Thursday 31 May 2012
Are you ready for the FAIS Act? Only a few short weeks left! Go to our website now! http://ping.fm/dEPWJ
Wednesday 30 May 2012
Tuesday 29 May 2012
The clock is ticking...are you ready for the FAIS Act Exams? You could lose your job if you don't comply! http://ow.ly/bczIK
Go to http://ping.fm/UfyfV for information on what you need to do to pass the FAIS Act exams. Go now!
Monday 28 May 2012
The JSE said listed companies would not be compelled to publish their entire results http://ow.ly/bbIUv
Sunday 27 May 2012
Yip, it's Monday again...you know it usually follows the weekend, so why is everyone so surprised when it pitches up? http://ow.ly/i/ExQD
Saturday 26 May 2012
Preparation for the FAIS Act Exam - Study material and training
Numerous training materials have been developed by various training providers like the Learncafe for the purpose of the regulatory level 1 exams.
It should be noted that the FSB does not endorse any of these training materials.
It is advisable to still refer back to the relevant legislation as contained in the acts and regulations in order to eliminate difference in terminology use, if you decide to use designed study material and/or training.
Please note: Examination bodies may not provide training and/or study material for the regulatory exams. Examination bodies will make FSB approved study guides with reference to suggested material available; however the sourcing of appropriate study material and/or training providers is the responsibility of the candidates.
Friday 25 May 2012
Planning for retirement? Be sure to get a FAIS-accredited financial advisor you can trust! http://ow.ly/b0o8x
Thursday 24 May 2012
Wednesday 23 May 2012
Tuesday 22 May 2012
The government was warned in 2010 that collection costs for the e-toll system would be much higher than a petrol levy! http://ow.ly/b2vls
Have you been to our website? Opt-in to get all the information you need about the FAIS Act Exams - http://ow.ly/b0o01
Monday 21 May 2012
Preparation for the FAIS Act Exam
Multiple choice exams (The FAIS Exam is multiple choice) cover a lot of detail and facts. The short term memory’s capacity is very limited; therefore it is essential to start preparing for the regulatory exams at least 3 month prior to your examination date. The learner will have to be repeatedly subjected to the material in order to store the information effectively in the long term memory.
Although attending workshops and training will certainly be helpful, this is no replacement for extensive studying of the required material. And yes, it is necessary and very possible to study successfully for multiple choice exams!
Studying instructions
You will need:
A positive attitude
Lots of will power
Enough rest
Quiet place to study
Qualifying criteria
Recourse material
Steps to follow:
1. Identify the regulatory examination(s) that apply to your situation
2. Find the corresponding sets of qualifying criteria, for each of the relevant regulatory examinations that you must prepare for. See appendix B for the qualifying criteria for the regulatory level 1 exams
3. Work through the qualifying criteria and make sure you understand them against the relevant acts and legislation
4. Use of additional study material is advisable but optional
5. Repeat step 3 as many times as necessary to store the factual knowledge in the long term memory
Why all the aggravation to write exams anyway? I mean, what's the point? Maybe this article will help clear things up: http://ow.ly/b0nFb
Sunday 20 May 2012
Saturday 19 May 2012
Friday 18 May 2012
the world’s fourth-largest gold producer, reported an 18% fall in quarterly earnings on Thursday http://ow.ly/aY4Yp
Thursday 17 May 2012
Planning for Retirement
Saving for retirement has become a major necessity for individuals from every socio-economic group. Due to high living expenses and the decrease in salary increase levels, more and more people find themselves unable to cope with their lifestyles after retirement due to poor planning.
The following article is an advice piece written by Gareth Stokes from the Mail and Guardian to help give individuals that step up needed to maintain a comfortable retirement.
The main reasons for saving include creating a buffer against unforeseen expenses and covering future liabilities such as your children's education and retirement.
One of the main obstacles to saving is the propensity of South African consumers to spend. A proliferation of credit options in recent years and mortgages and hire-purchase agreements resulted in the household debt-to-income ratio surging close to 80% of income.
