FNB says more South African consumers are growing accustomed to the benefits of investing, with significantly more investment accounts opened by clients between June and December 2021. As part of FNB’s focus of becoming an integrated financial services provider that is relevant to customers across their transactional, credit, insurance and investment needs, FNB Wealth and Investments proposition is attracting clients who are new to investing.
Bheki Mkhize, CEO of FNB Wealth and Investment Solutions, says, "Our commitment to helping customers throughout their money management journey and ensuring that investment solutions are accessible to all, has received an overwhelmingly positive response from our customers, particularly individuals," Mkhize explains. "This is evidenced by our scaling investment activities, which resulted in a 12% increase in our overall client base over the six months to December 2021."
According to Mkhize, a key driver in increased clients and market share has been their deliberate decision to provide solutions that help clients better manage their short, medium, and long-term money management goals. "We are also sensitive to the preferences of all our clients, in addition we offer them support on our digital platforms or through our skilled advisors," he explains.
Popular investment solutions include FNB’s Global Shares (ETNs), Shares Zero, Horizon Series unit trusts, and most recently, Retirement Annuity on App. Global Shares has enabled a growing number of clients to get exposure to some of the world's most well-known companies. Shares Zero is a no-monthly-fee investment account that allows clients to invest in FNB Exchange Traded Funds (ETFs) and ETNs at no cost, while investing into companies represented in the JSE ALSI Top 40 index for brokerage of just 0.25% . The newly launched RA on App allows anyone to take up a retirement annuity directly through the FNB App; customers can invest in FNB’s newly launched low cost Core Balanced Fund; with no lengthy documents to be filled out. This puts customers in control of their investments.
While investment appetite is improving among FNB clients, Chantal Marx, Head of Investment Research at FNB Wealth and Investments, says investors should not be discouraged by levels of market volatility. "Major global conflicts, such as the one involving Russia and Ukraine, are generally detrimental to sentiment, certainty, economic growth, or market returns," Marx explains, "and the sanctions have severely disrupted the supply of oil and other commodities, which does not bode well for the global economy."
"While South Africa’s large commodity exposure and the historical undervaluation of many of its listed shares have shielded its bourse from the full brunt of the fallout seen in global equity markets, local and global markets can be expected to remain volatile for the foreseeable future. However, investors, particularly those who are new to investing, should avoid reacting to short-term market downturns," she adds.
"The markets have always recovered well from disasters," she argues. "Therefore, it is critical to stay the course during this time; and while one should be aware of the risks, a decline in share values can also be an opportunity to carefully capitalise on future upward movement," says Marx.