Author: John Campbell


Reporting from the Helm


It was something to witness. At Crossways Hotel in Hilton, a group gathered, green-clad and geared for a gargantuan clash … all for a coveted gold cup.

I joined a few friends and family to watch the World Cup final, an event that seemed so much more than a game of rugby. I am always amazed at how sport unites a nation: we quickly forget about our turbulent and divided past and all live in the moment together as one.

South Africans are united in diversity and although divisions still clearly exist, we can achieve so much more when individuals come together and commit to a cause. President Cyril Ramaphosa affirmed this when he said that it showed what South Africans can achieve when they worked together for success.

Springbok Coach, Rassie Erasmus inspires us to serve our country following the triumph:
“Rugby should be about giving people hope through the way you play … about bringing people together to forget their problems for a while. It may not be our responsibility as rugby players to do that, but it is our privilege.”

Moody’s puts us on watch

We awoke that same morning to the news that Moody’s global credit rating agency has downgraded its outlook for South Africa. We are now on “negative watch”, the last before a downgrade to “junk status”, something we desperately need to avoid as this could set us back for many years.

The pressure is on our Government to devise serious plans for significant change in time for the Budget in February 2020.

Chartered hosted Investec Asset Management’s Jeremy Gardiner in October to share his latest views on the economy. We may see many negatives locally, but there is so much at play globally. Brexit has now been delayed until end January 2020 and Trump will be aiming for a second term re-election in November 2020. You can read Jeremy Gardiner’s article on the subject here.

Despite it being a volatile year for the markets, our JSE from 2 January to 1 November this year has returned 10.5%, and the dollar has strengthened by 3.5% to the rand.

At Chartered we continue to reinforce the importance of remaining invested and ensuring your investment strategies are adequately diversified both locally and globally to weather these uncertain times.

Chartered grows and expands

We are excited to have opened our Cape Town office. We are confident that Tom Brukman, who has been with us for five years in Johannesburg, will lead the business in Cape Town in line with our Chartered culture of excellence.

We congratulate Tom and his wife, Laura, as they will be welcoming their own tiny addition to their family. Marc Moir will be joining Tom from our Johannesburg office as an Articled Planner in the Cape Town office.

In Port Elizabeth we are delighted that Hayley Giuricich is joining Don and his team. Hayley is a Chartered Accountant and Certified Financial Planner® and I have no doubt she will be a huge asset to the Eastern Cape office. We wish Paul and Shené Greenwood a very happy marriage, and congratulate Don and Tracy Adams on the birth of Luke Michael.

I wholeheartedly congratulate Esther Mabunda for qualifying as a Certified Financial Planner® and on achieving her advanced Postgraduate Diploma in Financial Planning. We are very proud of her growth and achievements.

Finally, on behalf of the Chartered Family, I thank you for your support and contribution to Chartered over the past year. We are always grateful for the time we share together and the many insights you give us as we continue to strive to be the leading retirement planning business in South Africa.

Warm regards



In the news – some anxiety, some advantage

On busy days at Chartered House, you may find me picking up on news headlines between meetings. Our round glass table in reception displays the daily newspapers, and I regularly scan them for positive news – sometimes, in vain.

National Health Insurance Bill

The headline catching my eye in the last few months has been of particular concern: the tabling of the National Health Insurance Bill, which aims for universal access to primary healthcare for all South Africans. My immediate question is “How?” I have had many discussions with friends and clients who are doctors and their predominant feeling is that there is not a chance that they can depend on getting paid by the government every month. Furthermore, how can six million taxpayers fund this scheme for a population of 55 million people?

This proposed Bill, together with the Expropriation Bill (land expropriation without compensation), has South Africans in a state of suspended agitation – on those proverbial tenterhooks. Both these Bills still need to go through an extensive parliamentary process before becoming legislation.

