Polska wchodzi w złoty okres cyfrowej rozgrywki – aplikacje, streamy, zakłady na żywo. Rząd podniósł podatki, a jednocześnie otworzył drzwi nowym operatorom przyciągniętym obietnicą 30% przychodów z taksów. Właśnie dlatego przychody sektora rosną szybciej niż w Europie Zachodniej. Gracze nie chcą już tylko tradycyjnych stołów – kręcą cyfrowym kołem, wirtualnym ruletkarzem, które żyją własnym życiem.

Kluczowe trendy, które będą napędzać rynek

Po pierwsze, mobilność. Smartfony zamieniają się w mini kasyna, a aplikacje oferują bonusy, które przyciągają nawet sceptyków. Po drugie, regulacje. Nowe przepisy przyspieszą legalizację gier online, a jednocześnie wprowadzą bardziej surowe kontrole antyprania pieniędzy. Po trzecie, sztuczna inteligencja – algorytmy analizują zachowania graczy, dopasowują oferty i minimalizują ryzyko uzależnień. W efekcie rynek staje się bardziej precyzyjny i dochodowy.

Ryzyko i wyzwania

Nie wszyscy są zachwyceni. Krytycy ostrzegają przed rosnącą liczbą uzależnień, zwłaszcza wśród młodzieży. Odpowiedź? Większe fundusze na programy profilaktyczne i silniejsze ograniczenia wiekowe. Jest też kwestia bezpieczeństwa – cyberataki stają się coraz bardziej wyrafinowane, a operatorzy muszą inwestować w szyfrowanie i firewall’e. Ostatecznie, jedyną stałą jest niepewność regulacyjna: każde nowe prawo może wywrócić rynek do góry nogami.

Co mówią eksperci?

Według analityków z jakgracwkasyno.com, CAGR (rocznej stopy wzrostu) wyniesie ok. 12% w najbliższych pięciu latach. To nie hiperboliczny hype, to twarde dane. Eksperci podkreślają, że najważniejsze będą platformy, które potrafią łączyć tradycyjne doświadczenie kasyno z nowoczesnym UX. Inwestorzy już szukają partnerów technologicznych, bo każdy dzień zwłoki to utrata udziału w rynku.

Jak się przygotować?

Jeśli planujesz wejść na rynek lub już działasz, nie zwlekaj. Zainwestuj w analizę danych, zabezpiecz infrastrukturę i buduj markę, która mówi językiem gracza. Nie czekaj na regulacje – twórz własne standardy odpowiedzialnej gry i pokaż, że potrafisz kontrolować ryzyko. To jedyny sposób, by nie zostać w tyle, gdy rynek eksploduje.

The original intent of this statistic is to provide another way to evaluate and assess a country’s medical system.  This figure is examined along with an entire slew of medical data and international comparisons highlighting a country’s absolute and relative standings on areas such as number of healthcare spending, hospital beds, MRIs, pharmaceuticals etc. In Israel we fare very well on most parameters resulting in the favorable PYLL and top ranking of average life expectancy (80.7 vs. the declining 76.1 in US).

As a financial planner I found this notion of “potential years of life lost” intriguing, as this term is what regularly encapsulates many of my meetings with clients.  The decisions and choices made by clients on a daily basis have potential impact on their PYLL.  In a sense, my job is to reduce PYLL by ensuring that life cycle decisions regarding savings, investments and insurances are optimal such that the PYLL is minimized whereever possible.

A person’s PYLL can be addressed in a number of ways:

The first and most important PYLL is retirement age – perhaps the most central question for people approaching middle age – “when can I retire?”  The official answer for national savings entitlement in Israel is 67 for men and 62-64 for women at present (which I model age 67, as Bruce Springsteen said “blind faith in your government will get you killed” or my version, “leave you to die poor.”  At the macro level, these ages are based on life expectancy, contributions to national insurance and government budgets, however for the individual this can be quantified based on current income/expenses and forecasted pension.  The question is usually how much higher will expected pension be if I work X years more, which may be different than desired retirement age.  Given the generous contributions to pension by employers in Israel, each additional year of income and pension contribution has a dramatic effect on future retirement scenarios.  Further, by choice or circumstance, many will retire earlier than the statutory age of 67 and for a high-tech employee this might be as early as age 55.

However, there is also a PYLL in qualitative terms.  From a living life fully and “each day as if it’s your last” perspective, the more years a person works might be potential years of life lost depending on the actual mental or physical strain of employment choice, the opportunity cost of time spent in leisure or family activities.