During National Savings Month, financial industry stakeholders are calling upon South Africans to resist the urge to spend and focus instead on saving. Wilhelm Janse van Vuuren, a wealth manager at FNB Private Clients, says you should make a distinction between savings and investments.
"Savings," he says, "can be seen as short-term measures to cover the events already mentioned, while investments fall into your long-term plan for retirement." He says an early start to saving is essential in both instances.
The July 2010 Old Mutual Savings Monitor, which surveys the savings habits of 1 000 metro families in the LSM6 (living standards measure) to LSM10 categories, reveals that those who undertake long-range financial planning end up saving more.
The best way to prepare for retirement is to gain a full understanding of your future financial needs at an early stage. Most financial planners suggest you begin planning for your retirement five to 10 years before your intended retirement date.
A comprehensive financial review will enable you to assess the contribution each of your savings initiatives will make to your eventual retirement capital.
There are three golden rules to making adequate capital provisions. The first is to save 15% of your gross salary consistently over your working life. The second is to preserve your pension benefits each time you change employment. And the third is to secure the services of a competent financial adviser before retirement.
You should also avoid the common mistake of neglecting aspects of financial planning during your retirement. How much should an individual squirrel away for retirement? There's no easy answer to this question because of the complex variables at play before and during retirement.
The inputs to the retirement savings equation include the time to retirement, forecast investment returns, likely levels of inflation and life expectancy, among others. "The answer varies depending on these base assumptions," says Rian le Roux, an economist at Old Mutual Investment Group SA.
"The only conclusion one can draw is most South Africans save way too little." But economists are always ready for a challenge. To illustrate the uncertainties in the retirement saving process Le Roux described a "bare bones" retirement scenario.
Assuming no inflation, zero wage increases and zero investment return, an individual who worked for 35 years, retired at age 60 and wanted to draw 75% of his pre-retirement salary for another 25 years would have to save R54 of each R100 earned. Of course, you can only apply such an example to a modern-day Robinson Crusoe.
In the real world you have to allow for inflation at around 6% a year, annual wage increases of 9% (assuming career progress) and a conservative 3% a year real investment return. Under this scenario -- assuming the saver decides to draw only 6.5% of available retirement capital as income in the first year -- an individual saving 13% of income for 35 years would retire with only 32% of his final pre-retirement income. A real return of just 3% might not be enough.
Rob Formby, director of retail operations at Allan Gray, says the role of real investment return in retirement savings cannot be emphasised enough. Investment performance in excess of inflation contributes to effective long-term savings.
Assuming you save 12% of your income over 35 years to ensure a comfortable retirement, each 1% improvement in overall investment performance increases your postretirement income by 31%. The huge improvement demonstrates the magic of compound interest -- the interest (return) earned on interest in your retirement funds.
"Try not to undermine a long-term saving approach with short-term, emotional investment decisions," says Formby. Another mistake savers make is to follow an investment direction even if it's not particularly logical. "This is well illustrated by a study that shows fund flows as a percentage of assets against fund performance," says Formby.
Investors tend to sell when the market is low and buy when it is high or rising. In other words, the appetite to buy increases as the price of the product goes up. Saving is driven by the "herd" mentality. The very low levels of household saving (actually negative when expressed as a percentage of GDP) exhibited in South Africa are a reflection of the preference for consumption
expenditure over saving. "
For a portion of our population there is no option of saving; for the rest, saving is an option, yet they still often elect to follow the crowd and spend, even though the consequences at retirement are devastating," he says.
The Old Mutual Savings Monitor confirms this view Individuals with higher incomes are saving less this year than last. There is also an inverse relationship between the economy and savings activity.
Leon Campher, chief executive of the Association of Savings and Investments SA, says: "When consumers believe their income prospects are improving as a result of favourable economic conditions, better jobs and rising house prices, they tend to save less."
Elias Masilela, a board member at the South African Savings Institute (Sasi), says that, on a per-income basis, low-income earners are better savers than their wealthier counterparts. "There is one fundamental reason why this is the case and that is lowincome earners don't have access to credit," he says.
South Africa's poor live within their means and their financial planning process centres on the income they actually generated in a particular month. Three years ago Sasi conducted research into savings patterns among low-income families.
