At Cordatus we consider and manage both the tangible (market value of assets) together with the intangible (time and personal values), with the aim of incrementally improving your total wealth position over an undefined time horizon and within an uncertain environment. Our integrated Wealth Management Process incorporates the essential elements of day-to-day financial planning, however graduates you into the more detailed and collaborative aspects of creating the level and shape of wealth that aligns with your personal goals, needs and preferences. The primary components of our comprehensive and integrated Wealth Management Process are encapsulated in the graphic below. The Process at Cordatus is dynamic and responsive to changing personal as well as variable operating environments.
Cordatus Wealth Solutions
Cordatus offers a comprehensive selection of investment instruments and pre and post retirement products, which can be used to satisfy a single need or as part of an integrated comprehensive wealth management solution. Discerning individuals, families, trusts and companies are encouraged to contact Cordatus for a comprehensive, confidential analysis of their present situation.
Investment or retirement products held in your personal capacity and/or have been invested via a broker can be placed under the care of Cordatus at no cost to yourself and seamlessly integrated into our wealth management process.
Collective Investment Schemes (unit trusts)
Collective Investment Schemes are regulated products where the cash resources of many investors are pooled together and invested in listed assets (shares, bonds, property, preference shares, alternatives, cash, etc) both locally and abroad.
Investors are able to invest across a wide selection of funds which are aligned with individual investor preferences and requirements. Only funds which have been pre-approved by Cordatus, using our in-house ranking and selection process, are offered for investment.
Managed Share Portfolios
Share portfolios typically offer an investor more control over the underlying portfolio of investments. A share portfolio is able to invest in any listed instrument from shares to bonds and does not have to comply with any restrictions as to position and counter size. The tax implications associated with share portfolios are different to those of both a CIS and TFSA.
Cordatus offers managed share portfolios in isolation or as part of a holistic wealth management solution, where the value of the share portfolio exceeds R5 000 000. For offshore share portfolios, the minimum portfolio value is the USD or GBP equivalent.
An endowment policy is a life insurance policy designed to pay a lump sum after a specific term (on its ‘maturity’) or on death, due to the “life” structure beneficiaries can be nominated on the policy, the minimum investment period is 5 years. Endowments benefit investors with marginal tax rates greater than 30%.
Cordatus typically utilises endowments as a means to provide a diversified offshore portfolio across a wide range of international funds that would normally be prohibitive to South Africans due to international investment minimums and importantly allow for flexibility in estate planning.
Tax Free Savings Accounts (TFSA)
TFSA’s were allowed quite recently with the primary objective of encouraging individuals to save, in excess of contractual (via employment) savings, over longer-term investment horizons. Individual investors can currently invest up to R36 000 per annum (R3 000 per month) in a TFSA, with lifetime capital contributions capped at R500 000.
All interest, dividends and capital growth generated on the underlying investments within your TFSA are reinvested free of taxation. TFSA’s are very popular at Cordatus and are generally taken out for minor children by parents utilising their R100 000 annual donations allowance.
Retirement Annuities (RA’s)
RA’s are a personal retirement savings vehicle which allow you to save for your retirement in a tax-efficient manner. You are able to make an initial lump-sum contribution and/or on-going contributions to your RA, which reduce your taxable income (within limits) on an annual basis and the returns generated by the investments housed within a RA are exempt from taxation.
Tax may be payable at retirement depending on the size of the cash portion taken. You are able to elect from a range of approved investment options within some regulated guidelines, as well as being able to switch between them at any time, without cost.
You are eligible to retire from your RA from age 55, when you are able to take a maximum of one third of your fund value in the form of cash. The balance must be used to purchase an annuity which will provide you with an income in retirement.
Suitable for investors who are self-employed, those with an irregular income stream that want to be able to alter their contribution rates from time to time and those investors that are formally employed and would like to supplement their retirement savings in a tax efficient way, RA’s are a great addition to your portfolio with Cordatus.
Preservation Funds (Pension and Provident)
Preservation funds are tax-efficient vehicles which allow you to preserve the benefit that you have accumulated within your employer fund when you change jobs. You can only contribute amounts that have been accumulated within an employer fund to a preservation fund by way of a transfer. You are not allowed to make cash contributions.
By transferring your benefit to a preservation fund, you are not liable for any tax on the accumulated benefit. Furthermore, the future returns generated by the investments are exempt from taxation within the fund. Tax may be payable upon withdrawal or at retirement, depending on the on the size of the cash portion taken.
You are able to pick from a range of approved investment options. You are able to switch between these investment options at any point without cost and able to retire from your preservation fund from age 55.
In the pension preservation fund, you can take a maximum of one third of your benefit as cash. The balance must be used to purchase an annuity which will provide you with an income in retirement. In the provident preservation fund option, you can take the entire accumulated benefit as cash.
Investment Linked Living Annuities (ILLA’s)
An ILLA is a product that is utilised upon retirement by an investor to secure an income stream during the course of their retirement. The funding for an ILLA comes from either your employer fund at retirement date, a personal RA or the proceeds of a preservation fund.
Unlike conventional life annuities, the ILLA allows the investor to select the underlying investment portfolio and the level of income (within a regulated range) to be paid to the investor at selected intervals.
The best way to describe a living annuity is that it is a self-directed, investment linked annuity plan, providing an income for life.
Able to deliver a range of outcomes from high income through to high growth (or somewhere in between), the ILLA is not for everybody, as it is a sophisticated product, designed to meet the needs and demands of a select investor profile.