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Financial planning

Overview

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Why must a login be verified?

For your safety, FNB will classify the login attempt from your PC, Tablet or Banking App you use regularly as verified. If your login has been verified, you will be able to bank as usual. If we detect a login that is not verified, we will offer limited services for your protection and to prevent possible fraudulent activity on your account.

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Looking after you and your family.

Tying your life to that of another person is not a half-hearted affair; it's a life-long commitment built on trust, sharing and mutual cooperation. By bringing your spouse or life partner into your family's financial decision-making, provides significant benefits in terms of approach, planning, execution and risk diversification.

At FNB Private Wealth we believe that successful financial and investment planning should reflect the aspirations and concerns of both partners or spouses. This is why we focus on fostering solid relationships and delivering consistent and expert wealth investment advice. Our new spousal offering supports this commitment, as we take into account each family's unique needs, investments and personality, a combined approach to family finances ensures that, at all times, the needs of your entire family are catered for.

FNB Private Wealth's spousal offering allows your spouse or life partner to enjoy the same private banking experience you have become accustomed to; from access to our unique rewards programme to the all-important dedicated service of their own Private Banker, ensuring your families' wealth needs are met in the most efficient way. By taking advantage of the full FNB Private Wealth bundled offering your spouse will also benefit from having a Private Wealth Cheque Account, Credit Card and Overdraft facility, a Private Wealth Cheque Account, Credit Card and Overdraft facility. Our unlimited pricing extends to up to five free additional credit cards and five free linked Petro cards, a Global Account, Online Securities Trading Account, Global Trading Account as well as a Channel Islands Account provided this account maintains a minimum balance of £5000. In addition to this, your spouse can have their monthly account fee rebated if they maintain a credit balance of at least R100 000 in their cheque account throughout the month, in this way they get extra value for banking with FNB Private Wealth.

In a nutshell, your Private Banker together with a team of experts, help you and your partner benefit from consolidated investment and banking approaches, including tailored wealth management advice to formulate a family-focused financial plan which cuts across generations.

Recognising the importance of making FNB Private Wealth's exclusive services available to both partners, our spousal offering provides your spouse with 24/7 personalised assistance by the Private Wealth Service Suite for day-to-day banking, access to the FNB Banking App and FNB Online Banking, eBucks Rewards and eBucks Lifestyle were a Lifestyle Assistant, will help you and your partner with a wide range of travel and leisure arrangements, including car rental, booking flights and accommodation, and even sourcing tickets for must-see sporting, cultural or entertainment events. In addition, your Private Banker will be able to arrange Priority Pass membership, and you can both book Speed Pass services through FNB Online Banking.

To ensure any travel experience gets off to a good start, you and your spouse will also enjoy access to the award-winning airport SLOW Lounges and Bidvest Premier Lounges, the perfect sanctuary from the fast pace of travel and modern life. Plus you can now take advantage of our free Take Me Home Service; which can be utilised six times* per year to ensure you get home safely and comfortably.

These services support our Benefits Beyond Wealth approach to financial management, hinged on ensuring that our clients are rewarded for lives well lived. As part of your inner circle, your Private Banker and team of experts will continue to work closely with your family to ensure they incorporate the right services, products and solutions into you and your partner's banking experience.

Contact us

For more information on our spousal offering, speak to your Private Banker or contact the Service Suite on 087 730 6000.
* Terms, conditions and rules apply.

Private Wealth

© Copyright 2011, First National Bank - a division of FirstRand Bank Limited. An Authorised Financial Services and Credit Provider (NCRCP20).

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Investing and planning for the next generation.

While savvier families might be more strategic in their legacy planning, the pace in which their lives change often renders their legacy plan to become outdated. Ensuring that your legacy plan remains relevant and changes as your circumstances change, is essential. During each step of the way, FNB Private Wealth will provide you with an honest perspective on your financial position supported by recommendations on how it can be improved.

A study in published in 2014 by the US-based Corporation for Enterprise Development, draws a direct line between the future success and prospects of children with savings accounts. The study found that "children provided with a children's savings account at birth score better on socio-emotional development indicators", families that opened an account for children at birth "save significantly more for college than families of children who did not receive these accounts", and these children have a greater understanding of financial concepts.

Critically, children whose parents start them on the road to saving early go on to accumulate "a significantly greater level of savings as adults", and are more inclined to diversify their savings and investment portfolios.

Preenay Sathu, Channel Head at FNB Financial Advisory, says that FNB's family approach to wealth ensures that all members of the unit (including children of all ages) are considered in a holistic financial plan. "It's never too early to start teaching your children how to save," he says.

