In 2017, Damian Gawlowski, a South Africa insurance contractor based in the City of London, uncovered the hidden impact of intermediary fees with the more risk an investor took on
DAVOS, Switzerland, January 25, 2019/ — In the Financial Times’ (www.FT.com) report on Innovation in South Africa today, Aziza Coin (www.Aziza.io) simulates how to beat high fees and shows why “excessive profits in UK fund management industry handicap growth on the African continent.”
In 2017, Damian Gawlowski, a South Africa insurance contractor based in the City of London, uncovered the hidden impact of intermediary fees with the more risk an investor took on. Up to 78% of returns from private equity are consumed by intermediary fees. Gawlowski investigated and found that while this was the case, the underlying equity and bond returns were over 4% rather than the 1% he actually received. Undisclosed fees added, he calculated, made intermediaries consume over three-quarters of the underlying returns generated by the bond portfolio that was ultimately invested in. Gawlowski considered putting his pension into higher risk investments such as private equity funds and as the mutual fund returns resulted in real depreciation of his pension by 1.3% per year after fees. He modelled a dummy private equity portfolio where he calculated that the portfolio would need to make 140% over a typical seven-year period simply to cover the fees and to keep up with inflation. This meant that an (annualised) internal rate of return of 13.3% would be required to simply retain his 2017 buying power by achieving UK inflation of 2.7%. *
The Financial Conduct Authority has expressed concern about the level of fund management profits when it was quoted as saying in a report lambasting the statutorily-protected revenues of the United Kingdom’s £6.9 trillion fund management industry’s’ profit margin of 36%. It found that “firms do not typically compete on price with their retail active funds in the UK [and that] there is some evidence of a negative relationship between net returns and charges.” **
These fees, which the FCA regards as excessive, have real societal costs. As Einstein is alleged to have said, compound interest is the most powerful force in the universe. A pension that appreciates by 13.3% per annum (ie gross returns without the 78% intermediary fees will return 140% in seven years time, whereas with the fees added, an annual return of 2.7% will only appreciate by 20%. These fees have already broken the defined benefit company pensions system and has the potential to cause real poverty in the Western world, where their effect is not well understood by the general population. The fact that the UK financial services PR industry is worth £2 billion per year does not help. Furthermore, if the fund management industry is taking three-quarters of returns, with 40% of funds disappearing upfront, it becomes distinctly more risk averse, as any loss of retail investor capital will invite scrutiny and therefore shed light on the level of their fees.
This risk aversion is manifested in the fact that 0.02% of assets under management or only 8 billion Euros were allocated to startups in 2016. This matters since start-ups create more jobs than the rest of the economy combined. Pre-ICO, Damian invested in the Aziza Project, which seeks to use distributed ledger technology to automate and disintermediate the layers of fund management costs. The Project was careful to avoid the usual pitfalls that have beset other cryptocurrencies:
- From the outset, it avoided the argument as to where it was a security or a utility, by registering under Reg D exemption in the United States as a security token.
- Every buyer and seller of coins has been vetted and subject to the level of KYC required to open a high street bank account as well as being checked as being recorded as a taxpayer.
- It became the first cryptocurrency in the world to integrate its reporting systems with a tax authority when it became a third party data provider to South African Revenue Services (SARS), ensuring that investor gains were reported and taxed as capital gains. 4. It is asset-backed by seven oil and gas concessions in Southern Africa. Aziza Coin offers something Damian could not find anywhere else – low transparent fees where investor fees are limited to 10% upfront with no further fees. Its Ethereum-based smart contract automates the annual fund management function with a mere 800 lines of code. So if the underlying exploration projects deliver the same underlying returns as Damian’s fictitious portfolio – 140% in seven years, his returns after fees will increase from 20% using traditional fund management fee structures to 126% — over six times times the returns.
Aziza Coin offers something that excites Damian more than reducing the fees. He has starting working on Acqumine, which has had discussions with the South African Revenue to internalise commodities taxation into a smart contract and eventually a pan-African commodities exchange that will enable host countries and local communities in the developing world to receive royalties due to them, while giving end customers piece of mind as to the true source of the minerals that make up consumer goods they buy.