The study showed the preferred method of saving was by investing in housing, followed by investing in their children, basic bank accounts and pooled investments, such as stokvels, NGOs, women’s groups and similar organisations.
"By delaying ‘saving for tomorrow' in favour of ‘spending for today' a saver is gambling that they will be able to make up any shortcomings at a later date," says Formby. These individuals fall further behind the retirement curve with each passing year.
"Many discover far too late they are underprovided and will have to work way past normal retirement age," says Le Roux. Late starters also face an increased risk of being lured in by a "get rich quick" scheme. Saving for retirement is about starting early, saving conscientiously and maintaining discipline.
Note: In order to help plan your retirement well from a young age, it is recommended that you make use of the advice given by a well trained Financial Service provider. In South Africa, FSP’s must complete training in compliance with the FAIS Act, which regulates the profession, so advice given will be helpful in dealing with your unique situation.
The Learn Café provides training to individuals and groups looking to become compliant with the FAIS Act. The courses and training are dedicated to getting the client ready to successfully complete the FAIS Regulatory Examination (Level 1).
To learn more about how to effectively develop skills that will aid you in becoming a Financial Advisor, visit The Learn Cafe’s dedicated FAIS Training website to sign up and focus on preparing for the Level 1 FAIS Regulatory Exam, which is designed for Key Individuals and Representatives.
SA multinationals considering investing in Kenya and other parts of Africa stand to fall into a potential tax trap http://ow.ly/aY0kt
Wednesday 16 May 2012
Tuesday 15 May 2012
How is Joe Public meant to save when the government keeps burdening us with rising prices, higher taxes & tolls? Really! http://ow.ly/aTVVm
Monday 14 May 2012
Asian shares fell on today after weekend talks to form a new Greek government failed.
http://ow.ly/aT60k
http://ow.ly/aT60k
Sunday 13 May 2012
A picture says a thousand words...why should I ruin it with a caption? http://ow.ly/i/CDGj http://ow.ly/i/CDGR
Saturday 12 May 2012
Hmm...somehow I can't help but shake the feeling that tax-payers will be the losers at the end of the day anyway...http://ow.ly/aRGPI
Friday 11 May 2012
Thursday 10 May 2012
Wednesday 9 May 2012
Tuesday 8 May 2012
That's the trouble with democracy, the moment you get a plan together, someone else get's elected and rocks the boat...http://ow.ly/aJNno
Monday 7 May 2012
Happy Red Cross & Red Crescent Day! Celebrated on 8 May each year since 1948, on the birthday of founder Henry Dunant http://ow.ly/i/BSAH
Oh, I thought they sucked their thumbs while playing pin the donkey to determine fuel prices! ;D
http://ow.ly/aGYXB
http://ow.ly/aGYXB
Sunday 6 May 2012
Ah, don't you just "love" Mondays? Good old 5 day week again...sure didn't miss it. :P
http://ow.ly/i/Bzi7
http://ow.ly/i/Bzi7
Saturday 5 May 2012
We specialize in preparing candidates for the FAIS Act Exams...check out our Workshop Calendar for dates: http://ping.fm/aASUg
South Africa’s total new vehicle sales increased by 6.4% year-on-year to 52 356 units in February, http://ow.ly/aGZ8W
Friday 4 May 2012
How are fuel prices determined?
With recent increases in the price of crude oil, and the increase in disputes over the taxes being implemented in South Africa over the past year, many citizens have become angered, and have become increasingly aware of the need to know exactly where tax money is going, and how that fits into the price of petrol that is used.
The taxes paid by the public on fuel such as petrol and diesel are used each year as part of the infrastructure budget, which is used to build and upgrade roads around the country. (The percentage of the total price that is set aside for tax is explained in the below information provided by Sasol on the structuring of prices.)
