Momentum Sucks

[Safrica]

hi

This is the reason south africans dont save

The amount invested in premiums from inception 01/07/1999 to the maturity date 01/07/2009
was R 38 249.52. The amount paid out on 30/11/2009 was R 32 882.95. Our actuaries confirmed that the value paid out was the fund value,

TO make this more bizare than loosing money in a investment, im still waiting for payout
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SUPPLIER RESPONSE
Time: 12:13:33
Tue 15 Dec 09

Hello

Thank you for your feedback.

The investment vehicle which a client chooses is important to consider when looking at the value at the end of the term. You chose an investment portfolio which is 100% in an off shore equity fund. This would result in fluctuations in accordance with the global economy and possibly negative or positive returns. It is a high risk portfolio which you chose and would have therefore been affected by the drastic changes we have all seen in the global economy over the past while.

We have still not been able to pay your proceeds to you because we still await the requirements which we have requested from you, namely a copy of your identity document. Once we receive this, we will process the payment for you.

Kind regards

 

[ryu]

what a load of cr@p !

/ if thats the case then you might as well just open up a savings account !

 

[jano]

That looks strangely familiar... Fortunately I'm only down about R1000 after 6.5 years, only 3.5 to go...

(50% global equity, 50% money market)

It was the best mistake I ever made! I will never listen to a "financial advisor" (product peddlar) again. I am now my own financial advisor, and seeing as I don't get paid commission, I have my best interests at heart.

 

[Boomstomp]

ah, but hes not telling us the whole story either...

was it a savings policy or a risk policy (or savings with risk attached?)

 

[Boomstomp]

It was the best mistake I ever made! I will never listen to a "financial advisor" (product peddlar) again. I am now my own financial advisor, and seeing as I don't get paid commission, I have my best interests at heart.

ALWAYS find out what their qualification as a Financial Advisor is, some companies like to give people titles that dont really deserve it (PR spin is evil I tell you)

 

[Safrica]

Honestly, i remember a broker coming home and promising the world..
Being too young at that age i was never consulted on high risk or low risk...

Extremely depressing..

 

[Dean]

That sounds 100% right - and "acceptable".

That's what investments are - people forget that they're still buying a product. Risks and rewards of that product/asset are held by the owner/investor.

That's the difference between higher risk investments (which can yield very high returns) and safer savings accounts (lower return).

Also, the ID doc for payment is standard for FICA - that's a government requirement, not one of the company. Once you send your ID doc in once, you won't have to again (although something tells me you won't be rushing back to deal with them) - I went through the same *** with Old Mutual.

 

[Boomstomp]

That's what investments are - people forget that they're still buying a product. Risks and rewards of that product/asset are held by the owner/investor.

That's the difference between higher risk investments (which can yield very high returns) and safer savings accounts (lower return).

+1

 

[chutzpah44]

We are also not told the following.

Was there any life cover?

Was it a single premium investment?

If not as the $ was 5.84 on the 1/7/1999 there would have been investments during that period of say 9.99 or 10.00 to the $. So in effect you are buying an asset at say R9.00 to the $ and currently selling it at say R7.50. Secondly the Dow is currently at levels that were seen 5 years ago, same with the FSTE, whereas the JSE is well up on 5 years.

So there are 3 negative factors at play here.

People are quick to run down an Insurance company, remember you were I am sure kept informed over the past 10 years as to the value of the policy.

You can also leave the money with the Insurer hoping that overseas markets go up and that the Rand goes down. That way you will get an increase both ways.

Remember in choosing the portfolio you are taking the risk yourself

Just to give you an example that totally contradicts yours. An investment of R 20 a month in a Retirement annuity for 33 years (R 7920), currently has a value of R 180 000. This is not off shore and in a South African equity portfolio, also not with Momentum

 

[LancelotSA]

hi

This is the reason south africans dont save

The amount invested in premiums from inception 01/07/1999 to the maturity date 01/07/2009
was R 38 249.52. The amount paid out on 30/11/2009 was R 32 882.95. Our actuaries confirmed that the value paid out was the fund value,

TO make this more bizare than loosing money in a investment, im still waiting for payout
Add a new Momentum Health report Find this report inappropriate? Tell us

SUPPLIER RESPONSE
Time: 12:13:33
Tue 15 Dec 09

Hello

Thank you for your feedback.

