EMPOWERING INSIGHTS ALL ABOUT THE INDIVIDUAL - - PowerPoint PPT Presentation

EMPOWERING INSIGHTS

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ALL ABOUT THE INDIVIDUAL

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Consultant Survey Pre-Covid

TOP TRENDS

0% 5% 10% 15% 20% 25% Technological Innovation Member Focus Integrated Suite Flexibility Price Reductions Generation Shift Focus on Pre- Retirees Capital Protection Indexation Impact Investing

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Consultant Survey Pre-Covid

TOP TRENDS

0% 5% 10% 15% 20% 25% Technological Innovation Member Focus Integrated Suite Flexibility Price Reductions Generation Shift Focus on Pre- Retirees Capital Protection Indexation Impact Investing

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Consultant Survey Pre-Covid

TOP ADVICE TRENDS

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% Costs of benefits and services Provision of financial advice through to members Standard disciplines Prescribed assets More time to be dedicated to member education

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Consultant Survey Pre-Covid

TOP ADVICE TRENDS

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% Costs of benefits and services Provision of financial advice through to members Standard disciplines Prescribed assets More time to be dedicated to member education

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Consultant Survey Pre-Covid

CHANGING NATURE OF ADVICE

0.00% 5.00% 10.00% 15.00% 20.00% 25.00% Member Communication Member Engagement Impact Members Use Data to Impact Members

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PARADIGM SHIFT

Member’s experience of retirement funds Enable better decisions

Engagement Data

Role of Umbrella Funds

Changed expectations of Consultants & Service Providers Reduced complexity > 1,000,000 members joined over the past decade

Default Regulations

EMOTIONAL IMPACT

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STATS SA ALL TOLD COVID-19 SURVEY

UNDER PRESSURE

8% lost jobs during the lockdown 26% experienced reduction in income during lockdown 10% increase in persons reporting no income during lockdown 19% indicate that lockdown will have a major impact on ability to meet financial

• bligations

12% concerned about short term impact

• f Covid on financial situation

67% concerned about long term impact

• f Covid on financial situation

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MEMBER BEHAVIOR

0% 5% 10% 15% 20% 25% 30% Members’ queries and/or complaints

• n their

investment performance and/or fund values Requests from members to access portions of their retirement funds Requests for financial advice from members Members' queries regarding their group risk benefits Digital engagement from members Member investment switches None of the above The utilisation of retirement benefits counselling Consultants Funds/Employers

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FINANCIAL RELIEF TO MEMBERS

0% 5% 10% 15% 20% 25% 30% 35%

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Financial Relief to Members

TEMPORARY SUSPENSION OF CONTRIBUTIONS

0% 5% 10% 15% 20% 25% 30% 35%

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TEMPORARY INCREASE IN TAX FREE AMOUNT FROM R500K TO R1M

0% 5% 10% 15% 20% 25% 30% 35%

Financial Relief to Members

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Financial Relief to Members

ONCE OFF TAX EXEMPT WITHDRAWAL

0% 5% 10% 15% 20% 25% 30% 35%

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Sanlam RFA Administration Data

MEMBER DATA

Average fund balance 0.8x annual pensionable salary 60% of members have balances of 6 months pensionable salary or less 11% of members have more than R500,000 Fund Value (R’) Proportion Average Pensionable Salary (R’) Average Gross Contribution (R’) Average Gross Contribution (% of APS) < 50,000 50% 107,000 13,000 12% 50,000 – 100,000 10% 205,000 27,000 13% > 100,000 40% 330,000 55,000 17% Total 100% 203,000 31,000 15%

Tax relief limited in scope Access or Borrowing

May not provide enough relief Impact long term outcomes

Conflicting needs System not prepared Low preservation rates impact

NET EFFECT

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Survey closed 5 June

APPLIED FOR SUSPENSION

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Consultants Funds/Employers Yes No

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EXPECTED DURATION

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 1 2 3 4 5 > 6 Consultants Funds/Employers

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REACTIONS OF MEMBERS

0% 5% 10% 15% 20% 25% 30% 35% Concern regarding their retirement outcomes Concern whether they would be covered for COVID-19 related insurance claims Concern regarding the loss

• f insurance coverage

Gratitude towards the employer No reactions noted Consultants Funds/Employers

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COMMUNICATION MECHANISMS

20 40 60 80 100 120 Email WhatsApp SMS Other Intranet Webinar Telephone Unsure Social Media Did not communicate Consultants Funds/Employers

