By: desmond

desmond — Tue, 22 Apr 2014 15:06:33 +0000

Treasury is obviously right to push for simplification and reduction in unfair penalties on savings products. However the impression I get is that they (Treasury) are ignoring the main driver of these vilified fees, namely the commuted advice fee structure which results in product providers having to come up with ever more inventive ways to recoup this large initial outlay. Given that ASISA stats illustrate a vast majority of industry flows come from brokers, no product provider will be suicidal enough to be the first to kill off this commission structure and risk alienating its broker force. Treasury shouldn’t forget the reality that people are generally bad at saving and see little value in financial advice which clearly shows in how over 90% of South Africans are not able to retire comfortably. Brokers are a highly effective tool in getting people to save more and even an inefficient system is better than a system with highly efficient products that people don’t use due to a lack of financial advice. i.e. I hope they don’t throw the baby out with the bathwater

By: Stephen

Stephen — Wed, 19 Mar 2014 11:13:35 +0000

On the idea itself:
great way to incentivise savings (I think). But do the current interest rate & capital gains tax exemptions not achieve the same goal … arguably with much less admin hassles. Introduce a few more expemptions (dividends) etc and we have replicated the tax free savings vehicle.
Granted, probably not as marketable as “this is a tax-free savings vehicle”?

Am I missing something?

Comments on: Progress on tax free savings vehicles, but scathing words for life insurers

By: desmond

By: Stephen