Components that affect prices include:
International petroleum market spot prices
Freight, Demurrage, Insurance & Losses
The largest component of the basic fuels price is the price that one would be paying on international markets when physically importing product to South Africa. The FOB (Free on ship’s board) product prices from different locations in the world, based on international product availability and product quality, are used. The petrol FOB price is calculated as 50% of the Mediterranean spot price for Premium unleaded petrol and 50% of the Singapore spot price for 95 Octane unleaded petrol. For the FOB price of Diesel, the BFP formula use spot prices calculated as 50% of the Mediterranean price for Gas oil and 50% of the Arab Gulf price for Gas oil, plus the quoted spot price market premiums applicable.
Freight cost to bring product to South African ports
The freight component of the BFP reflects the cost of voyages from Augusta (in the Mediterranean), Singapore and Mina-al-Ahmadi (in the Arab Gulf), in 50:50 combinations as appropriate to the international markets used in the FOB calculations of the products concerned. Tariffs as published by the World Scale Association for transporting refined products via medium- range vessels to a weighted average for South African coastal ports, plus demurrage for an average 35 000 ton vessel for 3 days, adjusted with the Average Freight Rate Assessment (AFRA) of the London Tanker Brokers Panel, plus a market premium for transporting fuels to South Africa.
Insurance costs
Calculated as 0.15% of the product FOB and freight costs, to cover insurance cost, as well as other costs such as letters of credit, surveyors’ and agents’ fees, and laboratory costs.
Ocean loss allowance
In international petroleum products trading, shipping and insurance, a loss of 0.3% for products has been accepted as a normal leakage/clingage and evaporation loss. Simply put, this means that the “normal” loss is not insurable and has to be accepted by the buyer. The buyer therefore has a financial loss of 0.3% of FOB, Insurance and Freight costs.
Cargo Dues
The BFP calculates Cargo Due charges in terms of the ruling National Ports Authority of South Africa “contract” tariffs for “petroleum products”.
Coastal Storage
This element allows recovering of the costs realistically incurred in a substantial import scenario, related to costs of the handling facilities at coastal terminals providing storage.
Stock Financing Cost
The BFP includes a charge for the financing of 25 day’s coastal stock of an importer, at an interest rate of 2 percentage points below the ruling prime rate of the Standard Bank of South Africa.
The BFP as determined above is converted to SA cents per litre by applying the applicable SA Rand/US Dollar exchange rate (four banks selling rates at eleven o’ clock averaged over the pricing period before the price change), and a constant litre per gallon factor of 3.8038 for petrol.
2. Domestic Elements
To arrive at the final pump price in the different pricing zones (magisterial district zones) certain domestic transport costs, government imposts, taxes and levies and retail and wholesale margins needs to be added to the international price.
a. Transport costs (Zone differential)
Keeping in mind the import principle used, this element recovers the cost of transporting petroleum products from the nearest coastal harbour (Durban, Port Elizabeth, East London, Mossel Bay or Cape Town) to the inland depot serving the area or zone. Transport to the different pricing zones are determined by using the most economical mode of transport i.e. pipelines (C zones), road (B zones) or rail (A zones). This is the only element which values differ per pricing zone, and is the reason why the petrol price is not the same for the whole country.
b. Delivery costs (Service differential)
This element compensates marketers for actual depot related costs (storage and handling) and distribution costs from the depot to the end user at service stations. The value is calculated on actual historical costs of the previous year, averaged over the country and industry.
c. Wholesale (Marketing) margin
Money paid to the oil company through whose branded pump the product is sold, to compensate for marketing activities. This margin is controlled by the government, allowing for changes based on the oil companies’ return on their marketing assets.
The formula used to determine the wholesale margin is based on the results of a cost/financial investigation by a chartered accountant firm into the profitability of the wholesale marketers. The level of the margin is calculated on an industry basis and is aimed at granting marketers a return of 15% on depreciated book values of assets, with allowance for additional depreciation, but before tax and payment of interest.
d. Retail margin
The retail margin is fixed by DME and is determined on the basis of actual costs incurred by the service station operator in distributing petrol. Account is taken of all proportionate driveway related costs such as rental, interest, labour, overheads and profit. The way in which the margin is determined creates an incentive to dealers to strive towards greater efficiency, to beat the average and to realise a net profit proportionate to their efficiency.
