- Player: Michael Sassoon
- Company: Sasfin
- Position: Head of Wealth and Capital, Executive Director
- Visit: www.sasfin.com
It isn’t hard to see the attraction of a passive investment strategy: Set it, forget it, and save a ton of money on fees. But it’s not as simple as that. Sure, passive investing has its upsides, but it’s not quite the can’t-lose strategy it’s sometimes made out to be. There are still risks. And there are still fees.
Most importantly, though, it can oversimplify the process of wealth management, ignoring the needs, wants and personality of the person involved.
“A person’s relationship with his or her money is a very personal thing,” says Sasfin Head of Wealth and Capital, Michael Sassoon.
“Successfully managing someone’s investments means understanding what their overall financial situation is, and what their investment goals are.
“You’re often acting like a psychologist, encouraging them to spend less and save more. It’s also about helping people to manage risk and finding a solution that suits their risk appetite by appropriately blending different asset classes.”
Active and passive
Sasfin believes in a bespoke approach that suits the individual. So, does that mean that the company is against passive management? Surprisingly, the answer is no. According to Michael, a good argument can be made for blending the two.
“Passive investment can be useful as part of a comprehensive investment strategy, particularly if you’re trying to get some exposure to the market, but it is merely one tool in the toolbox. Any passive investment has to be looked at within the context of broader portfolio management decision-making.
“Fund managers at Sasfin can combine active and passive investments to manage a balanced portfolio for asset allocation and single-asset classes. ETFs (exchanged-traded funds) can be a cost-effective way to get exposure to specific asset classes and their respective traits or styles i.e aggressive, or conservative,” says Michael.
“So, it’s not as simple as choosing between active and passive. The whole landscape has evolved to a point where passive investing can be quite hard to define. Passive investing comes at a cost that needs to be evaluated, and all forms of passive investment require a component of active management initially, and at somewhat regular intervals thereafter.”
Fees must fall
In fact, the issue isn’t really about active versus passive. The issue is fees. “The big problem a lot of people have with active funds are the fees involved, and that is where some sort of change needs to take place.
“The industry has a lot of layers — lots of brokers, advisors, and so on. There are a lot of mouths to feed, which is why active management can be expensive. But it needn’t be. Active management can be offered in a more cost-effective way by appointing a portfolio manager to construct a direct share portfolio — thereby getting rid of some of the layers and complexities.”
How can this be done, though? How can you make active investment more affordable? The answer is simple: Technology.
Rise of the robo-advisor
One would expect a company like Sasfin to bemoan the recent rise of automated investment and robo-advisors. Instead, though, the company has invested in a Silicon Valley-based start-up that is in the business of creating robo-advisors.
“Our industry is ripe for disruption,” says Michael. “Changes are definitely coming. But we don’t view it as a bad thing. We actually believe that it can help us in making active management more accessible to more people. We believe there’s tremendous value in sitting across a table from a client and helping him or her map out their financial future, and technology can help us reach more people.
“There are elements of the process, regardless of whether you’re looking at active or passive, that can be digitised. Technology can help us streamline and simplify active asset management, and that’ll make it more accessible,” says Michael.
“It’s not about active or passive — it’s about a comprehensive strategy that works for you.”
Sound investment isn’t as simple as choosing between active and passive. Any investment should be looked at within the context of a larger portfolio.
Set Up Your SME For Success With Fibre
Boost your business potential when you plug into fibre. It offers unprecedented benefits, taking your business to the next level of connectivity.
More South Africans are turning to fibre for fast Internet access. We’re witnessing a boom in fibre expansion and as a result, it’s becoming a more affordable option for SMEs. Once businesses connect to fibre, they can access a reliable, ultra high-speed connection that unlocks the full advantage of cloud-based processing.
Cater to usage demands
A slow Internet connection can derail your business. It’s imperative for business owners to prepare their networks to handle additional usage requirements. Failing to do this might lead to interruptions, slowdowns and a potential impact on your bottom line. An Internet connection should be a tool that supports innovation and uninterrupted productivity.