Good news for Investors

On the investment front we saw South Africa’s largest stock and success story Naspers announce the listing of its offshore assets in a new entity on the Amsterdam Euronext market. This new share, Prosus, holds all of Naspers’s foreign-owned assets, which includes its 31% holding in the Chinese internet giant, Tencent. I am explaining this to you because most of our clients (through their unit trust holdings) hold approximately 9% of their equity investments in Naspers, so this is a significant development for all of us.

The rationale behind this move is as follows:

  • Naspers was 21% of our JSE and this size had become a constraint
  • Naspers is now 14% of the JSE.
  • By listing offshore, Prosus is now eligible for inclusion in the global indices.
  • Developed market funds could not buy Naspers before owing to limitations on their mandate; they can now invest in this for the first time.
  • This is very positive for the South African investor, who now holds shares in both Prosus and Naspers.

Prescribed Assets

I have noticed in client meetings that many people are concerned about Prescribed Assets, where the government makes it law for retirement funds to invest in certain government-approved investments. For any of us, the thought of buying bonds in SAA or Eskom is most concerning.

There are couple of important points to note:

  • This policy applies only to retirement funds, such as RAs, Pension funds and Provident funds.
  • This policy does not propose to include living annuities.
  • It will only apply to a very small percentage of your investment, if at all.
  • At this stage, the policy has been mentioned as a consideration; but, for it to be implemented, it must go through fairly rigorous process and will take a long time to become law. We will keep you informed of any further developments.

Great news for the Chartered Family

We congratulate one of our Retiremeant Specialists, Tiffany Venter, on her marriage to Chris over this past weekend. We wish Mr and Mrs Havinga much happiness for their future.


Financial Planning with Chartered excellence


When I started financial planning 25 years ago, I quickly learnt that there were many significant flaws in the industry. During your working lives, you may have either experienced or witnessed some of these pitfalls.

The first is that most clients deal with an individual advisor who represents a bigger business or themselves, but who approach planning in their own way. I believe that dealing with one person compromises you and your family’s financial wellbeing.

I recall my father getting advice on different occasions from two people representing the same company: their advice was completely different. I remember seeing another client who received a letter in the post informing them that their advisor was emigrating. Where does it leave the client in each instance? The greatest risk to your finances is a new advisor changing your investments to suit him.

Considering this very real problem, when we set out to build our company, we decided that Chartered Wealth Solutions would have an offering and advice process followed by everyone who worked here, ensuring consistency of advice. It was also essential for our Planners to have an associate with them in meetings so that at least two people were aware of clients’ family circumstances and finances.

It is important that our clients deal with specialists. In my first eight years in the industry, as a generalist, I offered advice across the full spectrum of financial services: retirement funds, medical aids, life assurance, and investments. As the industry became more complex, we realised that the general practitioner days were limited – being the best at everything was impossible. I equate this to a General Practitioner versus a Specialist in the medical field: if you need heart surgery, you are unlikely to consult your GP.

Chartered ensures that at every point of the advice process you deal with a specialist: a team only advising on medical aids; a team of lawyers who only write Wills, with a specialist executor winding up estates; dedicated specialists in assurance with a thorough understanding of this complex industry. Our RetiremeantTM specialists are highly trained, all with honours degrees in Financial Planning who not only understand RetiremeantTM but who also recognise when to involve another specialist in your planning – our team of tax specialists at Chartered Tax is an example. We have worked hard to build a business offering consistency of advice, where a team of specialists takes care of you and your family’s financial planning needs. We encourage our clients to form trusted relationships with our specialists, knowing that we can be true custodians of your RetiremeantTM.

I am often cautious to share much from Chartered’s behind-the-scenes, but following a recent forum where clients shared their experiences of Chartered, I realised that much goes on that clients should know. For many years we have been working on Chartered Invest, a business responsible for the implementation of your investments. This is because there is often a blurring between advice and implementation and, though inextricably linked, these are two distinct functions.

Two exciting outcomes are, firstly, the vastly improved reporting, simplifying your affairs and placing all your investments on one statement (not the variety from a few providers you may be receiving currently); and, secondly, the Chartered App. This will give you access to your new statements and Chartered newsletters and invitations. We will share more in the months ahead about this new offering.