e. Equalisation Fund levy
The statutory fund levy is a fixed monetary levy, and the fund is regulated by ministerial directives issued by the Minister of Mineral and Energy Affairs in concurrence with the Minister of Finance, as laid down by the Central Energy Fund Act, No 38 of 1977 as amended In terms of Ministerial Directives the Fund is principally utilised to smooth out fluctuations in the price of liquid fuels through slate payments; to afford synfuel producers tariff protection and to finance the crude oil “premium (price differential applicable to SA oil purchases during the late 1970’s).
f. Fuel tax
Tax levied by Government annually adjusted by the Minister of Finance effective from the price change in April of each year, announced in the Minister of Finance in his annual budget speech.
g. Customs & Excise levy
A duty collected in terms of the Customs Union agreement.
h. Road Accident Fund (RAF)
The Road Accident Fund receives a fixed value which is used to compensate third party victims in motor accidents.
i. Slate levy
A levy paid by the motorists recovering money “owed” to the oil companies, due to the time delay in the adjustment of the petrol pump price.
You may now have a number of questions including:
Who sets and controls the fuel price?
The petrol retail price is regulated by government, and changed every month on the first Wednesday of the month. The calculation of the new price is done by Central Energy Fund (CEF) on behalf of the Department of Minerals and Energy (DME).
As the BFP is used by the government as the transfer price between refining and marketing in the price build-up for petrol retail price control, South African refineries are price-takers. Neither the local refineries nor the government has any control over changes in this element, as it is based on international petrol prices. It also means that South African refineries have to compete with very large and efficient international refineries, based in Singapore, the Mediterranean and the Arabian Gulf.
Margin and transport element changes are based on actual cost incurred by the South African industry and are calculated according to specific formula ensuring efficiency in operations. These changes have to be approved by the Minister of Minerals and Energy before it is allowed into the price.
What drives international petrol prices?
Essentially, prices are driven by supply and demand for petrol in a particular market. Additionally crude oil prices have a major effect on the petrol prices. A crude oil refinery’s biggest input cost is crude oil. In order for a refinery to make a profit, the price for the product manufactured from crude oil has to be higher than that of the crude oil price. When crude oil prices increase – as they have over the past number of months – the petrol price must increase so that crude oil refineries are able to cover their own costs.
While the above scenario is relevant to Natref, a joint venture between Sasol and Total that refines crude oil into liquid fuels, crude oil prices do not influence Sasol Synfuels because their input cost is that of coal. The capital cost of Sasol Synfuels is however, much higher than that of a conventional crude oil refinery.
Because both crude oil and international petrol prices are dollar-based, any weakening of the SA rand / US dollar exchange rate will also increase the domestic petrol price.
What effect does the petrol price have on Sasol’s business?
Depending on the increase in the petrol price relative to crude oil, the impact of the higher petrol price on Natref could be negative, neutral or positive. For Sasol Synfuels a rise will always be positive and a decline negative.
Why are the Sasol branded fuel not cheaper, being a local company producing fuel from coal?
Sasol Synfuels produce about 30% of the country’s fuel from coal, the rest on the petrol are produced in conventional crude refineries – having to import crude oil and refine it into petrol. Sasol Synfuels produced petrol, are also subjected to petrol retail price control as stipulated in the Petroleum Products Act, and we therefore cannot sell it at a price different to the regulated retail price. This petrol price regulation means that the petrol pump price at all service stations in a pricing area must be the same, and no discounting is allowed.
Growing confidence in African economies has more than doubled foreign direct investment into the continent. http://ow.ly/aGYGl
Thursday 3 May 2012
For any questions, please refer to our FAQ videos on Youtube: http://ow.ly/aEg6X
Otherwise give us a call: 011 608 2590
Otherwise give us a call: 011 608 2590
Today we would like to introduce you to Mike Strohman, an excellent facilitator and presenter on our Youtube Channel. http://ow.ly/i/Bgmp
Wednesday 2 May 2012
Tuesday 1 May 2012
We specialize in preparing candidates for the FAIS Act Exams...check out our Workshop Calendar for dates: http://ping.fm/asttr
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