Category Investments

Winning the Soccer vs investment consulting

03 August 2006 Nigel Willmot

Winning the 2010 Soccer World and the parallels to investment consulting

In six years time the greatest show on earth will take place in our very own country. A spectacle that will be viewed by billions around the globe as players and spectators will converge to our country to cheer their gladiators on.

Meanwhile South Africa will be embarking on a programme to build infrastructure, upgrade stadiums, ensure sufficient accommodation and ensure that the transport requirements of the foreign visitors will be met.

Second to this, the Bafana Bafana will be preparing for the tournament.

The objective of any team taking part in the tournament is to win the World Cup. To achieve this end the team and management will have to develop a plan or strategy that will ensure success. During the build up to and during the tournament the management team will have to make use of players that will contribute to and ensure that they achieve the objective.

Then, once the strategy and tactics have been agreed to the management will implement, monitor and review the players during the tournament against the objective. Fans and management will require regular and clear reporting throughout the tournament. This is important, as fans and management want to know how the team is doing against meetings its objectives and how the respective players are doing throughout the tournament.

Lets now embark on the process of preparing and competing in the World Cup and draw parallels to the process of investment consulting

The objective

For a player, just playing in a World Cup is one of the crowning achievements of any players career. However, on the minds of every team and their management is the winning of the WC and being crowned the soccer kings. Bafana Bafanas objective will be to match what the rugby team did in 1995 and bring the WC trophy to South Africa. The objective of a retirement fund should be no different. Many retirement funds play but dont always recognise what their objectives truly are. Boards of management should ask themselves the questions what tournament are we playing in and what is our objective. Once the board of management understands the goals and objectives of the retirement fund it becomes easier to plot the target returns required in terms of performance to meet the objectives of the fund and the fund members, or in Bafanas case the fans in the stands and across the nation.

The strategy

Once the objectives and the target returns have been identified the management team has to then formulate the strategy that best suites the requirements of the objective and the target returns. The target returns can be likened to the level at which the team and the strategy need to perform at to ensure success. The management team has to bear in mind though that the faster paced the game or the more aggressive the strategy the more risk there is of injury to players and errors in play which may end in goals conceded against the team and even outright defeat.
It is therefore important that the strategy carefully aligns itself to the objectives and capabilities of the fund or the team and that the management team fully understand the risk implications of adopting a strategy to meet their objectives.

To meet the requirements of the identified objective and the target returns the management team will structure the appropriate tactic or asset allocations that will meet these demands. Typically, a more defensive structure may be 5-3-2 or an asset allocation with a lesser exposure to equities or shares and more exposure to property, bonds and cash. A more aggressive tactic may be 4-2-4 or an asset allocation with a higher exposure to both local and offshore equities and a lesser exposure to property, bonds and cash.

The asset allocations or game plans may have to be adapted or modified to different playing conditions throughout the tournament. The management team will be mindful to tweak the asset allocations or tactics employed to achieve the maximum potential out of the players and the playing conditions to meet the objectives.

The players manager selection

The players will be employed to fulfil certain specialist functions according to their specific positions within the game plan. A goalkeeper will be employed specifically for that task and not used as a centre forward. The same would go for any other position on the field specialist players in dedicated specialist positions.

The players will be carefully researched in terms of assessing their abilities, strengths and weaknesses to measure the appropriateness of their selection into the team. There will be selection for the players that take to the field and there will be players on the bench. These players on the bench will be watched closely as they may have to take the place of on of the players should they become injured or unfit for play.

Each player will sign a contract with management outlining their responsibilities and what is required from them in terms of their contribution to the overall success of the team. Failure to comply with the basis of the contract may result in the player being released and replaced by another player.

At the same time the management team will constantly research the market for any new potential players that may be appropriate to use in the future

It is important to note that throughout the employment of the tactics or the asset allocations that not every player plays only in defence or midfield or attacks but the structure of play is properly and appropriately diversified across the expanse of the pitch.

Implementation, Monitoring and Reviewing

The objective has been clearly identified, the game plan or tactics have been formulated and the team players have been selected it is now time to compete and let the games begin.

The opening qualifying rounds have been played and the measure of success of the tactics or strategies may need to be reviewed as well as the performance of the respective players.

The tactics or asset allocations may need to be tweaked to maximise the potential of the playing conditions and the players employed. Each one of the managers will be measured against their contractual benchmarks to understand the contributions that they are making towards the overall success of the team.

Should the review of the player or asset manager not meet favourably with the required levels of performance one of the players from the bench will be drafted in to replace the under performing manager.


Fans (fund members) and the retirement fund management committee need to have feedback in terms of the progression of the strategy towards achieving their retirement fund goals. The feedback should be regular and concise and structured in such a way that members will understand exactly what the reports mean.

The reporting can be done quarterly in a written or text format with an in person annual review of the fund strategy, which would include reviewing the managers employed and the contributions that those managers made.

It is clear from this brief discussion that the parallels between succeeding in a sports tournament and implementing a structured investment process are very similar. Its all about having a plan that matches the fund requirements. Targeting the correct returns and at the same time understanding the risk implications of the appropriate strategy. Selecting the right managers but then working through the process of the implementation, monitoring and reviewing of the investment strategy, asset allocations and the managers employed. Lastly, all of this needs to be communicated to boards of management, in a concise and regular manner.

Quick Polls


We have watched with interest as each of the country’s large life insurers report their 2021 life claims statistics, with soaring claims and claims values. That got us thinking: how do the big life insurers compare against one another, from an IFA perspective?


An insurer is an insurer is an insurer
All are excellent: would not deal with them otherwise
There is one insurance brand that stands out for me
Tied agent: but my brand is the best out there
fanews magazine
FAnews June 2022 Get the latest issue of FAnews

This month's headlines

A free smoothie does not make a loyal customer
Consequential loss policy court cases
Everything you need to know about death, disability and severe illness cover post-emigration
Are advisers doing all they can for clients’ portfolios?
Financial advisers need help - navigating the complex ESG fund environment
Subscribe now