Warm regards

You can read John Campbell’s article on the SA elections by clicking here.


Resetting South Africa


Some commentators said that the inauguration of the President of South Africa was reminiscent of 1994: a resurgence of hope and an optimism about the future of the country. Certainly, as I watched Cyril Ramaphosa’s swearing in, I felt more positive about the country’s prospects than I had in some time.

While an ANC win was inevitable, the ruling party’s reputation was severely tarnished by the revelations of the depth of state capture and the number of government officials involved in various degrees and manifestations of corruption. I am assured that, had Jacob Zuma still been the President, the ANC vote would have been closer to 50% and they would have lost Gauteng. Voter turnout dropped (65.99% of registered voters, contrasted with 73.5% in 2014), no doubt attributable to disillusionment with any of the political parties’ ability to effect change.

Strong leadership for investor confidence

As I write this, we are awaiting the announcement of the Cabinet by the President. That he will be able to compose this body completely free of any questionable members is unlikely, but he has assured us that it will be a leaner one. During his nine-year tenure, Zuma’s Cabinet swelled to 35, with ministers earning over R2 million a year and their deputies R1.9 million. Tax-payers want to have the confidence that their contributions for the betterment of the country are used for just that – and not for lining the pockets of fat-cats.

In addition, we expect the President to get the economy back on track, with positive gains for the Rand. A stable government with clearly-defined policies will engender investor confidence and encourage more inflows of foreign direct investment and local investment into the country. President Ramaphosa needs to provide clarity on such issues as land appropriation without compensation, and the nationalisation of the Reserve Bank. People only invest when they know that their money will be safe.
Ramaphosa’s ability to get the economy on track and to rid the ANC of individuals tainted by corruption and links to state capture is crucial to a more secure outlook. A stronger economy will generate an environment more conducive to a collaboration between government and the private sector – creating jobs is a priority not to be ignored, both for a thriving economy and to manage an increasingly hopeless unemployed, unskilled South African youth.
Our investment consultants will be watching for political and economic developments, ready to make changes always in the best interests of our clients. While I believe that Cyril Ramaphosa is the man best placed to lead this country to a more prosperous future, that future remains an uncertain one, and we are investing in the wake of a difficult time for both the country and our flagging market.

With so much focus on local happenings, it is worth noting that global factors (such as a weakened UK market and tensions between China and the US) impact equity markets significantly than a local event such as the outcome of our elections.

Matching your vision to your values

I find President Ramaphosa’s vision of “friendship, solidarity and co-operation” a hopeful one. So much can be achieved by a shared goal and solid values. When Barclay and I merged our companies 20 years ago to establish Chartered Wealth Solutions, we had a vision: to create a company committed to serving its clients with excellence.
We little knew that the Chartered team of four at the time would grow to a company of more than 80 staff and would extend our service to include Chartered Tax and Chartered Legacy & Trust. Our recently established Chartered Invest enables us to ensure that our vision of excellent service is consistent through every client interaction. When we receive positive feedback from our clients, we recognise that it is because our values pervade the company.
President Ramaphosa’s vision of “a society in which our worth is determined by how we value others” resonates with me, and I join his call of “Thuma Thina” – Send Us.


SA and the world: slowing, but growing

SA and the world: slowing, but growing

Recently, I have witnessed my father grappling with illness. He has been in and out of hospital, trying hard to maintain his characteristic strength. 

It has been a unique experience for me to see him dependent on us and on medical staff. To our family, Peter Campbell has always been that man to whom we look for decisive action and a refusal to give up. 

Times of uncertainty tend to highlight our fears, and often prompt personal introspection.  I have been reflecting on my own example set for my children that will help them when they face their own challenges as they grow.

The reality of the South African situation

Uncertainty has certainly been a theme in my past year’s communications.  The passing of the presidential baton to Cyril Ramaphosa, the unearthing of so much dishonesty, the reports of how state-owned enterprises are buckling under the loss of revenue owing to corruption … all of these can leave us wondering where to from here: in the dark (often, literally!).