The second axis for PYLL might be medical and the importance of maintaining good health.  On this front, having comprehensive private medical insurance which supplements the public system improves your PYLL.  The Israeli public health system is chronically underfunded in many areas, most acutely in advanced medicine and surgery alternatives. For catastrophic situations necessitating expensive cancer drugs, overseas treatments or transplants, private medical insurance can be life-saving.  However, even for less critical needs, private medical insurance can save time and discomfort.  For example, Israel has a shortage of MRI and CT resources (5.2 units per 1M population vs 37.6 in US) resulting in long wait-times and the access via private system can reduce PYLL to the public system.  Similarly, private medical insurance contains coverages for maintaining health and preventative procedures including diagnostic testing, and additional consultations with specialists which may not be done if insured only using the public system.

The third axis for PYLL can be applied to investment and savings as potential for returns are lost. Often investment years and potential are lost due to large amounts of cash sitting on the sidelines earning zero interest. Sometimes asset allocation is faulty or potential investment opportunities are missed due to lack of attention or knowledge. Similarly, much can be done to protect assets from the tax regimes and further increase the long-term potential years that investments and savings can last.

Navigating these axes and extending the potential years for both clients and their assets is the core of financial planning with a client.   This is a long-term process, necessitating regular monitoring and adapting of investments and insurances to your financial situation as life events unfold, markets move and regulations change, learning and understanding where and how to improve your situation.

At this time of year insurance companies, pension funds, provident and sabbatical funds are sending their annual statements for calendar 2017. The statements provide a summary of contributions made during the year, tax documents and data regarding fees and returns. The 2017 calendar year returns for the industry have been stellar with averages ranging from 6.9%-8.8% before fees, with some funds even reporting double- digit returns

The strong returns can be attributed to strong bond performance, as well as equity markets underpinned by global economic growth. However, an interesting observation is that these returns were achieved despite a relatively low exposure to equities. Israeli institutions, in contrast to their global peers, in terms of portfolio asset allocation, are underweight equities. As can be seen from the diagram below, pension fund exposure to equities has hovered in the 20-30% range over the past decade. This is despite the huge influx of capital, with the industry more than doubling its assets during this period.

Israeli Pension Funds (New) Asset Allocation 2007-2016

Furthermore, this low level of equity exposure is even more surprising given the global bull market run from 2009, meaning that fund managers have not been drawn into the market to chase returns.

It is worth pointing out that the composition of the Israeli public portfolio historically has been conservative, perhaps in response to the perceived risk or volatility of the Middle East, or more likely due to the overall wealth. Amazingly, the Israel public portfolio totaled over $1 trillion at end of 2017 or $117k/capita. This strong balance sheet reflects the emerging wealth of Israel as a result of the economic boom and is also what has been attributed to supporting the shekel against other currencies.

In general, retirement funds target a 5% annual real return over the long term. Investment giant Vanguard asked the question, “how often were retirement funds successful in meeting a 5% annual return over the long term?” They answered this question by analyzing the rolling 10-year real returns for a balanced portfolio of 60% equity/40% bonds historically. The graph below shows that nearly half the time the funds were unsuccessful in meeting this target. Interestingly, from the year 2000, this target was barely achieved; the last data point shows an 8.2% annual return for the customized period 2010-2017 period. Moreover, their analysis projects a median 2.8% annual return over the next 10 years, based on current valuation metrics for a 60/40 portfolio.

 Source: Vanguard

For the Israel retirement fund investor, the absolute and relative low exposure to equities might result in lower volatility of returns. Yet, implicitly, there appears to be a structural aversion to equities, which is not necessarily related to equity market valuation or performance. Due to the compression in bond yields over the past decade, this effect on overall performance may have been muted, as bond market returns gave back the “missing” equity market returns. Going forward, there is less room for capital appreciation based on bond yields and interest rate levels, such that the overall equity exposures will play a more crucial role in performance.

Therefore, the choice of retirement product and type of coverage is paramount. For a decision of this magnitude, professional advice by a licensed insurance agent is essential.

THE INFORMATION ON THIS SITE IS NOT INTENDED AS AND DOES NOT CONSTITUTE INVESTMENT, INSURANCE, LEGAL OR TAX ADVICE, NOR IS AN OFFER TO SELL ANY SECURITY, INVESTMENT PRODUCT, INSURANCE TO ANY PERSON OR A SOLICITATION OF ANY PERSON OF TO PURCHASE ANY SECURITY, INVESTMENT PRODUCT OR INSURANCE.

