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How do we make 2021 different?
Published: January 21, 2021
Toward the end of 2020, we counted the hours for a new year to present itself, with the hope for a fresh start and new beginning. “Now, we are in that new year, and everything feels a bit like déjà vu,” says Mzwandile Mtshali, Executive of PPS Advisory Services and Enablement.
The challenges and difficulties of 2020 have just rolled over, so perhaps all we can do is reflect on the year that passed, collect the teachable moments and prepare ourselves for the year ahead.
“Let us take a step back and learn from the teachings of 2020. Vernon Law said that experience is a hard teacher because she gives the test first, the lesson afterwards. With challenges and trials under our belts, our past experiences can pave the way for a better tomorrow,” adds Mtshali.
He notes that there are several financial lessons learnt from 2020. These include:
- The importance of having our finances in order
If anything, 2020 highlighted that cliché 'anything can happen', and the importance of being prepared. What we saw during 2020, was when people are under financial strain, insurance is the first to go. However, professionals bucked the trend reflecting a much lower cancellation rate than the industry.
Another trend was increased realisation of the risks to their mortality, and that they are not here forever. It took this pandemic to know that they've got to address what will happen, should they no longer be here.
The lesson: Essentialism, or the pursuit of less, is real. We need to be wise about how we spend, where we spend and why we spend. 2020 taught us to be more prudent and rather save any extra money for those ‘anything can happen’ moments.
- Insuring against uncertainty
Life products, such as life cover and sickness cover, have undoubtedly shown its value – insuring against the unknown during times of unprecedented uncertainty.
“What we also found, was that members tend to sign-up for additional products when they realise the value they are getting from the current products in place. They also recognise the value of the expert advice provided by financial advisers,” adds Mtshali.
Many clients realised that their wills required updating and pursued the opportunity to restructure their estate plan.
The lesson: 2020 has taught us that it is essential to not only protect our ability to earn an income and have financial freedom but ensure our affairs are in order should we no longer be around.
- Accelerated digitisation
Where red tape once meant a three-year plan to implement digitisation, companies fast-tracked their processes, implementing plans within a relatively short period.
“Here, we saw an uptick in innovative products and a change to business models. For example, financial advisers made a 100% shift towards digital consultations, using digital signatures and online meeting facilities such as Zoom and Microsoft Teams. Relationships are key, so this is tempered with a hybrid approach of digital and in-person consultations when possible.”
The lesson: Digitisation is different to everyone, but the important thing is to equip yourself as best you can so that you do not get left behind.
- Ongoing learning and adaptability
Covid-19 saw companies being forced to move entire workforces to work from home (WFH). The challenge was for employees to learn to juggle a work-life balance, but there were some positives such as saving on transport costs and travelling time. Meetings also became more productive as companies realised that not everyone needs to be sitting in the meeting to achieve successful outcomes.
The lesson: We need to open ourselves to change and to unlearn and relearn. Also, as the tax season fast approaches, do not forget to consider your WFH tax benefits when submitting your tax return this year.
- Responsible investing
Investors are giving priority to investments that uphold sustainable practices which benefit the environment and society. According to the Schroders’ Institutional Investor Study 2020, 67% of institutional investors believe the role of sustainable investing will become more critical over the next five years.
The lesson: Each of us can be leaders who contribute to a sustainable future that benefits both people and our planet.
A different 2021
"Experience is a great teacher, but the lessons are pointless if you do not implement meaningful change after you have reflected on those lessons. I always start the year by drawing up a list of what I want to stop, start and continue. Sometimes seeing something in writing makes it clearer. We now have 2020 hindsight and applying these lessons can help us to prepare for much of what 2021 will reveal, its challenges and yes, the opportunities brought by foresight, planning and striking the right balance," concludes Mtshali.
https://www.pps.co.za/how-do-we-make-2021-different