By Cornel Basson, 16 April 2018
No wonder ordinary South African consumers – some of whom are among the most anxious, risk-averse investors – struggle with being fully at the mercy of market returns and prefer something a bit more certain.
Enlisting the services of a reputable financial adviser is the only way to ensure a successful outcome, but the merits of good financial advice and planning is a discussion for another day. The crux of the matter for most investors in these turbulent economic times is: when I invest, what products will guarantee that I won't lose my money (at the very least), and at best, grow my investment beyond expectation?
'Certain clients want to get out at least what they put in,' explains Cornel Basson, Product Manager at Glacier by Sanlam. 'Cautious investors, who make up a large percentage of the investor population in South Africa, want to feel their money is completely secure. Moderate-cautious investors are satisfied to invest with a lower, yet some sort of guarantee. They have low to zero tolerance for losses.'
A considerable portion of discretionary funds (a lump sum of money that you wish to invest) in South Africa is sourced from the permitted third of a pension fund withdrawn tax-free on retirement or retrenchment. The need for security on these funds is high as they are often hard earned.
Cornel suggests a checklist of five key questions to consider when choosing a guaranteed or fixed-return investment product:
The Glacier Research team agrees with Cornel. In a global context of low returns, high volatility and uncertainty, guarantees have become critical and attractive, they say. But they caution against the inherent risks in guaranteed funds, summing them up as follows:
The most critical question is always: as an ordinary consumer, are you qualified to make an informed decision about any investments? A reputable financial adviser is qualified, has experience and has exposure to the product offerings of numerous financial services companies. Such an adviser is best placed to help you make the best choices as part of your carefully constructed, diversified financial plan.
Glacier offers you a suite of guaranteed solutions to choose from: