EDITOR'S COMMENTS

Our fourth quarter issue offers an opportunity to reflect on the very busy year that 2025 has been. It started with Donald Trump’s inauguration as the 47th president of the United States, sending economic and geopolitical ripples around the world. Tariffs, turbulence and trust remain key talking points.

Yet in this environment of uncertainty, markets have hit record highs, including our own bourse which broke the 100 000 points mark in July. In fact, as I write this, the South African equity investor has enjoyed bumper returns in 2025, with the FTSE/JSE up over 30% for the year. (This, of course, subject to change at any time.)

The markets aren’t the only thing that have been on the boil this year. The Regulators have kept service providers and retirement funds busy with the implementation of cybersecurity and cyber resilience policies and practices in June, requiring us all to brush up on our knowledge and understanding of the digital revolution underway. In August, the FSCA published Conduct Standard 2 of 2025, providing a much needed update to the conduct requirements for pension benefit administrators. Introducing things like fit and proper requirements for administrators, as well as complaints and conflicts management frameworks and protocols, this Conduct Standard is the bridge between the old Board Notice 24 of 2002, and the impending Conduct of Financial Institutions (COFI) legislation – now anticipated in 2026. Another step towards greater financial inclusion came in the form of Conduct Standard 1 of 2025, setting the requirements for the provision of financial education, establishing the baseline requirements for consumer financial education initiatives, which will come into effect in March 2026.

Financial inclusion grows when economies grow. And that’s why we’ve chosen to end the year with a special feature on impact investing. For trustees, management committees and individual investors, navigating the complexities of investment strategies, understanding what impact investing truly entails, and how it differs from ESG investing and socially responsible investing (SRI), is crucial. It enables informed decision making that align not only with your fiduciary duties (for decision makers and regulators) but also with the outcome expectations of retirement fund members and investors. After all, it’s not just about the amount of money accumulated at retirement, but also the world that members retire into.

As always, I trust this issue’s valuable insights will prompt your thinking and grow your confidence to navigate the rapidly evolving world around us.

Thank you for sharing another year with the team at Pensions World SA. We wish you a blessed holiday season of rest.

The retirement and investment industry in South Africa is undergoing a transformative phase, propelled forward by regulatory reforms, economic shifts and the rise of innovative players like Evolutionaries, who are reshaping how South Africans approach investing, retirement planning and wealth management.

The introduction of the two-pot retirement system one year ago was a game changer and the speed and creativity with which the industry evolved was unlike anything I’ve seen before in my career, spawning a new generation of not only retirement fund members, but also industry influencers. You’ll see our special feature for this edition of Pensions World SA is Evolutionaries, to inspire your thinking about where our industry is headed.

Through our EBnet platform’s Evolutionary Awards, we acknowledge the thought leaders who challenge the status quo to improve outcomes for fund members and individual investors. They move the dial in a way that has meaningful impact for those they serve. And appreciate that even the most humble spark can be a detonator for growth, efficiency or upliftment.

In 2024, the winners, as voted by you, the industry, were:

• Alexforbes – for their Evolution in Investments with the AF Retirement Navigator portfolio.
• GTC – for the Evolution in Improving Member Outcomes with their Altertude fintech platform.
• Alexforbes: for their Evolution in Employee Benefits and Advice with their Retirement Fund of the Future.

These represent cutting-edge solutions that position retirement funds and members proactively towards emerging trends, ensuring that they remain ahead of the curve. The great success of last year’s awards prompted us, ourselves, to evolve. For 2025’s awards, we have expanded the scope to include not only the above three categories, but three new categories:

• Most promising new women-led initiatives
• Most promising new black-owned initiatives
• The Greatest Impact

We look forward to celebrating with this year’s winners who again will be chosen by way of a peoples’ vote at EBnet’s 2025 Evolutionaries Conference from 6 – 10 October.

