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Cape Town - Trustees of funds carry a huge responsibility, and their decisions can affect thousands of lives.
One need only think of what happened to the funds intended for the Living Hands Umbrella Trust (formerly known as Mantadia Asset Trust Company, or Matco), says Bheki Khenisa, CEO of Sanlam Trust.
Khenisa points out that while there was general outrage over the light sentence handed down to former Fidentia boss J Arthur Brown - who chose to pay a R150 000 fine rather than go to jail for 36 months - the important question to be asked is whether trustees with similar responsibilities have learnt any lessons from the experience.
The Living Hands Umbrella Trust was responsible for paying money from the mineworkers' provident fund to the widows and orphans of workers killed in mine accidents.
Thousands have been left destitute and as much as Brown is to blame, so are the Living Hands Trustees, says Khenisa. "One wonders what is going through the minds of the trustees who placed benefits with Living Hands."
So how can we ensure that this never happens again?
More stringent legislation is not the answer, says Khenisa. He draws attention to the fact that it is the trustees of funds who decide which administrator to use.
Bottom line is that if trustees are going to be held accountable, they need to do their homework when evaluating an administrator.
Trustees often overlook the history of a company when selecting an administrator in pursuit of cheaper costs and higher investment returns.
Although both factors are important, corporates with a long business history and track record are financially stable and have large capital reserves, an important factor not to be overlooked, says Khenisa.
These companies are also audited both internally and externally with management held responsible for their actions.
Other advantages are that there is no one decision maker who dictates how investments are managed, or how the business is run.
Trustees of funds also benefit from the collective expertise of these companies, so decisions are taken with the advice of experts in the field, often at no cost to the beneficiary.
It is the responsibility of trustees to be very diligent when appointing an administrator, says Khenisa.
A comprehensive checklist against which prospective administrators can be rated is a good starting point, and will ultimately assist trustees to consider all relevant risk factors before selecting an administrator.
In the long run, beneficiaries will be better served by choosing a stable company with a long and stable track record, cautions Khenisa.
- Fin24
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One need only think of what happened to the funds intended for the Living Hands Umbrella Trust (formerly known as Mantadia Asset Trust Company, or Matco), says Bheki Khenisa, CEO of Sanlam Trust.
Khenisa points out that while there was general outrage over the light sentence handed down to former Fidentia boss J Arthur Brown - who chose to pay a R150 000 fine rather than go to jail for 36 months - the important question to be asked is whether trustees with similar responsibilities have learnt any lessons from the experience.
The Living Hands Umbrella Trust was responsible for paying money from the mineworkers' provident fund to the widows and orphans of workers killed in mine accidents.
Thousands have been left destitute and as much as Brown is to blame, so are the Living Hands Trustees, says Khenisa. "One wonders what is going through the minds of the trustees who placed benefits with Living Hands."
So how can we ensure that this never happens again?
More stringent legislation is not the answer, says Khenisa. He draws attention to the fact that it is the trustees of funds who decide which administrator to use.
Bottom line is that if trustees are going to be held accountable, they need to do their homework when evaluating an administrator.
Trustees often overlook the history of a company when selecting an administrator in pursuit of cheaper costs and higher investment returns.
Although both factors are important, corporates with a long business history and track record are financially stable and have large capital reserves, an important factor not to be overlooked, says Khenisa.
These companies are also audited both internally and externally with management held responsible for their actions.
Other advantages are that there is no one decision maker who dictates how investments are managed, or how the business is run.
Trustees of funds also benefit from the collective expertise of these companies, so decisions are taken with the advice of experts in the field, often at no cost to the beneficiary.
It is the responsibility of trustees to be very diligent when appointing an administrator, says Khenisa.
A comprehensive checklist against which prospective administrators can be rated is a good starting point, and will ultimately assist trustees to consider all relevant risk factors before selecting an administrator.
In the long run, beneficiaries will be better served by choosing a stable company with a long and stable track record, cautions Khenisa.
- Fin24
Consider yourself a savings hero? Or just have something on your mind? Add your voice to our Savings Issue:
* Write a guest post
* Share a personal story
* Ask the experts
