The Financial Advisory and Intermediary Services Act has changed the very nature of retail stock broking. Retail stock brokers have given way to wealth managers, who make their money from portfolio management fees, not from stock exchange trading income. Compliance processes now require a model portfolio with an approved list of shares that can be bought.
Tax-free savings accounts have to be managed by members of the Association of Savings and Investment in South Africa. This is making it nigh impossible to promote exploration in South Africa. The situation needs to be reviewed urgently if the South African economy is to save its mining industry from becoming a pale shadow of its current self. A mere fraction of a per cent of South Africa’s R9-trillion savings kitty would get South Africa’s exploration going like a train.
But what happens in other highly successful mining jurisdictions such as Canada and Australia is being prevented from happening here. If this short-sighted situation is allowed to continue, the South African economy will over time be dealt a massive body blow in the form of a drastic shrinking of its all-important mining industry.