Membership of a pension fund is often made a condition of employment. Retirement annuities (RAs), on the other hand, are purchased voluntarily, particularly by people who are self- employed, but are also suitable for employees who feel that their pension will be inadequate when they retire. Generally they are quite right. Read the rest of this entry »
Endowment policies have become a major element in retirement planning for most people and form a large part of all business written by life insurance companies. Read the rest of this entry »
With most longer term investments there are fees on buying, or selling, or both. With cash investments there are usually no fees involved in putting assets in money form. Thus the whole of the investment is working for you from the date of deposit. Any investment with entry or exit fees should be considered as medium to long term. Read the rest of this entry »
As the interest of the public is growing in financial matters, investment in unit trusts is rapidly gaining popularity in this country. The reasons for this are: Read the rest of this entry »
Property trusts are a very much neglected investment area for the average investor. Why this is the case is not exactly clear. While property trusts generally have not risen at the same pace as the other “glamour” sectors on the Johannesburg Stock Exchange, the property trust sector has outpaced the inflation rate by a comfortable margin. Read the rest of this entry »
You can invest in the stock market directly by buying shares yourself. It is also possible to invest indirectly by investing in unit trusts or certain products offered by insurance companies. All direct buying and selling should be done through a stockbroker who will be able to offer advice on which companies are suitable for your investment objectives. Read the rest of this entry »
In deciding any investment strategy the first task is to decide your objective. Shares can be purchased for the following reasons: Read the rest of this entry »
Every investment portfolio should contain an interest in the stock market — the question the average investor has to ask is “Can I do it myself?” For those who like to be heavily involved the share market can be fun, meeting with stockbrokers, discussions with friends, reading balance sheets and going to shareholders’ meetings. Read the rest of this entry »
For those who do not want the problems of storage or management, unit trusts or gold shares can offer another way to have an interest. Unit trusts will endeavour to make profits both on trading gold shares and (hopefully) by capital gain. Obviously this is a speculative investment but free of worry for those who want a bit of gamble without doing too much work themselves. Read the rest of this entry »
There are various ways to invest:
Gold in South Africa can be obtained by purchasing coins or jewellery. South Africans are prohibited by law from owning gold bullion so the most popular form of owning gold is Krugerrands and to a lesser extent other types of gold coins and medallions. Read the rest of this entry »
This is a popular pastime when the stock market is booming and investors feel that the market will never turn down. However, it is highly speculative due to the difference in nature of property and shares. Property is a stable investment which is not generally subject to sharp falls and rises. On the other hand some shares can rise and fall as much as 80% (or more) in a single year. Read the rest of this entry »
Advisers receive remuneration in two ways: fees for services rendered and commission paid to them on products they recommend. For years there has been a debate about which is best for the investor and there is no clear-cut answer. Read the rest of this entry »
First ask yourself what you expect your financial adviser to do. If you are having problems balancing your household accounts or finding direction, you should go to a financial counsellor — they can be hard to find but often your bank or building society may offer these services and occasionally a local school or college may have courses that could assist you. Read the rest of this entry »
Without any kind of stimulation plan, the market is going turbulent again. The market seems more dependable on US policy makers’ decisions.
It can not bear any kind of bad news from the economy. Job loss put the US market into another deep hole.
Stock market is intended to improve economy instead of put it into worse. Today stock market won’t be pleased by its millions of stockholders. It fluently affected by several policy makers.
Is our economy some kind of stimulation plan? The more money came in, the better the market. What sort of economy is that? Read the rest of this entry »
The conclusion from the foregoing discussion is that the trustee and the manager are not in partnership or in a general agency relationship. They are independent contracting parties to the unit trust deed. An examination of the terms of a typical trust deed of a non-authorized unit trust in detail reveals that the majority of the provisions are covenants made by either of them with unitholders or are provisions conferring powers or discretions on them by unitholders. When the regulations of the Financial Services (Regulated Schemes) Regulations 1991 are incorporated expressly into the trust deed of an authorized unit trust, it appears that they may be construed in the same manner. There are not many provisions that can operate as promises between these two parties.