In the US, long-term care (“LTC”)  insurance is a major issue as the cost of quality nursing care is expensive and can last many years. Policymakers are concerned about the aging population and the long-term costs to care for the elderly. Insurance companies are concerned about the open-ended liability from existing policies which were modelled on optimistic investment returns, lower life expectancy, and lower policy cancellation rates as policyholders realized their insurer’s miscalculations. Consumers are confused by alternatives and fear nursing care costs wiping out a lifetime of earnings and being a burden on their families.

Whilst these common concerns are shared in Israel, there are some major differences between Israel and the US. Firstly, Israel has one of the highest penetrations of LTC insurance members via the public health system, with over 4 million members. These policies are collective policies offering basic coverage at competitive premiums, but the premiums are periodically updated with regulatory oversight. Further, this coverage is for a fixed period only, typically 5 years; for a payment amount which only partially covers the costs; and is dependent on the age at enrollment. These policies are typically viewed as only the first tranche of LTC insurance protection and are not sufficient on their own.

Private insurance companies provide the second tranche of LTC insurance which supplements the public health system and further protects family assets. These policies can be set to the desired level of coverage and accumulate over time a cash value, and are marketed as a means of “pre-paying” for nursing care. The monthly premiums paid are significant and the decision to begin a policy is a major decision as once started the policy is unlikely to be cancelled. This is due to the increased likelihood of the insured growing older and developing a new medical condition that would render cancellation not worthwhile. Further, switching to a new company or policy is unlikely as newer LTC policies have tighter underwriting, higher premiums and harsher definitions for claim eligibility.

In response to increased life expectancies, rising LTC costs and a future of lower investment returns, many US insurance companies have gone out of business or have discontinued selling the policies. Currently, only about a dozen companies in the US still offer LTC policies. Most of the companies that remain in the business have taken steps to increase premiums for both existing policyholders and new customers. While current policyholders continue to pay premiums with the hope that their company will be solvent to pay their future claims.

Similarly, in Israel the feasibility of these policies has attracted the attention of the regulator. In both countries, there is no guarantee that if an insurance company is forced to liquidate, the policyholder will receive the coverage they initially contracted for. However in Israel, there is little, if any, attention paid to the financial strength of the insurance company.

Proposals to clients in the US typically show rating agency A.M. Best’s credit rating for the issuing insurance company. This is a major factor in the sales process as the LTC policy is exactly that, for the long term. If the insurance company due to mis-management, lack of underwriting, or cut-throat premium pricing becomes insolvent then its policyholder might be left in a terrible situation.

In Israel, at present there is tremendous attention to premium levels and fees by consumers, and meetings with clients usually start with costs and fees rather than qualitative factors. However, for LTC insurance due to the underlying nature, price should not be the primary criterion, rather the long-term ability of the insurer to meet its obligations in the very far future. The decision for LTC insurance is in effect a lifetime decision as premiums might be paid for 20+ years, with little or no ability to switch companies without impairing benefits. Therefore the choice of insurer and type of policy coverage is paramount. For a decision of this magnitude professional advice by a licensed insurance agent is essential.

THE INFORMATION ON THIS SITE IS NOT INTENDED AS AND DOES NOT CONSTITUTE INVESTMENT, INSURANCE, LEGAL OR TAX ADVICE, NOR IS AN OFFER TO SELL ANY SECURITY, INVESTMENT PRODUCT, INSURANCE TO ANY PERSON OR A SOLICITATION OF ANY PERSON OF TO PURCHASE ANY SECURITY, INVESTMENT PRODUCT OR INSURANCE.

Within the 2017 Framework Legislation, the Government legislated new changes for retirement and benefits in order to ensure that the self-employed will be better prepared for retirement and periods of unemployment.

The law now requires a minimum contribution for retirement, along with tax benefits for making contributions.  A portion of the contributions can also be used when you’re not working, as unemployment insurance. Failure to make at least the minimum pension contribution will result in financial penalties – currently announced as 500 shekels.  However, the real penalty is in forfeiting the tax benefits from making the contribution which can be considerably higher in both value and percentage terms.

The minimum pension requirement can be divided into two tranches:

The first level is earnings up to 50% of the average salary in the economy.  For this first tranche of earnings 4.45% must be contributed.

