KEEP UP TO DATE WITH ALL THE IMPORTANT COVID-19 INFORMATIONCOVID-19 RESOURCE PORTAL
FANews
FANews
RELATED CATEGORIES
Category Retirement
SUB CATEGORIES General |  Savings & Investments |  Annuties | 

Reset your GPS to build wealth for a stable retirement

25 August 2020 Alex Cook, CEO at GCI Wealth

To achieve your financial goals, you first need to get your thinking right – and then stick to your plan.

We are growing accustomed to being told that the COVID-19 emergency has changed everything. That sounds a bit glib to me – many things will change but history tells us that many things will stay the same. One thing that will not change is the need to cultivate the right mindset in order to build wealth and ultimately ensure a financially stable retirement.

It's worth reminding yourself that most South Africans notably do not have that mindset. Our savings rate is abysmally low and one estimate is that 89% of all South Africans will not be able to retire in financial security. The retirement crisis is so bad that 40% of survey respondents (and 50% of Millennials) are looking to a lottery win to fund their retirement. [1]

What one can say about the effect of COVID is that the investment climate has become even more complex, and more people are finding themselves in financial straits. In short, it’s never been more important to have the right mental approach to investing.

GCI’s core belief that this is encapsulated in the acronym GPS: achieving Growth through a focus on Purpose and Sustainability.

Lessons from Formula-1 great, David Coulthard
No surprises that this year’s GCI Wealth Tour is very much focused on this critical issue. The Wealth Tour is our annual road show round South Africa to connect with clients, investors and brokers, and bring them up to date with important trends. This year, of course, it will be virtual and our guest speaker is the renowned Formula-1 champion, David Coulthard. We chose David because his stellar career would never have been possible without a focus on intentional actions repeated over many years – and he’s applied the same approach to his life after Formula-1 when he entered the business world.

Mental attitude – resetting your GPS – is the essential first step in ensuring financial security but, of course, more is required. Two key success drivers I will be looking at on the Wealth Tour webinar are the power of independent decision-making based on the very best data.

Independence is critical when it comes to investing because each investor has a unique risk profile, and the advisor’s main job is to identify the best possible investment vehicle. Clearly, if they are tied to a particular investment house, fulfilling that essential requirement is hamstrung. Independence is everything when it comes to giving and getting the best financial advice.

Harness the power of technology
The second part of the equation is data. Corporations have woken up to the fact that data holds the key to their ability to compete successfully, and the same is true for financial advisors. However, there is simply too much data, so sifting it to gain the vital insights and presenting them to the client in a way that makes sense is a major challenge.

Technology is the cause of this flood of data and, fittingly, it also provides the solution. Today’s advisors need to be well versed in technology and what it can offer across all phases of the financial advice life cycle.

Financial planning has been lacking such technology. GCI co-developed a solution, which is now available as Wealthbit. It provides advisors with a powerful tool to help their clients “see” what their current financial situation looks like, and what the impact of various investment scenarios will be.

One cannot overemphasise the importance of providing clients with a way to visualise what their investment portfolio looks like, and what the effect of their decisions will be on their eventual position. Wealthbit has been carefully designed to provide this visualisation, coupled with a powerful backend which the advisor can use to input the data relevant to various scenarios.

By enabling investors not only to see what their current financial situation is but also what impact their decisions will have, Wealthbit also plays an important part in driving the all-important investment psychology we have been speaking about because it makes it easy for the client to keep track of how his or her portfolio is performing, and thus acts as a powerful incentive to stay true to the investment strategy agreed with the advisor.

In the post-COVID world, right thinking and right decisions are going to be more important than ever when it comes to achieving your financial goals. Is your GPS turned on?

Investors and financial advisors are encouraged to register for the free webinar on 1 September 2020 at 10h00 by visiting http://gci.co.za/wealthtour.

Quick Polls

QUESTION

The intention with lockdown was to delay or flatten the Covid-19 infection curve and give both the private and public healthcare sectors time to prepare for the inevitable onslaught. Did the strategy work?

ANSWER

No, the true numbers are not reflected. Almost a quarter of South Africans may already have been infected with Covid-19
It’s too soon to tell. We will likely get a second wave with stringent lockdown regulations in place again
Yes, South Africa bought enough time to make a significant difference. We saved lives and have passed our peak. The worst is over
fanews magazine
FAnews August 2020 Get the latest issue of FAnews

This month's headlines

Ethical behaviour - are you toeing the line?
Latest business interruption developments raise more questions than answers
Brokers remember: You are accountable...
A sustainable pension - How to manage living annuities in uncertain times
Claim stats… life can change in a heartbeat
Are South Africa’s income protection benefit providers ready for COVID-19?
Subscribe now