PSG Wealth ranked in top three for third successive year
IN 1890 one of the pioneers of stockbroking in South Africa, Otto Pollak, became a member of the JSE and built the foundation for one of the greatest names in South African securities trading – Max Pollak and Freemantle.
Today, 125 years later, Frankel Pollak trades as Sasfin Securities, a stockbroking and portfolio management business that has never lost sight of the value of personal attention, according to Chris Lemmon, head of private client stockbroking and Sasfin Asset Managers.
“Our personal-attention approach to investing and the manner in which we transact has resulted in a leading private client portfolio management and stockbroking business,” says Lemmon.
“With several branches throughout South Africa, we employ more than 120 staff of which 44 are qualified and experienced portfolio managers who transact, manage and advise on securities owned by 18 000 clients.”
Lemmon reports that Sasfin’s Wealth division produced pleasing results for the year ended June 2015 with profit growth of 34 percent to R64.4 million (2014: R48.2m) and funds under advisement and management growing to R117 billion (2014: R91bn).
“The division expanded its local and global investment offering (including the launch of a fixed income fund) and delivered excellent performance to its clients, as evidenced by Sasfin Asset Managers’ third Raging Bull award,” says Lemmon.
“Our wealth business is starting to reap the benefits of its investment in distribution, information technology and operations. The institutional fixed income desk continued to show good growth in profitability,” he adds.
We don’t take reckless bets with our clients’ money. We buy our shares for the long term…
Lemmon advises that selecting an investment manager is one of the most important decisions an investor can make.
He says Sasfin Securities has spent time with clients, understanding and unpacking what drives successful investor behaviour and identified six traits that are non-negotiable when it comes to successful investment management:
The ability to build a sound relationship with an investment professional that truly understands their needs and carefully manages the emotional
Relationship:
aspects of investing.
An adviser whose independence is unconstrained by investment bias.
Trust: An entity that has a solid reputation and extensive history of successful wealth management.
Capable and astute professionals who have the ability to navigate through difficult market cycles.
A clear and full understanding of the portfolio and related fees.
A globally diversified portfolio which is managed locally.
“We have listened to our clients and have structured our business to embody the six identified traits,” says Lemmon.
“Our heritage comprises over a century of experience in vanilla private client stockbroking with low portfolio turnover.
“We also have a very low turnover in our key investment decision makers, so across our wealth business we have a combined investment experience in financial markets of about 800 years.
“All this competence comes together to deliver a very simple investment offering for our clients, which is a bespoke, segregated investment portfolio.
“We are also quite careful in making sure that our expectations are aligned with our clients and that they commit
Independence:
Expertise:
Simplicity:
Global:
the right money to the market, which affords us the ability to make long-term investment decisions for them,” he explains.
Sasfin clients deal with an empowered portfolio manager who is able to make decisions on their portfolio given their specific circumstances, which is the chief reason clients remain loyal, according to Lemmon.
“This business model creates a level of authenticity in our relationship with clients that is hard to replicate.
“We don’t take reckless bets with our clients’ money. We buy our shares for the long term, run a low portfolio turnover and communicate extensively with our clients.
“Our service is foc u s s e d around delivering a fully managed, segregated equity portfolio to a client by an investment decision maker.”
When identifying PSG Wealth confirmed its place among the country’s leading stockbrokers for the third year in succession when it was placed third overall in the annual SA's Top Stockbrokers awards, which were held at the JSE on September 22, hosted by Intellidex and the Financial Mail Investors Monthly.
PSG Wealth was also recognised as a Top 3 online broker (ranked third) and also received special recognition for the availability of its instruments and trading tools, its client support (including research and tools) and the overall quality of both its online and offline services.
Corrie de Bruyn, the chief executive of PSG Wealth says the company will continue to build on its success.
“We are both pleased and proud to consistently achieve these favourable results. We also remain committed to continually enhancing our offering and improving our industry rankings in future,” says De Bruyn.
He explains that the results of the SA’s Top Stockbrokers survey for 2015 were based on a written submission and client feedback, which is particularly pleasing as it is PSG Wealth’s clients that helped the company achieve success.
“The results of the Intellidex survey are partly based on a client questionnaire. We are grateful to all of our clients who completed the questionnaire and took the time to rate our offering,” says De Bruyn.