But where to start?

"While the idea of investments, with exposure to underlying asset classes such as equities, property, bonds and cash, may be daunting to some, you don't need a fortune to start investing in your child's future," says Sathu. "Whether it's R250 a month, R100 or R50, it is important to start saving as soon as possible. Only then will your child receive the full benefit of compound interest over time."

For instance, if you were to invest R5 000 in a fixed deposit on the birth of your child and add R100 a month for 18 years into the pot, by the age of 18 your child would have a nest egg of over R46 000, he says. Should your child continue to contribute R100 monthly into the same account until their retirement at 65, the amount would be close to R700 000. This assumes no increase in contributions and a steady annual interest rate of 5%.

Another great option now open to South Africans are the tax-free savings accounts, of which FNB Private Wealth offers a range to suit all needs and savings goals, says Sathu. "The account allows you to save R30 000 a year, tax free, for your children. This helps to provide an invaluable foundation that you can lay for your children's financial future."

Here you should note, however, that by investing on behalf of your children, you reduce their tax-free lifetime contribution limit, which is currently R500 000. Explains Sathu: "Practically, if you contributed - over an 18-year period - premiums totalling R250 000 towards a tax-free savings account in your child's name, the child will have a total contribution limit of R250 000 available over their lifetime towards such tax-free saving themselves."

Another savings option open to a parent is investing in a retirement annuity in the name of the child. This can be done from as little as R250 a month, depending on the institution. "This way you equip your child with multiple years of compound growth. It also presents tax benefits, which can be passed onto the child when they take over after the age of 18," says Sathu.

When you consider the long-term benefits of compound interest coupled with the financial gift you give your child by teaching them about investing, saving and planning for the future, then the importance of smart investing in your child's future becomes apparent. These actions today become the foundation on which future financial legacies are built.

Contact us

For more information on our specialised savings and investments options for children and families, speak to your Private Banker

Private Wealth

© Copyright 2011, First National Bank - a division of FirstRand Bank Limited. An Authorised Financial Services and Credit Provider (NCRCP20).

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Wealth preservation basics for families.

In 2015, the CNBC Millionaire Survey, conducted by Spectrem Group, found that 38% of millionaires in the US with investable assets of US$1 million or more had never used a financial expert for an estate plan. This is quite an alarming statistic as estate planning is the first building block in ensuring that wealth can be transferred from one generation to the next.

It often happens that although the estate has sufficient value, the assets that make up the value are not liquid and therefore a worrying number of estates lack sufficient available cash to settle debts. The consequence of this is of course that it could place the family under immense financial pressure which re-iterates the importance of ongoing planning in order to ensure that the liquidity needs are sufficiently catered for. Other issues to consider are the impact of estate duty and capital gains tax on death.

If you are a business owner, the same principles apply with regards to estate planning but equally important is business succession planning. Business succession planning will ensure that your business is structured optimally and can survive after your demise. A lack of business succession planning can have devastating consequences for your family, your business partners and even your employees.

One of the first elements that will be addressed as part of the planning process is to ensure that your Will is fully aligned with your circumstances and the needs of your family. Understanding the requirements and aspirations of your next generation is as important as understanding your wishes, as this will ensure that the planning you put in place can stand the test of time - after all, you are doing this for your family.

Commenting on South Africa, Chanel Kempff, Head of Client Value Propositions at FNB Fiduciary, says, "Currently a high number of South Africans don't update their Will as their circumstances change and this could deprive the next generation of building on the legacy that the previous generation has created. This also entails taking factors such as assets that are situated in different jurisdictions into account as well as the impact of the legislative requirements of countries where some of your family members might want to settle."

Trusts remain an important vehicle that can be used to protect your family and to ensure that their lives continue as unaffected as possible, after your demise. Trusts are especially important if you have minor children. The law prescribes that the inheritance of a minor must be liquidated and places under the control of the Guardian's Fund until the minor reaches majority age and claiming funds from the Guardian's Fund can be time consuming if you are not familiar with the process. In addition, the Guardian's Fund restricts an heir from formally investing the inheritance, which could potentially mean that the inheritance doesn't grow as fast as it could have if it was invested in an alternative investment. This could result in a loss of wealth over time for your heirs.

Because your life and financial circumstances change over time, it is essential that your estate plan is never regarded as a once-off exercise. It must evolve as and when your circumstances change. FNB Private Wealth's expert advice will move with you, keeping pace with the momentum of your life and adapting as you change and grow, taking into account considerations such as the impact of your estate duty and capital gains tax.