Another emerging theme, though, in the wake of this year’s SONA and Budget Speech, has been gratitude for the new leadership in contrast to the former Zuma regime – you can read my Budget Speech comment by clicking here

In the words of Investec Asset Management’s Jeremy Gardiner: “One shudders to think how angry and depressed we would have been if we still had Jacob Zuma as President, with the prospect of another five years of the Zuma presidency after elections. We would still have Finance Minister Gigaba running what would be an officially (across all three rating agencies) junk economy and similarly junk currency, probably around R25 to the US dollar.”

Jeremy’s economic update at Chartered earlier this month was entitled: Signs of Spring? (you can read his full article by clicking here). He suggests that many South Africans have reached their ‘capitulation point’ – angry and disillusioned.  Many may feel that they are powerless in the face of rising petrol and electricity prices and further evidence of the crippling of state-owned enterprises. 

The power of perspective

Unsurprisingly, you can find both positive and negative responses to our global and local political and economic context.  Biznews Editor, Alec Hogg, reported on 11 March that “Africa is back in fashion” among global investors, according to the most recent issue of The Economist.  This publication dedicated four pages, including its lead article, to “The New Scramble for Africa”. Hogg himself views the low South African share prices as an opportunity to buy, not despair.

South Africa will lead the pack, says Hogg, “if president Cyril Ramaphosa achieves his objective of making the country the continental gateway”.  Of course, fixing the country remains a priority, especially Eskom, and holding looters to account.

The power of choice

When it comes to that legacy of character I want to leave my children, I turn to the words of Viktor Frankl, Holocaust survivor:  ”When we are no longer able to change a situation, we are challenged to change ourselves.”

In the context of South African – and global – uncertainty, I want to model an attitude that demonstrates the power of personal choice.  We all undoubtedly will find ourselves in circumstances that we cannot control in the course of our lives (illness, the economic and political situation, the markets dipping, corrupt practices), but we still all certainly have the choice regarding how to respond.

In line with this philosophy, I will be casting my vote on 8 May, in the belief that we all have a role to play.  As a Financial Planner, I want my clients to know that there is always more value in having a financial plan than none, especially when there is market uncertainty. 

I am always grateful to clients who express gratitude for and confidence in Chartered and our approach to financial planning. We are committed to seeing each of our clients retiring successfully.

Warm regards,



The 2019 Budget Speech: planting seeds for a future

John-CambellFinMin Tito Mboweni made his goal for the annual Budget Speech clear by referencing Biblical agricultural imagery.  The message?  To create a prosperous harvest, you must plant anew.  Acknowledging the shortcomings of the past – “despite our best efforts, sometimes, ravages and risks such as pests or rot could attack our green shoots” – the Minister called on South Africans to persevere, reminding them that “we must take the bitter with the sweet. Today, I bring you a seed to prove that if we plant anew, we can return to those plum times.”

Let’s have a look at the detail of what that ‘seed’ is going to mean for us as taxpayers.

Personal income tax

No changes will be made to personal income tax brackets.

Tax thresholds (the amount of income you earn before you need to pay tax) will slightly increase.

  • If you are under 65, and earn up to R79,000 during the tax year, you will not pay any tax on this amount.
  • If between 65 and 75, you will not pay any tax if you earn less than R122, 300.
  • If 75 and older, you will not pay any tax if you earn less than R136,750.

By not adjusting the income tax brackets for inflation, the government will raise R12,8bn.

No adjustments to medical aid tax credits

Medical tax credits have been not been adjusted for inflation, so that means when you pay your income tax, you can still claim R310 (per month) for each of the first two persons covered by the Medical Scheme, and thereafter R209 (per month) for each additional dependent.

