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GTC Press Release

Making changes to your investment portfolio because of pre-election jitters could be costly.

The upcoming elections, combined with poor market performance of the past five years, have prompted several investors to reconsider their investment portfolio construction and opt for more conservative positions. However, straying from a long-term investment view due to current uncertainty in the market, could potentially be one of the most detrimental actions to take. “While it is entirely understandable that investors become nervous at this stage, given the state of the stock market and the often unsettling news headlines in the run-up to the South African national elections which are scheduled to take place on 8 May, we do not believe that investors are likely to gain much by changing course in the middle of a poor returns cycle,” says Clive Eggers, Head of Investment Analytics at GTC. Eggers points out that markets have suffered longer periods of poorer performance...
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Funding your retirement property – how prepared are you?

Whilst in the midst of raising a family, everyday life and its accompanying financial challenges distract us from contemplating our future when we need to seriously think about scaling down our lifestyle as we approach retirement. We seldom give enough thought to the ‘golden years’ and, in particular, considering the purchase of that retirement property, which in most cases could be difficult to secure. GTC cautions that acquiring a property – for pensioners – requires careful and timeous planning to prepare for, and sustain, a consistent retirement income. “In our interaction with retirees or people about to enter retirement, we find that many savers have given insufficient thought to the purchase costs and ongoing running expenses of a retirement property, and subsequently they have not done enough to transition their financial planning from a monthly salary into a sustainable and...
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What new employees do not know about their first pay slip

Every first-time employee has aspirations and visions as to how they will spend their first month’s salary. Young employees are, however, often disappointed by the actual Rand amount which reaches their bank account – even after they believed they had negotiated a competitive remuneration package. “The majority of first-time employees are entirely focused on mastering the responsibilities of their new job and look forward to welcoming the receipt of their first salary into their bank accounts.However, many find themselves ill prepared when they realise that the total amount they are actually taking home differs substantially from the amount they assumed they would be getting,” says André Lindeque, consultant at leading wealth and financial advisory firm GTC. He attributes this to a lack of knowledge about their remuneration structures, regardless of the education or skills level of the new employee. “While...
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Focus on managing business risks including insurance policies in a holistic manner

One of the major risks that small and medium-sized enterprises (SMEs) are especially vulnerable to, is the negative impact of events such as service delivery protests, strikes by public transport workers or incidents calling for the shutdown of cities, which present risks that insurance policies do not cover Roy Wright, Head: Risk Solutions at GTC says: “Businesses can safeguard their operations better by changing their approach to risk management and engaging in an integrated process developed around their business needs, as opposed to merely relying on insurance policies for protection against perils.” He warns that traditionally, business owners tend to think of risk management as taking out insurance, but there are substantial risks to the sustainability of business operations – often unique to South Africa – that cannot be covered by insurance policies. “Rather than ignoring these threats, which are...
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Separate Wills should be planned together

It is National Wills Week next week so now is the time to ensure your estate planning is in order. There is a growing trend of married or partnered couples to draft separate wills, as opposed to a joint will. Whilst this enshrines each party’s individual wishes, it may result in unintentional errors creeping into wills, leading to outcomes that the deceased had not intended. According to Jeremy Woods, Senior Consultant GTC Fiduciary Services, one of the main reasons for these errors is the entrenched assumptions that influence much of our thinking about wills and estates, together with a lack of sufficient provision within the will for outcomes which differ from these naïve suppositions. “The assumption that the younger spouse – often the woman – will die after the older one still forms the basis of many separate wills. Whilst...
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Soon-to-be-wed couples should pay equal attention to both wedding contracts and the big day!

The near arrival of Spring – and wedding season – are likely to fill soon-to-be wed couples with excitement about their impending nuptials, and while it is undoubtedly good to plan the details of the celebration, it is also important for partners to pay equal attention to the details of their marriage contracts. Jeremy Woods, Senior Consultant Fiduciary Services, at leading financial advisory firm GTC, urges individuals to carefully consider their needs and to review their contracts before signing. “This has many consequences for your life together, and these may even continue after death has parted you,” he says.“It is entirely natural for couples to focus on making their wedding day as special as possible. However, it also is a reality that the majority of couples focus far too little attention on the less romantic aspects of determining an appropriate...
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Employers and medical aid members can exercise control over their medical aid increases by being more active

“Employers looking to assist employees in increasing their disposable income, would do well to focus more attention on increasing employees’ physical activity levels, thereby reducing absenteeism, decreasing the risk of staff illness, improving productivity and overall staff morale,” says Jill Larkan, Head: Healthcare Consulting. “An efficient service component of most medical aids, available to all members is the ‘wellness programme’. Members engaged in such schemes are generally proven to be healthier,” says Larkan.“Healthier members cost the medical aids less and – in turn – medical aids then also become ‘healthier’. Consequently, healthier medical aids have lower annual increases, resulting in members having more disposable income.” Larkan believes an active lifestyle is also a good way for people to decrease their medical bills, and in the long run, their annual medical aid increases. “It is abundantly clear from research by medical...
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Giving your child a quality education requires dedicated saving from when they are born

Giving your child a quality education requires dedicated saving from when they are born July is national savings month – a good time to seriously consider future needs Given the ever-soaring costs of tertiary education that have recently been widely publicised, parents need to consider this inevitability and should be prepared to budget for the pre-funding of future school education, as this expenditure continues to meaningfully erode the monthly income of an increasing number of South African households. Andrew Edwards, Wealth Management Consultant at leading financial advisory firm GTC, believes a growing number of parents are faced with steeper than expected costs related to primary and secondary education, whilst not having specifically saved for this priority expense.“It should be a well-known fact that the cost of education – at public as well as private schools – is one of the biggest...
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Pension fund defaults should not detract from individual retirement planning for members

Pension fund defaults should not detract from individual retirement planning for members The introduction of default in-fund options within retirement funds is a positive step towards ensuring that it costs less for pension fund members to transition into their financial retirement products, though this should not detract from holistic retirement planning – an element which is still largely lacking for millions of South Africans. Sabir Bacus, Employee Benefits Consultant at leading financial advisory firm GTC, believes that while default regulations are likely to help many fund members, the industry, trustees and employers should actively promote and encourage members to take a real interest in their retirement fund and not simply revert to default options as the solution to their retirement needs. The National Treasury has introduced regulations – which must be implemented across all funds by 1 March 2019 –...
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SA businesses reluctant to insure against cyber-attacks, despite past incidents – GTC Risk Solutions

South African companies have suffered several cyber-crime incidents over the past few years, yet local businesses are still reluctant to insure against this risk Roy Wright, Head of Risk Solutions at GTC, believes there are two primary reasons for this:  “Many businesses are aware of cyber-crime, but they – especially small and medium enterprises (SMEs) – erroneously believe their organisations will not be targeted. There is a perception that this risk is more prominent in large businesses or those operating within developed markets, whilst other companies tend to believe their IT security systems are sufficiently robust to either prevent or recover easily from an attack, and therefore do not see the need for specific cyber insurance,” he says.   “Both these arguments are flawed, especially when one considers the number of cyber-crime incidents that have occurred in South Africa recently.”...
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