Where provisions in the deed embody covenants made with unitholders, they can be enforced by unitholders as promisees. In respect of an exercise of power or discretion by the trustee which is without good faith or otherwise wrongful, unitholders can sue the trustee for breach of trust. In the case of the manager, unitholders may bring an action for an abuse of power on the basis of a breach of fiduciary duty. Thus, there is no problem of standing to sue for aggrieved unitholders. Read the rest of this entry »
In respect of the investment of the property of the unit trust, regulation 7.02.2 spells out clearly that it is not only a duty but also ‘a right’ of the manager to make decisions. Correspondingly, regulation 7.09 is drafted in negative terms so as to leave no doubt that the trustee’s obligation does not extend to a positive consideration on the merits of particular investments. In other words, the trustee has no ‘right’ to make an investment decision as its counterpart in an ordinary private trust. This is also echoed by regulation 7.03.1 which provides that ‘Nile manager may without the specific authority of the trustee give instructions to agents as to the acquisition or disposal of property of the scheme‘. But at the same time, regulation 7.03 requires the manager to restore the trust portfolio to its status quo if the trustee forms the opinion that the manager exceeds its power in a particular transaction. Read the rest of this entry »
It cannot be denied that by entering into the trust deed, both the manager and the trustee are entering into a venture that provides services to their `customers’ and that produces their income. This is cooperation in business, but is unlikely to constitute them a partnership. Basically, the test of the existence of a partnership is by reference to the definition of a partnership discussed and also by reference to the statutory rules regarding co-ownership of assets, sharing of gross return, and also sharing of profit.
There is no business in common. The demarcation of functions under the unit trust deed draws the line of business between them. In essence, the trustee is carrying on the business as a professional trustee and the manager is carrying on the business of investment management. Read the rest of this entry »
The conclusion from the foregoing discussion is that the trustee and the manager are not in partnership or in a general agency relationship. They are independent contracting parties to the unit trust deed. An examination of the terms of a typical trust deed of a non-authorized unit trust in detail reveals that the majority of the provisions are covenants made by either of them with unitholders or are provisions conferring powers or discretions on them by unitholders. When the regulations of the Financial Services (Regulated Schemes) Regulations 1991 are incorporated expressly into the trust deed of an authorized unit trust, it appears that they may be construed in the same manner. There are not many provisions that can operate as promises between these two parties. Read the rest of this entry »
It is important, first of all, to define a fiduciary. Despite voluminous literature, there is no ready answer and the fiduciary relationship remains ‘a concept in search of a principle’. In general terms, it is possible to divide fiduciaries into two categories, status-based fiduciaries and fact-based fiduciaries.
The status-based category includes a core of well established relationships such as trustee-beneficiary, guardian-ward, director-company, principal- agent, solicitor-client, employer-employee, and partner-partner. They are relationships which are regarded by equity as fiduciary per se. It is debatable as to what is the common denominator behind these relationships but it is not a matter of concern here. Read the rest of this entry »
In Parkes Management Ltd. v. Perpetual Trustee Co. Ltd. , the manager of a unit trust was aggrieved by the trustee’s issue of a certificate that it was in the interest of the unitholders that the manager should be dismissed. On the question of the manager’s locus standi, Hope JA said:
It is submitted for the Trustee that it is only a beneficiary who can challenge the exercise by a trustee of a power . . . There would appear to be three answers to this submission. Firstly, that the Manager was a beneficiary; secondly, that the provisions of cl. 20(1) of the Deed entitled the Manager to ensure that the Trustee exercised any power under the Deed bona fide without indirect motive, and with a fair consideration of the issues; and thirdly that being a party to the Deed the Manager was entitled to challenge the certificate . . . Read the rest of this entry »