Interest exemption

The interest exemption amounts remain the same. If you are under age 65, the annual interest exemption is R23,800, and if you are 65 and older, the exemption is R34,500. So, for example, you have R690,000 in a Money Market fund, earning 5% per annum interest, and you are over 65, you will not have to pay any tax on the R34,500 interest that you earn.

Tax-free savings account contribution

You can still contribute R33,000 per year toward these investments, in which all returns are tax-free.

Dividends Withholding Tax

This remains at 20%.  If you hold shares and a dividend is declared of, for example, R120, R24 will be deducted by the company issuing the dividend, and you will receive an after-tax amount of R96.

Donations Tax

You can donate R100,000 each year to anyone you wish, without attracting Donations Tax.  Amounts in excess of R100,000 attract Donations Tax at a flat rate of 20%.  Donations between spouses are exempt from Donations Tax.

Retirement Fund contribution deductions

There has been no change to the amount that you can claim as a tax deduction towards your retirement funds. The deduction that you can claim is the lower of 27,5% of your taxable income or R350,000 per annum before the inclusion of taxable capital gains.

Capital Gains Tax (CGT)

There has been no change to Capital Gains Tax. Capital gains are triggered by the sale of an asset such as your home or a unit trust.  The maximum effective tax rates are:

  • Individuals and special trusts: 18% (inclusion rate of 40%)
  • Companies: 22.4% (inclusion rate of 80%)
  • Trusts: 36% (inclusion rate of 80%).

The capital gains exemption thresholds remain the same:

  • The annual exclusion stays at R40,000
  • The exclusion amount on death stays at R300,000
  • The primary residence exclusion stays at R2 million.

If, for example, you withdraw R100,000 from your unit trust investment, and you initially invested R20,000, you would have triggered a capital gain of R80,000.  The first R40,000 of this gain is exempt, and thereafter, 40% of the remaining R40,000 is added to your taxable income, and you will have to pay income tax on this.

Estate Duty

Estate Duty remains unchanged.  Duty is levied on the dutiable value of an estate at a rate of 20% on the first R30m and at a rate of 25% above R30m. The Estate Duty abatement (exemption) remains unchanged at R3,5ml for each individual.

Anything left to a surviving spouse does not attract Estate Duty on the death of the first spouse.

Changes to Transfer Duty

There have been no changes to Transfer Duty.

Tobacco, alcohol and fuel

A pack of 20 cigarettes will cost you R1.14 more.  Your can of beer will cost you 12c more, and your can of coke will cost you 0.11 more per gram (sugar tax).  A bottle of wine will cost 22c more, and whiskey is R4.54 more.

General fuel levy increases by 15c per litre and road accident fund levy increases by 5c per litre on 3 April 2019.

A new carbon fuel levy at 9c per litre on petrol and 10c per litre on diesel will be introduced with effect from 5 June 2019.


The burning issue for many South Africans has been, not personal implications, but what stance the government is taking on State-Owned Enterprises such as Eskom, SABC, SAA and Denel.  While R23bn has been set aside per year to support Eskom during its reconfiguration, the FinMin emphasised that the government will not be bailing out these enterprises, but rather curating them more carefully through the appointment of Chief Reorganisation Officers.

Warm regards

Warm regards


2018: a good year that changed gear

2018: a good year that changed gear

John_Campbell_BlogLast week, I reviewed my first newsletter of 2018: Zuma out, Ramaphosa to be inaugurated, the rand strengthening 11.65 to the dollar (the best in four years) and our stock market at an all-time high. Sentiment was positive, and it looked like 2018 was going to be a good year.

Now, looking back, we wonder what went wrong …. Clearly, the rot caused by the Zuma era runs deeper than we imagined. Our economic challenges were already set to make a 2018 a tough year, but our local corporate issues have magnified the negative impact on our markets: Steinhoff’s share down more than 90%; Tiger Brands’ Listeriosis crisis; irregularities at Resilient and NEPI with a huge share price drop and impact on the Property Index; debt and sale of a division of Aspen Pharmaceuticals; MTN’s Nigeria woes;
and, more recently, the drop in Naspers share price on the JSE, amounting to 6% of the 10% loss we have suffered to date. (Naspers is the largest share on the JSE and it has lost
23% this year.)

