Independent Trustees on Trusts | Heritage Day, and Why the Springboks are World Beaters

Independent Trustees on Trusts

Many clients use family trusts where the purpose is for greater estate planning, allowing the assets to grow in the Trust and not within the individual’s estate.

When assisting clients in making investments in their family trusts, one of the requirements is for us to have a copy of the trust deed, which is, in effect, the “ID document” of the Trust.

This needs to be supported by the letters of authority that confirm which individuals are allowed to sign documents on behalf of the Trust.

Over the years, in my experience, I have noted several family trusts needing at least one independent trustee. While we can still do the investment, I would point this out as something that needs to be corrected.

Mandy Dix-Peek, Head of Fiduciary at Private Clients by Old Mutual Wealth, now unpacks recent changes to the Trust Property Control Act via Moneyweb and emphasises the importance of independent, professional trusteeship when using Trusts.

You can listen to this short interview by clicking on this link.

Heritage Day, Why the Springboks are World Beaters

I recently came across this article by financial services professional Ian Kilbride.

Born in England, Ian decided to leave the UK and embark on a journey that would see him travel across Europe and down the entire length of Africa. This proved a life-changing and eye-opening experience that allowed him to see first-hand the rich social and political tapestry of the African continent and its many people. And he has kept business and personal ties with SA ever since.

Heritage Day on Sunday with the accompanying public holiday on Monday, Ian uses the rugby world cup to share his sense of why us South Africans are unique;

Can they, or can't they? Can the Springboks go all the way and retain their William Webb Ellis Rugby World Cup trophy? In statistical terms, the Boks have an excellent track record in the tournament. Besides being one of only two teams to have won the trophy thrice (the other being New Zealand), South Africa has the highest title win rate (42%) and is the only team never to be beaten in a final.

Together with the late great Jonah Lomu and Julian Savea, Bryan Habana holds the record for the most tries scored in a tournament with eight and shares the record with Lomu for the most tries scored in all rugby World Cup tournaments, with 15. In the kicking game, no South African can hold a candle to All-Black Dan Carter or England's Johnny Wilkinson, but SACS old boy Percy Montgomery is up there in third place with 22 conversions in one tournament (2007). Handre Pollard is second in penalty goal conversions with 39 and will be sorely missed this year in France. 1999 was a forgettable tournament for the Springboks, but we all remember Jannie De Beer's record of five drop goals against England. South Africa also bookends another title with the oldest and youngest players to win a rugby world cup in Schalk Brits (38 in the 2019 final) and Francois Steyn (20 years in the 2007 final).

The Springboks go into the 2023 tournament on the back of a record 35-7 victory against the old enemy, New Zealand, and a 52-16 thumping of Wales. However, this year's preparatory record was patchy before this, with a win against a disorganised Australia and a defeat to New Zealand.

But a key advantage in South Africa's favour is continuity, both on the field and in the coaching staff. With few exceptions, the Boks who beat England in the 2019 final are fit and in the current squad. The biggest boost comes from the return to fitness of captain Siya Kolisi, supported by the giant and maturing presence of Eben Etzebeth, the impish Faf De Klerk at scrum half and a backline brimming with talent.

Along with coach Jacques Nienaber, the mercurial Springbok Director of Rugby, Rassie Erasmus, has provided rare continuity, particularly as a coach at the highest international level. This is in sharp contrast to the 'new' coaching appointments of England and Australia, for example, the re-appointment of Warren Gatland to the Wales job and Michael Cheika as the Argentinian Pumas coach.

Yet, the odds are against the Springboks. New Zealand go into the tournament again as favourites, followed by home boys France. From how France performed in this year's six nations, it's hard to see how the Gallic Roosters will not put the hugely partisan home crowd advantage to good use. The impressive Irish (ranked number one globally) enter the tournament as solid fourth favourites, followed by Australia and England. With respect to the latter two old enemies, Australia has an exceptionally young squad with a lot of improvement ahead of it. Lamentably, the same cannot be said of the under-performing England.

