Second Quarter 2015 – In Touch

jurgens group wealth management

…. and a good winter’s day to you all

As you can see from the above picture, I recently returned from an “eye- opening” trip to Japan where a small group of South African Advisors attended a conference which exposed us to Japan’s current economic climate. Japan has experienced deflation with markets performing badly for over two decades. Due to Government intervention in the form of quantitative easing, the objective is to achieve a 2% inflation rate. The devaluation of the Yen has also assisted in making exports more attractive. These factors are conducive to a more positive economy, with markets showing growth which is expected to continue going forward. With the above in mind, and the Government’s commitment, an increase in Japanese equities should be considered. Tokyo has a population of 13.5 million people who I found to be polite with immense respect for one another. The city itself is organised, efficient and litter free which was inspirational to witness.

…. and back to life in South Africa

The current situation with regard to our markets are that the JSE is considered fully priced. This means that investment returns from our local stock markets are not favourable, making it extremely important to ride out the day-to-day volatility as the share prices move up and down frequently, often falling sharply and quickly. However, on average the share prices move up over a longer period of time and one often has to ride the tides through this movement.

It is at times such as these that one must allow the financial planner to prevent one from reacting too hastily due to these movements and negative economic news. Often doing nothing is required to achieve long-term goals.

During the last quarter, Jurgens Group has had quite a few changes apart from the loss of Willington. We said good-bye to Kim who has been my Personal Assistant for over six years. Kim’s family won the jackpot and received their “Green Card” allowing them to immigrate to the USA. We wish Kim and her family the best of luck for the future. Kim has been replaced by Evita Gobel and I’m confident you will be in good hands going forward.

This chilly spell we are experiencing is killing off the bad germs, keeping us awake, alert and fired up to handle whatever comes our way, and the good news is we have reached the “half way mark” for winter.



Employee Benefits from Estelle Susanna

With effect from 1 March 2015, the Income tax Act has been amended to allow a member to choose when to retire if the rules of the Fund allow for it. Most Assurers will amend their rules to allow a member to defer their retirement to a date that suits them. This has been practiced by some Employers who allowed members to remain on their Fund post normal retirement age and continued to contribute to the Fund whilst remaining employed.

The new amendment allows a member who reaches normal retirement age and is compelled by his Company to leave employment to preserve his benefit within the Fund until a retirement date is chosen by the Member. Unfortunately, the Preservation rules have not been amended to allow for transfer to these products, hopefully this will be a consideration going forward or perhaps Annuity income products will be amended so that a member is not forced to take an income until the income is required.

Discovery Health – International Travel Benefit

When travelling outside South Africa, an active Discovery Health member has emergency cover for 90 days from date of departure (this benefit is built into your monthly premium).

Please note the following does NOT apply to members of the Key Care Plans.

Medical emergency cover is limited to R10 million for members on the Executive plan and R5 million for members on the Classic, Essential and Coastal plans. Please note this is per member and per journey. It is important to remember that an up-front co-payment will be required for out of hospital medical emergency treatments. Discovery Health cover out of hospital medical emergency claims after you have paid the first €100 or US$150 for each person on each journey.

If emergency hospitalisation while travelling overseas is required, it is necessary to notify International SOS as soon as possible after the emergency on +27 11 541 1222. Should you need assistance in contacting International SOS, you can also contact the international operator of the country you are visiting and request to be connected to International SOS on reverse call charges. International SOS will validate the membership and confirm any waiting periods, before they authorise the admission and issue a payment guarantee. Your medical savings account and other day-to-day benefits will not be affected.

It is not necessary to call or make arrangements for this benefit each time you travel to foreign countries. The only time it is necessary to make arrangements for the travel benefit claim form and letter is for Visa purposes.

For more information pertaining to the above, please contact Simone Heyman at Jurgens Finance, 011 622 2061 or Discovery Health Directly on 0860 99 88 77.

Short Term News from Russell Sourgen

Commercial Insurance In Challenging Times

Tough economic times have put tremendous pressure on most business owners.