Fortunately, our commodities have softened this blow, without which we would be close to 15% down for the year. The Global markets and South Africa have enjoyed the longest run of positive returns in the history of share markets, so a correction was expected – though it is never well received and timing is uncertain.

Where Financial Planning fits in
I attended the annual Financial Planning Association Convention in Chicago, the largest gathering of Financial Planners from around the globe with 35 countries represented … and one South African delegate! It’s my fourth global conference in a decade, and I apply the insights, practical strategies and knowledge in our business.  I noted a digital billboard stating that 837 lives had been
lost in road carnage since 2011, as a warning to drive carefully. I arrived at the Hyatt to find a large group of employees striking, playing drums and making a racket (we are definitely more vibrant!). I was reminded that every nation has its problems – often we think we have it much harder in South Africa. To top it, my hotel room faced a Trump hotel, so I was greeted by the word TRUMP in massive lights as I opened my morning curtains.

I thoroughly enjoyed the conference, listening to the most incredible speakers, many of whom are very highly qualified specialists in their fields – I met my first Doctor of Financial Planning! I learned from the Global Head of HSBC that their planners write over a million plans a year.

The Americans have the most interesting organisations; I met the founder of the Financial Psychology Institute, a researcher from the Stanford Centre of Longevity, and so it went. My takeaways are that our business, strategy and planning techniques are right up there with global standards and we shall continue to ensure that our Retiremeant™ Specialists and our business exceed this benchmark.

At Chartered House
I am excited to say that, on 1 November, Chartered Invest went live. This is a business we have formed to implement and consolidate your investments. For years, we struggled with clients having investments spread across various businesses like Old Mutual and Investec, with perhaps a few unit trusts at Allan Gray and Coronation. Every month they would receive from each business a different statement, difficult to read and understand.

We can now accommodate all your investments on one platform and give you one statement reflecting everything you have. This not only simplifies your life and removes clutter and confusion, but also allows us to access all your information on our system – no more dealings with numerous inefficient call centres.

So, you can receive one statement with your Living Annuity invested through Old Mutual and your tailored portfolio invested with PMX – all on one report. You will learn more about this in your next review meeting.

Warm regards,
John Campbell


Caring for clients finds new expression at Chartered

I recently attended my 30-year high school reunion – what a bittersweet occasion.

I enjoyed reconnecting with former friends, reliving some fond memories and valiantly joking about those I would rather forget. What I did note is that time stands still for no-one, and the passing of time is evident in our hairlines (mine silvering, others gone!) and faces.

What has not disappeared is the very real sense of camaraderie that humans somehow create and sustain when they care about each other.

It put me in mind of the changes that are happening at Chartered Wealth Solutions … and the carefully considered rationale behind them. As always, our relationship with our clients is at the centre of them.

Here is a brief summary of developments that you, our clients, will be seeing:

New reporting

If you have been a recipient of the weekly Interest statement from us, you can expect to see a new and improved version, entitled Navigating the Tides, from 1 July. Our goal with this updated format is to ensure that you are informed regarding weekly market highlights, especially as they influence your investments.

“This new format is much more reader-friendly.”

For those who have previously unsubscribed from this communique (possibly because the method of reporting was too convoluted), we have resubscribed you in the belief that you will find this new format much more reader-friendly. Should you not wish to receive this communique, you are welcome to unsubscribe by clicking on the ‘Unsubscribe’ button.

In addition, we are developing a consolidated reporting statement on your investments – with the same rationale: to make potentially complex information much more accessible; this will comprise quarterly statements. You will be updated about this in time, but, you may chat with your RetiremeantTM Specialist in the interim, should you have any queries.

In-house suite of services

Many of our clients have engaged the services of our legal team over the years, in meeting their Wills and Trusts needs, and in resolving any Estate issues. Our Legacy and Trust team has grown and continues to give our clients excellent service.

