viresh maharaj - sanlam.co.za · microsoft powerpoint - vm-presentation-bm-2019.pptx author:...
TRANSCRIPT
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Viresh Maharaj
Megatrends
Chief Executive:Corporate Sales and Marketing
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“The most reliable way to anticipate the future is by understanding the present”
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THE MEGATREND CONTINUES
22 1010 1717 years
Standalone
Incepted in the past
Umbrella
11 33 44 55 66 77 88 99 1111 1212 1313 1414 1515 1616
4
55
17
78
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CHANGING THE FACE OF THE INDUSTRY13,000 in 2005
1,500 in 2019
350 in process of transfer
< 2,000 members
< 500 members
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Governance – King IV
Member Engagement
Information Security
Default strategies
Professional and Independent Trustees
Scale
How to best enable financial resilience?
KEY CONSIDERATIONS
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NEXT STAGE – UMBRELLA REVIEWS
2019 Sanlam Benchmark Umbrella Survey
Considered Switching36%
Review 1-3 Years48%
Never Reviewed33%
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MOST CAPABLE OF ENABLING FINANCIAL RESILIENCE FOR MEMBERS
2019 Sanlam Benchmark Consultant Survey
Sanlam Umbrella Fund
A
B
C
Other
D
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HOW ADMIN FEES ARE CHARGED
R pmpm % of salary % of AUM
Standalone
Umbrella
7
3
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AVERAGE ADMIN FEES
Standalone
Umbrella
R pmpm % of salary % of AUM
R52 0.58% 0.78%
R40 0.59% 0.74%
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GROUP RISK AVERAGES
Standalone
Umbrella
Cover
Approved Life
1.44%
1.29%
3.3x
Unapproved Life
1.22%
1.24%
3.1x
Disability Income
1%
1%
75%
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TOP ADVICE THEMES RE GROUP RISK
Increase funeral cover
Introduction of Severe
Illness Benefits
Increases in insurance
rates
2019 Sanlam Benchmark Consultant Survey
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Increase funeral cover
Introduction of Severe
Illness Benefits
Increases in insurance
rates
TOP ADVICE THEMES RE GROUP RISK
52% indicated that their clients experienced large rate increases over the past 3 years
19% have experienced a trend towards more claims being declined
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AVERAGE CONTRIBUTIONS
Employer
Employee
Standalone Umbrella
Total
7%6.6%
9%
10%
16%
16.6%
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Gross Contribution 16.3%
Net Contribution 13.0%
Risk Costs: Life 3x + PHI 2.3%
Administration Fee 0.6%
Consulting Fee* 0.4%
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Term Replacement Ratio
10 9%
40 56%
30 36%
20 21%
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Term No Admin or Consulting Fees
10 10%
40 61%
30 39%
20 22%
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Term & No Investment Fees
10 11%
40 74%
30 45%
20 25%
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Term Income Uplift
10 2%
40 18%
30 9%
20 4%
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Fixation on Costs
• #1 issue that EB Consultants wish would change
• Costs need to be competitive & reasonable
• Marginal differences do not move the needle
• Megatrend here to stay
“PRICE IS WHAT YOU PAY, VALUE IS WHAT YOU GET”Warren Buffett
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• Medical inflation > CPI
• Healthcare need is immediate, regular & visible
• Medical debt
• Sandwich generation
Compete with Retirement Fund Contributions/ Preservation/ Attention
IMPACT OF HEALTHCARE
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2019 Sanlam Benchmark Consultant Survey
Unsure 26%
No 36%
Yes 38%
DO CLIENTS REGARD HEALTHCARE AS MORE IMPORTANT THAN RETIREMENT FUNDING?
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INTEGRATION OF RETIREMENT FUNDING, INSURANCE & HEALTHCARE ENABLES FINANCIAL WELLNESS
A great degree
2019 Sanlam Benchmark Consultant Survey
Uncertain
No impact
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DEFAULT REGULATIONS TIMELINE
1st Draft
July2015
2nd Draft
December2016
Published
August2017
Guidancenotes
2018
Implementation
by
March 2019
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of EB Consultants believe that theDefault Regulations will help to improve financial resilience for members
DEFAULT REGULATIONS TIMELINE
2019 Sanlam Benchmark Consultant Survey
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2019 Sanlam Benchmark Standalone Survey
READINESS FOR D-DAY
Preservation
Annuitisation
Counselling
Investments
Likely Unsure Unlikely
94
68
82
88
4
24
14
8
1
8
4
4
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Governance – King IV
Member Engagement
Information Security
Default strategies
Professional and Independent Trustees
Scale
How to best enable financial resilience?
KEY CONSIDERATIONS
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INVESTMENTS
Lifestage66% 56%
Balanced25% 27%
Guaranteed7% 16%
Expectations7.8% 6.8%
Standalone Umbrella
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INVESTMENTS
Standalone Umbrella
Lifestage66% 56%
100% Cash45% 38%
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ANNUITIES – STANDALONE
Guaranteed
9%
With Profits
33%
Living Annuity
26%
Inflation Linked
8%
Combination
Hybrid
23% 1%
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RETIREMENT BENEFITS COUNSELLING
Standalone
2019 Sanlam Benchmark Consultant Survey
Written
HR
Administrator
EB Consultant
IFA
51%
20%
47%
25%
22%
88% believe that RBC will assist in improving retirement outcomes
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ADVICE
Advice Strategy63% 62%
Preferred Panel66% 67%
Subsidised Advice30% 24%
Standalone Umbrella
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TRANSFORMATION
Standalone Funds
24% unaware of voluntary FSC B-BBEE Scorecard
7% would consider B-BBEE status when considering Umbrella Fund Providers
EB Consultants
60% of EB Consultants do not consider B-BBEE Level when recommending Service Providers
33% believe that Employers do not place any weight on B-BBEE Level
70% believe that B-BBEE Level should not carry greater weight in decision making
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GOVERNANCE: DIRECTIVE 8 STANDALONE
2019 Sanlam Benchmark Standalone Survey
Engage First 35%
Whistle Blow 53%
Declare All Gifts 54%
40%No Gifts
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GOVERNANCE – KING IV
2019 Sanlam Benchmark Consultant Survey
Unsure33%
No7%
Yes62%
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BEST GOVERNED UMBRELLA FUND
2019 Sanlam Benchmark Consultant Survey
Sanlam Umbrella Fund
A
B
C
Other
D
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MEGATRENDSGovernance & RegulationConsolidationReview of Umbrella ProvidersIntegration with HealthcareGroup Risk DisruptionTechnological InnovationFixation on CostsTransformationCyber RiskIndividualisation