Sanlam Limited · JSE:SLM
Sanlam — Investor Presentation (2018)
31 slides from Sanlam's investor presentation, Sep 3, 2018
Slide 1: #FeesMustbeTransparent
SKIN MUSCLES ORGANS NERVES CELLS te CODE 466907758 ies
Slide 2: Sample • 100 Standalone Funds • 50% > R1Bn AUM
Sample • 100 Standalone Funds • 50% > R1Bn AUM • 50% > 2,000 members
Slide 3: Sample
Consolidation 75% with < R1Bn AUM considered BIGGEST transitioning to Umbrella 32% with > R1Bn AUM considered #Trend transitioning to Umbrella
Slide 4: Consolidation
Administration Fee Expressed as Standalone Umbrella Percentage of Salary 52% 70% Rand pmpm 36% 30%
Slide 5: Administration Fee
Administration Fee Average Standalone Umbrella Percentage of Salary 0.54% 0.64% Rand pmpm R 54.00 R 44.00
Slide 6: Administration Fee
Administration Fee Average - Standalone < 500 Members > 10,000 Members Percentage of Salary 0.77% 0.41% Rand pmpm R 68.00 R 34.00
Slide 7: Administration Fee
Administration Fee Average < 500 members Standalone Umbrella Percentage of Salary 0.77% 0.68% Rand pmpm R 68.00 R 52.40
Slide 8: Administration Fee
Administration Fee - % of AUM Average – 0.55% AAV Cost ( % AUM ) Rand Cost PA R 25,000,000 0.88% R 220,000 R 75,000,000 0.78% R 585,000 R 400,000,000 0.26% R 1,040,000 R 2,500,000,000 0.13% R 3,250,000 R 5,000,000,000 0.32% R 16,000,000
Slide 9: Administration Fee - % of AUM
Investment Management Fees • 7% claimed that fees were transparent Fee breakdown ABC Portfolio base management fee 0.50% • 25% stated that fees were not transparent at all platform / asset based admin fee 0.00% • 93% want TERs and TICs guarantee premium 0.00% global / external manager fee 0.40% inve
Slide 10: Investment Management Fees
Slide 11: Slide 11
Slide 12: Risk Charges
Risk Charges Standalone Umbrella Approved Life Cover 1.45% 1.51% Unapproved Life Cover 1.23% 1.09% PHI 0.96% 0.88%
Slide 13: Risk Charges
Benefit Structures Average Multiple of Cover Standalone Umbrella Approved 3.25x 3x Unapproved 3.57x 3.53x
Slide 14: Benefit Structures
Severe Illness Benefit 75% would advise clients to offer • Awareness • Prevalence • 1 in 4 according to CANSA
Slide 15: Severe Illness Benefit
Contributions Standalone Umbrella Employer 9.9% 8.4% Member 5.7% 5.5% Total 15.6% 13.9% Administration Charges 0.54% 0.64% Risk Charges 1.45% 1.51% Net Contribution 13.61% 11.75% Replacement Ratio 80% 70%
Slide 16: Contributions
Targeted Pension • 2/3 Standalone funds • 1/4 Umbrella participants Jury out on RR • 1/3 Standalone funds • 2/5 Umbrella participants
Slide 17: Targeted Pension
Investment Strategies 80% in defaults Standalone Umbrella Balanced Active Fund 23% 18% Balanced Passive Fund 10% 10% Smooth Bonus Fund 5% 20% Lifestage Strategy 60% 50% 60% of Consultants recommend Lifestage
Slide 18: Investment Strategies
Investment Strategies Lifestage • Manage investment risks • At each Lifestage • Optimize salaries in retirement • Smooth transitions in working life
Slide 19: Investment Strategies
Investment Strategies Pre-Retirement … Post-Retirement • Single transition • Assets used to purchase an income • Assets pre – should match assets post • Investments to align with annuity strategy • Asset/Liability mismatch risk
Slide 20: Investment Strategies
A Critical Mismatch Standalone Umbrella Not explicitly aligned with annuity strategy 52% 32% Unsure whether aligned with annuity strategy 2% 26% 100% Cash in pre-retirement stage 40% 28%
Slide 21: A Critical Mismatch
Trustees South Africa - Employed Transformation Gap Black 47% 75% 28% Women 25% 45% 20% < 45 33% 70% 37%
Slide 22: Trustees South Africa - Employed Transformation Gap
Procurement • 50% did not monitor procurement • 15% indicated that no procurement from majority Black owned firms
Slide 23: Procurement
Perceptions of FSC Scorecard • Half believe that it will stimulate • 30% believe it will not impact ability to transformation gain new appointments • 35% uncertain of impact • 20% believe that existing appointments will be affected • 18% believe that it will have no impact • 20% take scorecard into
Slide 24: Perceptions of FSC Scorecard
Gateway to Africa • 33% of Consultants have clients with African links • 55% managed from South Africa • 30% allow regional entities to source locally
Slide 25: Gateway to Africa
Gateway to Africa • Obstacles – Legislative, Regulatory & Operating Context • Constraints – Different providers per country, different policy conditions
Slide 26: Gateway to Africa
Advice 49% 64% Standalone Umbrella Referral to preferred advisor 40% 34% Advice subsidised/paid by fund 22% 22%
Slide 27: Advice
Retirement Benefits Counselling
Slide 28: Retirement Benefits Counselling
Retirement Benefits Counselling Paper communication 17% Access to Benefits Counsellors 22% Member sessions 20% Contact by Financial Advisor at withdrawal 17% Contact with HR at withdrawal 13% Robo-counselling 11% 11%
Slide 29: Retirement Benefits Counselling
One Stop Shop 92% • Not locked in to a single provider • Not product push Blurring of institutional and retail contexts
Slide 30: One Stop Shop
Consultants • High Quality … Better Outcomes • Regular reviews • Innovation • New entrants • Costs • Complacency
Slide 31: Consultants
Differentiated/Advanced/Responsive Answer % A 11% B 0% C 26% D 10% Sanlam 34% Other 19%