Unfortunately, in a bid to cut costs, many business owners make the potentially fatal decision of reducing their insurance cover without fully understanding the implications of the risks involved. It is imperative that in this unfortunate environment, we as an industry, assist our clients to understand and insure against the risks that could adversely affect their business. In many instances, this relates to insuring against small financial losses such as damage to company vehicles. However, it is even more important to ensure that potentially crippling or catastrophic risks are mitigated.

In general, our clients know that improving their risk exposure has benefits however, it becomes difficult when these improvements require capital outlay – for example, sprinkler or alarm system installations. In tough economic times, many business owners cut back on such necessities, resulting in avoidable losses.

As Brokers, it is important to understand the risk exposure of each business and this is where Jurgens Insurance Brokers brings real value to the table – to assist our clients in avoiding claims.

In our ever changing environment, there are also many new risks which business owners need to be aware of and consider taking protection against; namely Cyber Crime, Directors & Officers Liability, Protection of Client Personal Information (POPI), Kidnap & Ransom, Gradual pollution, Professional Indemnity etc.

Where possible, we would look for alternative, more cost effective solutions for our clients. However, if there are no alternatives and we believe that the enhancement against risk is necessary and beneficial to the client, our requirements will be adhered to in the event of a claim. A further exacerbating factor is the belief that cheaper premiums are best. The truth here is that cheap premiums often result in uninsured losses and unnecessary, potentially crippling financial costs. Commercial brokers have an important responsibility to provide business owners with sound advice, appropriate products to meet their needs whilst still keeping affordable cover. This is not an easy task but one which Jurgens Insurance Brokers are in a position to provide. We at Jurgens believe that, if we work together with our clients, we can formulate an appropriate solution to satisfy all parties’ needs and best forms of protection of our client’s interests.

Jurgens Insurance Brokers are well positioned in the commercial market place and are able to supply insurance services to a wide spectrum of businesses – from the one-man business to the large corporate institutions.

We invite you to put us to the test. Call our office. (011) 622-2061/2/3

Our sales team consists of Greg, Russell and David who will be happy to assist you in this regard.

First Quarter 2015 – In Touch

Our annual Jurgens conference took place in Magaliesburg this year which was most enjoyable and a great motivational, team- building experience.

A question I am often asked is “How safe is your unit trust money?”

In a nutshell, to invest in unit trusts, your investment is regulated by law. Although these regulations cannot protect investors against market corrections or crashes, there are key role players put in place, making it very difficult for any one of the parties to disappear with your money.

The key role players are:

The Trustee is an independent Bank or financial institution appointed by the unit trust management company to safeguard the assets of the unit trust. The manager and trustee set up a unit trust together. The Trustee ensures the fund is managed according to the rules of the mandate and the Collective Investment Schemes Control Act.

The Financial Services Board (FSB) is the regulator of the unit trust industry and issues a licence to approved unit trust fund managers. The FSB has the power to request audits and the manager needs to submit regular reports to the FSB.

The Collective Investment Schemes Control Act (CISCA) regulates the way in which a unit trust should be managed and what information needs to be disclosed to investors. CISCA also limits exposure to any one holding or certain asset classes. The potential for your investment to be affected by fraud is thus curbed substantially when investing in unit trusts. If a company in which you are invested fails to adhere to any of the legislated regulations, this will have a limited impact on your total investment.

(Courtesy: Sanlam Investments, News and Insights)



Employee Benefits from Estelle Susanna

Tax changes that will have an impact on disability income policies effective 1 March 2015

A reminder : Effective 1 March 2012, all unapproved risk contributions are to be taxed as a Fringe Benefit in the hands of the employee.

The Income Disability contribution was then tax deductible by the employee, making the contribution tax neutral. The Income Disability benefit received was taxed.

With effect from 1 March 2015, the Income Disability contribution will continue to be taxed as a Fringe benefit and the employee cannot claim back the tax. All Income Disability, either new or existing claims, will be paid out tax free. This applies to Employee Benefits and privately owned Income Disability policies.

