Advisory firm, NMG Benefits has announced the appointment of Siphamandla (S’pha) Buthelezi to the expanded role of Chief Operating Officer (COO) and Executive Head of Platforms, reflecting the company’s continued commitment to operational excellence, digital transformation, and integrated service delivery.

S’pha has been an integral part of NMG Benefits’ leadership team, known for his strategic foresight, deep technical expertise, and passion for improving the client and member experience. In his new role, he will oversee the optimisation of NMG’s operating model and drive the growth of its technology and service platforms that power the company’s adviser, corporate, and member solutions.

“S’pha’s appointment comes at a pivotal time for NMG as we continue to scale our national footprint and enhance the platforms that connect and empower our clients,” says Geoff Baars, Chairman and CEO at NMG Benefits. “His leadership will be instrumental in delivering a more integrated, agile, and technology-driven client experience.”

This appointment strengthens NMG’s operational backbone and ensures alignment between its people, processes, and platforms - supporting its mission to deliver a seamless financial wellbeing journey for every client and member it serves.

Tax season is upon us!

If the thought of filing your tax return makes your head hurt or spin, here are a few suggestions to streamline the process:

• Bear in mind that this year, the window to submit your personal income tax return as a non-provisional taxpayer is from 1 July until 24 October. Rather do it now than leave it to the last minute. SARS is very strict about implementing penalties for late submissions. Penalties are based on your taxable income, starting at R250 and going up to R16 000 for each month that your return is late.
• Be honest about your tax claim. There are also strict penalties for incorrect submissions, even if they are accidental. Make sure that you can prove and verify everything you are claiming for by means of invoices, bank statements, certificates, etc.
• Using the SARS online e-Filing service is the way to go. If you plan on filing at a branch, you will need to make an appointment. Walk-ins will not be permitted.
• SARS might send you an auto-assessment notification via SMS, based on the information submitted by your employer, bank, medical aid, retirement fund, etc. If you are happy with the result of the auto-assessment, you don’t have to file at all! But if you disagree with it, you will need to make changes on the e-Filing platform or the SARS mobile app within 40 business days.
• When you complete your return on the e-Filing platform, remember that a negative amount means that SARS will pay you a refund – this usually happens within 72 hours. If the amount is positive, you will need to pay SARS. If you have any queries about e-Filing, you can call 0800 7277 between 08h00 and 17h00 on business days.

If you have a complaint related to SARS, and you have already gone through the SARS complaint process, remember that you can lodge a complaint with the Office of the Tax Ombud.

• Download a complaints form from www.taxombud.gov.za
• Complete the form in full, ensuring that all supporting evidence is submitted.
• For any queries send an email to complaints@taxombud.gov.zaor call 0800 662 837

T&Cs apply. The NMG SA Group of Companies are authorised financial services providers t/a NMG Benefits.

World Password Day is celebrated on the first Thursday of May each year and is a reminder of the importance of protecting ourselves through strong passwords.

Cybercrime is growing and at the current rate, it is expected to replace many traditional forms of financial crimes.

The first step in protecting yourself from cyber security is to choose strong passwords which can protect us from many cybercrimes on the rise.

Celebrate #WorldPasswordDay by choosing a strong password

How to choose a strong password:

1. Choose a complex password: Set a password consisting of at least 16 or more characters, using numbers, special characters, uppercase and lowercase letters
2. Turn on two-factor authentication for your important accounts: This means you get an SMS or an email to confirm it’s you that has logged into a certain account.
3. Have more than one password: Many of us struggle to keep track of our passwords and end up using the same one for everything which isn’t always safe. You can rely on technology to safely store your passwords, ensuring that only you have access to them.
4. Keep your software up to date: We often see Software updates as providing new features, but they could also protect against cybercrime.
5. Choose strong password recovery questions: Think out of the box when you create security questions that can be worked out easily.

The security and the privacy of your personal information is a priority. If you suspect irregular activity on your personal accounts, immediately report this to the relevant business.

T&Cs apply. The NMG SA Group of Companies are authorised financial services providers t/a NMG Benefits.

The content in this communication is for information purposes and is not intended to be detailed advice.

Being mindful of fraud and being extra cautious can save you time and money.

Here is more information to help you avoid fraud or manage fraud if you have fallen victim:

1. How to avoid fraud

• View any communication that requests for your financial or confidential information with suspicion. Do not trust any requests that seem slightly unusual compared to the standard communication you usually receive from NMG Benefits.
• NMG Benefits will never ask you for money to process a claim. Be wary of any individual who claims to work for us when they ask for money upfront to process a claim.
• Always choose strong passwords to protect your personal information.

