Dear Reader: I have a dream

When will someone get around to establishing an honest citizens’ bank? One that does plain, ordinary banking; no high wire walking, no juggling, no jumping through hoops, no rabbits out of a hat, no now-you-see-it, now-you-don’t ... just plain ordinary, honest – did I forget to say that? – yes, honest banking. A business geared to providing a service for ordinary citizens at a reasonable fee: a current account, a modest home mortgage, standard vehicle finance for the family car, online banking, a credit card related to reasonable credit means.

And – dare we dream – an insurance company to match. One that invests our pension savings with due care and caution, credits our pension fund with the full proceeds of the investment, charges a fair fee for its services and then accounts to us fully for all the aforementioned, on a regular basis. The sort of bank that would be happy to advertise in noseweek. Is that so difficult for an honest businessman to contemplate?

I’m talking about a bank or insurer that does not go into the market investing for its own account – in competition with its clients – with all the conflicts of interest and suspicion which that gives rise to.

There is currently no bank or insurer in South Africa that meets that description. The so-called “main fund” gig that our authorities have allowed to take root in most, if not all, our insurance companies has institutionalised a gross insensitivity to the principles of trust and conflict of interest. Even Sanlam and Old Mutual mix their own shareholders’ funds in one pot with policyholders’ funds, where investment policy is dominated by one interest – their shareholders’ interest. Out of the same investment pot shareholders draw the maximum profit: policyholders and pensioners get only what the company, in its marketing wisdom, reckons it needs to give them – in fact the minimum it reckons it can get away with and still stay in business.

True to that thesis, when it no longer intends to stay in the market, as Investec Employee Benefits decided in about 2000, it need pay pensioners and policy holders no bonus, no dividend. And it will find an actuary to bless the deal! (Have actuaries always been the most subtle and best paid professional thieves on the block, second only to Mervyn King – or is that another modern day phenomenon?)

Which brings us to our lead story.

We note that Investec’s share has been on the decline of late. No surprise to us. Being an Investec shareholder is a bit like investing in a pyramid scheme: you’re hoping to profit from the foolish and ignorant joining after you, so that you may reap from their ruin. You’re the sort who would have carted containers of arms to Zimbabwe – for a special fee.

But most South Africans, we have been encouraged to discover, would rather block the highway to that container – for no fee. And that blocking the highway, or refusing to unload the ship, can make your day – and a big difference. They don’t allow their broker to invest their pension funds with Investec, a company that sees pensioners as an emminently exploitable commodity.

And, now, a new discovery: Investec are even happy to defraud investors on the stock exchange when it suits them.

Take a look at "Investec on a plate" and make your move.
The Editor

PS: Next month we intend returning to that other albatross still trailing in Investec’s wake: Fedbond. Yes, albatross – as in harbinger of doom on the high seas.

Meanwhile, in anticipation of all that excitement, please, if you live in or around Cape Town, don’t forget to come to our only party ever – to celebrate our 15th year in business, passing our hundredth issue, and finding ourselves amongst South Africa’s ten fastest-growing publications. And there’s that little Sanlam award I’m still blushing about ... So phone Nicci on 021 686–0570 and book your ticket now!


A former partner in a top London law firm has been struck off for taking £223 203.00 from a client account to spend on strippers.

Paul Saffron, 43, raided company accounts at Radcliffes Le Brasseur, Westminister, while still a partner there. The divorced father of three said he was depressed and spent the money quickly so he would have no option but to kill himself when found out. The Solicitors’ Disciplinary Tribunal ignored his pleas.

– Evening Standard, London, 9 May 2008
  • Many years ago Radcliffes set up Radcliffes Trustee Co SA in Geneva, which catered for a largely South African clientel’s “discreet” offshore needs. (The president of Radcliffes Trust was a one-time Durban attorney, Cecil Simon.) More recently the secretive Geneva Trust company was taken over by Investec.

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Submitted by : Joe Wolfson of Echunga on 2008-05-29 05:48:14
Dear Editor.
A bank that is honest is actually impossible to find. Yes you are right we need a bank that upholds principles so that we can feel our money is safely tucked away.
However where you go wrong is the insurance part of it. They must be separate and the insurance company must be a co-operative - I wanted my Old Mutual shares for the windfall (read greed) however in hindsight I dont think the performance of my policies has benefitted from the profit motive of the company and its service to shareholders. I think we sold out so that a few could get very rich on conversion. With banks as soon as a fee for service organisation can earn commission and the bigger the deal the bigger the reward that the principles get mashed. This whole bankassurance is really a smokescreen the bank wants to leverage its earnings by tapping into commission. I firmly believe that its the carrot that starts them thinking of ways to increase earnings and commission and it always outranks fees for service and that these types of organisations then get bent by profit sharing , share incentives etc etc.

We need a few old style co-operatives back in business with collective motives.

We definately need a community driven bank with a charter that allows only fee for service charges.


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