Asset Consulting - Strategic Wealth Botswana

Asset Consulting

OUR SERVICES

Asset consulting (Investment consulting) has a long history. The profession has been around for decades and involves the providing of investment advice and implementation for asset owners such as retirement funds. Being specialist asset consultants, Strategic Wealth offers its expertise to help clients, by way of advice and implementation, to manage their investment plans to achieve the best possible results and ensure their adhere to all legislative requirements.

What is asset consulting?

Asset consulting is a term that is so often misunderstood and the term is perhaps a little broad as it could well mean anything to do with providing a service in relation to an asset.

ALM, an early diagnosis for some

What if I told you that there is a way to ensure that you age gracefully and that you are guaranteed never to get a chronic illness in your life. All you have to do is a simple annual medical, it’s a quick painless check-up available for free at all local clinics.

Fund analysis

Investment Strategy design, implementation and review

Investment Policy Document, draft and review

Risk management

Asset measurement and investment reporting

Portfolio optimization

Asset liability modelling at Fund and Member level

Legal regulatory and compliance oversight

Manager selection and performance monitoring

Investment research

ALM, an early diagnosis for some

What if I told you that there is a way to ensure that you age gracefully and that you are guaranteed never to get a chronic illness in your life. All you have to do is a simple annual medical, it’s a quick painless check-up available for free at all local clinics. After the medical, the doctor gives you a list of ingredients to include in your diet and a few simple daily exercises and that’s it, guaranteed health.

Well, that is exactly what an Asset and Liability Model does for your long term financial health and what more is that if you start early enough you can almost guarantee that you will be able to maintain your same level of income from the time you retire until the day you die. Imagine blissful weekends at the family farm and years of stress free living.

So how does this work?
First let me explain what a Net Replacement Ratio (NRR) is. A NNR is a target which I set or which my pension fund adopts. It is the amount of income, expressed as a percentage of my salary that I would like to receive for the rest of my life upon retirement.

Where do I receive this money from?
When I retire, I either take the full amount or two thirds of the value of my retirement fund and purchase an annuity from an insurance company. The amount that the insurer promises to pay me on a monthly basis is the amount that I use to calculate my NRR.

So if I retire at 65 years, and my final pay check is P10,000. I would need to be paid P7,500 per month from the annuity that I bought in order to have achieved a NRR of 75%.

How can I know if I am going to be ok at retirement?
Well your funds asset consultant can actually run a simple exercise for all the Funds members to work out the expected NRR for each member.

How do we do this?
Although our in-house sangoma, “Sangi” would like to take credit for this, we actually use your current fund value and monthly contribution rate as well as a number of assumptions such as; investment growth, annual salary increase, life expectancy and annuity rates to calculate your expected NRR at retirement.

What if my NRR is below 75%.
That is the beauty about identifying this at an early stage. You can increase your monthly contribution, choose to retire a little later, add a lump sum of cash to your retirement fund or take on a little more risk if you still have more than five years to retirement.

Like regular health checks, this should become part of your financial wellness plan and if you start early enough, do the checks, and if you are willing to take action immediately you can almost guarantee yourself a well-funded retirement.

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