As a developing, globalised economy with a world-class financial sector, South Africa offers a rich opportunity for investment, if you know where to look and how to proceed. The recent relaxation in exchange controls has also meant that it is now easier than ever before to move your money into and out of the country.
For those who prefer to invest in stocks, the Johannesburg Stock Exchange (JSE) has several indices, mostly resource/commodities based, as well as an All Share Index. However, before you try to invest in the JSE, you are, of course, advised to consult with a local expert, who can give you the low-down on local companies and their recent performance trends.
For those of us who prefer not to invest independently, but to make use of an investment company, there are many options in South Africa. There are small-scale brokers and advisors, and then there are much larger investment firms and fund managers. Whichever you choose, be sure that you have obtained proper references, especially in the case of smaller operators. Word of mouth is a good method, but in the case of the larger firms a prospectus or annual report should be freely available to give you up-to-date figures.
Also keep in mind that any person or entity in South Africa who gives financial advice is legally required to undergo certain specific training. This is known as FAIS (Financial Advisory and Intermediary Services) training and the person then becomes FAIS compliant, or, in the case of a company, they should be registered with the Financial Services Board (FSB). You are quite within your rights to insist on seeing proof of accreditation. According to the FAIS legislation, your financial advisor is required to give you advice that is in your best interest, not in their employer’s or their own interest. Therefore, be wary of advisors who insist on only their own products when your research has shown that there are potentially very good alternatives.