Connect with us

Wealth Management

HELPING MILLENNIALS PLAN FOR RETIREMENT

By Jaco Prinsloo, Financial Planner at Alexander Forbes Financial Planning Consultants

Have you ever wondered why millennials don’t answer their phone and then respond to a message or email two seconds later? The majority of millennials prefer text where they have the opportunity to analyse and edit their response. Secondly, with a text they want a record of what has been said; this stems from a lack of trust in people and text offers flexibility in the 24/7 communication cycle.

Growing up in the 1990’s and early 2000’s with iPhones, internet access and knowledge at their fingertips, millennials have become the do-it-yourself generation where it is easier and more convenient to Google something than to ask for help from a real person. This poses a challenge for financial advisers who want to help millennials make smart financial decisions.

To successfully connect with millennials, financial advisers will have to change the traditional model of prescribing financial advice; bulky investment reviews will have to be compressed into brief but meaningful information like infographics. Skype meetings will replace face to face meetings and traditional TV advertising will move to social media where millennials spend an ever-increasing amount of their time. Dealing with millennials requires lower barriers to entry, frictionless communication and a revised service offering from financial advisers, to ensure millennials are part of the minority who can retire comfortably.

The common misconception is that millennials don’t save for retirement. But is this correct? Most millennials employed in the formal sector will belong to a company pension or provident fund, and as retirement reform and employee benefits become more important, the number will only increase. The concern is those millennials who don’t belong to company pension or provident funds.

Led by the need to be independent and a lack of trust in the financial system, a lot of millennials are saving but in their own entrepreneurial way. A 29-year-old who changed employers recently approached me for advice on his employer benefits. After explaining the importance of preserving his funds and the benefits of compound interest, he purchased a Toyota Corolla and leased it to an Uber driver. The income from the Uber rides is then divided between him and the driver.  He proudly stated the car was providing him with a consistent return on his investment.

One of my friends quit her job at the age of 31 and embarked on a mini-retirement. Using savings and an income she receives weekly from renting her 2-bedroom apartment on Airbnb, she is travelling South America. She plans to return home and start her second career once she is done with her wanderings. 

The peer-to-peer economy is allowing us to rent out physical assets for a steady return on investment and income. Is this not the aim of traditional retirement planning?

Millennials are also more open to alternative investments like exchange-traded funds, futures contracts, and cryptocurrencies. Without going into the correctness of and the risks of cryptocurrencies, financial advisers should accept that ETF’s and cryptocurrencies are not going away and adapt to the new opportunities and threats to remain relevant. These alternative investments, often with a social conscience, will have to be merged with traditional assets to provide a balance between risk and return. 

A real risk is the fact that one in three millennials who are between the ages of 23 and 34 in South Africa are unemployed. It is a concern as this group of millennials is losing the time and opportunity to save for retirement. Every generation has their problems and struggles with a major unemployment problem in the country. This should be an opportunity to change the savings culture and the thoughts of the traditional retirement solutions.

We have to help millennials find a balance between saving and enjoying life.  It’s not the responsibility of financial advisers to sell retirement annuities or grow their client’s funds with CPI+5%. Financial advisers are there to ensure their client’s well-being – even if that means the client taking a mini-retirement.  Millennials need support to reach their financial goals with traditional or alternative investments strategies and financial advisers to protect them against outside forces like cryptocurrency bubbles and the ‘know it all, do it all yourself’ approach.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Wealth Management

HOW RESILIENT IS YOUR ORGANISATION’S SECURITY?

Kimon Nicolaides, Digital Services Group Head at MASS

 

Organisational security can be thought of like peeling the layers of an onion – with critical assets sitting in the middle protected by multiple layers, and if one layer is removed or breached, there’s another one underneath. At least that’s the way it should be – too often, however, we see a siloed approach to the different areas of security. In practice, physical, cyber and personnel security can be much more inter-related than many imagine.

The finance sector is arguably one of the more mature in terms of established security measures. However, it’s also vastly diverse, targeted by some of the most advanced threat actors, and one where even the smallest breach has the potential for significant impact, monetarily, or on market reputation, perception or confidence. Security measures should therefore be viewed holistically, led and understood by senior management, otherwise gaps for exploitation will be found by intelligent and experienced people, supported by an ever-growing arsenal of exploitation technology.

