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CDH Financial Advisory Service

In the modern age of financial services, different banks offer a variety of financial services to different customers. But there is a new approach which CDH Asset Management Limited has developed expertise in. This approach is aimed at providing specialised advice on financial matters to individuals and companies. That service is called financial advisory.

Financial advisory service is professional advice that is given to individuals and companies on financial matters such as investments, financing, divesture, savings, retirement planning among others.
In this brief article, the Fund and Investment Manager for CDH Asset Management Limited, Mr. Thoko Mkavea explains what financial advisory is and puts forward a proposition as to why CDH Asset Management Limited should be the preferred choice when you need financial advisory service in Malawi.

Our financial advisory services which are described below include financial planning, treasury management or outsourcing, financial restructuring, capital re-organisation, raising debt or equity capital through private placement or public offer.

Financial Planning
Financial planning is a systematic financial resource allocation advice provided by CDH Asset Management Limited to assist customers to maximize their existing financial resources by utilizing our expertise and investment tools to achieve the desired financial goals.

CDH Asset Management Limited makes financial planning recommendations that perfectly fit the specific circumstances of individual customers or companies. The service covers the following areas: -

• Planning savings for major expenses, for example, funding a child's education, buying a house or car, or developing a cash reserve for special occasions like weddings and vacations. This could also involve planning for a major project.
• Planning for your retirement by estimating your retirement income and expenses. The service will assist you plan on how you can structure your investments now to enable you fulfill retirement goals.
• Planning on how to legally minimize taxes, project the effect of income taxes, and develop a tax deferment strategy
• Provide assistance in drawing financial plans that cover you and your family against the risk of financial crises for example, when you die or become incapacitated
• Assist you draw plans for distribution of wealth to future generations

A financial plan can help you prepare for after retirement life and it give you a clear picture of where you going, and peace of mind about your future.

Treasury Outsourcing
Treasury outsourcing is an advisory service where a company appoints a specialist third party, like CDH Asset Management Limited, to manage its treasury activities on its behalf rather than having to carry out these functions in-house.

The benefits of outsourcing treasury activities involve: -

• The company has access to an effective treasury function which is supported by a wider pool of treasury and investment research expertise
• The company benefits from treasury activities that are well managed using clearly defined objectives, responsibilities and service levels
• The company will be left with enough resources to focus on their core competencies  through streamlined processes thereby benefiting from efficiency
• For groups of companies, the service provides for reduced costs through centralization of treasury activities. Rather than duplication of treasury functions in each of the individual companies within the group.
• The company saves costs by avoiding the cost of investing in systems and personnel

Overall, the company benefits from flexibility, efficiency and value for money through an already existing treasury resource that does not require a company to invest in information technology and personnel.

Financial restructuring
Financial restructuring is a major change in the finances of a company which is usually done to improve the efficiency of a company. Financial restructuring can involve the following: -

• Balance sheet reorganization

This may involve changing asset mix, funding mix etc. Some companies might have too much equity and would need to introduce debt to optimize cash flow and take advantage of tax reliefs.

• Downsizing

This is where a company reduces the size of its workforce or disposes of its non-core assets to improve efficiency

• Creation of new profit centers from existing business areas

A company may decide to improve its profitability by introducing new profit making units within its structures or converting some of its existing parts into profit centers

• Recapitalisation

This is where a company decides to increase its capital structure.

• Debt rescheduling

A company can decide to lengthen the maturity of its debt to improve its cash flow or shorten it to minimise interest expenses

CDH Asset Management Limited provides assistance in these areas by providing the expertise thereby easing the burden on finance managers to deliver superior performance and enhanced value for their shareholders.

Capital re-organisation
A capital reorganisation is a significant change to a company’s capital structure, and refers to an adjustment to the amount and composition of capital.
CDH Asset Management Limited can assist a company restructure through: -

• Reducing or increasing its share capital through adjustment of its distributable reserves. This may be done through either consolidation or splitting of shares
• Changing the structure of a group of companies, for example, introducing a subsidiary or holding company
• Cancelling securities
• Changing the rights of particular classes of securities for example shares
• Introduction of debt or other forms of capital.

A company can benefit from capital reorganisation through; acquisition of additional shares at attractive prices, improved and efficient capital structure, EPS accretion, improved liquidity in equity investments and dilution of a single controlling shareholder.

Raising debt or equity Capital through private and public placement
For companies seeking to raise debt or equity capital in the capital markets, CDH Asset Management Limited can provide an independent view of the critical issues involved in accessing a particular capital market, whether the company intends to raise capital privately or publicly. Our advice is tailored according to whether you are a small and medium enterprise, or an entrepreneurial company.
The service involves: -

• Reporting on financial track records in prospectuses
• Project management
• Corporate governance and systems reviews
• Market and operational due diligence
• Assisting in resolving issues with stock market regulators

The key benefit of raising capital through a public issue is that a company has a wide access to financiers. This results in the company raising the required amounts of money at an affordable cost.

CDH Asset Management Limited provides advice at all stages of this process.

Tax planning
Tax planning is a systematic approach which CDH Asset Management Limited employs to analyse differing tax options aimed at minimising tax liabilities in current and future tax periods.
Tax planning is beneficial to both individuals and corporate and its features include: -

• Taking advantage of tax exemptions available under the law;
• Taking advantage of permissible tax deductions and rebates available on stipulated tax-saving investments; and
• Making optimum use of tax-exempted incomes

To effectively manage your tax obligations is not easy, especially if tax management is not your area of competency or is not a core business for your company. If professionally done it can relieve the onerous financial burdens that can stifle a company’s development and prosperity.

Why CDH Asset Management Limited?
CDH financial advisory service offers the following benefits:

• Unbiased and impartial advice delivered with speed
• Unique ideas and financial structures.
• Client confidentiality and anonymity is assured.
• Solutions derived without limiting or tying client to specific financial institution.
• Intelligence on new financial products and experience in evaluating client needs.

In delivering its advisory services, CDH Asset Management Limited makes sure that it operates within an environment in which it develops findings, conclusions and recommendations that are presented to the client for consideration and decision making at a reasonable fee. The financial advice is presented to the client in an acceptable professional format.
CDH Asset Management Limited is on First Floor of Unit House, along the Victoria Avenue. Its address is: PO Box 1444, Blantyre. Its telephone number is 01 821 300. Fax: 01 830 638/679. Email: info@cdh-malawi.com; website: www.cdh-malawi.com
CDH Asset Management Limited was incorporated in 2002. It is a licenced portfolio/investment manager, regulated by the Reserve Bank of Malawi under the Capital Market Development Act, 1990. Other services on offer include management of pension funds, gratuity funds, medical funds, staff savings schemes, staff welfare schemes, severance funds, family trusts, special purpose funds, endowment funds. It also provides private wealth management services targeting high net wealthy individuals.

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