2. Some common scams, include:

• Phishing: A common scam that attempts to steal money or your identity by obtaining your personal information - such as credit card numbers, bank information, or passwords. This information can be requested on websites that pretend to be legitimate.
  • SMShing: This is a type of scam that uses mobile text messages to get you into calling back a fraudulent phone number, visiting fraudulent websites or downloading malicious content.
  • Deposit and Refund Scam: This is a scam when criminals contact you telling you that an amount of money was deposited into your bank account by accident, or that they have paid you a deposit for an urgent order that must be delivered immediately.
  • Vishing: This type of scam entails making phone calls, posing to be from reputable companies to encourage you to reveal personal information.

3. Reporting fraud

If you have fallen victim to fraud, it’s important to report it. It’s not always possible to get your money back, but you might be able to reduce the damage and stop it from happening again to you or other people.

If you’ve been approached by an individual who has asked for payment so that they can get your benefit for you, immediately report this to your NMG consultant or administrator.

4. Getting in touch

If we are unable to get in touch with you, we will use a reputable tracing agent to try contact you to start the claims process.

Our reputable tracing agents:

• Clearly identify themselves
• Ask potential beneficiaries to submit the relevant claim form
• Never request payment

If you’ve been a victim of fraud or have been approached by someone you don’t know who has requested payment so that they can get your benefit for you, please email NMG Benefits at fraud@nmg.co.za.

Don’t let negligence get the better of you - be mindful and keep your guard up against fraud.

Disclaimer: The information in this communication is for information purposes and is not intended to be detailed advice described in the Financial Advisory and Intermediary Services Act. The fund, administrator and trustees cannot be held liable for damage or loss suffered as a result of any action that you take based on the contents of this communication.

It takes massive amounts of long-term discipline, planning and sacrifice throughout your working career to make early retirement possible. Very few of us can make it possible – especially if we want our retirement lifestyle to at least match our current lifestyle.

Here are a few things you need to consider very carefully before you make any firm decisions. The questions are tough ones, but they are crucial. As always, it is strongly recommended that you discuss your plans with your NMG financial planner before you take the next step towards planning your dream retirement.

Fewer years to save: If you retire at 55, how much less will you have saved than if you continued to work into your 60s? Are you maximising your retirement fund contributions in anticipation of this? Are you making the most of tax deductions by making additional voluntary contributions whenever you can? Have you created a realistic plan to pay off all your debt by the time you stop working?

More years to finance: Will you have enough money to see you through three or four or even five more decades of life – and potentially rising medical expenses, should your health deteriorate? Similarly, if you need to move into a retirement home or an assisted living facility, will you be able to afford this?

Mental health: Are you sure you will enjoy retirement? Will you have enough money to indulge your hobbies and travel dreams? If you grow bored or listless, do you have a plan to counteract this? Will you be able to take on a part-time job or ‘side hustle’ to keep your mind alert – and possibly supplement your retirement income as well?

Your loved ones: Will there be others who depend on you financially after you retire? If so, have you discussed your plans with them, and have you factored in the possibility that some of your family members may experience unexpected hardship, even if they are coping now? And even if none of this is the case, will you be able to leave a legacy for your dependants, or will your savings be depleted?

Disclaimer: The information in this communication is for information purposes and is not intended to be detailed advice described in the Financial Advisory and Intermediary Services Act. The fund, administrator and trustees cannot be held liable for damage or loss suffered as a result of any action that you take based on the contents of this communication.

Downsizing means that you go for smaller, more affordable lifestyle choices. Your monthly expenses will reduce, allowing you to free up some cash to pay off debt. It offers you an opportunity to actually enjoy life without worrying about your future financial security. In fact, downsizing your life could be the best decision you ever make.

Financial freedom: By downsizing material things like your home, car, or garden, you can significantly reduce expenses, which will increase your cash flow. Think about how much space you really need, what car you can live with in comfort, and how much time and money you could save with a smaller garden, or none at all.

Mental well-being: Downsizing brings less stress. With less material things cluttering every part of your life, you will sleep better, have a clear mind, manage your time better, and enjoy the mental health that comes from less bills to pay.

Time saving: Without a pool that needs cleaning or a massive garden that needs weeding or a huge house to clean, you will find that you have a lot more breathing space for just kicking back over weekends. And you might even find that you have the capacity to clean or garden for yourself, rather than having to outsource and pay for having someone else do these chores.

Expanded opportunities: There’s a reason young couples prefer a convenient ‘lock up and go’ environment. It gives them freedom of movement and therefore a hassle-free reason to travel more. After all, life should be about quality, rather than the quantity of material possessions that you accumulate.

Disclaimer: The information in this communication is for information purposes and is not intended to be detailed advice described in the Financial Advisory and Intermediary Services Act. The fund, administrator and trustees cannot be held liable for damage or loss suffered as a result of any action that you take based on the contents of this communication.