The second tranche goes from 50% of the average salary in the economy (NIS 9,673) to 100% of the average salary in the economy.  For this second tranche, 12.55% must be contributed. For earnings above the average salary, contributions are optional, but are deductible up to the statutory limit (2017: NIS 33,024 if disability insurance is not paid).

For illustration purposes:

The pension contribution is allocated as follows: two-thirds for retirement benefits, and one-third for periods of unemployment.

The contributions can be made into qualified pension plans, provident funds and manager insurances depending on needs and circumstances. Over the past 5 years the returns on these plans in aggregate have been stellar while fees have come down tremendously.

As always, it is advisable to consult with a licensed professional to ensure that your retirement plans and obligations are being adequately met.

THE INFORMATION ON THIS SITE IS NOT INTENDED AS AND DOES NOT CONSTITUTE INVESTMENT, INSURANCE, LEGAL OR TAX ADVICE, NOR IS AN OFFER TO SELL ANY SECURITIES TO ANY PERSON OR A SOLICITATION OF ANY PERSON OF ANY OFFER TO PURCHASE ANY SECURITIES OR INVESTMENT PRODUCTS.

Mutual fund companies are complicated organizations, as are the people working inside them.  Mutual fund companies are primarily marketing organizations focused on gathering assets by promoting investment returns, which are then underwritten by the investment management team. As a result, there is pressure on mutual fund managers to perform with hyper focus on the return game, while at the same time needing to devote considerable time to marketing activities. This dichotomous tension results, in the best case, of valuable time wasted by investment managers on marketing activities; and in the worst case, in the launch of “fad” mutual funds from driving using the rear-view mirror.

The second aspect is the choice of mutual fund companies, the correct product within the myriad of choice, and lastly to be managed by the right manager.

The wrong investment house might be in the process of being silently acquired by another company, leaving staff more concerned in updating their CVs than servicing clients.  The wrong investment house might have a tendency to cremate their funds that blew up, never to be seen or heard from again.  Or perhaps to  silently reclassify their poorly performing investment funds into easier peer performance categories in order to whitewash them.  Or more commonly, they might be radio stations that always seem to be playing the newest song in town.

The wrong product is more nuanced.  Investors want the highest level on investment management and this is simply the firm with the best investment ideas and the managers who know how to execute on these ideas on risk/reward constraint.  It is very difficult for an outsider to choose the right product from the large product menu that most firms offer.  All too often, the investor chooses badly, and watches haplessly other funds within the same firm that provided better returns.

Mutual fund managers are severely limited by regulation and internal compliance from trading on their own account.  However, the best investment advice from a mutual fund manager is the answer to this question, “Which fund from your fund family would you invest in?” The answer to this question is worth money in the bank. Why? Because the mutual fund manager – due to compliance – might invest his own personal money in mutual funds as the least regulatory problematic option and which funds does he know the best? The fund he manages, as well as those of his colleagues – this is legal inside information at its best.  He knows which investment teams are struggling, which funds might have toxic assets or even hidden assets, which sector is most promising on investment merit and not marketing hype.

The last point is size. Smaller funds have an advantage over larger funds. It is far easier to navigate a small boat than an ocean liner. When managing large funds, the investment choices are initially screened for liquidity.  No matter how compelling the situation is, if it would be impossible to accumulate a decent position, it is rejected.  The cost of building up a position without moving the price is also a factor on the entry, but even more so on the exit side if there is a need to sell due to change in investment or unforeseen redemptions.  Here is the key takeaway – I would even request this be referenced in my name –

“Within a mutual fund family, a smaller mutual fund will usually outperform the larger mutual fund when operating under roughly similar objectives.”

This is important for a number of reasons.  Typically, the small fund will be serviced by the same research team as the large fund.  When new investment ideas are produced, the small fund might piggyback on the larger fund’s buying power, thereby providing an almost implied “put” option to its holding.  The smaller fund will typically have a lower management fee in order to entice investors and will also have an advantage in being able to accumulate positions more easily without incurring frictional trading costs.  Further, often there are funds which are similar but might have different names or classes, and only a forensic analysis of holdings will yield the golden nirvana of the best investment management of the firm in the lowest cost wrapper.

