Ghana’s financial services sector has undergone a process of restructuring and transformation in recent years. The sector has shown significant development over the past decade. The regulatory and supervisory framework is strong, backed by a modern financial infrastructure. The financial system has been resilient to the global financial crisis, largely owing to its limited integration with international markets and important reliance on domestic funding. The financial services sector of the country has been classified into three main categories; banking, insurance and capital markets. The Ghanaian financial services sector keeps broadening as its operations widens to cover other ‘catchment’ areas of need. One emerging area in the financial industry is the asset management industry. Asset management is commonly used to describe people and companies that manages investment on behalf of others or a company that invest its client’s funds like money, stocks,shares etc into securities. They conduct research and statistical analysis of markets and trends in order to determine what investment to make or not to make on behalf of clients.
Ghana’s Asset management industry has been growing at a faster pace over the last decade, coupled with its own challenges. The industry saw its funds under management increased by 56.15% from Ghs 8.3 billion in 2014 to Ghs 13.6 billion in 2015.The rise in the volume of investible assets which has occurred over the last, is set to continue to increase in the future and investible assets expected to be significantly higher in the near future than today in the country. The regulatory body has been successful in keeping the industry in check but more needs to be done following the influx of increased number of licensed investment companies in recent years to enable them improve their monitoring and supervisory role in order to keep the market players in check. This is also very important following the problems some players have suffered which have led to their shut down.
By bridging the gap between investors seeking suitable investment vehicles and financing the needs of the economy, the asset manager or management place a role of efficient allocation of capital in the economy.
CHALLENGES OF THE INDUSTRY
Every growing institution encounters various forms of challenges in its growing phase and the asset management industry is no exemption. The asset management industry in Ghana faces a number of challenges that impede its success. Some of the challenges are:
Unfamiliarity of the Industry: The asset management industry in Ghana is fairly new and relatively unknown compared to the banks. This has resulted in majority of the populace not to appreciate its importance in the role of wealth creation and other benefits it comes with.
Investor Education: Investor education in Ghana is low even though the regulatory body has taken steps to deal with the issue, together with the support of industry players. Even in the corridors of banking, research shows that only about 30% of the working group save with the banks.
Maturity Duration: Investors are also more comfortable with short term instruments rather than looking at medium to long term securities because of the uncertainties of the economy.
The Depreciation of the cedi: The depreciation of the cedi has also pushed prospects to the forex market instead
OPPORTUNITIES IN THE INDUSTRY
For investors to leverage the opportunities of this vast and growing sector, they must remember that Ghana is a collection of different markets, each with its own characteristics. Among the opportunities are still the young and strong youth force the country holds and also, it is expected that more education shall be done to improve the market.
ROLE OF LEGACY FINANCIAL SERVICES
Legacy Financial Services– a bourgeoning asset management firm, known for its professional investment advisory and fund management has resolved to provide a world class differentiated investment solutions to suit the needs of every client by providing them with quick, excellent and effective yet inexpensive fund management and investment advisory services.
As the firm aims to be the leader in the industry, it has shouldered the responsibility of educating the public by creating more awareness about the need to invest. In achieving this objective, the firm intends to leverage all the available means such as the various media platforms, one- on-one marketing strategy, institutional marketing, organizing seminars etc. Also, recognizing the need for spot-on products targeting a specific audience, the firm has resolved to provide alternative tailor-made products on the forex market.
Legacy Financial Services, as part of its expansion program, has established various branches to serve existing and prospective investors. These branches can be located in some regions of the country with its head office situated in Accra. The branches are as follows: Accra (Head Office), Tarkwa, Takoradi, Obuasi, Kumasi, Tamale. The firm intends to reach the other regions within the shortest possible time to also provide investment for them as well.
GENERATING MORE INCOME
It is a common notion that majority of Ghanaians have not imbibed the concept of investment very well and as a result suffer the consequences in old age. The question begs asking: why this situation? In finding an appropriate response the Managing Director of Legacy Financial Services, Mrs. Nancy Tomani said, “This is one of the major problems facing us as a country, but all hope is not lost. We have to first start educating the young ones right from primary or Junior High School about what investment is and its benefits, so that by the time this young ones get to active work, they start putting some funds down for their old age. Tailor made products for the informal sector also needs to be rolled out and implemented quickly to bring this group on board as well. This will also complement activities being undertaken by the National Pensions Regulatory Authority”.
One major cause of this setback is the misconception of the made-to-be- believe synonymity of the terminologies: “savings and investment”. It is evident that majority of the public mistaken these two for each other as a result of inadequate knowledge on the two. In helping to address the ambiguity of the use of the two terminologies, we were made to understand that “Savings is keeping money in an account or other forms with low or no interest on it, to meet pressing needs. But investment is using some of your savings or income to purchase instruments (i.e. fixed income, shares etc.), usually short, medium and long term in nature to generate more income”, Mrs. Tomani enlightened. From the above explanation, it is obvious that if anyone needs ‘more’ money for any future use the person needs to invest and not to save.
COMPETITIVE ADVANTAGE
COMPETITIVE ADVANTAGEThe Ghanaian economy has been overwhelmed with various finance houses providing almost similar services to the limited public therefore resulting in a high competition among players in the financial industry. In this era of setting the standard, companies that distinguish themselves shall take the lead.