"Your Private Banker, together with our Fiduciary Specialists - both in South Africa and offshore, will work with you to provide a holistic and comprehensive estate plan," says Kempff, who notes that each family is unique and requires solutions and advice that are customised to suit their individual requirements.

Contact us

For more information on our estate planning and other fiduciary services to help protect and preserve your legacy for future generations, speak to your Private Banker or Fiduciary Specialist.

Private Wealth

© Copyright 2011, First National Bank - a division of FirstRand Bank Limited. An Authorised Financial Services and Credit Provider (NCRCP20).

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Investment and economic update.

The month that was

Global equity markets continued to tread water in September, offering no clear direction for the world economy. Developed market bond yields also ended the month more or less where they started.

In the United States, economic indicators have been mixed. Indicators that disappointed included the ISM Manufacturing Purchasing Managers Index (PMI), which contracted for the first time since February, as well as retail sales and nonfarm payrolls. On a more positive note, consumer confidence improved and the services PMI also recorded good gains. While the United States Federal Reserve kept rates unchanged during the month, Chairwoman Janet Yellen indicated that the case for an increase in the federal funds rate had strengthened in recent months.

In the Eurozone the manufacturing PMI slowed slightly and headline inflation remained unchanged at 0.2% year-on-year. The European Central Bank left interest rates unchanged and reaffirmed its commitment to keeping the asset purchasing programme at €80 billion a month until March 2017, and beyond if necessary.

In China, the manufacturing PMI jumped back into marginally expansionary territory registering 50.5 in August.

In Japan, the Bank of Japan (BOJ) adopted a new monetary policy stance by introducing a policy aimed at controlling not only money supply but also short- and long-term interest rates. The aim is to generate a steeper yield curve with short-term rates being lower than long term rates (although the 10-year rate will be capped at 0%). This will benefit the banks, which borrow short and lend long. BOJ Governor Haruhiko Kuroda has promised to keep increasing the monetary base until inflation exceeds 2% and stabilises there. The aim is to achieve a decline in real interest rates in order to stimulate economic activity.

On the local front

Local economic data was mixed during the month. On the positive side second quarter GDP growth surprised to the upside and South Africa recorded yet another trade surplus in July, which translated into a R17.4 billion trade surplus for the year to date. Business confidence also improved off a low base (although it still remains subdued). On a more negative note, output from the mining and manufacturing sectors declined in July on a month-on-month basis, and retail sales were considerably weaker than expected at 0.8% growth year-on-year. Inflation declined to 5.9% and the South African Reserve Bank's Monetary Policy Committee decided to leave interest rates unchanged.

A strengthening rand held back the rand hedge-heavy JSE All Share Index over the period.

Market outlook

Our cautious assessment of global and local growth assets remains intact.

Uncertain global economics makes for significant earnings forecast risk and while interest rates will likely remain at low levels for some time, it is unlikely that they can go meaningfully lower to offset increasing earnings uncertainty. While less austere fiscal policy could improve the outlook, we continue to favour a conservative approach to global risk assets.

From a more local perspective, the outlook has begun to brighten a little thanks to a relatively strong rand, a declining inflation trajectory and a reduced current account deficit. The economy is, nevertheless, likely to underperform and remains hamstrung by a lack of confidence, low levels of private and government fixed investment expenditure, and generally low commodity prices.

Equity market valuations have improved on the back of lower risk free rates, but implied risk premiums are still below long-term average levels.

While bond yields have fallen on a stronger rand and lower inflation expectations to less attractive levels, bonds still represent value in that yields are still substantially above the likely long-term inflation outlook. On the listed property front, low yields compared with bonds could limit near-term returns.

On the currency front, while there are increasing signs that the current account deficit is likely to continue diminishing, based on weakening import demand, there remains two-way risk to the local currency. Offshore investment continues to retain investment merit from a diversification perspective.

Contact us

For more information or advice on investing in South Africa and offshore, or to get insight on how to diversify your wealth, contact your Private Banker.

Private Wealth

© Copyright 2011, First National Bank - a division of FirstRand Bank Limited. An Authorised Financial Services and Credit Provider (NCRCP20).

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Sustaining you, your business and your family for the future.

There are unique combinations of traits and talents it takes to be a successful entrepreneur. Words and phrases that are frequently used to describe these dynamos of business include: innovative, passionate, committed and risk taking. Less spoken about, but no less important for entrepreneurs who achieve a legacy, are planning and pragmatism.

South Africa has a proud history of impressive entrepreneurs who have defied the odds and those individuals have paved the way for subsequent generation of entrepreneurs; equally passionate businesspeople navigating a challenging and changing global world.

