Tuesday, December 1, 2015

News letter 2015

Dear clients and associates                                                                                                       December 2015

2015 is almost over and it’s time for our annual newsletter. A warm welcome to all our new clients – it is our privilege to have you at our practice. All the new clients were referrals from existing clients, and we are grateful for these referrals. (Please find attached an interesting article from Discovery regarding referrals.) During the year risk and short-term clients contacted us for advice, while other clients retired or accepted retirement packages. In some cases clients had only three days to decide whether they will accept the severance package from their employer. We drafted reports to assist these clients and to ensure they made an informed decision. Please note: It is of the utmost importance that you contact us before retiring or when you are considering accepting a severance package, as we can draft a detailed report that considers and highlights all financial implications.

Investments and creation of wealth
Investments and the creation of wealth is the single biggest component in our practice; that is why we spend an enormous amount of time and energy on investment management. As we are passionate about investments, we continuously try to improve investment management. 2015 was a trying year for markets, with the JSE All Share growth of 3.72% for the year up till 30 November 2015. During the same term money markets performed at 6.28%. South Africa is currently experiencing a rising interest rate cycle. While this is good news for investors with money-market funds, it puts a lot of pressure on those with debt. Financial studies have shown that money-market funds cannot outperform inflation over the long term, and this is why one should not invest excessively in these funds. Economists predict further volatility in the market during 2016. Because of this, we advise you not to make short-sighted or emotional decisions, but to stay focused on your long-term goal. Our and our fund managers’ objective is to achieve fund performances equal to or greater than the respective benchmarks over a three-year rolling period. Even though this implies there will be periods of volatility (as we are currently experiencing), our model portfolios still achieved its long-term goals. The chart below indicates the net growth of our models for 2016.

Risk profile
3-year rolling benchmark
1 year
3 years
5 years
Inflation +2%
Inflation +3%
Inflation +5%
Moderately aggressive
Inflation +7%
Inflation +9%
Money Market

JSE/Alsi 40


Congratulations and inspiration
Congratulations to all our clients who have successfully completed their studies, those who were promoted and those who reached any other milestone. We are proud of you.
We also want to congratulate to Betsie Roux’s grandson with his great achievement in rugby, as well as Chris Smit’s son Nico, who were selected for the u.18 SA athletic team for the disabled. You are an inspiration to us all. You are most welcome to share your and your family’s achievements with us.

We keep up with constant changes in the industry by attending several workshops and seminars, as it is our objective to always render the most appropriate and up-to-date service and advice to you, our valued clients. This practice is also in line with the Financial Service Board’s (FSB) continuous education program.

Tax assessments
The assessments were mostly settled without problems, but we had a few cases where the South African Revenue Service (SARS) incorrectly disallowed claims. In some cases it took months to rectify these. Please keep in mind a lot of these cases were due to an error that SARS made, and we really try our best to rectify it as soon as possible. We have brought this issue to SARS’ attention, and they confirmed as from 4 December 2015 the dispute resolution process will be extended and improved. Please also supply your tax documentation in good time to ensure next year’s tax assessments are finalised as soon as possible.

Estates/wills and legal advice services
Thank you to all the companies for your expertise and personalised service to us as well as our clients. A special thank you to Petri Lourens, a senior legal advisor at Old Mutual.

Sad news
Best wishes to everyone who is recovering from a serious illness or accident. Our thoughts are with the Van Breda family, who lost a member. Rita’s optimism in spite of the serious illness is an inspiration and an example of a life lived fully.

Benefits and claims: life cover/disability/severe illness (risk)
During the past year our office handled only disability and severe illness claims. Thank you to our product providers, who paid out 100% of all the claims submitted. We only make use of reliable product providers with an excellent claim and payment history. Thank you to all our consultants and your administrative staff. You contribute a great deal, but do not always receive well-deserved credit.
Clients often enquire about direct product providers offering cheaper premiums and great payback values. Please be careful when requesting quotes from these companies. Ask written quotes from them and we will do a complete comparison on your behalf. We have requested quotations ourselves (on our own details), and the premium for the same benefits was 32% more expensive without any payback values.
During the past four years we have submitted seven claims for one client. Six of them have been settled, and we are finalising the latest claim. This highlights the value of using recognized and trusted product providers. 
Unfortunately we also know about a tragic case: due to financial difficulty a former client, a qualified craftsman, cancelled his insurance and resigned, forfeiting his group scheme benefits. Recently he contacted us with the news that he has lost his leg, but now cannot receive any compensation in this regard.  

Well wishes
Best wishes to everyone now living overseas, whether temporarily or permanently. We also want to send our regards to our retirees who have moved to retirement villages. All the best with this new phase; you can rest assured that we will be with you every step of the way.