The two-pot claims experience has furthered the evidence of the ongoing challenge of long-term financial security for South Africans – 49% of South Africans live below the poverty line and lack confidence in retirement planning. These talk to an economic and political reality that we can no longer ignore. What role can we play in growth, inclusion, financial literacy and hyper-personalisation?

As always, I hope this issue sparks your thinking.

Security and resilience – the two words that best describe the past few months. And not only in the cyber context.
When I penned my Editor’s note for our Q1 edition of Pensions World SA for 2025, I could never have predicted the extraordinary geopolitical and market volatility that we would see in the coming months. And even if I had, I’m not sure I would’ve believed myself.

As we reflect on the past quarter, South Africa’s financial landscape has been a dynamic interplay of opportunity and uncertainty. The markets have experienced pronounced volatility, driven by global economic shifts, local policy developments, and the ever-present spectre of geopolitical tensions. For investors and advisors, these times call for smart thinking, careful planning, and staying focused on protecting and growing wealth in spite of the challenges.

The South African economy has faced some tough moments. The rand has fluctuated against other currencies, affected by rising prices worldwide and issues at home, like power shortages and debates over government spending. (Whoever could’ve foreseen a cancelled budget speech?) The JSE has been unpredictable, with industries like mining and banking reacting to changing commodity prices and interest rate worries. Globally, central banks’ efforts to tame inflation have introduced uncertainty, with the U.S. Federal Reserve and European Central Bank’s rate decisions rippling through emerging markets like ours. Locally, the South African Reserve Bank’s cautious approach to monetary policy has aimed to balance growth and price stability, but the path remains fraught.

For the financial sector, a big focus has been on cybersecurity and resilience, in light of Joint Standard 2 of 2024 taking effect on 1 June 2025. As more people use apps and online tools for banking and investing, the risk of cyberattacks is growing. South Africa has seen some major data breaches already, showing how important it is to stay protected.
Cybersecurity isn’t just a tech issue – it’s a vital part of keeping our clients’ and members’ savings safe. In our special feature for this quarter, we have experts sharing their views on all matters cyber – from platforms, to passwords, to risk and insurance.

At the heart of it all is resilience—the ability to bounce back and keep going, no matter what comes. Whether it’s handling market ups and downs or protecting your money and personal information online, being prepared and staying strong is key.

As we move into winter, I trust you find this issue brimming with interesting content.

This issue of Pensions World SA has been an exciting one to put together. We believe that the two-pot system requires us to evolve from being either focused on retirement funds OR individual financial planning. Rather, we need to support the industry in bringing these two advisory capabilities much closer together. With this in mind, we approached a number of individual financial advisors with this issue’s theme of “inclusive financial planning”.

Their different interpretations of this phrase was thought provoking in itself. Some viewed this as financial planning being much closer to, and really part of, the institutional consulting advice given to trustees and employers (and consequently, members). Others interpreted this as financial advice being for everyone – not only the well-to-do few who have significant assets in retirement funds. And still others took it to mean that financial planning is not a solo endeavour and should take the whole family into account – including spouses and other family members.

None of these approaches are wrong! And reflecting on them, opens an unlimited number of avenues and opportunities of helping fund members achieve better retirement outcomes.

You will thus see in this issue not necessarily the customary “special feature” section, but rather a renaming of our usual financial planning section, to “Inclusive financial planning” – reflecting the focus of this issue. It is an idea that is carried through many of the other sections and articles as well.

Two-pot also spotlighted the need for financial literacy and education as a national imperative. This was the focus of the FSCA’s Financial Education inaugural summit in August last year, where the theme was “Creating accessible financial education for all South Africans”. I believe that there is a lot that the traditionally distinct retail and institutional advisors can learn from each other, to meet this need, in a very impactful way.

It is in this light that I particularly enjoyed the comment made by Bryan Nicol, CFP®, CEO of Freedom Financial Planning, one of this issue’s contributing authors:

We need to dispel the misconception that employee benefits and financial planning are two separate entities – the client wins when we bring the two together. 

And so, as we start 2025, I hope, as always, that you find this issue as thought provoking and interesting as we did putting it together for you.