When it comes to investing, there are many questions that investors face: is my investment Regulation 28 compliant; by how much can I boost my tax return; am I saving enough for retirement and how do costs impact my investments? Fortunately, PPS Investments has developed five calculators to assist investors to answer these questions instantly.
Nick Battersby, CEO of PPS Investments, says that many South Africans question whether they are saving enough for retirement and how the rising cost of living affects their savings. “Now they can have the answer at the click of a button.”
The PPS Investments Retirement Health Calculator, helps investors determine whether they are saving enough for retirement, based on their circumstances and goals, he says.
“Users simply provide how much they need at retirement, how much they have accumulated and how much they are currently contributing. Thereafter, the tool will calculate the shortfall or surplus between the predicted and required retirement savings. In addition, the calculator will give the investor the option of creating different scenarios by either changing their income expectations, adjusting their return target, or making additional contributions (among many others), to ensure the investor can work towards a comfortable retirement.”
The second tool, the PPS Investments Retirement Savings Tax Calculator is designed to ensure that investors are making the most of the tax incentives offered by the South African Revenue Service, says Battersby. “The investor inputs all their information (including taxable income, year-to-date contributions to retirement schemes and their age) and the tool will calculate the shortfall or surplus of the investor’s tax contributions as well as how much they need to add to their retirement annuity to take full advantage of tax incentives.”
Izak Smit, PPS: Group CEO, states that the launch of the calculators is in line with the PPS Group strategy to implement many new technological advancements across its various business divisions, all with the purpose of making the lives of PPS members and clients easier.
“When a financial adviser uses these digital tools to assist their clients to monitor their savings performance and make financial planning decisions, the client will experience great benefits in the long run as more time can be spent on advising clients based on their unique needs. Financial advisers should not see these type of self-help tools as a threat to their profession, but rather a supportive tool to enhance their current service offering to their clients.”
He says that the digital forces in the world are too powerful for any company to fight and the sooner everyone embraces technological advancements, the better. “At PPS we are keeping abreast of the technological movements in the industry and we aim to make it as easy as possible to do business with us. These calculators are the first of many more innovations to come from us.”
When a financial adviser is truly committed to providing added value to their clients they will find these type of digital tools very useful, Smit concludes.
Battersby says that PPS Investments also have additional calculators in place that assist investors in various other ways. “The PPS Investments Effective Annual Cost (EAC) Calculator allows investors to see the impact of individual cost items attached to their investment. These are assigned into three broad categories of charges; administration, investment management and advice charges. The EAC Calculator will also disclose any additional charges that fall outside of these three cost categories in a fourth cost category named “other”. The EAC is a fee disclosure method created by the Association for Savings and Investment South Africa (ASISA) to help standardise how fees are reflected across all providers. It helps investors compare the impact of costs on most investment products.”
The PPS Investments Regulation 28 Tool will help investors ascertain whether their retirement fund savings are Regulation 28 compliant or not, says Battersby. “Note that in addition to this, there is a Regulation 28 validation service built in to each applicable online transaction to ensure Regulation 28 requirements are met. When a retirement fund is Regulation 28 compliant, it is deemed to be a suitable investment option for retirement savings. This is because exposure to high-risk assets is limited to specified restrictions (maximum limits of 75% to equity, 25% international and 25% property).”
Lastly, there is a Capital Gains Tax (CGT) calculator built into the online instruction service that allows investors to calculate the illustrative CGT applicable should they decide to either switch between unit trusts or withdraw an investment, says Battersby.
“It is important to note that these tools are illustrative and one should always seek the advice of a qualified and experience financial planner,” he states.
Anyone can access the calculators by following the link; http://retirementportal.pps.co.za/