Ten innovative financial products launched in 2015

Cape Town – A number of new financial products were launched during the course of 2015, growing the range of choice that consumers have and improving their access to financial services. Here Moneyweb lists ten of the most innovative:

SmartRand

Developed by financial planning firm Galileo Capital, SmartRand is one of South Africa’s first ‘robo-advisers’. The online service gives anyone, with any amount of money to invest, access to advice and the ability to invest securely through its platform.

SmartRand takes users through a detailed questionnaire that assesses their risk profile and their investment goals before recommending a suitable product for their needs. It currently uses a selection of just five passive fund choices to keep things simple and the costs low.

Just Retirement

With the reform of the pension fund industry a government priority, Just Retirement’s ‘enhanced annuities’ offer potential benefits to anyone with a below average life expectancy. Since the likes of smokers or those with medical conditions have different risk profiles, enhanced annuities can potentially increase their retirement income.

Based on a telephonic questionnaire, Just Retirement assesses an individual’s risk profile and offers them an annuity rate based on that risk. It therefore moves away from the one-size-fits-all approach that is currently the norm.

RMB Krugerrand Custodial Certificates

A first in the world, Krugerrand Custodial Certificates give investors to own Krugerrands while enjoying the liquidity of an exchange. The certificates offer a low cost way to invest and store gold, with the option for investors to take delivery of the physical product if they prefer.

Investment Solutions stokvel funds

Members of stokvels in South Africa currently put between R45 and R50 billion into these organisations every year. However, the systems employed by most financial services companies simply don’t recognise these structures or provide ways for them to use formal savings methods.

Investment Solutions has therefore designed a targeted product offering that recognises stokvels as entities and provides special application forms for their FICA registration. This gives stokvels the opportunity to invest in unit trust-type funds to earn better returns for their members.

Absa Stockbrokers ETF only account

As passive products grow in popularity in South Africa, financial services providers are increasingly looking at ways to make investing in them easier and cheaper. The ETF only account from Absa Stockbrokers does exactly this.

For a brokerage fee of 0.20% per trade and a minimum fee of R20, the platform allows South Africans to invest in any locally-listed ETF at a reduced fee. Particularly for large lump sum investments, this is a very competitive rate.

Old Mutual MSCI World ESG Index Fund

Combining two of the hottest trends in investing – index tracking and sustainable investing – Old Mutual’s MSCI World ESG Index Fund offers institutional investors a low-cost way to reduce the external risks that environmental, social and governance (ESG) issues represent.

The fund tracks the MSCI World ESG Index, which gives exposure to companies with higher ESG performance relative to their peers. The returns from the index have very closely tracked those of the parent MSCI index, meaning that investors don’t sacrifice any performance but can significantly reduce their risk.

The fund is unfortunately not available to retail investors.

SatrixNOW

Making use of EasyEquities’ slick online technology, SatrixNOW gives investors the chance to access Satrix’s suite of ETF products at very low cost. As the experience is also totally online, it will be appealing to the new generation of investors that do everything through their mobile devices.

There is no ongoing administration fee to use the platform, and brokerage on trades is just 0.25%. Currently only Satrix ETFs are available, but the unit trusts, which offer some different exposures, will also be added soon.

Different Life

Life insurers are generally not the most popular companies, but Different Life is showing that it is possible to run a good business while showing concern for more than just your own bottom line. The company allows policy holders to donate their first premium and each anniversary premium to charity.

Liberty Agile Exact Income Fund

One of the greatest problems that those saving for retirement face is that generally their pension funds or retirement annuities are valued in terms of a capital amount. However, what they really need to know is how much income that is going to give them.

Liberty’s Agile Exact Income Fund allows investors to buy income rather than simply adding to a pot of money. This gives them the chance to secure future income and know what they can expect in retirement.

Old Mutual Money Account

Teaming up with Bidvest Bank, Old Mutual launched a transactional banking product that is not just about spending. Account holders can choose to invest a percentage of each card purchase into a money market account, which means that each time they swipe, they are also putting money away for themselves.