In the latter half of last year, we welcomed Charmaine Prout and her team as Chartered Tax. As those clients who have worked with them can attest, they certainly go the extra mile … but you can read about them yourselves in the interview with Charmaine in this newsletter.

I have mentioned Chartered Invest in a former communique, and will continue to keep you updated on this part of our offering in the course of the year.

Finally …

In keeping with our mandate to help clients retire successfully, this issue of The Beacon includes a client story of Alex Isaakides, who, recently retired, has found meaning in a whole new area of interest. You can also read about our most recent client functions around the country.

Warm regards


When the markets cause concern, consider context

When the markets cause concern, consider context

What is your burning question? If you were seated, face-to-face with your financial planner right now, what would be that top-of-mind concern that you would raise?

I got a sense of the answer at the most recent Retiremeant™ workshop, our third in Johannesburg, when I asked the audience, comprising clients and their guests, “What would you most like me to share with in the time we have together?” The unanimous response was: the flat market conditions.

It is the same question that has been emerging in our client review meetings, where the reporting cycle preceding it has reflected flat returns.

I thought, in light of this understandable sense of disquiet, that I might share some points to lend perspective.

The relevant reporting period
The reporting period is the period over which you measure your returns. For most people, it is the day on which you invest your money until the end of the most recent month.

I found the following stats quite interesting:

* If we go back three years from December 2017, we see that the JSE yielded an 18.5% return

* Three years from 31 march 2018, and the JSE only gave you a 6% return (this is why the last quarterlies statements looked so poor)

* Go back three years from the 31 May 2018, and we have a return of 10%.

So as you can see there is quite a difference in returns across these three periods which are within six months of each other.

The same applies to the currency, US$ to the rand. Looking at the three periods in rands, you either gained 7%, lost 2% or gained 4.3%. This variance can be quite significant. This is why the recommended term for investing in equities is seven years plus: over the short to medium term, returns are highly volatile. We are gratified by the fact that we have had no negative years since 2008, the longest period in history without any negative years. If we look at the five-year and seven-year performance, we are comfortable. It’s through these inconsistent returns that we must sit tight.

A local and global trend

Blaming the asset manager might be a valid response, were the markets going up and your investments were not. In reality, it’s the investment markets as a whole that have really struggled this year, both locally and globally, so it’s not fair to blame the asset manager.

Our JSE is down 6% this year and most of the global indicies are in the same space. Both PMX and OM Multi managers are doing the best they can, ensuring you have a well-balanced portfolio spread across various asset classes, and also across a number of world-leading asset managers.

We will share updates with you in your review meeting: information relating to market performance; we aim to give you a greater understanding of the current investment climate. It’s useful to remind ourselves that last year was probably the toughest year for South Africa in the post apartheid era: sentiment was at an all-time low, yet our JSE still delivered a 21% return.

Change in Chartered’s reporting to clients

At Chartered, we have been working on creating a reporting communique that is comprehensive and easy-to-read. We are happy to announce that, from the beginning of July, you, our clients, will no longer receive the communique entitled Interest. Rather, you will receive Navigating the Tides which is your new weekly economic market update. If you have unsubscribed before, you will find we have re-subscribed you, giving you the option to consider this new format. If you don’t receive it, please check your junk mail or spam folder – your server may be filtering it out.

As always, Chartered Wealth Solutions is hard at work to continue improving on the service we offer our clients, and to keep our relationship based on trust and reliability. I appreciate discussions with our clients, be it face-to-face at events or via email, so feel free to continue to communicate with me.

Warm regards


Your quick guide to the toughest budget in years

We’re not even two months into the year and we’ve already seen some game-changing political events.

Our new President was sworn in on Thursday, 15 February – almost 18 months sooner than expected – and we wish Mr. Cyril Ramaphosa every success in returning South Africa to an all-important economic growth path. A growing economy makes our lives that much easier in that it improves the outlook for investment returns and reduces the pressure on government to raise income tax. And that brings me to the topic of today’s communication: the 2018 Budget Speech.

