Publications
Partners
A FEW weeks back there was quite a bit of noise around the fact that only "accredited" investors in the US would be able to access Facebook stock as it was marketed by Goldman Sachs.
I understand the American concept of "accredited" investors preventing people from investing in certain types of deals, but similarly I see it means that the man in the street often gets left out of the juiciest deals.
That particular argument will go round and round but it was in the back of my head when I received a press release from Sanlam personal finance, saying the firm had just launched new retail products which were exclusively aimed at "previously disadvantaged individuals".
Basically the new products would be a savings instrument you could access from between R250 and R400 a month, which would give you access to private equity deals.
These would include black economic empowerment (BEE) financing, equity transactions including "socially responsible listed shares" and property where you could invest in "community builder property investments".
Mainly to stir the pot, I wrote back asking if that meant these products were accessible only to people of 35 and older, who would have been impacted by apartheid and could make a genuine claim to being "previously disadvantaged".
The reply came back that in fact the product was available to all "South African black, Coloured and Asian individuals, but there is no age limit".
OK, so in my multi-cultural family two of my kids are "previously disadvantaged" and two aren't?
Wow. We complain about President Jacob Zuma playing God and deciding who gets into heaven, and yet we now have Sanlam deciding who is disadvantaged and who isn't.
I admit, that is just me being facetious. I know that "PDI" has been clearly defined but we still have choices as to how we pander to it. As there are at least four other families at my children's schools with black and white "brothers and sisters", how is Sanlam going to deal with the matter?
Let's be clear about this: these products have nothing to do with empowerment. They are a marketing gimmick. If people want to empower themselves financially and participate in the BEE share market, then go and take advantage of the BEE board the JSE is establishing.
At R400 a month I'm willing to bet in 10 years' time that any of the Satrix exchange-traded fund products will have outperformed these Sanlam products. Heck, maybe I'll even put my money where my mouth is and do a split between my advantaged and previously disadvantaged kids.
Fundisa does it better
For crying in a bucket, we are now 17 years into a democratic South Africa. Those turning 18 now and thinking about retirement products are just as disadvantaged or advantaged as circumstances allow, irrespective of race or colour. Maybe these products might have had some relevance pre-2000, but in 2011 surely not.
How can you in good conscience send a sales force out into the market to sell products on the premise that black, Coloured, Indian or Chinese people will supposedly get better investment performance because of their colour or "previously disadvantaged" status?
Why can the asset management industry not take a leaf out of the Fundisa product manual, which potentially does far more for broader South African empowerment than a product like this?
Fundisa says if I invest X, the government will subsidise my savings and top up my investment, provided I use it for the long-term goal of educating my children. I don't think you could argue that we all benefit from a better educated South Africa.
Fundisa attracts next to no fees, is tax efficient if you use it for the education grant, accessible from as little as R50 a month and doesn't discriminate on grounds of race.
Sometimes the best pieces of wisdom come from those who don't know any better, and I'm going to sign off with one of them from my adopted eight-year-old Afrikaans boy.
If you ask what the difference is between him and his black six-year-old "sister", he will tell you that the only reason she is black is because her old mom left her out in the sun for too long.
How does he know this? It's easy - look at the bottom of her feet.
Come on Sanlam, up your game a bit.
- Fin24
I understand the American concept of "accredited" investors preventing people from investing in certain types of deals, but similarly I see it means that the man in the street often gets left out of the juiciest deals.
That particular argument will go round and round but it was in the back of my head when I received a press release from Sanlam personal finance, saying the firm had just launched new retail products which were exclusively aimed at "previously disadvantaged individuals".
Basically the new products would be a savings instrument you could access from between R250 and R400 a month, which would give you access to private equity deals.
These would include black economic empowerment (BEE) financing, equity transactions including "socially responsible listed shares" and property where you could invest in "community builder property investments".
Mainly to stir the pot, I wrote back asking if that meant these products were accessible only to people of 35 and older, who would have been impacted by apartheid and could make a genuine claim to being "previously disadvantaged".
The reply came back that in fact the product was available to all "South African black, Coloured and Asian individuals, but there is no age limit".
OK, so in my multi-cultural family two of my kids are "previously disadvantaged" and two aren't?
Wow. We complain about President Jacob Zuma playing God and deciding who gets into heaven, and yet we now have Sanlam deciding who is disadvantaged and who isn't.
I admit, that is just me being facetious. I know that "PDI" has been clearly defined but we still have choices as to how we pander to it. As there are at least four other families at my children's schools with black and white "brothers and sisters", how is Sanlam going to deal with the matter?
Let's be clear about this: these products have nothing to do with empowerment. They are a marketing gimmick. If people want to empower themselves financially and participate in the BEE share market, then go and take advantage of the BEE board the JSE is establishing.
At R400 a month I'm willing to bet in 10 years' time that any of the Satrix exchange-traded fund products will have outperformed these Sanlam products. Heck, maybe I'll even put my money where my mouth is and do a split between my advantaged and previously disadvantaged kids.
Fundisa does it better
For crying in a bucket, we are now 17 years into a democratic South Africa. Those turning 18 now and thinking about retirement products are just as disadvantaged or advantaged as circumstances allow, irrespective of race or colour. Maybe these products might have had some relevance pre-2000, but in 2011 surely not.
How can you in good conscience send a sales force out into the market to sell products on the premise that black, Coloured, Indian or Chinese people will supposedly get better investment performance because of their colour or "previously disadvantaged" status?
Why can the asset management industry not take a leaf out of the Fundisa product manual, which potentially does far more for broader South African empowerment than a product like this?
Fundisa says if I invest X, the government will subsidise my savings and top up my investment, provided I use it for the long-term goal of educating my children. I don't think you could argue that we all benefit from a better educated South Africa.
Fundisa attracts next to no fees, is tax efficient if you use it for the education grant, accessible from as little as R50 a month and doesn't discriminate on grounds of race.
Sometimes the best pieces of wisdom come from those who don't know any better, and I'm going to sign off with one of them from my adopted eight-year-old Afrikaans boy.
If you ask what the difference is between him and his black six-year-old "sister", he will tell you that the only reason she is black is because her old mom left her out in the sun for too long.
How does he know this? It's easy - look at the bottom of her feet.
Come on Sanlam, up your game a bit.
- Fin24
