There are several factors you may want to consider.
Aspects like pricing, product offering, and investor protection tend to be quite competitive and standardized among the larger platform providers. The factors that usually differentiate one platform from another are the quality of service and the use of fintech. Service being perhaps the more important of the two.
Exchange control restrictions on investment platforms
Fortunately, living annuities do not have to comply with Regulation 28 of the Pension Funds Act, which imposes restrictions on the amount one can invest in direct offshore assets.
Unfortunately, many of the largest investment platforms have reached their capacity for offshore assets on their life licenses, impacting investment vehicles such as life annuities, endowments and free savings. tax.
Simply put, although life annuities are not subject to offshore restrictions, several platforms have had to limit offshore exposure in these investment vehicles due to their own exchange control limits.
The table below shows the current offshore limits for the various rig providers under their lifetime licenses.
| Investment platform | Current offshore limit (life annuities, endowments, tax-free savings investments) | Source |
| Allan Gray | 40% | Practice Note 365 |
| Ninety-one | 40% | Practice Note 309 |
| Glacier | No restrictions | Recommended by a call center contact (14/12/2021) |
| Momentum | 40% | Recommended by a call center contact (14/12/2021) |
| Old mutual | Still waiting for a response |
There is no central database that can be easily accessed to see which platforms are implementing limits on offshore assets and, if so, what those limits are.
The exercise of contacting the different platforms to clarify the above highlighted the “service” factor that should be taken into account when selecting a platform. Needless to say, some platforms consistently disappoint in their levels of service to financial advisors and investors.
Offshore rig-level restrictions will likely be relaxed at some point in the future. One option is to use the Glacier platform which the call center says has no offshore limits in their life annuities. Alternatively, you can consider maximizing your permitted offshore exposure on one of the above platforms and wait for the restrictions to ease, in which case you can increase your offshore exposure. Finally, you can consider exploring smaller rig providers that don’t have restrictions on offshore assets.
Based on the fact that you have a guaranteed annuity, I agree that it is worth considering leveraging higher offshore exposure via your life annuity to hedge some risk, particularly if your guaranteed annuity is issued by the government.
Regarding sustainable withdrawal rates in retirement, I encourage you to watch Allan Gray’s presentation on How to manage your life annuity in times of uncertainty.
