Frequently Asked Questions

A financial adviser analyses your income, expenses, assets, liabilities, risk profile and life goals, and then builds a plan covering investments, retirement, insurance and estate planning. Even if your finances feel straightforward, a qualified adviser can identify tax efficiencies and coverage gaps you might miss. As an authorised financial services provider (FSP 1907), Multi Brokers is regulated by the FSCA and required by FAIS to always act in your best interest.

Our initial Financial Needs Analysis (FNA) is provided at no charge. Ongoing fees depend on the solutions we implement — these may include product provider fees, asset management fees and an adviser fee, all of which are disclosed upfront in our Record of Advice (ROA). We are committed to full transparency in line with FAIS requirements.

Under the FIC Act (FICA), we are required to verify your identity. You’ll typically need a valid South African ID or passport, proof of residential address (not older than three months), and a recent bank statement. For business clients, we’ll also need a company registration certificate, company bank statement and details of directors or beneficial owners.

We are truly independent. Unlike tied advisers or bank consultants who can only recommend their employer’s products, we compare solutions across the full market to find the best fit for you. Our obligation under FAIS is to you, the client, not to a product provider.

Exchange-Traded Funds (ETFs) are index-tracking funds listed on the JSE that offer broad market exposure at a fraction of the cost of actively managed unit trusts. Research shows that SA actively managed unit trusts carry an average Total Expense Ratio (TER) of approximately 1.6%, with the true cost of active management exceeding 4% when all hidden fees are included. ETFs typically charge a TER of just 0.2–0.5%. Over 10–20 years, that fee difference can cost you hundreds of thousands of rands in lost growth. We believe in keeping costs low so more of your returns stay in your pocket.

Both ETFs and unit trusts are collective investment schemes regulated under CISCA and overseen by the FSCA. The key differences are: Cost — ETFs are significantly cheaper because they passively track an index rather than paying teams of analysts to pick stocks. Trading — ETFs trade on the JSE like shares and are priced continuously throughout the day; unit trusts are priced once daily. Performance — Studies consistently show that most active fund managers fail to outperform their benchmark indices after fees over the long term. ETFs capture the full market return minus a very small fee.

Some can, but the evidence shows most do not — at least not consistently over the long term. Academic research on SA equity unit trusts found that fund managers were “hardly able to earn back their fees”, with the mean overall fund alpha (excess return) close to 0% across three-, five- and eight-year periods. This means that on average, investors in actively managed funds received market returns minus high fees. With an ETF, you get market returns minus very low fees — a much better outcome over time.

A TFSA is a government-approved investment account where all interest, dividends and capital gains are completely tax-free. From 1 March 2026, you may contribute up to R46,000 per tax year, with a lifetime limit of R500,000. Contributions exceeding these limits attract a 40% penalty tax. Important: withdrawn amounts permanently reduce your lifetime allowance and cannot be “re-contributed”. You may hold more than one TFSA, but the combined limits still apply across all accounts.

A Retirement Annuity (RA) offers an upfront tax deduction on contributions (up to 27.5% of taxable income, capped at R350,000 p.a.), but your money is locked until age 55 and retirement income is taxable. A TFSA offers no upfront deduction, but growth and withdrawals are completely tax-free. A discretionary investment (e.g. an ETF portfolio) is fully flexible — you can withdraw at any time — but interest, dividends and capital gains are taxable. The three work best together as part of a balanced financial plan.

Regulation 28 of the Pension Funds Act limits the asset allocation of retirement funds to protect members from excessive risk — for example, a maximum of 75% in equities, 25% in property, and 45% in offshore assets. Any fund used inside a retirement annuity or pension/provident fund must comply with these limits. Discretionary (non-retirement) investments are not subject to Regulation 28.

Effective 1 September 2024, all retirement fund contributions are split into two components: a Savings Pot (one-third) from which you may make one withdrawal per tax year (minimum R2,000, taxed at your marginal rate), and a Retirement Pot (two-thirds) that must be preserved until retirement. Your existing savings as at 31 August 2024 moved into a Vested Pot, with up to R30,000 seeded into the Savings Pot. The system is designed to balance access to emergency funds with long-term preservation.

