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Retirement Planning
Wednesday, October 1, 2008
Transparent treat

Last year the South African unit trust industry grew by a record R58.2 billion to R546 billion, displacing the life assurance industry as the preferred vehicle for long-term savings.

According to Dale Lippstreu of Maitland’s fund services division this represents nothing less than a tectonic shift in savings patterns, considering the pre-eminent position once enjoyed by life assurance savings products.
Until recently the sale of market-linked products such as retirement annuities, preservation funds and living annuities was the sole preserve of linked investment service providers (LISPs) operating under life licences. Yet unit trust management companies are now moving rapidly into this space. They have their own life licences and are packaging their own underlying unit trusts to service the discretionary investment market.
“Unit trusts are broadly regarded as the most cost-effective, direct and efficient means to access professional asset management. Nothing prevents other investment vehicles from achieving the same, but the fact that that they seldom do is, in my opinion, because they lack the transparency inherent in unit trusts.
“The unit trust industry has worked hard at transparency. As a result, practices that held potential prejudice to investors have been eliminated and standards which ensure full disclosure of costs have been advanced. Contrast this with the undisclosed or poorly disclosed practices in the life assurance industry and the consequences that have been brought upon it as a result,” he says.
Maitland’s fund services division provides administration and infrastructure services to the fund management industry. Its investor services platform has recently been expanded to offer administration to management companies offering their own retirement fund products.
Russel Julie, head of investor services at Maitland, says the platform caters for endowments, retirement annuities, pension and preservation funds and living annuities. He says the reporting function is crucial, allowing investors to receive regular reports indicating the status of their investments in a totally transparent manner.

About Maitland

Maitland’s international wealth management and business services are run on a business model that integrates the firm’s cross-border expertise in advisory, trust and corporate, asset management and fund services.
Maitland provides services to both corporate and private clients, particularly family and owner managed businesses, devising and implementing strategies and solutions for the creation, preservation and management of its clients’ wealth and commercial success.
The group administers approximately US$70 billion in assets on a direct or fiduciary basis on behalf of international clients and administers $42 billion in assets on behalf of over 80 fund management businesses. It has a network of offices in London, Paris, Luxembourg, Monaco, Dublin, Geneva, Isle of Man, British Virgin Islands, Johannesburg, Durban and Cape Town.
From its beginnings in 1976 in legal advice and trust management, it now provides services through its four divisions:
• Trust & Corporate Services — for personalised management and administration services to private clients, companies, trusts and investment structures.
• Advisory — teams of lawyers work creatively to provide solutions in areas including tax planning, corporate, commercial and trust law and dispute resolution.
• Asset Management — for investment solutions tailored for client needs, with an emphasis on funds of hedge funds and other absolute return strategies.
• Fund Services — for administration solutions to fund managers and the providers of related investment products.

Copyright © Insurance Times and Investments® Vol:21.9 1st October, 2008
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