Mei 2014
22
Howwell doSouthAfrican
grainproducers plan their personal finances?
D
uring 2013, Old Mutual commis-
sioned Marketing Surveys & Sta-
tistical Analysis (MSSA) to do
research that reveals interesting
facts about commercial producers and also
specific factsabout thewaygrainproducers
(grain producers in this article refer to pro-
ducers who are producing summer crops
as their primary farming activity) approach
personal financial planning. A fewof the as-
pects arehighlighted in the article.
The Old Mutual MSSA research revealed
that the annual turnover of grain producers
outweighs the average annual turnover of
all commercial producers. In thecategoryof
R5millionandhigher inannual turnover, the
percentage for all commercial producers is
10%, compared to 75% for grainproducers.
Accredited financial advisers may not un-
derstand much about the operational chal-
lenges tomanage a grain farm successfully,
but they do understand the risky nature of
farming and how important it is to have a fi-
nancial partner throughevery lifestage. Per-
sonal financial planningwill create certainty
inuncertain timesandensure that astrategy
is inplace toprotect your grain farm against
uncontrollable events.
The research shows that 54% of grain pro-
ducers use financial advisers as and when
they need them and only 24% of grain
producers have a comprehensive financial
plan. See
Graph 1
.
If you fail toplan, youplan to fail.A lifeevent
can destroy in a day what may have taken
you and your family years or even decades
to build up. It takes an act of financial stew-
ardship to leave a legacy behind for future
generations.
Sound succession planning requires com-
prehensive financial planning, including
estate and retirement planning. This will
ensure a smooth transition to the next gen-
eration. The status of grain producers’ re-
tirement plans is aworrying factor because
only41% indicate that theywill haveenough
capital to retire independently from their
business income. See
Graph 2
.
This means that the incoming generation
will have tosupport theoutgoinggeneration
KOOSNEL,
head: Agri Market, OldMutual
financially,whichplaces stresson the finan-
cial resources of the grain farm. An appro-
priate financial plan should be put in place
tocreatecertainty forboth theproducer and
the successor and their dependants.
Grain producers’ financial planning in the
event of death before retirement seems to
be better addressed than retirement plan-
ning, with 88% having a comprehensive
plan inplace. See
Table1
. However, if this is
compared to other commercial producers,
then it is 5% lower than, for example, the
93%of wool/mohair producers.
As a grain producer you understand how
important it is to plant good seeds in fertile
ground to ensure you reap a good harvest.
To enjoy financial freedom you also have to
sowgood seeds (savings andprotection) to
reap a good financial harvest (accumulated
wealth).
At Old Mutual we make it our business to
prepare financial advisers tohelpyoucreate
ahealthy relationshipwithyour hard-earned
money and to invest your money in aman-
ner that will protect you, your family and
your business against any event in life.
PLAN INTHEEVENTOFDEATH
SUMMERCROPS
I have a comprehensiveplan inplace
88%
This plan is reviewed regularly
81%
Graph 1: Kindof advice/service required from advisor.
TABLE 1: GRAIN PRODUCERS’ FINANCIAL PLANNING IN THE EVENT OF DEATH BEFORE
RETIREMENT.
Graph 2: Status of retirement planning.
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