANSWERS

“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.

Travis McClure

Q: A Financial Plan is all good and well, but how does one protect against the unknown factors in your financial plan? What and how much should I be protecting and what do the statistics say?

A: Too often people plan their investments and retirements based on the assumption that they are going to reach these goals without any health risks along the way. Risk or life and disability needs form a very important part of the financial planning process.

Most people list their assets as their house, or business or investments. Few list their own income earning ability or their intellectual capital that pays for these assets as their main asset. Without income it would be impossible to amass the material wealth and tangible assets we desire now and into the future. So your greatest asset is actually your ability to earn an income and your future earnings potential.

Like all assets, your future potential income, needs to be protected. Premature death, disability or severe illness may prevent you from realising the full value of your earning potential.

The way to protect this asset is to have a life assurance policy that covers you against these risks, be they an accident or a debilitating disease.

The life companies offer a range of products that can ensure that your full potential can be reached no matter what may befall you along the way.

One should consider the impact on one's family should a death or disability occur. Events are random and insurance is a great way to hedge your future potential income and make it safe so that you can invest to achieve your life's goals successfully.

50% of a particular life companies death claims were from policyholders younger than 50 yrs and 75% were from people under the age of 60 yrs.

This is in a period of one's life where you are still trying to consolidate and grow your wealth. Debt is still quite high and earnings potential still on the up.

40% of income disability payments are made

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for claimants between the ages of 31 and 40. The probability that a 45 yr old male claimant is permanently disabled is 23%. 70% of all lumpsum disability claims were between the ages of 31 and 50 yrs. Remember that in the disability space it is not just the medical impairment that is taken into account, but also the ability to perform one's nominated occupation that counts.

The two leading causes of claims in the severe illness category were cancer and heart and artery disease, accounting for more than 70%.

In order to establish how much cover is enough we use financial needs analysis tools that give us a guideline as to what amount of cover you should have. It does, however, depend on each individual's requirements and what amount they want to protect or what sort of income they would want to replace and leave for their family. One also needs to understand that it is a dynamic thing, because as you accumulate more assets over time and your needs and liabilities reduce or increase, your risk cover will need to be adjusted.

The products offered by the leading life assurance companies are very comprehensive and competitively priced. They cover just about any event and often try and reward clients for being healthier and therefore less of a risk. Benefits such as income protection are also tax deductible so it makes the “grudge” payment a less bitter pill to swallow.

Risk cover is an important part of the financial planning process and we would encourage people to review their cover levels and consult a professional financial planner to ensure that they know what they are paying for and realise the consequences to themselves and their families of being under insured.

Please address all Questions to: Travis McClure, NFB Sensible Finance Q&A, Box 8132, Nahoon, 5210 or email: nfb@nfbel.co.za

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NVest Securities (Pty) Ltd NFB House, 42 Beach Road, Nahoon East London 5241 PO Box 8041, Nahoon 5210 Tel: (043) 735-1270, Fax: (043) 735-1337 Email: nvest@nvestsecurities.co.za

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NFB have a STRONG, REPUTABLE TEAM OF ADVISORS with a WEALTH OF EXPERIENCE between them: Anthony Godwin (RFP™, MIFM) - Managing Director and Private Wealth Manager, 23 years experience;

Private Wealth Manager, 7 years experience; Phillip Bartlett (BA LLB, CFP®) - Private Wealth Manager, 9 years experience;

Gavin Ramsay (BCom, MIFM) - Executive Director and Private Wealth Manager, 18 years experience;

Duncan Wilson (BCom Hons, CFP®) – Private Wealth Manager, 4 years experience;

Andrew Kent (MIFM) - Executive Director and Share Portfolio Manager, 16 years experience;

Glen Wattrus (B.Juris LL.B CFP®) – Private Wealth Manager, 14 years experience;

Walter Lowrie - Private Wealth Manager, 26 years experience;

Leona Trollip (RFP™) - Employee Benefits Divisional Manager and Advisor, 35 years experience;

Robert Masters (AFP™, MIFM) - Private Wealth Manager, 26 years experience; Bryan Lones (AFP™, MIFM) - Private Wealth Manager, 20 years experience; ®

Travis McClure (BCom, CFP ) - Private Wealth Manager, 12 years experience;

Leonie Schoeman (RFP™) - Healthcare Divisional Manager and Advisor, 14 years experience; NFB has a separate specialist Short Term Insurance Division, as well as now offering specialist group companies in the fields of stock broking, wills and the administration of deceased estates.

Marc Schroeder (BCom Hons(Ecos), CFP®) -

sensible finance march12

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“It requires a great deal of boldness and a great deal of caution to make a great fortune...but when you have got it, it requires 10 times as much wit to keep it” Nathan Rothschild, 1834

You’ve worked hard for your money... now let NFB make your money work for you. fortune favours the well advised contact one of NFB’s financial advisors East London • tel no: (043) 735-2000 or e-mail: nfb@nfbel.co.za Port Elizabeth • tel no: (041) 582 3990 or e-mail: nfb@nfbpe.co.za Johannesburg • tel no: (011) 895-8000 or e-mail: nfb@nfb.co.za Web: www.nfbec.co.za

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