Changing strategies for a brighter future discussed at FISA conference

October 17th, 2019

By Kgomotso Ramotsho

Guest speaker and Managing Director of Verso Wealth, Wessel Oosthuizen, presented on ‘clients of the future’ at the Fiduciary Institute of Southern Africa’s ninth Annual Conference on 5 September in Johannesburg.

The Fiduciary Institute of Southern Africa (FISA) held its ninth Annual Conference on 5 September in Johannesburg. Guest speaker, Managing Director of Verso Wealth, Wessel Oosthuizen, presented on ‘clients of the future’. Mr Oosthuizen said when he was asked to speak on the topic, he did not know what he was going to say as he did not know what future clients will look like. However, he pointed out that there is going to be tremendous change on how fiduciary practitioners and legal practitioners will engage with their clients in the future. He added that the fourth industrial revolution is going to become very important.

Mr Oosthuizen said that the fourth industrial revolution is about using technology to create different intelligence. He added that fiduciary practitioners and legal practitioners will need to understand the elements of the fourth industrial revolution to engage with their future clients, and that these practitioners and their practices must have the necessary knowledge of the Internet. He pointed out that during the fourth industrial revolution, technology will make it easy for practices and companies to market their services and to deliver those services to clients.

Fiduciary specialist, Ronel Williams, spoke about the future of estate planning at the conference.

Fiduciary specialist, Ronel Williams, spoke about the future of estate planning. Ms Williams presented on the ‘then’ and ‘now’ of estate planning and how it has changed over the years. She started by summarising the meaning of estate planning. She said that in simple words, estate planning is not a ‘one size fits all’ exercise. She pointed out that estate planning differs from client to client, as it does not always have to be about planning for when death occurs. She added that the ultimate goal of estate planning depends on the client and their specific circumstances.

Ms Williams pointed out that since estate planning is not only for death, a client could be planning to grow their wealth, or could make provision for incapacity or even divorce. She added that in death, estate planning looks at succession for future generations.

Ms Williams noted that when dealing with estate planning, tax is important, especially when planning for a client who is still alive. One always has to look at various tax matters, risk management and insurance. She touched on some of the changes that have been taking place in estate planning, such as the changes in the estate planning duty rate, income tax, as well as trusts and how beneficiaries who are getting capital from offshore trusts – who hold more than 50% of local participation rights in offshore companies – now have tax implications.

Ms Williams also touched on investing in cryptocurrency. She spoke about how some countries refer to cryptocurrency as ‘currency’ and others as an ‘asset’. She said in South Africa (SA) the Reserve Bank issued a Consultation paper on policy proposals for crypto assets wherein it states that cryptocurrency is not regarded as currency, but as an asset. She added that estate planners needed to understand investment planning in a form of cryptocurrency. Ms Williams shared some challenges of investing in cryptocurrency and referred to the example of one losing the key to their cryptocurrency, which means that they have lost their investment. She added that there is no physical organisation that one can go to, to resolve such matters, because cryptocurrency is all cloud-based.

Acting Chief Master of the High Court, Tessie Bezuidenhout, said the Master’s Office is currently developing an online trust platform, which will be implemented in 2020.

Acting Chief Master of the High Court, Tessie Bezuidenhout, gave an update on the developments happening at the Master’s Office. She said that one of the developments, which is being prioritised, is the project of online trust accounts. She pointed out that trust applications will be done in an e-filing format and a legal practitioner will be able to do work on trust documents in the comfort of their office without having to go to the Master’s Office to hand in documents. She said their system will have functions that will guide legal practitioners on how to file and upload the necessary documents.

Ms Bezuidenhout said one of the reasons for the Master’s Office going digital is that budget cuts have been forecast for the Master’s Office for the next three to four years. She added that the Master’s Office needed to save on capacity, as its main focus is on deceased estates, and on the vulnerable guardian fund. She said another reason was to prevent files from going missing. Ms Bezuidenhout noted that the e-filing project would be implemented around March 2020.

Chief Executive Officer of the South African Institute of Tax Professionals and Professor, Keith Engel, spoke at the conference.

Chief Executive Officer of the South African Institute of Tax Professionals, Professor Keith Engel, said that South African’s are frustrated because they feel like they are being blocked from doing what they are capable of. He said in the treasury boardroom, the discussion focuses on the purpose of taxation and how to make money. He added that in the social aspect, when it comes to money, government is balancing the economy. Prof Engel pointed out that the worst thing a tax system can do is to distort one’s moral behaviour.

Prof Engel noted that the tax collected in SA is decreasing because there is no growth. He said the economic growth is slow and the country missed the global recovery. He added that there is no rise in corporate income tax, because rates were increased. Personal income tax is easy to do, however, it has been maxed out. He said value added tax was raised by 1%, however, it should have been raised by 2%.

Prof Engel pointed out that SA relies on National Treasury for everything and the problem with this, is that other sectors are not working, and some regulations have an effect on taxes. He added that SA does not have to change much to grow the economy or change policies, but it can look at how to ease up on some regulations.

Other speakers at the conference included the Director of the University of Stellenbosch Business School, Professor Piet Naudé; fiduciary specialist Nel Schoeman and the University of the Western Cape’s, Professor Francois du Toit.

Kgomotso Ramotsho Cert Journ (Boston) Cert Photography (Vega) is the news reporter at De Rebus.

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