Internasional Investment Solutions - Finsolnet

By: The Financial Solution Network  09-12-2011
Keywords: portfolio management, Investment Management, Consumer Protection

Investment Objectives

Finsolnet is a network of independent professionals that combine their resources to develop best practice solutions at a reduced cost. As independent participants in the investment process they can be truly objective to:

  • Reduce the cost of investment administration
  • Reduce investment portfolio management fees
  • Improve investment performance
  • Comply with the requirements of consumer protection legislation (FAIS)

FSB Approved Investment Solution

Associates of the Network do not recommend investment into any one fund. Investment recommendations utilize FSB approved targeted return strategies. These strategies are actively managed to risk and return specific investment mandates.

Finsolnet's FSB approved discretionary investment manager may select the best of breed portfolio managers - including non-FSB approved fund managers and asset classes. The individual managers have full discretion to use all asset classes to achieve their investment objectives.

The Solutions Network adopted targeted Return Strategies:

Each strategy has clear a clear risk and return mandate:

  • LIBORPlus 2-3% 24 mths 36mths rolling average
  • LIBORPlus 3-4% 36 mths 60mths rolling average

FAIS Compliant Investment Decisions

The Finsolnet targeted strategies focuses on the investor's needs and risk profile to determine the most appropriate investment strategy. The fund selection decisions have been fully delegated to the Investment manager and the team of portfolio managers

ABSA appointed as Investment managers

ABSA Investment Management Services (AIMS) has been appointed as the Finsolnet's FSB approved investment manager. In consultation with Network associates it will appoint and monitor style differentiated portfolio managers to manage the mandates of each of the strategies.

  • The managers must select their most appropriate fund for each strategy.
  • The investments are split equally amongst these managers.
  • Asset allocations are rebalanced quarterly amongst the portfolio managers

Investment managers differentiated by style manage strategies:

The Managers have a flexible mandate to use Equities, Bonds, Property, Alternative strategies and Currency to achieve the investment objectives. Each has been contracted to manage the strategies as individual unit trusts. The initial managers are:

The performance of each of the managers is continually reviewed to ensure compliance to the strategy's mandate. The portfolio managers charge an average management fee of 1.5% pa. This fee is fully accounted for in the published results. A portion of this fee may be rebated back to the Network. A detailed fund fact sheet will be prepared monthly to report on funds, asset allocation and performance.

Endowment Wrapping Option

An assurance wrapper is not required for Finsolnet's strategies - even when non-FSB approved investments are included. However the Finsolnet assurance wrapper, underwritten by ABSA Life should be considered. The assurance wrapper:

  • Is very cost effective. The additional fee is limited to 0.15% pa.
  • It eliminates problems with accounting for income and capital gains.
  • It allows the investor to nominate beneficiaries and additional lives to ensure continuity.
  • The assets can then be distributed directly to beneficiaries without any estate complication.

Outsourced Administration:

The administration of the International Investment Solution has been outsourced to ABSA Investment Management (AIMS) . The ABSA's link to Barclays ensures strong representation in international financial markets.

The AIMS administration system is cost effective and offers extreme benefits:

  • Supports a total investment product range including Assurance Wrapping
  • Full Capital Gains Tax functionality to minimize CGT events
  • Fully automates the administration process integrating image and workflow
  • Provides full audit trails and security - fully configurable for legislative compliance
  • Enables the use of e-Commerce for
  • Valuations, ad hoc statements, prices & interest rates, transaction details, e-forms, commission tracking etc.

Reducing Cost Through Economics of Scale: Summary

The economics of scale achieved by the Network, has reduced administration costs:

  • Initial Fees:No Initial Fee on investments transferred
  • Initial Fee for New investments: 0.5% The financial advisor may charge a planning fee to initiate a new investment
  • Reduced Annual Fees: 0.6% per annum. Includes a fee of 0.1% for the Network
  • Wrapping fee: 0.15% per annum
  • Total fee Direct: 1.0% per annum
  • Total fee Wrapped: 1.15% per annum

Values Summary

  • FSB approved investment strategy
  • Clear mandate with regard to risk, return and time
  • Actively managed by style differentiated portfolio managers
  • Performance monitored by ABSA Investment Manager Services
  • Reduced cost by economies of scale and direct negotiations by Service Providers
  • Cost effective wrapping option
  • Facilitate estate planning

Conclusion

The Network's Investment Solution offers substantial benefits to Investors:

  • Security offered by ABSA & Barclays Bank
  • Active management of investment expectations
  • Clear risk and return mandates of targeted return strategies
  • Diversification and asset allocation by style differentiated portfolio managers
  • Income Tax, Capital Gains Tax and Estate Duty management through wrap option
  • Competitive costing

Keywords: Consumer Protection, Investment Administration, Investment Management, investment manager, portfolio management, Portfolio Managers,

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