Learn more about Aziza Coin at: www.Aziza.io
Based on IFA trail commissions of 3% upfront plus 0.5% per year, pension fund fees of 1.o% per year, fund of fund fees of 1% per annum and 10% profits and private equity fees of 2% per annum and 20% of profits on exit. Based on a dummy portfolio of five investments delivering an average of 140% over a seven year period.
Asset Management Market Study – Final Report Market Study – MS15/2.3-June 2017 recommendations 1.9 1.10 and 1.11 page 4 https://bit.ly/2tnjKVw
Note: Aziza Coin is not available for sale.
Distributed by APO Group on behalf of Financial Times Africa Representative.
4 Essential Points To Consider Before Buying a Power Bank
Power bank render (image: belkin), Article: John Neesham
Smartphones have emerged as an indispensable part of our lives. From the instant, we awaken we’re maximum probably to be using our smartphones most of the day. We need to either speak with other human beings or use it as a form of enjoyment through smartphones. You need to buy the best power bank which will help in your bad conditions where no charger can help you.
All these elements cause your battery to run low. Which is one of the fundamental motives why the best power bank exists. in recent times. While deciding to own an electricity financial institution you’ll find out that there are numerous alternatives on the market. How do you choose the right best portable power bank? You should consider the following listed reasons before buying a portable charger. The best power bank is one of the most beneficial devices nowadays.
Whenever you spot your cellphone or your Nintendo transfer about to die, plug it into a power financial institution. And it’ll start charging immediately. That stated, shopping for a strong financial institution isn’t that easy as it appears. When you have purchased one and aren’t satisfied with it. We consider you could have neglected some crucial elements.
At the same time as buying an energy bank, you ought to don’t forget factors like the brand call, customer support. And the actual capability of the tool, among many different things.
Whilst the portable charger is actually too big to be installed in your pocket or too heavy to hold around, may you be willing to apply it anymore? If you continually convey the transportable charger with you wherever you cross. You ought to not forget a light energy best portable power bank with a graceful design.
- The Capacity of The Power Bank
How frequently might you want to rate your digital devices without charging your electricity financial institution? that could be a query that the capability of the strongest financial institution can tell you. Every other critical question is, for what tool you’ll use your strong financial institution? A pc needs more energy than a phone. A phone can be charged with an electricity financial institution of 3.350 mAh however a pc wishes more electricity. In need of a laptop energy bank? Use an energy bank with a capacity of 30.000 mAh or better.
- Price and Quality
If you are searching for the best-power financial institution that suits your wishes. You have to look in addition to just the photos. check the specs and determine what specs are crucial for your usage of the strongest financial institution. Occasionally a less expensive model isn’t matching your desires. And the reasonably-priced energy bank may not last as long as you want.
Moreover, another cause to take a good look at the price exceptional ratio is the overload. A few reasonably-priced strength banks can overload and damage your electronic devices. All of our strength banks are tested and meet all ECU safety needs.
- Usage of The Power Bank
An energy financial institution may be used for greater than just one cause. A student can use an electricity financial institution inside the bus to school when there is no socket available. A climber can use the best portable power bank to use his smartphone when he needs to send an emergency signal. Or a survival specialist can use an outdoor power bank when a storm is raging over him.
African fintech aYo looks to data to drive growth
African fintech aYo Holdings Group CEO, Marius Botha (Image: Supplied)
African fintech aYo Holdings is transforming its technology back end and data management approach as it gears up to drive greater scale, better customer experience and faster access to markets across the African continent in the coming years.
The company already has more than 15 million customers using its microinsurance products across Uganda, Ghana, Zambia and Côte d’Ivoire, and Group CEO Marius Botha says its vision is to grow into the largest financial services technology platform in Africa by enabling the distribution of a range of affordable and accessible micro financial services products.
aYo and its shareholder, MTN, are currently working on the final details of a partnership with a new insurance group for access to more underwriter licenses, in order to expand its product range and penetrate more markets.
