“Be unpredictable, be real, be interesting … and tell a good story!”
So says author, James Dashner. And you may be forgiven for believing that he was commenting on the state of the global political and economic landscape – now and in 2016. His view is supported by the two presentations by economic gurus, Andrew Salmon and Jeremy Gardiner, hosted at Chartered House in February and March.
Investec’s erudite Jeremy Gardiner accompanied us to our client functions in various parts of the country to update clients on both Chartered’s news and the economy.
Jeremy’s brilliant presentation shares Investec’s views on the global and domestic economies. We love the fact that Jeremy engages his audience through telling a story and using thought-provoking pictures rather than the usual technical graphs. Some key takeaways are in Jeremy’s article which you can read by target=”_blank”>clicking here.
A year ago, with where South Africa was, one would never have anticipated such a recovery in the rand. In January last year one dollar was R17 and now it is R13, the pound was R23 and now it is R16. That is between 30 and 40% difference. It was quite something to see much of our returns being diminished by a strengthening rand! And the year got off to a great start with Markets doing more in January than they did the whole of last year. The lesson is to have a balanced portfolio with a spread of asset classes and not to do anything extreme either way.
In my last newsletter, I took the opportunity to share Budget Speech highlights. Notable changes were the increase in Wealth taxes; we have seen dividend tax increasing from 15 to 20% and the top marginal tax rate increasing from 41% to 45% for anyone earning more than R1.5mill pa. There are also quite severe tax consequences where you have loaned money to a Trust that has not yet been repaid. You are welcome to chat to your financial planner for clarity on any of the changes.
The Davis Committee was mentioned. It is still looking into changing Estate Duty and circumstances under which this will be payable. We will alert you to any changes that may affect you, but are not expecting any more news on this until late August.
We also shared with our clients some of the post migration issues of the Acsis administration moving to Old Mutual Wealth in August last year. We are well aware that the communications out of Old Mutual Wealth have not been ideal, and are working closely with them to ensure that our clients receive statements of a better standard. It is important to note that if you had money invested with Acsis it is now invested with Old Mutual: there are two Old Mutual businesses involved. Andrew Salmon who was the Chief Investment Officer at Acsis is now the CIO at Old Mutual Multi Managers and we are very comfortable that they are managing your funds as well as, if not better than, they were being managed at Acsis. The administration is being done by Old Mutual Wealth, the business that houses the Living Annuities and Tailored Portfolios and we have had some difficulty with them. They are doing a system upgrade in August 2017 and I have been assured that at this point they will be able to offer us a much better service.
Tell a good story
Lastly, I mentioned some of the amazing articles that our clients have written in our various newsletters and social media. We are so grateful for many inspiring stories and articles. On our travels we were impressed by how many people all over South Africa have been inspired by these articles and in many cases made changes in their lives to live and enjoy more enriching experiences.