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THE FCB GROUP
RETIREMENT FUND
Background
Administration
Insured Benefits
Investment Strategy
Background
>> BACKGROUNDThe FCB Group identified many shortcomings in the current Retirement Fund environ-ment. These shortcomings include appalling administration and communication as well as poor assistance to members regarding the choice of Investment Portfolios. The FCB Group has compiled an offering, which in our opinion, is superior and addresses these problems. Great care was taken to produce an offering that is unique to the Marketplace. We have partnered with leaders in the industry to achieve this goal. >> TYPE OF FUNDS A company has a choice to either offer the benefits of a retirement fund to its employees by means of its own private fund or by participation in an umbrella fund.>> STAND ALONE FUNDA Private Fund is a Provident or Pension Fund which is a stand alone fund for a specific employer. The fund has to conform to the provisions of the Pension Funds Act and must be registered with the Registrar of Pension Funds. The fund has to appoint a Principal Officer as well as a Board of Trustees. From an economical point of view a stand alone fund is generally only suited for larger Employer groups.>> UMBRELLA FUNDAn Umbrella Fund is a Provident or Pension Fund to which any group of employers can apply for membership as a participating employer. The umbrella fund will be registered and approved with an established Board of Trustees.Due to the enormous additional costs of running a Stand Alone Fund, together with the growing obligations of the fiduciary duties placed on Trustees, have made professionally run Umbrella Funds attractive to the small to medium sized companies. These type of funds ensure that Employers get value for their members contributions. Employers are increasingly seeing Umbrella Funds as a viable alternative to Stand Alone retirement funds. A professional Board of Trustees will manage the fund in accordance with all the fiduciary duties laid down by law. Each employer will have employee representation on a fund committee.The FCB Group offers its clients the opportunity to structure their retirement fund needs through either a Stand Alone or Umbrella Fund solution.
Administration
>> ADMINISTRATIONA recent survey into retirement fund governance showed that more than half of the principal officers of funds would change their administrator if a viable alternative were available.It was also highlighted in a significant number of areas, funds fall short of acceptable levels of governance policies and procedures. It was found that Trustee performance was far below standard and poor administration was prevalent.Gone are the days of bad administration and communication. The administration facility provided by our strategic partners will guide you through the process of change. They will facilitate the handover and validation of data to the new administration unit to ensure the capture of accurate data. The ongoing administration process ensures that new data is validated and made available to members and their human resources departments on a monthly basis. Internet based access will allow employer and member access to essential fund information. This includes benefit statements, member booklets and the fund rules. This information can be accessed through a secure password controlled environment and is updated regularly as the monthly contributions are processed.This facility can be extended to include the communication of the investment strategy, objectives and performance against targetThe benefits of this to our clients are:> Active reviews of the risk benefit providers> Regular investment performance reviews from the Asset Managers> Detailed statements of fully disclosed costs > Monthly updated retirement benefit statements.
Insured Benefits
>> INSURED BENEFITS (Risk Cover)Our strategic alliances with industry partners provide access to a wide range of leading risk cover providers which include Sanlam, Metropolitan, Old Mutual, Capital Alliance and Hollard. This always ensures the best risk rates (Life, Disability and Funeral cover) available in the market for each participating Employer.Our unique wellness programme, Comprehensive Employee Risk Management System (CRMS), has proven to reduce risk premiums in some instances by up to 50% and increase retirement savings by as much as 7%. An additional benefit to the Employer is reduced absenteeism and increased productivity which reduces Company costs.The comprehensive Employee Risk Management Systems (CRMS) has been implemented with certain Employer Groups since 2006 with unprecedented results.This unique programme is currently revolutionising the Retirement Industry.