Here, we take a closer look at some of the things that comprise a holistic view of security – based on the approach we take with public sector and defence organisations.

 

Physical security

It may seem obvious, but the first layer to assess should be the physical access to your business. For all organisations, this step remains as true today as it ever has been – even for the finance industry where physical security principles have been established over many years.

This stage should go back to the basics of how an intruder could gain access, starting by reviewing the ‘perimeter’ controls. In fact, the first question is, ‘what is the perimeter?’. With the potential for distributed site facilities, linked remote assets, and supply chain dependencies, this simple question needs careful consideration.

Scenario-based analysis, using threat actor personas, motivations and objectives can really help by defining a where a ‘perimeter’ really lies. It’s also an invaluable methodology for exposing how an organisation could be exploited.

This stage should involve a review of physical controls such as fencing, access technology, CCTV coverage etc., including, their role in deterrence and detection of hostile reconnaissance activities.  Disrupting the planning cycle of attacks is often overlooked relative to direct prevention of unauthorised access.

Ultimately, security measures are only as effective as the people that apply them, so an understanding of human behaviours is essential. It’s important to consider how people’s actions affect overall site security and, why these actions occur.

Issues can range from the wearing of security badges in the street through to poor motivation and effectiveness of roving security staff or those monitoring CCTV. Simple and innocent human mistakes could form the seed of future security breaches.

 

Cyber security

The finance sector has progressed its cyber resilience considerably as it’s been dealing with threats for many years. But business sizes now range from the very large to the small and, as new forms of financial transactions evolve, protection becomes more challenging. There is an increased availability of cyber exploitation toolsets and associated managed services and coupled with a reduction in their cost – lowering the financial and technical barriers to advanced cyber-attacks.

This means that cyber security, even for the finance sector, needs to be taken to a new level and existing assumptions continuously challenged.

For example, while penetration testing regimes remain a vital tool in mitigating network cyber risk (including ‘CBEST’ which has been widely rolled out across the finance sector), these still remain a snapshot in time. While they deliver valuable depth of analysis within a network, they are often constrained in breadth of scope and can potentially leave vulnerability blind spots. Very frequent, lighter-touch cyber assessments can fill this gap as they offer a more dynamic view of ongoing vulnerabilities over a wider proportion of the estate, which could represent ‘low hanging fruit’ for the cyber actor. Assessments can be enhanced by applying modern threat intelligence techniques to rapidly identify existing compromises and potential weaknesses (including personnel and corporate digital footprint). This establishes a picture of cyber posture and vulnerabilities before any testing taking place.

Similarly, end-user device security is often viewed in terms of the encryption strength, keys etc.  However, modern methods of fault injection attack (a device’s response to artificially applied ‘fault conditions’ used to derive security credentials), can effectively sidestep assumed security measures, which would normally take decades to ‘crack’ using computer power. So, it makes sense to test a device’s vulnerability to fault injection, rather than assuming encryption alone will protect it.

For this reason, it’s crucial to examine the wider supply chain. In the finance sector, there is high dependence on suppliers of digital telecommunications and energy services, and when different systems are interconnected its challenging to pinpoint cyber resilience risks. Despite this, it’s possible to map complex information to establish risk, by identifying ‘hot-spot’ concentrations of dependencies that represent single-point failures within the complexity of the overall business operation.

 

The insider threat

The potential threat from insiders – those who might misuse their legitimate access to an organisation’s assets for unauthorised purposes – is often overlooked.

This is particularly true for financial businesses, where personal financial gain could be an incentive, or where security controls are so effective that hostile actors must exploit those with legitimate access to circumvent them. You can think of insider threat as the ‘grand master skeleton key’ of security, as there are few security measures that cannot be overcome by the right insider, or team of insiders.  Security compromises involving insiders can also have a disproportionately high business impact.

Yet many organisations consider insider risk to be mitigated simply by pre-employment screening and fail to recognise the spectrum of risks ranging from genuine human error, through to orchestrated insider activity by paid professionals. Insider cases frequently involve individuals who have been with an organisation for some years and have had some personal vulnerability exploited or exposed, or simply become disgruntled.

It’s a broad area to address. Internal governance, security culture, employee wellbeing, employment measures, corporate digital footprint, and perceived employee sentiment are some of the aspects that should be considered. When you have understood this for your own organisation, you should make the same assessment of your supply chain.