Inflation and the oil price from Chris Botha

Inflation slowed to its lowest rate since April 2011 at 4.4% in January compared to a year ago, as lower fuel prices and slower increases in food inflation offered relief.

The inflation data supports the case for stable interest rates for at least the next few months, which will offer over indebted consumers some respite.

The 4.4% also means inflation began the year well within the 3%-6% target band.

The Reserve Bank said in January it expected inflation to remain within the band.

Oil prices reached $115 a barrel in the middle of last year and fell to about $45 later in the year and in January, to about $62 a barrel.

Food inflation will play a role in how inflation performs in future. Annual food inflation moderated from 7.4% in December last year to 6.6% in January 2015.

Courtesy: Business Day

Short Term News from Greg Brits

The effects of load shedding has brought about more and varied claims for the insurance industry.
Consumers are encouraged to remain vigilant in order to ensure that resulting claims will be covered by their insurance policies. Load shedding has become part of our daily lives and may be so for at least the next 3 to 5 years.

Where insurance cover is subject to a burglar alarm warranty, and the alarm fails due to load shedding, should a loss occur during that load shedding period, the insurers have advised that they will deal with each case on its own merits.

If an alarm failure was solely due to load shedding, a client will not be prejudiced by that failure which is beyond their control. It is, however, expected that the insured will at all times act in a reasonable manner by ensuring that the alarm is activated and that the alarm back-up battery systems are fully functional and tested regularly.

To help our clients understand and protect themselves from risks that involves load shedding, the following precautionary measures should be followed:

  • Check and replace old batteries of alarm systems, electric gates etc to ensure that they are functioning and are able to sustain the power source during periods of load shedding.
  • Arm your alarm if you leave your residence, even if load shedding is expected. Should it malfunction during load shedding, you may have to prove that your alarm was in good working order at the time you left your premises for the insurer to consider your claim.
  • Switch off and disconnect all electrical appliances when load shedding occurs or when leaving the premises. This will avoid power surge damage when power is restored (except for fridges, of course).
  • Where possible, install a power surge protector to reduce the risk of damage to electrical appliances and DB boards.
  • Should you install a generator, please ensure that it is installed by a qualified electrician and that the relevant and compliant change over switches are used.
  • Connecting a generator direct to a plug point could have disastrous consequences, one being a fire hazard! This type of claim will usually be rejected by the insurer.
  • Power Surge cover is usually limited to a certain amount on insurance policies.
  • The risk of burglaries and armed robberies are higher during load shedding, be vigilant and keep security gates locked.

In terms of alarm warranties and how your insurer will handle a claim due to load shedding, please contact our office.

Fourth Quarter 2014 – In Touch

I would like to take this opportunity to formally welcome Digby Levenson and Russell Sourgen to Jurgens Insurance Brokers, effective October 2014. They bring along much experience and expertise and we look forward to a productive and successful relationship.

You may have noticed that, from the beginning of this year, most financial institutions have reduced their fee structures. This is largely a knock-on effect from the long awaited Retail Distribution Review (RDR) report released by the Financial Services Board.

The RDR report, which was published recently as a discussion paper, will be implementing new rules regarding the financial services industry. Many of these rules being proposed are to protect you, the consumer. Ceasing of upfront commissions on investments, and a clearer breakdown of exact costs within all investment products, are two of the many changes being proposed in this report. We, at Jurgens Group, welcome these rule amendments, as it encourages transparency, lower fee structures and more disclosure.

South Africa is facing political challenges and with this in mind, as previously mentioned, diversifying your investments is vitally important. Our economy accounts for less than 1% of the world’s economy, and our currency remains under pressure.

On a positive note, the official inflation rate has remained at around 6% – a significant contributing factor is that the price of oil has reduced over the past few months – hopefully this will bring some relief to those of you travelling long distances over the festive season.

I would like to thank you once again for your continued support and loyalty in all divisions of our company.

To my colleagues and staff, a sincere thank you for your dedication and commitment during the past year.

