Client-Centricity Is Not A One-Day Game

A conversation with Johan van der Merwe, CEO: Sanlam Investments

It’s a year since you decided to make client-centricity your focus and change the business structure accordingly. What does ‘client-centric’ mean to you and why did you choose this as the focus of the business?

Client-centricity means finding out what clients want and giving it to them. You can’t assume just because you have a product and good performance that clients will buy from you. We had these, but we found many potential clients were still buying from our competitors. So, when we introduced these changes in November 2013 we felt – and we continue to feel – optimistic, believing that we will significantly improve our ability to attract new clients into our solutions. But client-centricity is not a one-day game; it’s a five-day match.

We had to fundamentally review our engagement model and approach to clients. We also continue to attract new talent into client-facing roles, which will allow us to serve our clients with the level of sophistication they require.

Can you give us examples of the changes the different business units made to be more client-centric?

The Institutional Business (IB) is now segmenting its clients based on their needs and how they ‘buy’. The business has assessed its staff and matched the right people with the right segment, bringing in new talent where there were gaps.

The team has also explored ways in which they can optimise existing relationships with institutional clients from other businesses across the Group. Similarly, the Retail Business is positioning itself as the ‘intermediary investment partner of choice’. Hence, the team has developed sales guides to assist in sales, portfolio manager presentations and marketing material. Significantly, this business now leverages off the distribution force of Sanlam and its platforms much better than before. A number of opportunities, such as customised solutions, have been identified to make the life of the Sanlam financial adviser easier and simpler.

Employee Benefits has also established a Client Solutions unit, which is aligned with what the rest of the business, particularly IB, is doing. In addition, Sanlam Private Wealth, which was already well structured to serve their clients, further segmented their client base to serve clients even better and provide them with perfectly tailored solutions.

It’s been only a year, but have you seen these changes bear fruit yet?

Oh yes. Increasingly I’m seeing examples of how our people are thinking differently about client engagement because they are considering clients’ needs first. I’ve also had several client interactions over the past few months, with BlueStar advisers, IFAs and multi-managers, and they are telling us, ‘We can sense the difference’. As a result, they have started voting with their feet. We have been very fortunate to see financial results relatively quickly. For example, on the retail side, the changes have resulted in several new implemented consulting clients with substantial amounts of flows into that solution set. In terms of institutional business, the current pipeline includes significant new mandates that have been confirmed, either in writing or verbally. Because of a more sophisticated approach to due diligences, we are attracting mandates from clients who didn’t see us as a viable solution provider before. We believe these recent wins will attract more mandates from areas that were inaccessible to us before.

Is there any achievement during 2014 that really stands out for you?

Our Employee Benefits business has concluded what many are calling ‘the deal of the century’ – the largest life insurance policy ever written in SA, as far as we are aware. The annuity policy guarantees the pensions of 3 650 pensioners for life and also guarantees that it will increase with inflation every year. This solution speaks directly to our purpose at Sanlam Investments, which is to improve the lives of a broad range of stakeholders by protecting and growing their wealth in a sustainable manner.

Speaking of stakeholders, transformation has an impact on the community, staff and clients, but remains a challenge for local asset managers.  How is Sanlam Investments faring in this space?

We understand the need for transformation and will continue to comply with the relevant legislation. However, to make a meaningful contribution to our industry and the community we need to build BEE capacity from a trainee level. This is why initiatives such as the Alternative Investments Academy, targeting talented black graduates, are crucial for our future success. Instead of just poaching black asset managers from other investment houses, which doesn’t benefit the community as a whole, we focus on training new entrants, placing them in the workforce and giving them every opportunity to develop into asset managers.

Since its demutualisation in 1998, Sanlam has served its shareholders, of which many are policyholders and clients, well. Did you create any new business units this year to cast your net wider in search of operating profits?

 Yes, we have long pursued a diversification strategy to create value for all our stakeholders under varying market circumstances. We are therefore very excited about our Africa Investments business.

Finding growth opportunities in non-traditional asset management arenas is becoming increasingly important. We have therefore also accelerated our efforts to grow a leading Africa Investments business by, among other things, consolidating our African listed equity, real estate and debt products into a separate Africa Investments business housed within the Investment Core. St John Bungey was appointed as the first CEO of this new Sanlam Africa Investments business and Brett Mallen was appointed COO. This business will leverage off the Africa expertise of the Sanlam Group.

To remain competitive even highly successful businesses need to constantly innovate and introduce new offerings. In which way did innovation serve Sanlam Investments’ clients better in 2014?

