Foreword

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By Christo Luüs, Chairman, SAIFM

christo

We are proud to announce SAIFM’s ground-breaking tripartite agreement with Imara Holdings and Unisa to provide SAIFM’s flagship Registered Persons Examinations to 80 high-achieving students from poor backgrounds annually over a period of three years. This will no doubt ensure that talented students without sufficient financial resources are adequately prepared for the workplace and enhance their employability in the financial services sector. Since they would have passed the prescribed examinations once they graduate, employers will no doubt favour candidates who have completed the requisite exams when they start their careers in the financial markets.

The theory of shareholder primacy in corporate governance and whether this theory should still be the dominant one in the corporate sector is discussed. The arguments for and against this theory are sketched particularly against the background of the financial crisis of 2007/8.

The debate on whether an active investment strategy is superior to a passive one, is deemed less relevant as new ideas to rejuvenate the investment management industry are becoming de rigueur. The main thrust of the argument is that risk management, not return, should be the main focus while technology, rather than human judgement, should be used to manage such risk.

The implications of a sovereign risk rating downgrade and the extent to which such a downgrade has already been priced into the financial markets are discussed.

The JSE will be moving to T+3 in settlement cycle in July 2016, thereby completing a project that spanned many years of preparation and would ensure that the JSE complies with international benchmarks.

Various articles cover issues important to individual investors, such as how to evaluate spending habits and how to increase wealth by boosting income, increase saving and ensuring the best returns on investment. The importance of selecting a good investment strategy at inception of an investment and then to persist with such an investment is regarded as outperforming a strategy whereby investments are often changed.

The value of trusts as a tool for preserving wealth for future generations is emphasised – this despite proposals in the Davis Tax committee report and the Minister’s budget speech to restrict tax avoidance schemes based on trusts. The risk factors of volatility in the short term and inflation in the long term are emphasised when investors draw up financial plans. The devastating effects that capital gains tax could have on the performance of an investor’s investment portfolios are highlighted.

Thank you to all our contributors who made this edition of the magazine so stimulating and for sharing their insight, thereby enhancing professionalism in our industry.