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Finance questions answered

Personal Trust International offers you a unique service at no cost.  We are happy to assist you with your general finance queries – from retirement planning questions to queries on tax services, investments, wills, estate planning etc.

If you have a question or are in need of advice of a financial nature, email Personal Trust at or YEI at  Personal Trust will respond to your queries, and feature them online for all to view.  Your identity will not be shared with anyone.

Please note that Personal Trust are in a position to respond only to general finance queries.  Should you have a specific enquiry, it will be suggested that you make an appointment with a Financial Advisor.  As this is becoming a popular forum, we may need to limit your enquiries to one per person.


Could you explain exactly what a Financial Planner has to offer a client?
What is the difference between a Financial Planner and a Financial Advisor?

The words financial planner & financial advisor are used interchangeably in South Africa although theoretically, there is a subtle difference.

A financial planner would be someone who helps you create a plan for your financial future working with a client to map out retirement, tax, estate plans according to the client’s needs.

A financial advisor deals specifically with investing – guiding a client on how best to invest money in accordance with the financial plan.

At Personal Trust, we act as both a client’s financial planner and their advisor.

In answer to the first question, in simple terms, a financial planner’s role is to advise clients on how best to save, invest and grow their money.  At Personal Trust, the role of our financial planners is to act as our clients partners in providing professional guidance on all aspects of a client’s financial affairs including retirement & estate planning, investment & portfolio management, tax services, offshore investment, money market services amongst other things.

As an aside, the CFP (certified financial planner) designation is the professional certification mark for financial planners and it means that an advisor/planner has passed a rigorous set of exams relating to all aspects of personal finance.

How often does one need to meet with a Financial Planner?

It depends on the simplicity or complexity of your financial affairs, your personal needs and circumstances, as well as the service levels required by the client. Generally, if you are younger and in the capital accumulation phase of your investment planning, once a year should be sufficient. More meetings and planning sessions will be required as you move closer to retirement.  Typically 2-3 times per year. Retirement planning should not commence on your last day in the office. It is always good to contact your advisor or planner when your personal circumstances have changed, e.g. birth of a child, marriage, divorce, etc.

What is the cost of a Financial Planner – is it more affordable than we think?

Fees vary from advisor to advisor.  When it comes to investment management, there is a distinction between upfront (initial) and annual (ongoing) fees.

For initial fees, the maximum industry charge is 3%.  However at Personal Trust, the initial fee varies according to which unit trust fund is selected.  In addition, initial fees are negotiable dependent upon fund selection and the investment amount.

Annual fees are determined by the advisor or planner.

Additional fees may be incurred for tax services and/or the formation and administration of Trusts for example.

It is best to discuss fees directly with your appointed planner or adviser but be mindful that all fees should be disclosed upfront and investors should be made aware of other product/fund fees and platform fees if applicable.

I took early retirement in January 2012, and am drawing the absolute minimum pension.  Ideally I would like to keep saving for retirement, and would like to place this pension money plus a little more in some kind of retirement savings vehicle?  What would you suggest?  Would a retirement annuity be the right way to go?

Unfortunately you do not provide information on the retirement vehicle you are drawing a pension from, but let us assume it is a living annuity and that you are withdrawing the minimum 2.5% p.a.  A retirement annuity (RA) is mainly a pre-retirement investment vehicle. Saving additional money for retirement is a good idea if you took early retirement (assuming prior to age 60). There are of course tax benefits to investing in an RA.

You do not specify where the ‘little more’ income will come from. A direct unit trust investment is a good option because you will have access to your money. We do not have a clear picture of your financial affairs, assets and liabilities, income and expenses etc. which therefore limits the extent of our advice.  I would be happy to discuss this in more detail should you wish to review your financial situation.

My husband and myself have written our own wills and power of attorney using a template.  They are duly signed and have been witnessed by two people (not family).  Is this legally accepted?

The Wills Act requires a Will to be signed by the Testator/Testatrix on every page in the presence of two witnesses who must sign the document with the Testator/Testatrix on the last page. It is important to note that a beneficiary mentioned in your Will,  will be disqualified from receiving any benefit from your Estate if he or his spouse signed as a Witness. Without having had sight of your documents, it seems that you have adhered to these requirements.