Investment Strategy
>> INVESTMENT STRATEGYThe biggest shortcoming, besides poor administration and communication, which we have identified, is the fact that Retirement Fund members are left to a great degree on their own to make investment decisions. Many are ill equipped to deal confidently and effectively with these choices. Through a first in the Retirement Fund Industry, we equip and empower these members. A comprehensive and vigorous process of risk profiling empowers the member to make informed decisions regarding investment and portfolio choices. The different investment options have been selected with great care to satisfy any combination of investment needs.Albert Einstein once said that the most powerful force in the universe is compound interest.We have a unique approach in the sense that we can offer our risk profiling model to an Employer Group. Our whole suite or specific investment options can be added to enhance your current investment choices without disrupting your current Retirement Fund offering. It is the only strategy available in South Africa that offers this unique approach. All our investment options have been put through vigorous scrutiny and due diligence processes by our Professional Board of Trustees. It therefore offers a great deal of protection to an Employer and current Board of Trustees if it is decided to add some of these options to your current offering.The following investment options are available:>> PSG Konsult – Share PortfolioThis is a unique share portfolio for the very informed investor who understands the risks and rewards of a direct share portfolio. This is a segregated portfolio built around the client's individual needs. Quarterly feedback is given on a personal basis to the investor by the portfolio manager and broker.Investment strategy: Portfolio management always takes place in an uncertain environment and these uncertainties are managed by buying quality companies with a proven track record at a good price, investing in companies with negative correlations, focusing on the quality and price of the company rather than trying to forecast short term uncertain variables. The investment horizon is at least 3 years and is not focused on short term performance. Risk: Moderate to highPerformance history: 2009: 22% (JSE 32%) • 2008: -8.8% (JSE -23.2%) 2007: 13.3% (JSE 19.1%) • 2006: 30% (JSE-41%)>> Cadiz Money MarketThe Cadiz Money Market Fund is the top performing money market unit trust fund over almost all measured periods since its inception, and has the lowest annual management fee in the industry. It is ideally suited for investors seeking a “parking bay†or a phasing-in vehicle. Investment strategy: Investment strategy aims to provide investors with a higher return than bank savings accounts and term deposits. Risk: LowPerformance history: 1 year: 7.20% 2 years: 8.90% p.a. >> Third Circle Asset ManagementThird Circle Asset Management (Pty) Ltd (TCAM) is a registered financial services provider licensed by the Financial Services Board under license number 24202. TCAM is an independent asset manager which focuses on the multi management of collective investment schemes. TCAM is a pioneer in the field of aligning a person's asset allocation with a person's money personality. TCAM has maximized risk profiling in such a way that a seamless integration is maintained between the client's wishes, personality traits and the eventual design of the client's portfolio. TCAM has succeeded in aligning the psychology of investing with the mathematics thereof.The different portfolios have been back tested to January 1994 using the Monte Carlo simulation model.The following six money personalities will be used and matched to the appropriate Third Circle Investment Portfolios. > TCAM CPI+3%Investment strategy: a Conservative portfolio with very low exposure to shares. The objective return is inflation plus 3% per annum, with a structured draw down of not more than 5% per annum over a rolling 3 year period. Risk: LowPerformance history: 1 year: 17.18% p.a. (JSE: 20.65%) 2 years: 13.42% p.a. (after costs) > TCAM CPI+4%Investment strategy: a Conservative portfolio with very low levels of volatility. The objective return is inflation plus 4% per annum, with a structured draw down of not more than 7.5% per annum over a rolling 3 year period. Risk: LowPerformance history: 1 year: 18.92% p.a. (JSE: 20.65%) 2 years: 14.38% p.a. (after costs) > TCAM CPI+5%Investment strategy: a Conservative to moderate portfolio with low to medium levels of volatility. The objective return is inflation plus 5% per annum, with a structured draw down of not more than 10% per annum over a rolling 3 year period. Risk: Low to moderatePerformance history: 1 year: 20.43% p.a. (JSE: 20.65%) 2 years: 16.12% p.a. (after costs) > TCAM CPI+6%Investment strategy: A moderate portfolio with medium levels of volatility. The objective return is inflation plus 6% per annum, with a structured draw down of not more than 12.5% per annum over a rolling 3 year period. Risk: ModeratePerformance history: 1 year: 21.04% p.a. (JSE: 20.65%) 2 years: 16.41% p.a. (after costs) > TCAM CPI+7%Investment strategy: A moderate to high risk portfolio with medium to high levels of volatility. The objective return is inflation plus 7% per annum, with a structured draw down of not more than 15% per annum over a rolling 3 year period. Risk: Moderate to highPerformance history: 1 year: 21.42% p.a. (JSE: 20.65%) 2 years: 16.48% p.a. (after costs) > TCAM CPI+8%Investment strategy: A high risk portfolio with high levels of volatility. The objective return is inflation plus 8% per annum, with a structured draw down of not more than 17.5% per annum over a rolling 3 year period. Risk: HighPerformance history: 1 year: 21.32% p.a. (JSE: 20.65%) 2 years: 16.63% p.a. (after costs)
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