Unlock the value of investing as a family

Creating family wealth to meet future financial needs has become increasingly important.

The Old Mutual Savings & Investments Monitor in 2018 shows that 28% of middle-aged adults in South Africa are classified as part of the ‘sandwich generation’, that refers to those wedged between raising dependent children while caring for aging parents and/or parents-in-law who did not make any or adequate retirement provision. It can be challenging to strike the balance between meeting immediate family needs while building future financial security.

Building family wealth is also not exclusive to wealthy families and can be achieved by family units, regardless of the family’s net worth. Research done by Professor John Davis from the MIT Sloan School of Management shows that when family members collaborate and unite around a joint purpose to benefit future generations, the likelihood of success increases. In addition, they tend to take a long-term approach when managing assets.

Family collaboration is key
At PPS Investments, we’re geared to provide you and your family with opportunities to build intergenerational wealth to further your family’s financial future.

One such avenue is through the PPS Investments Family Network that enables you to connect your family members’ investments on one platform to ensure that they benefit from a reduced family administration fee.

The Family Network provides opportunities to assist your aging parents by giving them access to lower administration fees during their fee-conscious retirement years, while fostering a family culture of saving for your children when you open and connect an investment for them.

The more you and your family invest with us, the more everyone benefits.
As part of our tiered administration fee scale, we offer reduced administration fees for assets under management over a particular threshold for individuals. By creating a Family Network and connecting family members’ investments on one platform, you and your family members could have access to the reduced administration fees as a collective unit, rather than as an individual, by taking the family market value into account.

The PPS Investments administration fee scale that will be applied is shown below:

Investments in the PPS Enhanced Yield Fund and Allan Gray Money Market Fund are excluded from the investment amount when applying the above sliding scale. An annual platform administration charge of 0.40% (excluding VAT) is charged on investments in the PPS Enhanced Yield Fund and Allan Gray Money Market Fund.

Creating family connections
By creating a Family Network, you will be considered to be the core investor. You have the option to connect a spouse, parents (including parents-in-law), and children of all ages.

The solution caters for any modern family situation provided that all family members must be PPS investors, either in the PPS or OPN range, in order to connect. You do not need to be a PPS member to connect to a Family Network.

Let’s look at the Smith family as an example. Susan is the core investor with R800 000 in assets. She adds her husband, Dave (R1 million), mom-in-law, Kathy (R1 million), father, Henry (R500 000) and her daughter, Sally (R20 000) resulting in a Smith family market value of R3.32 million on our platform. The family administration fee sliding scale will be applied to the total family market value resulting in a 0.16% saving in administration fees for all the connected family members. Everyone benefits by paying 0.34% in administration fees, even those whose individual market value would not have qualified for a reduced administration fee.

Some of the ways that the Family Network enables all connected family members to benefit from reduced administration fees include:
• Parents and parents-in-law post-retirement savings last longer due to lower fees.
• As the core investor, you and your spouse benefit from lower fees that you can use to boost your retirement savings.
• It helps to ensure that you achieve your retirement goals and ultimately, will not burden your children when you retire and repeat the cycle of the sandwich generation.
• Your children can also reap the benefits when applying for a PPS Investment Account for your child, from as little as R200 per month, and then connect their investment to your Family Network to qualify for the reduced family administration fee. Fostering a culture of savings for your child, and facilitating the first step to obtaining financial independence, is the best gift you can give them.

Linking family for Profit-Share
As a qualifying PPS Member, you’ll have an additional, exclusive opportunity to maximise the benefit of family resources invested on our platform. By linking the investments of your minor children, spouse or parents who are not PPS Members (invested in the OPN range) to your membership number, you could earn additional Profit-Share allocation. Essentially, you could earn Profit-Share from your and your family’s assets invested with us. The Profit-Share will be calculated on the total linked investments held with PPS Investments, and is paid out to your PPS Profit-Share Account annually.

Families who invest together, grow wealth together
Investing as a family can provide benefits on an individual and collective basis while engendering a family culture of investing towards future long-term wealth. Over the long term these incremental savings compound, and can contribute substantially to your growth potential by paying lower administration fees and ultimately helping you and your family reach investment goals.