Innovation is part of our core values, along with passion and transparency. We have numerous examples of innovation during 2014, of which I’ll extract only a few. I’ve already mentioned the pension-for-life solution that resulted in the biggest policy ever written in South Africa.

Another example is the fact that we introduced a credit facility to clients, secured by their listed share portfolios.This was a proactive step by the business to retain clients who might otherwise have switched to the wealth management divisions of the big banks. The book is also profitable and secured by clients’ investment assets.

We also looked at the challenges that advisers face because of tougher regulation and designed customised solutions to mitigate a large part of advisers’ compliance risk. These solutions make the life of the Sanlam Financial Adviser easier and have translated into additional revenue for the business. It’s a really successful value-add for our clients.

In the passive space we launched the Satrix Low Equity Balanced Index Fund, and we will continue to expand our Satrix range where there is investor demand.

Sanlam Investments offers such a comprehensive and diverse range of solutions, with some great minds managing these funds. How do you share this knowledge with your clients?

Sharing information and con-tributing to thought leadership is essential for a company like Sanlam Investments. We believe that by sharing we help our stakeholders make more informed decisions about protecting and growing their wealth.

We have a couple of platforms for sharing information. For example, this year we hosted the first i3Summit – a speaker platform where we shared thought leadership – our own and that of local experts and international visitors, such as Dr Philippa Malmgren (former adviser to the White House). The feedback from the delegates was overwhelmingly positive and we’ve set a high standard for future investment seminars. Throughout the year we continue to share video interviews and articles on this portal.

To conclude, how would you describe your vision for Sanlam Investments?

We need to get to that place where all our stakeholders have an emotional bond with the company. Everyone who interacts with us should want us to succeed. They should want to invest with us, work for us, buy from us and ask us to get involved in their communities.

We have everything that is needed to become an organisation that is relevant and that connects with all of our stakeholders, not only shareholders. After all, we hold the savings and investments of the nation in our hands.

We need to be successful to make it possible for people to retire with dignity and to save for an important goal, such as their children’s education or starting their  own business.

Sharing information and contributing to thought leadership is essential for a company like Sanlam Investments.

DISCLAIMER: The Sanlam investments cluster is part of the Sanlam Group. It consists of the following authorised Financial Services Providers: Sanlam Investment Management (Pty) Ltd (“SIM”), Sanlam Multi Manager International (Pty) Ltd (“SMMI”), Satrix Managers (Pty) Ltd, Graviton Wealth Management (Pty) Ltd, Graviton Financial Partners (Pty) Ltd, Radius Administrative Services (Pty) Ltd and Blue Ink Investments (Pty) Ltd and has the following approved Management Companies under the Collective Investment Schemes Control Act: Sanlam Collective Investments (RF) (Pty) Ltd and Satrix Managers (RF) (Pty) Ltd.

Disclaimer

Although all reasonable steps have been taken to ensure the information on this website/advertisement/brochure is accurate, Satrix Managers (RF) (Pty) Ltd does not accept any responsibility for any claim, damages, loss or expense; however it arises, out of or in connection with the information. No member of Sanlam gives any representation, warranty or undertaking, nor accepts any responsibility or liability as to the accuracy of any of this information. The information to follow does not constitute financial advice as contemplated in terms of the Financial Advisory and Intermediary Services Act. Use or rely on this information at your own risk. Independent professional financial advice should always be sought before making an investment decision.

Collective investment schemes are generally medium- to long-term investments. Please note that past performances are not necessarily an accurate determination of future performances, and that the value of investments / units / unit trusts may go down as well as up. A schedule of fees and charges and maximum commissions is available from the Manager, Satrix Managers (RF) (Pty) Ltd, a registered and approved Manager in Collective Investment Schemes in Securities. Additional information of the proposed investment, including brochures, application forms and annual or quarterly reports, can be obtained from the Manager, free of charge. Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. Collective investments are calculated on a net asset value basis, which is the total market value of all assets in the portfolio including any income accruals and less any deductible expenses such as audit fees, brokerage and service fees. Actual investment performance will differ based on the initial fees applicable, the actual investment date, the date of reinvestment of income as well as dividend withholding tax. Forward pricing is used. The Manager does not provide any guarantee either with respect to the capital or the return of a portfolio. The performance of the portfolio depends on the underlying assets and variable market factors. All the portfolio options presented are approved collective investment schemes in terms of Collective Investment Schemes Control Act. The Manager has the right to close any portfolios to new investors to manage them more efficiently in accordance with their mandates. The portfolio management of all the portfolios are outsourced to financial services providers authorized in terms of the Financial Advisory and Intermediary Services Act, 2002. Standard Bank of South Africa Ltd is the appointed trustee of the Sanlam Collective Investments scheme.