Nelson Mandela Metropolitan University Retirement Fund

Nelson Mandela Metropolitan University Retirement Fund

Personal Financial Planning

Retirement Fund

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  • Demonstrate an understanding of the differences between pension and provident funds.
  • Explain the different types of pension and provident funds.
  • Explain the difference between defined benefit and defined contribution funds.
  • Understand preservation funds.

PERSONAL FINANCIAL PLANNING (EBF201)

This module is presented as follows in 2017:

  • SUMMERSTRAND CAMPUS SOUTH: Full-Time (A1)Can be used as a major: No
    Offered in: Term 1+2
    Credit value: 16
    Estimated fees: R3460
    Lecturer(s): GOLIATH, JE;

SYLLABUS

PURPOSE
The overall module objective is to equip students with a broad perspective of the fundamentals of personal financial planning with specific reference to the following key areas of personal financial planning:

  • the financial services environment and related legislation;
  • the Financial Services Board and other regulatory bodies;
  • asset types;
  • short-term insurance;
  • long-term insurance;
  • retirement fund types and the six-step financial planning process.

LEARNING OUTCOMES
Introduction to Financial Planning

  • Understand and explain the fundamentals of financial planning.
  • Identify the main role-players in the financial planning environment.
  • Discuss the other role-players in the financial services industry.
  • Understand and discuss the main consumer protection bodies in the industry.
  • Demonstrate an understanding of the factors influencing the financial planning environment.
  • Demonstrate an understanding of the role of the Financial Services Board.
  • Identify and discuss the main acts administered by the FSB.

Asset Types

  • Understand money market instruments.
  • Compare and demonstrate an understanding of the various money market products.
  • Discuss the advantages and disadvantages of investing in money market instruments.
  • Understand capital market investments.
  • Demonstrate an understanding of the difference between interest-bearing and discounted investments.
  • Calculate the purchase price of a bond in the secondary market.
  • Explain what is meant by equities.
  • Discuss the requirements for listing on the various boards of the JSE.
  • Recognise the difference between various types of shares available in the market.
  • Explain how to read the prices in the newspapers.
  • Understand how to value an equity investment.
  • Understand risk and return in relation to equity investments.
  • Understand the basic tax implications of investing in equity instruments.
  • Recognise the different property portfolios available to the investor.
  • Identify the advantages and disadvantages of investing in property.
  • Understand the tax implications of investing in property.
  • Discuss the types of hard assets.
  • Demonstrate an understanding of liquidity, risk and return.
  • Demonstrate an understanding of derivatives, futures and options.
  • Compare the advantages and disadvantages of using the various instruments.
  • Demonstrate an understanding of the principles of trading futures and options.

Investment Products

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  • Demonstrate an understanding of the operation and types of collective investment schemes.
  • Understand unit trusts and the use of them.
  • Understand the various retirement fund options.
  • Explain the difference between insurance and assurance.
  • Understand life assurance and the various life assurance and ancillary products in the market.
  • Demonstrate an understanding of offshore investments and the reasons for investing offshore.

Short-term Insurance

  • Understand the basics of insurance.
  • Differentiate between personal accident insurance and sickness insurance.
  • Understand and discuss the different classes of motor insurance.
  • Explain fire insurance and other property insurance.
  • Understand and discuss theft and all risks insurance.
  • Describe the different types of liability insurance and indemnity insurance.
  • Explain multi-peril insurance.

Long term Insurance

  • Understand the main provisions of the Long Term Insurance Act.
  • Explain the technical aspects of long-term insurance policies.
  • Explain the taxation of life insurance companies and funds.
  • Discuss the provision of disability benefits.

Retirement Funds

  • Demonstrate an understanding of the differences between pension and provident funds.
  • Explain the different types of pension and provident funds.
  • Explain the difference between defined benefit and defined contribution funds.
  • Understand preservation funds.

Six Steps of Financial Planning

  • Understand and discuss the compliance requirements when establishing a professional relationship.
  • Discuss the information and data gathering process.
  • Explain information and data analysis.
  • Describe the process of preparing and presenting recommendations.
  • Discuss the implementation stage of the planning process.
  • Explain the process of review and monitoring.

CORE CONTENT

  • The Financial Services Environment and related legislation:
    • Rudiments of the SA Financial System.
    • Financial Intermediation.
    • Financial Intermediaries in SA.
    • Other financial bodies.
  • The Financial Services Board and Regulatory bodies:
    • Focusing on legislation related to the financial services industry.
  • Asset types:
    • Introduction to the different asset types.
    • Risk inherent in these assets.
    • Taxation issues relating to the various asset types.
    • Long-term and short-term products which could be formed by combining different asset classes.
  • Short-Term Insurance.
  • Long-Term Insurance.
  • Retirement Fund Types.
  • Six Steps of Financial Planning.

 

EVALUATION CRITERIA

1 x 3-hour examination, 50% class mark + 50% examination mark.
*Class mark = 60% (average of two semester tests) + 40% (assignment).

MODERATION
Internal.

PREREQUISITES NEEDED FOR THIS MODULE

  • Mathematics For Accounting  (MACC101)
  • Business Statistics  (STAE102)
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