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It's an important thing to look at where clients are investing their money.

There are a lot of options; you just need to look at the JSC, which worldwide is a speck of dust. So the range is just mind blowing: how much there is available and the options are endless. That in itself creates an inherent risk problem for both brokers and for clients. Wrong fund selection, wrong composition, and it's a very, very difficult conversation to have with the client.

Having said that, we are all are trying to do our best, trying to do what's right by our clients and we follow a principle of treating customers fairly. To get that done right we then need to derisk our investment opportunities and the advice that we give to our clients. So, in doing that, we have embarked on a journey of creating the 1.618 Model Portfolios. The idea behind this is to try and get the best of breed in what is available for our clients, especially in the retirement space.

We're giving our clients an opportunity that is more secure and different to what you would get in the mainstream investment landscape. A lot of the fund selections from the big name providers tend to be the same. The only differentiating factor would be the level of service or preference of what marketing brand you prefer.

Now, we think that we could be missing a gap with our clients by following this route. We believe they could be getting a better opportunity and growth within their portfolio as well as having a more smooth ride when markets tend to get a little bit turbulent.

The 1.618 Model Portfolio was designed with risk appetite. Are you an aggressive investor? Are you needing a more conservative element to your portfolio? Does a portion of your portfolio and your investment strategy need to be moderately based where you're getting some secure return, but you're also making sure that you've de-risked the model. We have followed what's called a multi manager approach for these Model Portfolios.

We've gone and researched asset managers out there where their sole role and their sole focus is building and constructing a portfolio by picking and choosing the best stocks and shares available to them, to build something that meets the client mandate and directive. We've then decided that instead of passing that on to just one provider in particular, why don’t we take a range of multi managers, or a range of portfolio managers and spread the investment opportunity across them? This then means we're getting the best of breed across multiple minds, with world class research.

We're also getting different investment themes, different investment strategies, different investment cycles. This is beneficial to our clients. We hope to extract the best out of each different portfolio manager. 1) We de-risk the portfolio: which means we give your investment the opportunity of not succumbing to major market fluctuations. 2) We're also giving your money the opportunity of being involved at a specific time when markets move favourably and positively up.

By taking the best of breed of all of these portfolio managers together, we then condense it, wrap it in the 1.618 Model Portfolio label. This allows us to offer a single base cost structure. Instead of getting costing from all three asset managers and passing this on to the client, we've been able to negotiate a more favourable fee that justifies the return we're getting.

For example, our return last year in our 1.618 Aggressive Integrated Model delivered 15.24% after asset management costs were taken into play. A lot of you will jump up and down and say it was a great investment year last year in 2024 - it was. But the balance between the funds that were inside the Model Portfolio was able to give us really good growth points, and mitigate certain areas that maybe underperformed slightly. Overall I would suggest that that Model Portfolio delivered very favourable and pleasant results for our clients.

I would, without hesitation, say that every single client who's involved in a compulsory fund, and anybody who is putting compulsory money towards retirement, should be following a model portfolio approach, whether it's ours or somebody else's. You need to be involved in a space where you are not reliant on your broker or your financial adviser having to make critical, crucial decisions about specific fund selections. Rather the Model Portfolio is designed to give a feeling of a trust to our clients by the brokers who recommend it.

In summary, the model portfolio succeeds in: 1) De-risking the money you're putting in as a client, 2) Giving you the opportunity as a client to grow your portfolio and 3) Taking the onus and the burden away from a broker to be a crystal ball specialist. 4) Relying on world class research from our portfolio managers.

From a risk point of view, speak to your broker. We have got seven different Model Portfolios that we are running. We believe that these Model Portfolios are excellent for your retirement planning, your living annuity or for your local South African endowments. Even some unit trust investments are going to de-risk your exposure to the market through the model. This gives you the opportunity of growth and facilitates the great relationship between you and your broker in terms of what we've put together.

Watch the full video here: https://youtu.be/6JczuNIzrPo