The investment vehicle which a client chooses is important to consider when looking at the value at the end of the term. You chose an investment portfolio which is 100% in an off shore equity fund. This would result in fluctuations in accordance with the global economy and possibly negative or positive returns. It is a high risk portfolio which you chose and would have therefore been affected by the drastic changes we have all seen in the global economy over the past while.

We have still not been able to pay your proceeds to you because we still await the requirements which we have requested from you, namely a copy of your identity document. Once we receive this, we will process the payment for you.

Kind regards

First off, yes you are right to be upset. But your anger should probably be directed at the advisor you took the policy with. They appeared to follow the flavour of the day in 1999 and head offshore. Many people were doing so as the future was uncertain in SA. Many have lost as a result of this short sightedness. With the FAIS act now in place something like this should no longer be able to happen.


Now the next part is not what you want to hear.

Can you please specify the specific fund you were invested in? The reason I ask is you need to remember that you were invested in a fund which was offshore, hence you were investing in rands into a foreign currency, as well as being equity based. Knowing which fund will clarify which currency.

On the 1st point, the rand dollar (without knowing which portfolio you were invested in I am going to assume dollar based) on the 01/07/1999 was R5.84 to the dollar. This reached R13.60 in 2001. It then again dropped to R5.64 in 2004 before once again reaching R11.27 in 2008. Now each time the rand moved dramatically your fund value in rand terms was affected. If you were buying at an average of R9 to the dollar and now the exchange rate is now R7.50 you are going to lose.

http://www.indexmundi.com/xrates/graph.aspx?c1=ZAR&c2=USD&days=3650&lastday=20091215

On the 2nd point, your equity exposure means that when the markets took a slump late last year and into this year your investment felt the brunt of that. You were not protected with exposure to the other three major asset classes. To put some figures to this the Dow Jones Industrial index fell from 13,930 around Sept 2008 to 6,547 Mar 2009! That is massive. Over 50% of your fund gone in a few months. Obviously some of this has now been recovered.

If you had exposure to that then there is not much blame Momentum can take. If your investment portfolio suited your needs then you should have been aware of these risks. Further to this, and again the advisor can be faulted (or yourself for not following up on your investment as it is your money after all), if you were wanting to definitely take the money after 10 years you should have slowly moderated your risk as you neared maturity. If you were not wanting the money you should have left it there for now. If the rand weakens and the markets recover you would have been positioned to take advantage of this. All losses are paper losses and are only realised when you cash in your investment.

 

[Shayd]

Guys as an Independent Adviser I can tell you that yes many "advisers" are very bad, this comes from primarily a commission driven sales model and "advisers" merely interested in the quick buck.

The return from pure offshore over the last 10 years would have been worse than just putting your money under a mattress irrelevant of the service provider you chose.

It sounds like no risk profile was done and you were just shoved into whatever was popular at the time. Unfortunately this was pretty common for the time. Since FAIS was introduced adviser's and the companies they work for are financially and legally bound to the advice they give you and if this were to happen now you could take them to the ombudsman for the return you should have gotten.

If you need an Adviser make make sure you get one that will see you regularly and works on a fee model not a commission one. This way you know the advice you get is truly independent.

 

[LancelotSA]

Guys as an Independent Adviser....

If you need an Adviser make make sure you get one that will see you regularly and works on a fee model not a commission one. This way you know the advice you get is truly independent.

The parts above sound like RAS.

A fee does not guarantee regular visits. An as and when commission model does.

 

[xrapidx]

Why don't you leave the policy as is and give it time to recover?

Most of mine are now breaking even - and mature next year March - but I might leave them as is until they recover

Speaking of which - I need to start a thread about it.

 

[Shayd]

LancelotSA I didn't say the fee basis is the reason the adviser would see you often, I use a simple SLA with my clients. But yes I do partly agree with you, I work on a as and when/service fee model with my clients.

This is only because pure as and when isn't going to work with a client saving lets say R500, I would only earn R7.50pm... lol 27 months to get my money back for cost of first appointment.

 

[Shayd]

Guys any investment that has been running 5yrs or longer and still needs more time to break even is simply rubbish. Unless you stuck it all offshore because you though SA was the new Zimbabwe.