Shift to the cloud
More businesses are accessing cloud-hosted information via Software-as-a-Service (SaaS) tools and other platforms. In 2018, nine out of 10 companies in South Africa said they had increased spending on cloud computing, according to a report by World Wide Worx and F5 Networks. Running your day-to-day business on the cloud requires you to have a more powerful Internet connection.
Support video and VoIP
Some businesses make use of video capabilities for training and meetings, and VoIP for sales and marketing. On a fibre line, businesses can ensure they meet these demands without putting a strain on the network. With fibre, business owners can run voice and Internet data on the same line but may look at installing a second data connection for redundancy.
Get what you pay for
There’s no denying it, fibre provides exceptional speeds and offers a brilliant price-to-performance ratio. You won’t receive the same contention ratio as other connection mediums – you will get what you pay for. Bandwidth caps are less of an issue with fibre because there’s a choice of affordable uncapped deals on offer.
Make the right choice
- Before you decide on your fibre deal, ask the right questions, understand exactly what you’re paying for and match your business requirements with the right amount of bandwidth.
- Choose a provider that allows you to manage growth for the long term – one that allows you to choose your deal, scale when necessary and not throttle your fibre line.
- You’ll also want an ISP to have your back further down the line. Insist on obtaining a comprehensive list of services along with the monthly fee. Ensure you are provided with a full service including all necessary support and equipment to deliver optimal fibre performance.
Ignite’s drive and purpose is to be the spark that inspires SMEs, which is why the Ignite Fibre service is structured to put you in control. Ignite offers you tailored packages that take into account your daily Internet and business startup needs.
Designing Her Destiny
Oh Yay! owner, Emmerentia van den Hoven does business her way.
In 2011, Emmerentia van den Hoven took a leap of faith when she decided to leave her graphic design job at an agency and pursue her real passion – and it has paid off tenfold. Here’s her story.
“When I started planning my own wedding eight years ago, I fell in love with wedding design and wanted to do that for the rest of my life. Designing for brands had become a set of rules rather than being creative, and I’d always wanted to work for myself. So, in September 2011, I turned my seven-month-old side gig into a fully-fledged business and launched Oh Yay!
I have to hustle every month to get new clients because every client will use my services maximum twice – first for the wedding invitations and then for the stationery on the day – so I don’t normally have returning clients.
Because my main business is seasonal and usually once-off per customer, I have branched out into branding for small businesses in the beauty and lifestyle industry. I also earn a passive income through the Oh Yay! online shop where I sell wedding décor items. Oh Yay Kids – my other online store – is my passion project. I launched it just before my second child was born, adding items to the store that I made for my two boys when I saw a need for it. I then expanded into prints for nurseries and kids’ party stationery.
I work for myself and have no employees, so the fact that QuickBooks lets me load all my services, products and prices in one place makes running my business so much easier. Being an entrepreneur is difficult because you don’t know if you’ll be successful or not. But if you believe in and love what you’re doing, it reflects in your work and the service you give.”
Less admin, more of what you love
When Oh Yay! was launched, along with her dream of being an entrepreneur, came the nightmare of other administrative tasks. But that changed in 2018 when Emmerentia started using QuickBooks.
“When I was using spreadsheets to balance my books, I was spending 80% of my time on admin, which left very little time to tend to customers’ orders. I now spend no more than 25% of my time on admin, which is important, especially when it comes to the speed at which I send quotes. You don’t get any work if you don’t send out quotes and it’s tough to juggle the admin with your actual job of running the business.
Numbers were never really my strong point, so having a professional quote done in record time not only projects professionalism, but the format also changes the way new clients see me. In my industry, the quicker you can send a quote out, the likelier you’ll get the clients’ business. It gives legitimacy to my business. The QuickBooks system operates so seamlessly that clients communicate with me differently, like I have my own accounting department, when in fact, I’m a one-woman-show.
I used to dread doing admin, but now it’s so easy and quick. I’m not just saying this – QuickBooks changed my life.”
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