Lifestyle creep is what happens when an increase in your income results in an ever-escalating increase in your spending on expenses rather than saving. Even if you are earning a generous income, lifestyle creep may result in you living from paycheck to paycheck or racking up unfordable debt.

If you have fallen into this trap, don’t worry, there is a solution.

Firstly, you need to prioritise budgeting. Creating a monthly budget puts you in control of your money and prevents you from overspending. This will help you to understand how you spend your money and discover where you need to control your expenses. You need to ensure that you prioritise savings and paying off debts: you can do this by either cutting costs or increasing your income.

Set yourself long-term goals and ensure that you frequently update your progress. You may want to save up an emergency fund, pay off significant debt, save for retirement or for a deposit for a house. Committing to written down financial goals, and actional plans on how to achieve them, will set you up for success. If this process seems overwhelming and you don’t know where to start – ask for professional help from your NMG financial planner.

Manage your debt. Review your debt accounts to understand how much you owe, what the minimum payments are and how much interest you are paying. Expensive, bad debt such as astronomical clothing accounts, overspent credit cards and unaffordable car loans are usually a sign that your lifestyle has run away from you. You’ll will be surprised how much income you will free up by paying off the accounts and removing the interest pressure from your budget.

Make saving your top priority: As famously advised by Warren Buffet: “Do not save what is left after spending; instead spend what is left after saving.”

Make savings and investing easy. You don’t have to rely on will power to achieve your goals; just a little admin in this department will go a long way. Automate your savings debit orders to go off first every month.

Create a plan. Increases in income are usually predictable. Before the money hits your account, have an actionable plan ready on how you plan to use the money. Allocate as much as possible to savings and long-term goals. However, if a windfall of money surprises you, make a promise to yourself not to spend it until you have an actionable plan in place. The rule of thumb is to save 75% of your annual increase amount, with the aim to contribute 20% of your salary to long term retirement savings.

Enjoy it! You need to plan enjoyment into your budget. You’ve worked hard for it, after all. Research indicates that people gain more happiness from experiences than products, which is something to consider when preparing. By planning and controlling this portion of your budget, you can remove potential spending remorse and appreciate the experience more.

Build a side hustle. 100% of this income can be saved towards your goals and reduce the pressure from your main salary. Consider aspiring to join the wealthy who have an average of 7 income sources. You don’t need to create extra pressure on yourself- discover what passive income sources you can create to earn you money while you sleep.

Disclaimer: The information in this communication is for information purposes and is not intended to be detailed advice described in the Financial Advisory and Intermediary Services Act. The fund, administrator and trustees cannot be held liable for damage or loss suffered as a result of any action that you take based on the contents of this communication.

1. Market Sizing

The last few years have seen unprecedented challenges for the South African insurance industry. Although most of the attention is usually on the underwritten life insurance industry, Funeral Insurance – a non-underwritten, event-based life product – has also experienced a unique set of pressures.

The funeral and underwritten life markets are both very large, and of great importance to the South African insurance industry. They differ in some key areas.

In the 12 months to June 2021, the value of sales of new funeral insurance products was almost four times that of the underwritten life market, at R13.5bn against R3.9bn.

However, enforce premiums for underwritten life are R12.7bn, one-third greater than those in funeral insurance. The primary reason for this is much lower persistency of funeral insurance products, as explored below.

2. Persistency and Payment Dynamics

The funeral and underwritten life markets are both very large, and of great importance to the South African insurance industry. They differ in some key areas.

As figure 2 illustrates, the majority of funeral policies sold will not persist beyond their first year, with nearly a quarter of them lapsing before the first premium is received (hence classified as “not taken up” or NTU).

Compare this to underwritten life, where 1st-year lapse rates average 13% and subsequent year lapsation is around 9% - both substantially below their funeral counterparts.

This results in a higher degree of customer turnover for funeral insurance and much greater acquisition costs. The wastage is substantial, and to no party’s benefit.

There are some interesting avenues to explore to improve customer persistency.

One approach appears to be around payment flexibility – e.g. despite affordability challenges, a majority of consumers (63%) expressed an interest in paying for multiple months of cover up front, even with no discount offered.

Furthermore, we know that the payment method through which policies are sold plays a huge role in persistency, with payroll deduction reducing lapse rates four-fold (and halving first-year lapses), as compared against debit-order and cash payments.

Of course, a payroll deduction system is not always viable. Development often comes with high set-up costs and requires entrenched relationships, not to mention employer facilitation and support.

It is therefore only seen to work effectively within some distribution channels, such as through workplace tied agents.

3. Direct Channels and Barriers

Turning to distribution channels, the ‘direct’ channels (online and telephone direct-to-consumer, with limited intermediation) experienced substantial shifts throughout the last 18 months.

Direct channels experienced their sales peak (relative to other channels) in 2020 Q2 as lockdown measures came into full force.

