Today’s harsh realities demand that you not only work harder to conserve your money but also pull out all the stops to grow it. If you want advice on investments, employee benefits, retirement, insurance or tax and estate planning strategies, a financial planner is for you.
Some financial planners specialise in one or more areas – estate planning, retirement strategies, tax and asset management planning. Some deal with a certain type of clientele – small or big business owners. It is up to you to make sure a prospective planner can satisfy your special situation.
Whether they are engaged in investment banking, sales and trading, asset management, or private equity, those who wield power on the JSE know that success is more than negotiating money-making deals – it is also about helping to transform our society.
With the US and Europe experiencing financial stress, India and China are the new heroes. In fact, China has overtaken the US and Japan as the world’s largest consumer.
Readjustment
If we want transformation, if we are proactive, we can see all this as an opportunity for readjustment.
Seeing how everything is interconnected, now is the time to re-examine and re-work our social, economic, political and investment structures. Now is the time to build a new society based on new meanings, understandings and foundations of human thinking and human doing.
That is why the Association of Black Securities and Investment Professionals (ABSIP), was established in 1995 to address the apparent lack of representation of black professionals in the securities and investment industry. It was also conceived of as a platform to address the aspirations of those in the industry and to create a forum for black professionals to exchange information and ideas.
Black securities and investment executives, who have launched successful careers in financial services, acknowledge that the opportunities are there but require more transformation. The old axiom that you need to be twice as good just to be recognised is still true.
There has been significant progress in the formation and promotion of black investment banks and brokerage houses, but the number of black professionals at the top is still very small. There are opportunities, but the most important thing is that the industry must continue to diversify. Businesses need to fully represent the marketplace in order to be able to respond to opportunities in different multicultural sectors.
It is true that the financial services sector has experienced growth and stability. With R6 trillion in assets, the sector is six times larger today than it was at the advent of democracy, and the financial services’ contribution to gross domestic product has increased by 38 percent since 1994. This means the sector is far stronger today in the era of transformation than it was before, thanks to the transformation agenda driven by organisations such as ABSIP.
Indeed, ABSIP helped steer the debate and implementation of the Financial Services Charter, which has served as the blueprint for achieving sector representivity.
The mandate of ABSIP has evolved to encompass the empowerment of black professionals and business across the financial industry. Its membership has grown to include sub-sectors such as asset management, corporate banking, corporate finance, corporate managerial and financial consulting, employee, insurance, investment banking, retail banking, private banking, private equity, stock broking, treasury and development finance institutions.
In its championing of women’s empowerment and inclusion in the world of business, ABSIP has also made strides in ensuring that the role that women play in business is well recognised.
Gender policies
One of the key resolutions of the 2014 Women in Focus summit was to advocate for corporates with the intention to list on the JSE to provide a disclosure of gender policies and gender mix in integrated reports submitted to the JSE.
This will help monitor the representation of women in corporate, as well as promote their inclusion. The JSE has responded with proposed amendments to the listing requirements, which will better track the progress of listed companies.
The financial services sector has spent more than R200 billion on the imperatives set out by the charter, including in areas such as procurement and infrastructure financing. The sector has committed to spend an additional R100bn over the next four years.
These kinds of investment initiatives have contributed to meaningful change in the lives of millions of South Africans. Today, two-thirds of adults have a bank account, something unheard of across the continent and even among our emerging market peers. ABSIP’s talent management programme has opened up opportunities for emerging talent to enter the sector.
Several of the cadet training and professional mid-career programmes offered by financial institutions are as a result of ABSIP’s intense lobbying efforts. For me, my leadership of ABSIP became the realisation of my youthful bravado.
But more importantly, it brought into being an instrument that allows us to commit to the task of educating, inspiring and uplifting black financial services managers and executives, showing them how to thrive professionally, economically and as proactive, empowered citizens.
At the moment black financial services managers are victims of inequality and cannot afford to participate in a sector that deepens and entrenches inequality.
The securities, asset management and investment sector is not fully transformed. It is not transforming fast enough. Here are the facts to show how “untransformed” the investment and securities industries is:
- R283.1bn represents the total industry assets managed by majority black owned firms.
- R6.5 trillion is the estimated size of the total South African investment and savings industry.
- 4.4 percent represents how much is being managed by black firms of the total South African investment and savings industry.
- Two companies manage just over 50 percent of the total assets managed by black firms.
- 10 companies manage 94 percent of the total assets managed by the black firms, out of a total of 32 firms.
- 18 black firms have been in operation for less than four years.
- 55 percent of total assets managed within long-only domestic active equity mandates followed by money market mandates represent 26 percent of the total asset pool managed by black fund managers.
Out of reach
The sector is not transforming fast enough. After all these years we have to ask where we are and what needs to be done.
Despite everything we continue to notice that the sector is still out of reach for many, and the ownership of big investment and asset management firms remains in the hands of a few blue chip companies. We need to accelerate the transformation of the financial services industry: not only in who runs it, but also in what it does.
Central to the transformation process is the upgrading of skills and the capacity that enables the country and organisations, including our sector, to raise productivity and respond to new economic challenges, including capitalising on opportunities in the global market.
The transformation will help reduce societal imbalances. Transformation is inextricably linked to inequality and the sector is the instrument to correct broader societal imbalances.
The financial services industry is at the heart of our economy. For an example, asset managers are the centre of the financial system. Dynamic, transformed asset managers will definitely play a crucial role in driving better behaviour in the industry.
Ultimately, an efficient and affordable investment fund industry, which helps the poorest and most vulnerable in our society save for retirement, is in the interest of all of us.
Let the transformation of the financial services sector march on.
* Tryphosa Ramano is the president of the Association of Black Securities and Investment Professionals.
** The views expressed here are not necessarily those of Independent Media.
BUSINESS REPORT