This communication on the update of our business reaches you at a time when we here at Point 3 are very excited about what we have achieved for you as investors and what we have in store for the near future.

First, some history. Point 3’s legacy since the start of the business 15 years ago was at a time when we did not have the Financial Advisory & Intermediaries Services Act 37 of 2002. (FAIS Act). It was a time when we embarked on managing client funds in a model portfolio management structure and when financial services seemed a little simpler. In 2004 when the FAIS Act placed a very onerous task on financial services providers, we decided to change our licensing authority from an Investment Manager status with the Financial Services Board (the regulator) to two types of
licenses namely, a Category I license which allowed us to provide advice and intermediary services and a Category II license which allowed us the status of a discretionary manager of client funds. Over the years our clients have not noted the difference between these two licenses or services of our business largely due to the advisors in the business performing both the advice function and the investment management function at the same time.

However, to ensure that clients are able to differentiate between the services of providers and the way in which these services are provided, the regulator has introduced an amendment to proposed legislation in 2015 under the so called Retail Distribution Review. We have for some time now anticipated these changes and made a decision in 2014 to register a new company called Point 3 Investment Solutions (Pty) Ltd which will solely look after the investment management solutions for our clients and investors and thus hold the Category II license going forward. Point 3 Financial Solutions (Pty) Ltd, the company you have known over the years, will have as its core function the advice and intermediary services to our clients and investors and thus hold the Category I license going forward.

Today Point 3 manages in excess of R 1.3 billion for private clients and investors through an array of different administrators and product providers. We employ 14 staff of whom 4 are investment professionals with over 62 years’ industry experience. The management team of 4 has over 65 years’ industry experience.

Our capabilities as a discretionary financial services provider means that we view the future differently in light of what legislation demands from us. It means that we need to manage our business smarter and wiser in order to provide the best possible service to you, our valued client. We have over the years negotiated on your behalf for better fee arrangements at the respective Administrators and Asset Managers, often without you evenknowing or realizing the benefits.

It is with this background in mind that we are very pleased to announce the launch of our own Fund of Funds structures in May 2016. Point 3 has partnered with Boutique Collective Investments (Pty) Ltd to be our third party co-named partners for our Collective Investment Schemes. Boutique Collective Investments (BCI) is a manager of over R 82 billion of assets to the discretionary investment management industry. BCI will provide a quantitative and qualitative research methodology, as well as an administrative fund platform to Point 3. We are very proud to be associated with them.

Our Fund Of Funds will be managed in the same way as we have done our model portfolio and we will offer the same target return strategies as we always have but just under a more structured, more admin efficient manner. We are pleased to offer the following Fund of Funds structures with their key features:

Point 3 BCI Conservative Fund Of Funds
Description: A cautious risk profile portfolio with the objective to provide investors with a high level of income and capital stability. The portfolio will be managed in compliance with prudential investment guidelines for retirement funds (Regulation 28) in South Africa to the extent allowed for by the Act.

  • Benchmark: CPI for all urban areas + 2% p.a.
  • ASISA category: SA Multi Asset Low Equity
  • Income distribution declaration dates: 28 February, 31 May, 31 August, 30 November
  • Service charge (ex VAT): class A = 0.50%
  • Performance Fee: 10% of excess performance above benchmark, calculated daily and billed monthly, capped at a maximum of 1% p.a.

Point 3 BCI Balanced Fund Of Funds
Description: Offers investors a moderate to high long term total return. The portfolio will have investment instrument exposure across multiple asset classes in order to ensure portfolio diversification and therefore risk reduction. The portfolio will be managed in compliance with prudential investment guidelines for retirement funds (Regulation 28) in South Africa to the extent allowed for by the Act.

  • Benchmark: CPI for all urban areas + 4% p.a.
  • ASISA Category: SA Multi Asset High Equity
  • Income distribution declaration dates: 28 February and 31 August
  • Service charge (ex VAT): class A = 0.50%
  • Performance Fee: 10% of excess performance above benchmark, calculated daily and billed monthly, capped at a maximum of 1% p.a.

Point 3 BCI Moderate Worldwide Fund Of Funds
Description: A worldwide flexible portfolio with the objective of providing investors with a moderate long term total return.

  • Benchmark: CPI for all urban areas + 5% p.a.
  • ASISA Category: Worldwide Multi Asset Flexible
  • Income distribution declaration dates: 28 February and 31 August
  • Service charge (ex VAT): class A = 0.50%
  • Performance Fee: 10% of excess performance above benchmark, calculated daily and billed monthly, capped at a maximum of 1% p.a.

For clients who have mandated us to manage their portfolios according to a set target return objective, we will make the necessary changes from our model portfolio structures to the Fund of Fund structures as far as practically possible. This means that we are very sensitive to voluntary capital transfers because of Capital Gains Tax (CGT). We will therefore embark on the transfer of Compulsory Capital (Retirement annuities, Preservation Funds and Living Annuities) first since these portfolios will not trigger a CGT event. We see this process as an ongoing approach to client’s needs and investment strategies. In due course the necessary discussions will take place with you to highlight the impact of Capital Gains Tax on the voluntary side of your portfolio.