"Many of these individuals are FNB Private Wealth clients, who seek our advice not only for their businesses but also for their personal and family investments," says Gugu Sidaki, a Wealth Manager at FNB Private Wealth. "Over the years we've observed that successful entrepreneurs are those who invest not only extensively in their business, but also outside the business in order to ensure that their wealth is sustained in the down times and that their family's lifestyle remains unaffected in the event of any economic uncertainties."

In our experience, entrepreneurs are positive; they see the upside, they spot opportunities and they are quick to adapt when the need arises, says Sidaki. "They are also extremely pragmatic, which is why we guide our clients towards a careful balance of individual and business risk and work hard to find ways in which to sustain their wealth for both themselves and their family."

Step one, says Sidaki, is doing your homework. "Work with your Wealth Manager to consider all the factors and options at hand before committing your hard-earned money to any form of investment," she recommends. "Then ensure that your investment trajectory fits your current circumstances and that the future prospects align with your requirements and objectives."

For the entrepreneur, this means analysing not only your current business situation and trajectory, in the context of the local and global economy, but also the status of your personal investments. In other words, financially speaking, where are you now and where would you like to be?

Once you have determined how much you can commit towards your investment strategy, you need to quantify the period over which you intend to invest. "Investing for less than two years is considered short term, while a period of between three and five years is regarded as medium term. Long-term investing is anything in excess of five years," explains Sidaki.

Determining these needs and the right investment selection comes down to a specific approach which takes into account both the entrepreneur's business interests and their personal needs and wants. This ties in closely with the level of risk to be incorporated into the investment plan, or the risk or return profile.

Explains Sidaki: "As an investor you are ultimately compensated in terms of returns based on the amount of risk you take on. For example, equities are considered to be one of the riskiest assets but there is also a high probability of high returns. Conversely, keeping your money in a bank account is considered less risky, but the potential for making high returns is low. As an investor, you need to select investments that best suit your risk tolerance."

As an entrepreneur, for example, you might consider the easy access to equity investments to be more favourable than tied-in, long-term investments. Or, your portfolio needs to make provision for a balance of both. For example, if your business runs into a lean patch, there is the possibility that you may need to access some of these funds immediately. Speak to your Private Banker about putting in layers of access in for the form of liquidity enhancers which recognise the nature of entrepreneurship and the possibility of needing access to easy cash.

That said, it is vital to ensure the security of your family and individual investments. A balanced portfolio offers the best combination of assets - from equities to bonds, property or cash - to ensure steady and stable growth, without jeopardising the future of your family's financial wellbeing.

"A good example of this is the Ashburton Houseview Solution," says Sidaki. "This is a direct share portfolio which comprises shares, listed properties, bonds and hedge funds, both locally and offshore. The portfolio aims to maximise investors' returns at moderate levels of risk." Most investment houses have different versions of this type of investment, she explains, which you can access both directly and on a unit trust basis.

Ultimately, the best advice is just a phone call away. Your Private Banker together with your Wealth Manager can weigh up your business demands and family obligations and recommend the most favourable solution for the long term.

Contact us

For more information on wealth planning to help you balance your business and family's wealth obligations, speak to your Private Banker.

Private Wealth

© Copyright 2011, First National Bank - a division of FirstRand Bank Limited. An Authorised Financial Services and Credit Provider (NCRCP20).

Life and Times Newsletter issue 7

Keeping you up to date

Spotlight

Private Banking for your spouse or life partner

Local + global market updates

Market insights to help you invest and manage your wealth

Global equity markets continued to tread water in September, offering no clear directions for the world economy.

Explore the Magnificent Eastern Cape with eBucks Lifestyle

Enjoy the treasures of the wild with your family

Are you planning your next family holiday and in need of some inspiration and ideas? FNB Private Wealth and eBucks Lifestyle are offering you discounts on a selection of three superb local experiences that are suitable for every age and taste.

Get your legacy plan in order

Protect your legacy for future generations

While savvier families might be more strategic in their legacy planning, the pace in their lives change often renders their legacy plan to become outdated.

Ensuring that your legacy plan remains relevant and changes as your circumstances change, is essential. During each step of the way, FNB Private Wealth will provide you with an honest perspective on your financial position supported by recommendations on how it can be improved.

Balance your own business + family obligation

Uncover the key to sustaining your wealth

Despite the challenges inherent in business ownership in South Africa, entrepreneurs continue to spot opportunities, adapt and stay agile.

First National Bank - a division of FirstRand Bank Limited. An Authorised Financial Services and Credit Provider 1929/001225/06 (NCRCP20).