Think carefully before withdrawing. The withdrawal is taxed at your marginal income tax rate, and the money no longer compounds in a tax-sheltered environment. For someone in the 31% tax bracket withdrawing R30,000, you’d only receive roughly R20,700 after tax — and lose decades of potential growth. We strongly recommend speaking to your adviser before accessing the Savings Pot.

At retirement, you must use at least two-thirds of your retirement savings to purchase an annuity (up to one-third may be taken as a cash lump sum, taxed per the retirement lump-sum tax table). A living annuity keeps your capital invested and lets you choose a drawdown rate (2.5%–17.5% p.a.), but you carry the investment and longevity risk. A guaranteed annuity pays a fixed monthly income for life, removing longevity risk, but the income is usually lower and there is no remaining capital at death. Many retirees use a blend of both.

A common guideline is to target a retirement income of roughly 75% of your final salary. To sustain that from a living annuity at a 5% drawdown rate, you would need a retirement fund of roughly 15 times your desired annual income. For example, if you want R40,000/month in retirement, you’d need approximately R9.6 million. Our retirement calculator can give you a personalised projection.

This depends on your life stage, but most working adults should consider: Life cover (to protect dependants if you die), disability/income protection (to replace income if you can’t work), severe illness cover (a lump sum on diagnosis of a specified condition), and short-term insurance (vehicle, household, buildings). We tailor cover recommendations to your Financial Needs Analysis (FNA) to avoid over- or under-insurance.

Life insurance pays a larger lump sum (typically R500,000+) to your nominated beneficiaries on your death. It’s designed to replace income, pay off debts and cover long-term family needs. Funeral cover is a smaller, fast-paying policy (typically R10,000–R80,000) that covers immediate funeral costs. Most families need both, but life cover is the more important protection.

Medical aid schemes reimburse in-hospital procedures at scheme tariff rates, which are often lower than what specialists actually charge. The difference (the “shortfall” or “gap”) is your responsibility. Gap cover is a short-term insurance policy that pays this difference — often saving you tens of thousands of rands per hospital event. If you’re on a medical aid with limited specialist cover, gap cover is strongly recommended.

You can deduct contributions to approved retirement funds (RA, pension or provident fund) up to 27.5% of the greater of your taxable income or remuneration, subject to an annual cap of R350,000. Contributions above this limit are carried forward and deducted in future years or at retirement.

Your assets form part of your estate, which is administered by an executor (often nominated in your will). Retirement funds (pension, provident, RA) are handled separately — the fund trustees allocate benefits to dependants and nominees per the Pension Funds Act, regardless of what your will says. It is essential to have an up-to-date will and to review your beneficiary nominations regularly.

Estate duty is a tax levied on the net value of your estate at death. The first R3.5 million (R7 million for spouses combined through a “section 4(q)” deduction) is exempt. Amounts above this are taxed at 20% (up to R30 million) and 25% thereafter. Life insurance payable to your estate is included in the calculation. Proper estate planning — including the use of trusts, insurance and beneficiary nominations — can significantly reduce this burden.

Multi Brokers operates under FSP Licence 1907, authorised by the Financial Sector Conduct Authority (FSCA) in terms of the Financial Advisory and Intermediary Services Act (FAIS). We are bound by the General Code of Conduct and the Policyholder Protection Rules (PPR), which require us to act honestly, fairly and with due skill, care and diligence in the interest of clients.

We recommend a full review at least once a year. You should also revisit your plan after any major life event — marriage, divorce, birth of a child, job change, retrenchment, inheritance or purchase of a property. Markets, tax laws and personal circumstances all change; regular reviews ensure your plan stays on track.

In most cases, yes. You can transfer your existing servicing adviser (broker of record) on an investment or policy without changing the underlying product — often called a “Section 14 transfer” for retirement funds or a simple broker code change for other products. We’ll handle the paperwork and, where required, provide formal Replacement Advice in terms of the FAIS Policyholder Protection Rules to ensure the switch is in your best interest.

We take complaints seriously. Start by contacting your adviser directly. If the issue is not resolved within 30 days, you may escalate it to our internal complaints officer (see our complaints procedure). If you remain dissatisfied, you may approach the FAIS Ombud.