It is however advisable to contact a professional when drafting a Will and GPA. The importance of a valid Will that correctly and legally reflects the wishes of the Testator/Testatrix cannot be understated.

I am a UK citizen with SA permanent residence who has been living and working overseas for 24 years and will be retiring to Cape Town in 18 months. I fill in SARS returns every year for rental property income in SA but do not actually have to pay any tax at present.
When I return to SA part of my income will come from a GBP offshore insurance bond from Friends Provident (funded by offshore earnings) – the rest of my income  will come from Rand investments made in SA at the time. Friends Provident claim that the offshore remittance from their bond ( I will take 4-5% pa) will not be taxed in SA , but I do not feel this is correct.
Can you tell me what the true position is please?

South African residents are taxed on their worldwide income, subject to certain exclusions. Moving to South Africa after retirement and assuming you will spend more than 330 days in South Africa per annum (during the tax year from 1 Mar – 28 Feb), means that you will qualify as a South African resident and pay taxes according to our tax legislation.

Foreign income is taxable but dependent on its nature. We do not know the full details of the Friends Provident income you refer to but assume from your e-mail that it is a pension payment, and should therefore be included for tax calculations. However, South Africa has a double taxation agreement with the UK, so you will not pay tax twice on the Friends Provident income. Foreign taxes on that income are allowed as a credit against South African tax payable.

Please note that the advice given is based on the information provided to us.  Should you wish to discuss this in more detail, please call Loren le Roux on 021 689 8975 or email

Die meeste beleggings-kundiges is klaarblyklik van mening dat dit, onder andere ter wille van diversiteit, belangrik is om ‘n stewige gedeelte van mens se beleggingsportefeulje in buitelandse aandele te hê. Ek het geen blootstelling aan buitelandse aandele nie, maar ek het wel beleggings in die 3 top gebalanseerde effektetrustfondse, wat op hulle beurt almal  blootstelling het aan buitelandse aandele.
My vraag is of die persentasie blootstelling aan buitelandse aandele van hierdie gebalanseerde fondse genoegsaam is, en of dit raadsaam is om bo en behalwe voorgenoemde, verdere blootstelling aan buitelandse aandele te hê?

Korrek, u gebalanseerde effektetrustfondse behoort blootstelling te hê aan buitelandse aandele. Die fondse se mandate en die huidige persentasie blootstelling wat elke fondsbestuurder het aan buitelandse aandele sal die totale blootstelling bepaal.
Dis egter onmoontlik om ‘n persentasie voor te skryf wat voldoende is vir elke belegger. ‘n Analise van u risiko-profiel, bate-allokasie, plaaslike versus buitelandse blootstelling en  finansiële behoeftes sal bepaal moet word.

English version:   Correct, your balanced unit trust funds should have exposure to offshore equities. The fund mandates and the current weightings of the various fund managers will determine the total offshore exposure in equities.
It is not possible to allocate an appropriate offshore equity percentage to every investor. An analyses of your risk profile, asset allocation combination, local versus offshore exposure and your financial situation will determine the exposure.

I want to know why when investments are done the fees are in percentages, why as any other wage/salary earner are paid in our currency Rands? Why do they hide behind percentages? Their argument that the percentages are small does not wash, because accumulatively it amounts to a large amount after years, and can be as much as 60% of money over 30 years.

Fees are normally expressed in percentages because it is difficult to calculate an exact Rand amount over a long period. Annual unit trust fees, for example, are calculated on the month end value. In other words, 1/12 of the annual fee percentage is applied at month end on the market value of the investment.  The market value will differ from month to month and it is impossible to predict what the next month end value will be, we are dealing with future values. This is a fair calculation of an annual fee. Calculating the annual fee on one specific day (e.g. last day of the year) will not be fair as the market value on that specific day could be high or low compared to the rest of the year. The percentage based fee aligns the investment manager’s remuneration in line with the performance of the client’s investment.


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