Wishing all of you a safe, happy and relaxing festive season.


Employee Benefits – Estelle Susanna

It’s been a year of turmoil in the Employee Benefits industry with proposed changes, then legislated changes, months of workshops and training, only to be informed at the last minute, that these changes would be delayed, possibly as late as March 2016.

With all the retirement reforms proposed, the most important reform, that being compulsory retirement savings, has not yet been addressed. It’s devastating to process retirements for members who do not have sufficient provisions to retire on. However, they’re the privileged few; their employers have at least made some type of effort to provide a retirement savings scheme.

It won’t be long before Treasury realises that it is unfounded to impose prescribed minimums, tax rules and the Pension Fund Act on some of the South African workforce, whilst others don’t have the opportunity to contribute to any type of retirement savings.

Employers should have a sense of responsibility to provide a retirement savings facility for their staff and not wait for Government to impose a compulsory one.

Most young employees do not consider it necessary to start saving for retirement whilst in their 20’s. Unfortunately, employers who think that these employees are contributing in their personal capacities, are mistaken. Until South Africans develop a culture of saving; employers should take on the responsibility of ensuring that their staff members’ retirement needs are taken care of by means of a retirement savings facility.

On that note, less Christmas cake for employers and more bread for employees. Have a Blessed Christmas!!

Short Term News … from Greg Brits

We echo the sentiments of Mark by welcoming Digby, Russell and Debra from Bert Levenson Insurance who have joined forces with Jurgens Insurance Brokers. They bring with them, many years’ worth of experience as well as giving added value when dealing with the insurers. This in turn, means more leverage regarding premiums and services for our clients. We look forward to a long and beneficial relationship in the future, which will grow from strength to strength.

The insurers are currently taking a closer look at thatched lapas on client’s policies. There have been a few burn down claims recently which have affected the main residence. Should you have a thatch lapa on your premises, please let us know so that we can ensure it is covered correctly.

With regards to jewellery and watches, the insurers require that whilst not being worn, these items must be kept in a locked safe, bolted to the wall or floor.

As we head for the end of the year, here are some helpful tips should you be going away:

  • Do you have the correct travel insurance policy in place? The cover offered by credit card companies is usually inadequate. For more information, please contact our office.
  • Has your insurance policy been updated to ensure that there is adequate cover for additional goods purchased or items being taken out of the home on holiday?
  • Have you asked a neighbour or friend to keep an eye on your premises and to remove any markings or newspapers delivered which give the impression that the home is unoccupied? Do they have keys should they be required to access your property?
  • Give our contact details to a neighbour or friend so that they can contact us if assistance is required.
  • Test your alarm to see that is in good working order. This should be done at least once a month.
  • Turn the water mains off in case of a burst pipe or geyser to avoid your home being flooded.
  • If you are able to, try and lock the main gate to your home as this is usually the access point to your property for intruders.

Please note that our offices are open over the festive period and our staff are available to assist you in the event of an incident.

We would once again like to thank you for your continued support and wish you a blessed Christmas and a Happy New Year.

A Christmas holiday Parable:

One Christmas holiday, Sherlock Holmes and Mr Watson went on a camping trip. After a fulfilling meal they lay down in their tent for the night and went to sleep. Some hours later, Holmes awoke and nudged his faithful friend awake. “Watson, look up and tell me what you see. ” Watson replied, “I see millions and millions of stars. ” “What does that tell you?” Holmes questioned.

Watson pondered for a minute. “Astronomically, it tells me that there are millions of galaxies and potentially billions of planets. Astrologically, I observe that Saturn is in Leo. Logically, I deduce that the time is approximately a quarter past three. Theologically, I can see that God is all powerful and that we are small and insignificant. Meteorologically, I suspect that we will have a beautiful day tomorrow. ” “Is that all?” Holmes asked. “Yes,” Watson replied. “Why have I missed something?” Holmes was quiet for a moment, then spoke. “Watson you idiot! Someone has stolen the tent!”

Source: Perspective Vol 8 No4 © Perspective 2001