In this regards, Legacy Financial Services has resolved to provide world class differentiated investment solutions to suit the needs of every client by providing quick, excellent and effective yet inexpensive fund management and investment advisory services. In trying to set the standard to outstep the other players in the industry, the company has also taken insurance policies to safe guard its clients’ funds.
Moreover, in stretching the boundaries beyond the reach of competitors, Legacy Financial Services has established a credible attitude that has endeared the firm to its numerous customers. In identifying what the belief systems are, The Managing Director of the firm stated as such “At legacy, we believe in good customer service and we have a dedicated, competent and experienced team to give the best of investment advice to clients and prospects. We also have competitive rates and pay promptly when it comes to redemption”. In compliance with their core values namely: integrity, professionalism, trust and Excellence; the company won two prestigious awards in 2016. The awards include: The Best Enterprise Award and Best Manager Award 2016 by the by the Europe business assembly.
Considering these reports of great achievements the firm therefore “encourages investors to invest with legacy Financial Services to experience the best of investment professional service”.
The company’s astronomical growth in its few years of establishment is unparalleled because of its “understanding of the needs of clients and prospects by providing quick solutions to them and also giving them the best of services they need”.
MARKET DIFFERENTIATION
Legacy Financial Services Ltd., in differentiating itself from the rather growing and competitive industry– asset management, has sought to not relent on its core values and improve on their services to both existing and prospective clients.
Some of the products and services the firm provides for its numerous existing and prospective clients include
- Private Wealth Management (PWM) :This service is personal and ideal for individuals with unique investment needs. One-time lump sum investment can be made or regular contributions. Clients are assigned a relationship manager who ensures that their needs are taken care of. There is a wide range of portfolios under the PWM including fixed income, equity and mixed portfolios.
- Provident / Welfare Fund Management :The firm manages traditional Provident and Welfare Funds for institutions who choose Provident funds over the 3rd tier voluntary pension The firm also assists institutions to establish provident funds and provide expert advice in the areas of Provident Fund rules, constituting board of trustees, etc.
- Collective Investment Schemes (CIS) :These are pools of funds managed by Legacy Financial Services on behalf of The funds are diversified into selected financial securities in strict accordance with the investment policy statement of the fund. The firm’s collective investment schemes do not only offer you high returns but are also affordable and ideal for everyone on the income spectrum (both high and low income earners).
- Pension Fund Management :In collaboration with competent licensed pension trustees and other stakeholders, the firm provides exceptional pension fund management services under the 3-tier pension scheme. The firm provides advisory services on the creation of personal pension fund portfolios to maximize the benefits of the scheme.
HANDLING THE ISSUE OF RISK IN INVESTMENT
Running a successful asset management business is equally about the need for forward-facing, sound risk management and innovation as sound returns and profitability. Despite ongoing pushback that the asset management industry does not present the same types of systemic risk implications as other financial market sectors do, it is imperative for asset management firms in Ghana to prove to their clients the safeness of their investment.
Having in mind the true nature of the Ghanaian investor, highly risk-averse person, the Managing Director of Legacy Financial Services disclosed how the firm deals with the issue of risk. “We believe every prospect or individual is unique, so we profile our clients by engaging them to know their objective in relation to their preference and risk tolerance before recommending a product for them.” Beyond this profiling, “the public is made to understand that as a company we are licensed and regulated by both Securities and Exchange Commission, and National Pensions Regulatory Authority”.
Moreover, assuring the investor on the safeness of his/ her investment with Legacy Financial Services, the company has taken a number of insurance policies such as Fidelity Guarantee, Professional Indemnity, and All Risk Asset to ensure their investments are secured.
DAUNTING HURDLES
Over the period, Legacy Financial Services has managed to navigate through some tough moments as a growing institution and become strengthened and more innovative in contending future challenges. Some of the challenges that affects its operations include “the fear the public has towards investment firms following the collapse of other companies in the financial sector”, Mrs. Tomani revealed. It is no new news as this attitude of misappropriation of investors’ funds by some firms in the industry has affected the genuine operations and activities of some trustworthy firms. Legacy Financial Services in recognition of this situation has ‘hedged’ itself against such activities and taken steadfast steps to insure its clients’ investments as earlier stated.
Every election year in this country impacts negatively on investment companies as majority of investors withdraw their investments before the election dates with the “fear of the unknown”. This is not to say the country’s democracy has be doubted but for the fear of the unknown outcomes, investors withdraw their investments.
WHY INVEST WITH LEGACY FINANCIAL SERVICES?
WHY INVEST WITH LEGACY FINANCIAL SERVICES?
There are many Investment Houses that has inundated the market today and as a result become very difficult for the ‘investing public’ to know which one can offer to them best and competitive rates. Legacy Financial Services in assuring its clients has guaranteed them of “competitive rates, excellent client relations, prompt service delivery and feedback, prompt payment and Relationship building”.
LOOKING INTO THE FUTURE
Every successful company thrives on its long term agenda. Legacy Financial Services, poised to be the market leader in the next five years as revealed by the Managing Director that they will give shareholders value for their investment in the company by good returns or post profit. She said “We will do this by putting in the right mechanisms to accelerate growth”.
To their stakeholders she assured them of the following: “They should expect more improved client service, improved tailor made products to meet client’s needs especially the informal sector, Compliance to industry standard and best practices, improvement in client service, informed investment advisory”.