“We value our client’s participation and feedback. The fact that we maintained our overall ranking from 2014 also shows that our clients remain pleased with our service, results and continuous efforts to develop and a stockbroker, Lemmon advises investors to pay attention to the reputation of the business, their core competencies, and how long
they have been in the business.
“Ideally investors should make sure that the service they are expecting is the core competency of the stockbroker and that they receive value for money, which is largely dependent on what services they need.
“There is always a cost-benefit relationship between how much support is needed and how competitively it is priced.
“Ultimately, the biggest issues are whether the stockbroker can deliver what the client needs, whether the client understands the investment offering, and how the securities broker goes about managing money.
“Sasfin’s unique approach to partnering with an extensive network of independent financial advisors further enhances our value proposition. Together with the independent financial adviser, we ensure that the client’s needs are understood and that the service we are able to offer is appropriate for the needs of the client, as well as their trusted adviser,” says Lemmon.
Sasfin believes the core drivers necessary to achieve sustainable compounding returns, over the long-term are: improve our administration services, research and development, distribution channels, and offering.
“Intellidex also conduct their own investigation by visiting stockbrokers and their websites to ascertain whether they have the same experience as the information provided when they register as a client.”
De Bruyn believes PSG Wealth’s strength lies in its diversified offering to clients, which ranges from financial planning to estate and trust services, multi-management, health care, employee benefits, and portfolio management.
Identifying themes:
global macro Financial markets are impacted by global themes and trends. These need to be identified and interrogated when making sound investment decisions.
Asset Allocation: Risk-adjusted returns are derived from appropriately blending different asset classes.
Risk Management:
Sound investment processes must be centred on risk management.
Our service is focussed around delivering a fully managed, segregated equity portfolio.
Controlling costs:
A guaranteed way of improving investment performance is the ability to contain costs.
Lemmon says global research shows that the foundation of long-term investment performance is making sound asset allocation decisions.
“Strategic asset allocation is therefore the reference point against which we construct and manage our clients’ multiasset class portfolios.
“Our process incorporates extensive research into asset class optimisation and combines with our forward expectations per asset class, to provide
“We offer a value-orientated approach to our clients' financial needs, including a comprehensive wealth management service and asset management that incorporates local unit trusts, global funds and segregated portfolios.”
De Bruyn says clients’ approval of PSG’s offering is not merely based on cost, but on PSG Wealth’s complete service, from registering as a client all the way through to being supported in making their investment choices.
“We are fortunate in that we have an extremely loyal client base, which in itself says much about PSG Wealth. investors with a range of investment solutions designed to generate the highest return for a given level of risk.
“We then use a combination of individual instruments, active and passive strategies to manage our clients' portfolios in the most efficient manner.
“Our investment philosophy combines thorough fundamental stock specific research, with focused analysis of the global economic environment.
“This philosophy translates into an in-depth investment process, ensuring we are able to navigate the global investment maze to achieve superior returns for clients.”
According to Lemmon the process begins with qualitative and quantitative macro-economic analysis, which defines core investment themes.
“We then leverage off established independent company specific research, which is interrogated by our in-house research division, ensuring congruency with our core investment themes.
“Our solid and robust investment process ultimately results in risk-profiled foundation models from which our asset managers leverage.
“Our investment approach combines experience and superior judgement with a sound scientific basis for portfolio construction that is supported by evidence and backed by proven theory,” said Lemmon.
“Whenever a client chooses someone with whom to place their investments their first criteria is trust, particularly in the current economic climate in which there is much uncertainty and volatility,” he adds.
In the current economic climate PSG Wealth has seen clients moving back to the traditional share and ETF funds instead of going the contracts for difference and single-stock-future route.
“Clients are a bit more conservative and are gearing towards longterm investing, which is good.
“We have also seen a healthy uptake on our tax-free savings products,” adds De Bruyn.
PSG is currently developing a single platform on which a client, whether personal, institutional or adviser, can access any of its instruments over almost any licence whether it is a life wrapper, a retirement annuity, preservation fund, or a voluntary-discretionary, local or offshore shares, ETF, or derivative instruments. The platform will be open to open any client, whether they have come through a PSG advisor, independent adviser, or are self-directed.
“PSG Wealth is consolidating all its client-facing web platforms, which will offer clients a consolidated view of all their investments with PSG or one of our advisors with full details of their portfolio, performance, underlying instruments, and market information, all on a single platform.
“Our clients will not have to visit multiple platforms to get a view of their total portfolio, which will give us a competitive advantage based on our unique place in the market.”