If the business is committed, it’s possible to use structured analytical methods to quantify your organisation’s maturity and assess where the key vulnerabilities and risks could lie. This understanding paves the way for improvement, and even small changes can make a big difference.

 

The hidden layers

Like an onion, there are hidden layers to security that may be overlooked so it’s important to consider physical, cyber and personnel security collectively, and to understand the dependencies you have as a business.

For example, your own environment may be protected, but if data is shared with your suppliers or partners, is it still secure? Similarly, if a supplier or partner has a security breach, what does it mean for your operation, your business continuity and your customers?

When assessing security measures, it’s essential to go an extra layer deeper and consider how a range of factors could impact your organisation and its readiness to respond to an incident.

At MASS, our security experts consist of professionals with extensive experience in preventing security breaches and performing assessments in accordance with Ministry of Defence processes, so that we can ensure our security analysis meets and exceeds industry best practice.

For more information, please visit: https://www.mass.co.uk/what-we-do/cyber-security/cyber-security-training/

 

Continue Reading

Wealth Management

HOW TO CATCH UP ON YOUR RETIREMENT SAVINGS

By Gerard Visser, Certified Financial Planner at Alexander Forbes

For many South Africans who were already finding it difficult to save for retirement, Covid-19 has created additional financial pressures which may take years to overcome.

If you stopped contributions to your retirement annuity, or took a payment holiday on your pension or provident fund, you might be worried about the shortfall created, and how you’re going to catch up.

Stop worrying and take action to avoid retiring with insufficient funds. There are many ways to contribute to your retirement, from employer and employee contributions to pension or provident fund, monthly contributions to a Retirement Annuity or a tax free savings account.

With many people having a reduced income due to the economic ramifications of Covid-19, it might be impossible to contribute a large monthly amount to catch up while having concerns such as debt to pay, but I recommend starting with your budget. This will aid you not only by freeing up extra funds to catch up your retirement contributions with, but could also create some peace of mind with an opportunity to pay debts off faster or save some discretionary money.

Gerard Visser

There are many reasons why it is important to follow a monthly budget. Besides reducing stress levels by keeping an eye on your spending habits, it also allows you to track your debts, finding opportunities to top up emergency funds or save extra towards your retirement. A budget goes hand-in-hand with setting and achieving financial goals.

A budget does create an additional administrative burden and requires time to update. I have my budget on an Excel spreadsheet and update it monthly when making EFT payments.

Costs for entertainment, groceries and petrol are variable in nature and change each month. You might end up not using all the funds set aside for these variable costs. Adding these leftover funds at the end of the month to your savings is a good habit to inculcate. The immediate impact might seem small but over time will make a positive outcome to both your retirement and the development of a savings mind-set.

When you are able to free up some money each month, start automating your savings. Instead of having a variable amount go towards savings, set up an automatic contribution, where you “pay yourself first”. Set up an automatic debit for your retirement savings and you’ll grow these funds without having to think about it.

One of the most important decisions you can take to help make your retirement comfortable is preserving your retirement funds when changing employer.

When starting new employment or if you are coming out of a payment holiday, try matching your employer’s monthly contribution toward your pension or provident fund, or if on a total cost to company structure, start on the maximum employee contribution percentage. By doing this as well as automating your savings, you get use to contributing those amounts and could potentially have a larger nest egg at retirement.

Remember that life happens, and your budget might come under strain – many of us have experienced this during the pandemic. If you have been going through a difficult financial time, it is time to reassess and ask yourself, what in your budget is necessary and what is actually a luxury?

It is never too late to start sorting out your finances, but the earlier you start, the better, and more achievable, the outcome will be.

 

Continue Reading

Magazine

Partner Events

Trending

Top 105 days ago

WHY INDONESIA IS THE WORLD’S NEXT DIGITAL PAYMENTS BATTLEGROUND

Kelvin Phua, Global Head of Payment Networks at PPRO   The COVID-19 outbreak has seen the e-commerce sector surge. Despite...

Business5 days ago

HELPING SMES ACCESS FINANCE IN EXTRAORDINARY TIMES

Tim Vine, Head of Credit Intelligence at Dun & Bradstreet   The closed doors of businesses have become a sadly...

Business5 days ago

DO MESSAGING APPS PUT THE FINANCIAL SERVICES INDUSTRY AT RISK?

