FA News (2020) compiled an article of views on trends and what to expect in the year 2020.
According to Viresh Maharaj, Chief Executive of Corporate Sales & Marketing at Sanlam, the key trends that will shape our future, specifically 2020, include:
1. The rapid consolidation of standalone funds into umbrella funds.
Standalone retirement funds have been converting into umbrella funds over the course of the past decade, and it is anticipated that the vast majority of such funds still remaining will do so over the course of the next few years.
2. The introduction of severe illness benefits.
The introduction of severe illness benefits is a trend identified by Benefit Consultants as employers have a greater appreciation of the need to provide financial cover for severe illnesses.
3. The increased role of Retirement Benefits Counselling in improving financial outcomes.
Retirement Benefits Counselling can provide up to date information in an easily accessible manner to all fund members to equip them to make better financial decisions. As such, people are encouraged to obtain financial advice.
4. Greater pressure placed on the industry by the regulator to play a meaningful role in the transformation of the sector.
5. The growing need for cyber security.
Cyber risk a threat to the retirement fund industry and all stakeholders need to play an active role in ensuring the cyber-resilience of members’ funds.
The reality is that people are living longer, resulting in baby boomers retiring later, and therefore staying in working field for a longer time. This is largely driven by the tough economic environment, and the realization that most have not made adequate provision for retirement.
Why is financial advice critical?
Based on Momentum Corporate research, many employees recount personal stories of financial stress where advice and assistance would have made a real difference. As such, given the lower levels of awareness and education around financial products, people need financial advice in order to make wise decisions at different stages of their lives e.g. when they join or leave an employer, when they buy a house, or have children, as their inaction or decisions will have significant impacts on them in later years.
According to the research, approx. 60% of respondents have a formalized strategy to provide financial advice to members. Of these, two thirds have implemented access to a preferred panel of financial advisors and just under a third do provide subsidized advice. Members who receive high quality financial advice tend to have better outcomes in retirement and access to advice therefore becomes a transformative component of financial inclusion. Our financial experts have been unpacking and providing practical advice on the best ways to preserve your financial freedom. Contact our financial advisors to ensure that you are receiving shariah compliant finance advise.
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(Source: FA News, 2020)