Short-term insurance
Last year we mentioned a case study where a false claim was submitted. The claim was denied, the client’s short-term insurance was cancelled and consequently no insurer will issue him a new policy. When you apply for a new policy or submit a claim, please ensure that all the information you supply is true and accurate.
Our office policy is to provide the best products to our clients, but these are not necessarily the cheapest. Where possible we do try to provide a competitive premium with discounts, and we endlessly seek to improve and extend our service to our clients. Please take note of the advantages of working with and advisor.
Advisors versus direct marketers:
1.)   The advisor works for the client and has the client’s best interest in mind. The clerk at the call centre works for the service provider and acts in the interest of the service provider.
2.)   Claims: The advisor handles claims and negotiates on behalf of the client, if necessary; direct marketers negotiate on behalf of the service provider.
3.)   Over time you build a relationship with the advisor and speak to the same individuals every time. With direct marketers you have to communicate with different people every time. All our information is stored, amended and documented on the electronic system we use; with direct marketers the same information is requested every time you contact them.
Statistics confirm traditional insurers maintain a claim payment ratio of at least 70%, compared to 52% by direct insurers. Please ensure that you have sufficient insurance coverage at all times. Replacement values of buildings and house content, as well as the book values of vehicles, must be adjusted annually. Please check your schedules carefully and make sure all the information is correct. All expensive items must be specified, and also take note of any excess payments. At additional charges excess payments can be removed, but we would advise you to discuss this with our office if you are interested. Please also remember any items taken out of your home must be specified, for example your laptop, iPad, GPS and iPod. Cell phones, bicycles, cash and sports equipment must also be specified to be able to claim. Contact us if you are unsure about any of the requirements.
Please also inform us if you are not satisfied with your premium or service. We would rather address the problem than have you change to a different service provider without our knowledge. In most cases we will be able to provide a solution.

For enquiries during the festive season when our office is closed:
Mutual & Federal                               Tel: 0861 247 365 (Claims, emergencies, Swiftcare: roadside assistance, household emergencies and medical emergencies.)
Tel: 0860 637 373 (For example enquiries about adding or removing items or any other amendments.) You will have to provide the policy number or the ID number of the policy holder.
Santam                                               Tel: 0860 505 911 (Claims, emergencies, SOS: roadside assistance, household emergencies and medical emergencies.)
Tel: 0860 726 826 (For example enquiries about adding or removing items or any other amendments.) You will have to provide the policy number or the ID number of the policy holder.
Auto & General                                  Tel: 021 527 8666 (All claims, enquiries and amendments.)
Tel: 0860 104 210 (Emergencies after hours) Please remember there is an additional excess of R2 000 for accidents between 23:00 and 05:00.

Revision appointments
In an ever-changing environment your portfolio and financial needs must be reviewed annually or biannually, and we are committed to fulfil this requirement in our service agreement. Please also provide us with your group scheme benefit statement on (benefits at work) when you receive it.

Please visit our website, www.tvzfinancialservices.co.za, or comment on our Facebook page. We aim to regularly upload new information or articles. You are welcome to give recommendations and refer your friends and family to these platforms to get to know more about our practice.

Masthead, the biggest network for brokers, still assess whether we are compliant with industry standards. They provide the FSB with input and recommendations, and we are extremely proud to announce with our most recent compliance report we received a score of 100%. This means our work complies fully. Thank you to everybody at Masthead.

Our practice behind the scenes
This year we made a few changes to provide a better service. We upgraded our computers, bought a cordless phone and switched to another internet service provider to ensure a more stable connection. New programs were also developed and installed. Our offices are also continuously being improved, and you would have noticed our entrance has moved from Bluegum Avenue to Boundary Road. Please feel free to visit us at any time.

Unfortunately we have also fallen victim to crime – in November there was a break-in at our office. Amongst other things laptops and wallets were stolen. Thanks to our short-term insurance our new laptops were delivered a day after the incident, and Janneri reinstalled all the necessary programs over the weekend. Thank you for the dedication.
Toni had a successful thigh, navel hernia and eye operation. Afterwards he received stitches for a dog bite, but he is now fully recovered. Antoni had a toe operation, but has also recovered. We are proud to announce we will soon be welcoming a new member to the family: Janneri and Antoni’s second baby is expected to arrive early May. This means Janneri will be on maternity leave a part of the year.
At the time of compiling this letter, we had already achieved our financial goals for the financial year. We are humbled by this and would like to sincerely thank all our clients for making it possible.

We look forward to 2016 and all its challenges.
Our office will close on 18 December and re-open on 7 January 2016. Antoni and Janneri will be back at the office on 13 January 2016.

Merry Christmas and best wishes for the New Year!
Kind regards
From all of us at Toni van Zyl Financial Services