 

[chutzpah44]

Can you please specify the specific fund you were invested in? The reason I ask is you need to remember that you were invested in a fund which was offshore, hence you were investing in rands into a foreign currency, as well as being equity based. Knowing which fund will clarify which currency.

On the 1st point, the rand dollar (without knowing which portfolio you were invested in I am going to assume dollar based) on the 01/07/1999 was R5.84 to the dollar. This reached R13.60 in 2001. It then again dropped to R5.64 in 2004 before once again reaching R11.27 in 2008. Now each time the rand moved dramatically your fund value in rand terms was affected. If you were buying at an average of R9 to the dollar and now the exchange rate is now R7.50 you are going to lose.

[.

Lol I see we were looking at the same website
http://www.x-rates.com/cgi-bin/hlookup.cgias regards exchange rates

This is a good one for the DOWS history

http://www.moneyweek.com/news-and-charts/market-data/dow-jones.aspx

However you expressed yourself much better then I did

 

[Ou grote]

First off, yes you are right to be upset. But your anger should probably be directed at the advisor you took the policy with. They appeared to follow the flavour of the day in 1999 and head offshore. Many people were doing so as the future was uncertain in SA. Many have lost as a result of this short sightedness. With the FAIS act now in place something like this should no longer be able to happen.


Now the next part is not what you want to hear.

Can you please specify the specific fund you were invested in? The reason I ask is you need to remember that you were invested in a fund which was offshore, hence you were investing in rands into a foreign currency, as well as being equity based. Knowing which fund will clarify which currency.

On the 1st point, the rand dollar (without knowing which portfolio you were invested in I am going to assume dollar based) on the 01/07/1999 was R5.84 to the dollar. This reached R13.60 in 2001. It then again dropped to R5.64 in 2004 before once again reaching R11.27 in 2008. Now each time the rand moved dramatically your fund value in rand terms was affected. If you were buying at an average of R9 to the dollar and now the exchange rate is now R7.50 you are going to lose.

http://www.indexmundi.com/xrates/graph.aspx?c1=ZAR&c2=USD&days=3650&lastday=20091215

On the 2nd point, your equity exposure means that when the markets took a slump late last year and into this year your investment felt the brunt of that. You were not protected with exposure to the other three major asset classes. To put some figures to this the Dow Jones Industrial index fell from 13,930 around Sept 2008 to 6,547 Mar 2009! That is massive. Over 50% of your fund gone in a few months. Obviously some of this has now been recovered.

If you had exposure to that then there is not much blame Momentum can take. If your investment portfolio suited your needs then you should have been aware of these risks. Further to this, and again the advisor can be faulted (or yourself for not following up on your investment as it is your money after all), if you were wanting to definitely take the money after 10 years you should have slowly moderated your risk as you neared maturity. If you were not wanting the money you should have left it there for now. If the rand weakens and the markets recover you would have been positioned to take advantage of this. All losses are paper losses and are only realised when you cash in your investment.

+1

And another point is, that you've only lost your money once you cash in your investment. Overseas investments may pick up nicely in the next few years, then again it may not.
Another thing is that you shouldn't invest more than 15% (most people would say, i think) of your moolah overseas.

 

[LancelotSA]

That looks strangely familiar... Fortunately I'm only down about R1000 after 6.5 years, only 3.5 to go...

(50% global equity, 50% money market)

It was the best mistake I ever made! I will never listen to a "financial advisor" (product peddlar) again. I am now my own financial advisor, and seeing as I don't get paid commission, I have my best interests at heart.

Not sure what kind of advisor that was!!

50% in very aggressive and 50% in ultra conservative. Strange choice!

 

[Ou grote]

Not sure what kind of advisor that was!!

50% in very aggressive and 50% in ultra conservative. Strange choice!

I'm guessing the MM was overseas as well.

 

[CathJ]

ah, but hes not telling us the whole story either...

was it a savings policy or a risk policy (or savings with risk attached?)

It was invested in equities, so I assume (hope!) it was a risk policy.

ALWAYS find out what their qualification as a Financial Advisor is, some companies like to give people titles that dont really deserve it (PR spin is evil I tell you)

Legally that's not allowed; the FSB requires all Financial Advisors to be licenced and qualified. Doesn't mean they're not lying, though, so always check they're reigstered with the FSB.