But there's something more than physical prowess and tactics at play here and that is national pride. As mentioned, France entered the tournament with confidence and huge national support. Paradoxically, perhaps, expectations of New Zealand are slightly lower than usual. So, it is to the reigning champions that we must look for something that can make the difference between competing and winning. Recall that, along with enormous home-country advantage, national pride was undoubtedly the determining factor in South Africa's first championship victory in 1995. Of course, the All Blacks still bemoan that their squad came down with food poisoning the night before the final. But is it plausible to blame dodgy South African biltong for Joel Stransky's magical extra-time drop goal? As Naas Botha once commented, cowboys don't cry.

No, there's something more to Springbok rugby than brute force and physicality. It is seldom as skilled as the Australians or as complete as the best All Blacks teams. It doesn't possess the gallic flair of the French or exude the devil may care running rugby of the Argentinians. But what we do have in buckets is national pride. And here's the rub. Excluded from international sport and the first rugby world cup because of apartheid policies, Springbok rugby had historically represented the epitome of 'white' sporting prowess and Afrikaner power. And it has taken over a generation to change this racial exclusivity elite to blend into what is now a team that, on merit, is representative of the excellence in our society in all its colours, cultures and hues. This gives us the edge and makes today's Springboks world beaters.

Looking forward to the tournament, as their national anthem says, "Scotland is brave", but come Sunday, 10 September, 60 million South Africans will be bound together in wishing the boys in green and gold the ultimate rugby world cup success.

Reserve Bank keeps repo rate unchanged at 8.25% in a 3/2 split decision - Johann Els

Johann is the lead economist for Old Mutual. His views which I share below:

In a repeat of the “hawkish hold” decision in July, the Reserve Bank announced yesterday – at the conclusion of the September Monetary Policy Committee meeting – that they have decided to keep the repo policy rate unchanged. The statement again – as expected – highlighted the upside inflation risks emanating from the recent sharp increases in international oil prices and the weaker (and volatile) rand exchange rate.

While the MPC lowered their core CPI inflation forecasts, they are concerned about the potential upside impact of higher fuel prices on inflation expectations and wage growth. They emphasized that they would prefer to see interest rates anchored at the inflation target mid-point of 4.5% (inflation expectations vary (survey vs. market pricing) but are generally around 5.8%.

As usual, they ended the statement by emphasizing their approach that they will watch the data and stand ready to act to protect inflation from 2^nd round risks.

Johann’s view: We have seen the end of rate increases in the current cycle, i.e. I do not expect any further rate increases. However, inflation risks might result in a delay in the start of the downcycle which I have currently pencilled in for the first quarter of 2024. Depending on how these risks play out, the downcycle might also turn out to be milder than expected. For now, I am keeping my forecast of 100 to 125 bp’s of rate cuts in 2024 unchanged.

Investec CCM Rates & Specials

While the interest rates are still high you can take advantage of them with Investec’s Corporate Cash Managers. If you would like more information, please contact me.

Notice Plus Deposits: rates are highly competitive and open to Individuals and Non-Individuals:

· CCM 15-Day Notice: 8.70%

· CCM 32-Day Notice: 8.90% (an additional 0.10% is added to the base rate if notice is not placed for 30 days)

· Range from 15 days to 120 days with liquidity as required

Fixed Deposit Specials: For individuals over 55

• Investec CCM is offering rate specials for 6, 12, 24 and 60 months for individuals over 55. Let me know if you would like to explore this option.

Rugby World Cup | Updated Algorithms

Artificial Intelligence (AI) updates regularly. After last weekend’s matches that saw all the leading teams winning comfortably - the Boks over the last week have seen a sharp increase (SA 34%, compared to New Zealand at 25.9% and France at 18.3%) as now being statistical favourites to take the overall title.

AI is becoming more prevalent, but remember that human interactions are far less predictable, and this gives me faith that I can still enjoy the games without spoilers. We play Ireland this Saturday, who beat us end of last year 19-16, and who have won their last 15 matches in a row. I think Saturday’s match is going to be a close tough battle of the top two ranked sides in the world.

Friday Food for Thought