Lastly, smaller funds outperform, but when they become big funds, they find it more difficult. This holds especially true in Israel, where the top performing funds have beaten the larger funds, and based on their stellar returns have now become the “big boys.”  These firms are now awash with new funds, with their back offices flooded with capital flowing in as their funds take top position on 1, 3 and 5 year performance tables.  The fund flow has catapulted these firms’ assets and the ability to rely on past performance is diminished, because the new fund is growing by leaps and bounds every day and the manager’s main job is to deploy these assets as quickly as possible, as his portfolio becomes diluted by the new cash.  Likewise, his time is now even more stretched by marketing activities as the demand to present to banks and advisers is greater than ever.  This is a far cry from the situation a few years ago and as such the product is unalterably changed. Whether the firms manage this growth is not the mutual fund investor’s problem, he is not a shareholder participating in the growth of the mutual fund firm.  But qualitatively the firm and product have changed, and for top-performance ranked mutual funds, the warning “past performance does not guarantee future returns” resonates even more strongly.

The information on this site is not intended as and does not constitute investment advice or legal or tax advice or an offer to sell any securities to any person or a solicitation of any person of any offer to purchase any securities or investment products.

What is Tikun 190?

Over the past decade the Israeli Government has been encouraging citizens to ensure they have long-term savings for retirements. A classic example would be a doctor who is working in a public hospital who contributed to his pension plan based only on his paltry government salary, while in his private practice he earns a multiple of this figure but neglected to put aside funds for retirement income.

This strategic goal has reshaped the investment landscape with new laws, new financial products and constant tax rule updates and changes. The most current ruling titled “Tikun 190” is an opportunity for huge tax savings, efficient estate planning and maximum investment flexibility and returns.

In short, “Tikun 90” allows an Israeli citizen to contribute significant amount of funds into a provident fund or kupat gemel. Funds invested in these provident funds are locked until retirement age, which is at the young age of 60, and earlier than the official retirement ages of 64 for women and 67 for men.
A provident fund is a long-term savings vehicle that does not pay tax on interest, dividends, or capital gains. In other words, all investments inside the fund are tax-free (aside from certain foreign withholding taxes). Of course, there is a catch; in order to withdraw funds tax-free, they must be paid as an annuity, i.e. a monthly payout for life.

But, in contrast to the typical provident fund (for which tax relief was given at time of deposit) this annuity will be paid tax free as it is coming from after-tax funds. In other words, if the account holder has a monthly pension of 20,000/month at retirement, which according to current tax laws is liable for taxes, the additional annuity monthly payment generated by the Tikun 90 kupat gemel will be paid out tax free!

Now, what about paying out a lump sum? According to current rules, a lump sum may be withdrawn provided that the account holder can demonstrate a minimum monthly pension of approximately NIS 5,000/month, which is deemed to be the minimum living pension; then he will be entitled to withdraw the funds as a lump sum, but with payment of 15% nominal tax on cumulative capital gain – versus the current capital gains rate of 25%.

Lastly, and perhaps most importantly, if the account holder passes away, the beneficiaries can reap as well certain tax benefits.

As such, for people who are nearing retirement, in their 50s and 60s this might be an opportunity to allow tax free investing for the short-to-medium term, with the ability to withdraw funds in an efficient manner.

The information on this site is not intended as and does not constitute investment advice or legal or tax advice or an offer to sell any securities to any person or a solicitation of any person of any offer to purchase any securities or investment products.

The Israeli pension system is designed for an employee who is on the “40-year plan”, staying with the same employer for the full course of their working career. Unfortunately, this system clashes with the reality of the ever-changing global environment which results in wholesale shifts in industries and diminishing job security for most employees outside of the public sector.  This is further exacerbated by the necessity of opening a “new” policy with each new employer and regulatory changes, such that, one can easily accumulate 10s of plans/policies by retirement.

When changing jobs, the first factor to be aware of is the cessation of payments to your pension plan. The pension plan is comprised of 3 components: retirement savings, life insurance and disability insurance.  The retirement components will remain as savings for future retirement, however as contributions have stopped the projected annuity payment at retirement will be impacted by the length of non-payment period.   Fortunately, the insurance components will remain in effect for 5 months after your termination date.  This insurance is vitally important, and even when unemployed you want to maintain coverage for you and your family.  The premiums for this policy will be paid from within the policy for the first 5 months.  Following this period you will be offered the opportunity to extend this coverage for an additional 24 months.  The premium for this coverage can come from the savings in pension or paid via direct debit.

When you are starting your new job, you are legally allowed to choose the pension product, i.e. keep your existing policies.  However, your new employer will need to sign off on your choice of pension and direct all contributions to your pension as instructed.  All contributions from your new employer will be shown separate from the contributions of previous employers, albeit in the same pension plan.  There are various issues regarding tax planning, severance pay and pension plan options that are outside the scope of this article and require professional advice from a licensed agent.