“We see ourselves as a technology company first and foremost, that happens to sell microinsurance now. As our customers transition to a world where financial services are easily accessible via mobile phone and transacted via apps and other channels. We need to respond with a platform business model that will allow us to scale rapidly and cost-effectively manage material volumes of nano transactions,” said Botha.
Part of this technology evolution has seen aYo transition to a cloud data warehousing approach. Using Snowflake as a solution as it looks to deal with growing volumes of customer data.
“Data is a key asset that we want to grow and leverage, as it will allow us to drive better outcomes and value for our customers. Moving into a new generation data warehousing capability gives us the ability to analyse usable data faster, and build automated models for particular use cases. Like more granular target market segmentation, retention strategies and targeted customer propositions,” said Botha.
Choice of technology plays a critical role in ensuring the affordability of micro financial services by driving ‘frictional costs’ out of the system. Like the costings involved in using legacy tools and processes, or online physical hosting solutions. A solution like Snowflake helps the company to scale up and down according to demand. And makes it easier to build real-time reporting capabilities which are key strategic aims.
“We’re excited to be experimenting with world-class technologies that help accelerate our vision to enable first-time access to financial services for many African consumers, and bring them into the economic mainstream. That’s where insurtechs are truly contributing to financial inclusion across the continent, and making a positive difference to people’s lives,” said Botha.
Social media main enabler for growth among women-owned businesses
95% of women SMEs in the region identify social media channels as the top tool to drive their business ventures
Mastercard, the Official Payment Technology Partner of Expo 2020 Dubai, and Female Fusion Network unveiled new research at the first in a series of workshops for the region’s female entrepreneurs at the world’s largest cultural gathering.
Held at Expo 2020 Dubai’s Women’s Pavilion, in collaboration with Cartier, the session focused on the power of the digital economy in enabling women-owned businesses to go online. In a study conducted among Female Fusion’s network of 20,000+ members across the region, it was revealed that 95% of women SMEs in the region identify social media channels as the top tool for their business ventures. Other channels include their own e-commerce websites (72%) as well as messaging services such as Facebook and Whatsapp (50%).
In addition, three out of four (72%) women-owned businesses said they rely on word of mouth to market their products and services. The workshop identified how SMEs can make the most of their online footprint, and better connect to their consumers in a digital economy.
Speakers included Ngozi Megwa, Senior Vice President, Digital Partnerships MEA, Mastercard, Sarah Beydoun, Founder and Creative Director of social impact fashion business Sarah’s Bag in Lebanon, Ioanna Angelidaki, co-founder of Instashop, and Maureen Hall, Founder and CEO of COÉGA Sunwear.
“The findings from the study indicate a clear need for further education and empowerment. Mastercard has long pushed for the success and growth of women as we break gender barriers around the world. Digital tools and technologies are the greatest equalizer for businesses and as the shift towards e-commerce becomes increasingly permanent, we are committed to helping women businesses go digital and grow digital as they pursue their entrepreneurial passions,” said Ngozi Megwa, Senior Vice President, Digital Partnerships MEA, Mastercard.
The recent unveiling of the inaugural Mastercard MEA SME Confidence Index also revealed that in terms of a digital footprint of the region’s women entrepreneurs, social media (71%) leads the way followed by a company website (57%).
“We are proud of the successful launch of our workshop series in partnership with Mastercard. As a growing community of ambitious women leaders, Female Fusion Network looks to support our members with access to platforms that offer simple yet effective takeaways for them to grow their business. We look forward to having more of these impactful sessions during Expo 2020 Dubai,” said Jennifer Blandos, Managing Partner, Female Fusion Network.
Mastercard has made a global commitment to connect 25 million women entrepreneurs to the digital economy by 2025 as part of its goal to build a more sustainable and inclusive world. As part of its efforts, the technology leader recently launched ‘The Entrepreneur’s Odyssey’ a first-of-its kind digital education platform that brings together a range of world-class academic and business resources to help small businesses learn and thrive.
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