Ashley Friedlein, founder and CEO, Guild   Accelerated by the coronavirus pandemic, the use of messaging apps for professional communications...

Business5 days ago

HOW PREVENTING AND MITIGATING FRAUD CAN IMPACT YOUR CUSTOMER RELATIONS

Matt Mascherin, Solutions Engineer, Enterprise Sales Americas, Syniverse   Texting has become a staple of modern life and is so...

Finance6 days ago

2020: THE YEAR OPERATIONAL RESILIENCE AND CYBER-RISK TAKE CENTRE STAGE IN FINANCIAL SERVICES

Miles Tappin, VP of EMEA for ThreatConnect, explores how financial providers can build a cyber security strategy that enables operational...

Wealth Management6 days ago

HOW RESILIENT IS YOUR ORGANISATION’S SECURITY?

Kimon Nicolaides, Digital Services Group Head at MASS   Organisational security can be thought of like peeling the layers of...

News6 days ago

INTERNATIONAL BANKING NETWORK EXPANDS AS IT WELCOMES STANDARD CHARTERED BANK

IBOS Association (IBOS), an international banking network, is delighted to announce its newest member to the group, Standard Chartered Bank....

Wealth Management6 days ago

HOW TO CATCH UP ON YOUR RETIREMENT SAVINGS

By Gerard Visser, Certified Financial Planner at Alexander Forbes For many South Africans who were already finding it difficult to save...

Technology7 days ago

ARTIFICIAL INTELLIGENCE AND FUTURE OF TECHNOLOGY

Ashish Jain, CEO, Future FX   Artificial Intelligence refers to machine intelligence that is programmed to think like humans and...

Finance7 days ago

GROWTH OF FINANCIAL MARKETS AND TECHNOLOGY

Ashish Jain,CEO, Future FX   The economic development of any nation completely depends on its financial structure both in long...

Banking1 week ago

NO SAFE HARBOUR FOR DIGITAL BANKING

by Konstantin Bodragin, Business Analyst and Digital Marketing Officer at Bruc Bond   At the beginning of 2020, the future...

Business1 week ago

CAN TECHNICAL INNOVATION HELP FINANCIAL SERVICES FIGHT BACK AGAINST FINANCIAL CRIME?

By Charlie Roberts, Head of Business Development, UK, Ireland & EU at IDnow   It’s no secret that the financial...

News1 week ago

ARE MIDDLE EAST ENTERPRISES PREPARED FOR THE FUTURE?

Deloitte releases 2020 tech trends report   Deloitte’s 11th annual report on technology trends captures the intersection of digital technologies, human...

Wealth Management1 week ago

ONLINE STOCK BROKERS ARE BENEFITING IN 2020

2020 has changed our lives in dramatic ways. Thanks to COVID-19, many of us now work from home. Rather than...

AI AI
Finance2 weeks ago

COULD COVID-19 BE THE CATALYST FOR DIGITAL TRANSFORMATION IN FINANCE?

By Simon Bull, Sales Operations & Business Development Manager at Aqilla   We are all now living in a new...

Banking2 weeks ago

WHY OPEN BANKING SHOULD BE EVERY MARKETER’S BEST FRIEND

By Kathryn Wright, CSO, Upside   To date, Open Banking has been mainly utilised to help consumers with account switching...

Finance2 weeks ago

TOP TECHNOLOGY TRENDS FINANCIAL INSTITUTIONS SHOULD INVEST IN TO BRIDGE THE GAP IN REMOTE WORK

Chirag Shah, Senior Vice President, Fintech & Innovation Lead, Publicis Sapient   More than ever before, technology is critical to...

Business2 weeks ago

TOP 5 LINKEDIN PROFILE OPTIMIZATION HACKS FOR ASPIRING BANKERS

According to Firmex, finance professionals cannot afford to be not on LinkedIn. A significant number of organizations acquire talent in...

Wealth Management2 weeks ago

TAPPING INTO THE DATA GOLDMINE: THE FUTURE OF DATA-DRIVEN CREDIT MANAGEMENT

Willand Brienen, product owner at Onguard   Data, and the insights it reveals, can offer organisations a vast number of...

Finance2 weeks ago

ENLISTING TECHNOLOGY TO HELP FIGHT FINANCIAL CRIME

By Rachel Woolley, Director of Financial Crime Fenergo   Million-dollar properties, private jets and parties on luxury yachts with celebrity...

Trending