There has been so much political noise over the past two months that we were left wondering whether the Budget Speech would even take place today – and as recently as yesterday we weren’t even sure whether the current Minister of Finance, Mr. Malusi Gigaba, would take to the podium. But sanity prevailed, and the speech went ahead at 2pm as planned.

Budget day is an important ‘marker’ in the financial planning year. It is held near the tax year-end of 28 February and is a great time for you to focus on getting your tax planning right and to take advantage of any ‘tools’ to save tax efficiently, in line with your Retiremeant™ plan, of course.

What did we expect from the Budget?

Most analysts quoted in the media in the past two weeks predicted a tight budget. You need only look at some of the key issues to appreciate National Treasury’s problem … They are struggling with slow economic growth; a R50.8bn shortfall in revenue collection for the current tax year; and rising expenses due to the funding demands of free education and National Health Insurance. These projects are consistent with Government’s focus on socioeconomic transformation as they strive to overcome the inequalities and divisions so apparent in our society.

What did the Budget Speech reveal?

At the outset I should say that the 2018 Budget Speech is one of the toughest that we’ve seen in many years, but this wasn’t unexpected. Chartered Wealth Solutions predicted that the 2018 Budget would be extremely tough on High Net Worth (HNW) clients, difficult for the middle class and largely neutral for the rest. And we had it spot on!

Our expectations were confirmed early in the speech. An additional R36 billion is being raised through a combination of tax increase, mainly through a higher VAT rate and below-inflation adjustments to personal income tax brackets. We summarise the main tax proposals as follows:

  • An increase in VAT from 14% to 15%;
  • A below inflation increase in the personal income tax rebates and brackets, with greater relief for those in the lower income tax brackets;
  • An increase in the ad-valorem (proportional) excise duty rate on luxury goods from 7% to 9%;
  • Estate Duty will be levied on the dutiable value of an estate at a rate of 20% on the first R30 million, and at a rate of 25% on the value above R30 million;
  • A 52c per litre increase in the levies on fuel (22c for the general fuel levy and 30c for the Road Accident Fund); and
  • Increases in the alcohol and tobacco excise duties of between 6% and 10%.

There were no changes to the marginal rates of individual income tax, the rate of tax on trusts (45%) or the rate of tax on companies (28%). Transfer duties on the sale of properties remained unchanged too, with a 13% tax on the portion of the transaction exceeding R10 million.

The feared removal of medical-schemes tax credits did not materialise either; but the increases were minimal – from R303.00 to R310.00 for the main member and first dependent, and from R204.00 to R209.00 for each additional beneficiary. Other good news is that there were no changes to the tax treatment of retirement fund lump sum benefits or severance benefits.

What does it mean for you, near retirement or in retirement?

We were a bit disappointed on two fronts: firstly, the R500,000 tax-free portion of the retirement lump-sum benefit was not increased; and, secondly, there was no increase in the maximum contribution in either Retirement Annuities or Tax-Free Savings, being 27.5% of Retirement Annuities contributions capped to R350,000 and R33,000 for Tax-Free Savings contributions per annum respectively.

The changes in Estate Duty apply to estates worth more than R30 million and will affect High Net Worth individuals who will have to review their financial plans and estate plans accordingly. We note that the basic deduction allowed under this tax heading was left unchanged, at R3.5 million. We will be communicating more on this in due course.

What happens next …

You should not make hasty financial decisions based on the changes announced in today’s Budget Speech. Your best approach is to stick to your RetiremeantTM plan and make considered changes to your portfolio over time based on the advice of your Retiremeant™ Specialist, thus continuing your journey towards a secure RetiremeantTM based on your lifetime goals and dreams.

We invite you to contact us if you have any concerns about the Budget Speech and what the various changes to taxation rates mean to you.

Warm regards
John Campbell

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Tel: +27 11 502 2800
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Tel: +27 41 001 1026
Western Cape Office
Tel: +27 21 001 0048
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