Retirement reform key for fiscus
SOUTH Africans are failing to prepare adequately for their old age as longevity and a shortfall of up to R7 trillion in insurance is putting strain on the country’s fiscus.
Pravin Thakur, a Durban financial adviser who has just returned from Chicago where he was installed as the chairman for South Africa of the international Million Dollar Round Table, said the financial planning sector was under the spotlight as people were living longer – putting governments and the management of personal finances under strain. He said South Africans were under-insured to the tune of about R7 trillion.
The meeting was attended by delegates from countries such as the US, the UK, Greece, Israel, Australia, New Zealand, Mexico, Pakistan and the UAE.
Thakur said that globally, over-indebtedness was a growing problem and that First World countries, in particular, were having to care for ageing populations.
“South Africa is quite well-positioned to respond to some of these developments, and retirement reform is a significant item on the government’s agenda,” he said.
As a result, traditional practices were being re-assessed, particularly relating to advice and commission structures. “Financial planning is under the spotlight. People are worrying more than ever about their… pension funds,” he said.
He said the Chicago meeting had also highlighted that authorities all over the world were tightening up on harmful and reckless practices. “The sales-driven models of the past will slowly give way to advice-driven models where clients will have to be more informed,” he said.