Accompanied by a severe drop in overall sales – primarily in face-to-face (or intermediated) channels – direct channels accounted for 24% of all sales.

This was a temporary blip, and the recovery of intermediated channels as a result of easing lockdown measures saw a return to normal distribution which continued into Q2 of 2021.

While direct sales seem to be on an upward trajectory, lockdowns do not appear to have been a key catalyst for largescale adoption or permanent rotation into these channels.

Furthermore, as evidenced in figure 6, direct channels experience even worse persistency than the rest of the market (regardless of Covid).

The majority of consumers prefer engaging with providers and administrating policies through digital means.

However, as seen in figure 7, the lack of trust in purchasing through a ‘faceless’ digital proposition remains a stiff barrier to sales growth and translates into poor ongoing engagement and thus poor persistency.

The digital channel faces the challenge of improving consumer belief and trust, and the model is currently quite low-engagement; developing a human-digital omnichannel proposition within an online ‘ecosystem’ could go a long way to solving this, and certain providers are starting to see some success here.

Furthermore, it stands to reason that a well-designed digital ecosystem would increase customer engagement and improve persistency.

There should be a huge opportunity for a funeral insurance provider that can fully establish this financial ecosystem, where funeral plays a role as one piece of a holistic suite of financial products, and the provider has access to customers with a pre-existing relationship and engrained trust in the brand.

The aforementioned preference for online administration already lends credence to such a strategy.

4. Covid: Reasons for Optimism

Of course, the biggest factor impacting the funeral insurance market over the last two years (as indeed has been the case for all life insurance products) has been the Coronavirus pandemic.

Sales clearly suffered during the pandemic, with the falls in intermediated channel sales and rotation into (and out of) direct channels discussed previously occurring across the market.

However, despite an initial sharp spike in NTUs (26% to 40% in Q2 and Q3 of 2020, respectively), lapses slowly improved, from a high of 23% in 2020 Q1 to a 2-year low of 20% in 2021 Q2.

This improved persistency could be due to an increased appreciation of the importance of cover, and this is corroborated by consumer responses – 79% of consumers stated that funeral insurance has become more important as a result of Covid.

5. Opportunities

One consistent theme is the need to resolve the glaring issue of persistency. Various strategies are already playing out as outlined earlier in this article.

Despite an initial drop in sales, Covid has lifted consumer awareness and demand for cover.

There also appears to be a gap in the market between funeral and underwritten insurance, where we’re starting to see the emergence of ‘semi-underwritten’ or non-underwritten life products. The topic deserves its own article, but there will be key questions such as:

1. Which group of providers are best placed for this? Those already in funeral or mass market, or those already in the underwritten space?
2. Which dynamics (e.g. sales channels) will be similar to the funeral market and which will look more like the underwritten market?

We believe funeral insurance will continue to be an exciting and dynamic sector going forward, and opportunities such as those we’ve outlined will result in improvements for customers and insurers alike.

The information in this communication is for information purposes and is not intended to be detailed advice described in the Financial Advisory and Intermediary Services Act. The fund, administrator and trustees cannot be held liable for damage or loss suffered as a result of any action that you take based on the contents of this communication.

Markets struggled in November on news of the Omicron variant, which was initially thought to be a more dangerous variant with more mutations. This was on the back of a fourth Covid wave racing through Europe, which had already led to lockdowns.

Globally, supply chain pressures are easing, both China and Japan have announced additional policy stimuli, whilst the US household saving rate continues to drop, supporting consumption. Continued uncertainty around Covid has allowed monetary policy to stay more accommodative for longer. This should allow economies to continue to grow, albeit at a slower, more sustainable rate.

From a South African perspective, some performance has been hampered by a series of poorly timed unfortunate events. Eskom’s ability to supply power rapidly decreased over the course of 2021, bringing the highest amount of load shedding within a single year. This has battered the local economy, as load shedding reached level 4 across the country. Talks of Renewable Energy through the REIPPP Programme remain in the far future, with no real short-term fixes in sight.

The main economic factors impacting the fourth quarter include:

Looking back on 2021, the SA Equity Market had stellar performance across all sectors, as economic growth continued to recover. Value stocks outperformed growth stocks for the first time in 5 years.

SA Bonds ended the year at expected performance. South African cash performed below historical expectations due to Interest rates remaining low to allow for more stimulus for economic growth.

International equities provided great returns for the year, driven mainly by the Developed markets. International and Domestic Property clawed back some of its major losses of 2020. The Rand ended the year negatively but performed well relative to other Emerging Market currencies.

Over 2021 the main topics of economic relevance included:

The information in this communication is for information purposes and is not intended to be detailed advice described in the Financial Advisory and Intermediary Services Act. The fund, administrator and trustees cannot be held liable for damage or loss suffered as a result of any action that you take based on the contents of this communication.