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AWARENESS OF SUSPENSIONS

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Not at all Moderate Fully Consultants Funds/Employers

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CONTACT DETAILS

0% 10% 20% 30% 40% 50% 60% 70% Yes Partial Yes Partial No No Unsure Consultants Funds/Employers

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Full name Date of Birth SA ID number or Passport number Income Tax Number Contact number & cell number where available Email address Postal address Residential address

In respect of EACH MEMBER …

DRAFT CONDUCT STANDARDS

Date of membership Employer Pay Number Annual pensionable emoluments and annual CTC % and amounts of contributions Split between member and employer contributions Details of additional voluntary contributions An indication of any changes to previous period showing any differences in the data

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Consultant Survey Pre-Covid-19

HAS RISK PRICING STABILIZED?

Yes No

Upward rates revisions Linked to economic cycle Covid-19

Healthcare Impact Economic Impact

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EXPECTED PREMIUM INCREASES

0% 10% 20% 30% 40% 50% 60% < 10% 10% - 20% > 20% No increases anticipated Consultants Funds/Employers

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REVIEW DISABILITY INCOME BENEFITS

0% 10% 20% 30% 40% 50% 60% Change from flat benefit structures to income tax rate scaled benefit structures Increase the waiting period Reduce benefit levels Terminate the disability income benefits policy No need to review the disability income benefits policies Disability income benefits not available via the employer Consultants Funds/Employers

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EVALUATED INSURER SOLVENCY

0% 10% 20% 30% 40% 50% 60% 70% Consultants Funds/Employers Yes No

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Consultant Survey Pre-Covid

FRUSTRATIONS WITH INSURERS

0% 5% 10% 15% 20% 25% 30% Underwriting process Steep rate increases Administration burden Claims repudiation Complex benefit structures None

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Consultant Survey Pre-Covid

FRUSTRATIONS WITH INSURERS

0% 5% 10% 15% 20% 25% 30% Underwriting process Steep rate increases Administration burden Claims repudiation Complex benefit structures None

A ROUGH 12 YEARS

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WHAT DOES THE FUTURE HOLD …

V – U - W – L … US Elections Geopolitical Conflict Debt – GDP Future Pandemics ??? …

Accumulation

Time on your side Ride volatility Equity risk premium

Pre-Retirement

Conservative Less volatile

REVIEW STATUS QUO

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Sanlam RFA Data

MEMBER SWITCHING BEHAVIOR

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INVESTMENT DEFAULTS

Median tenure estimated at 4 years (Stats SA) Preservation a major obstacle Member switching behavior during downturns telling Reconsider investment defaults (11% cons ||16% funds/employers) Allow for volatility protection + Risk Profiled Member Choice Smoothing and/or guarantees Especially for pre-retirees

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PRE-RETIREMENT DEFAULTS

Most retirement capital available

Risk of losses greatest Opportunity to rebuild the least Retirement a once-off event

Correlations in diverse asset classes converge in crisis 13% of Consultants & 11% of Employers / Funds considering Relevant post-retirement to mitigate sequencing risk

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Consultant Survey Pre-Covid

TOP TRENDS

0% 5% 10% 15% 20% 25% Technological Innovation Member Focus Integrated Suite Flexibility Price Reductions Generation Shift Focus on Pre- Retirees Capital Protection Indexation Impact Investing

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HOW TO REBUILD SA’S ECONOMY

0% 5% 10% 15% 20% 25%

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USE UNCLAIMED BENEFITS TO HELP THE POOR

0% 5% 10% 15% 20% 25%

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INFRASTRUCTURE / ESG / ALTERNATIVES / SA INC.

0% 5% 10% 15% 20% 25%

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Consultant Survey Pre-Covid

WHAT IMPACT?

0% 5% 10% 15% 20% 25% 30% 35% Decent work and economic growth Climate action, clean water and sanitation Affordable and clean energy

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POST-COVID IRRELEVANCE

Individual’s needs

Cashflow Accessibility

Employer Value Proposition

Attract / Retain / Engage Burden Administration / Complaints

Low success rate Why bother Window of opportunity

Connect Engage Provide meaning

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REIMAGINE OUR PURPOSE

GOING VIRAL

Professions die and new professions emerge Whole industries die as new industries emerge Possible to rent almost anything so ownership is unnecessary Designs become rapidly obsolete Culture is transient – goods, services & relationships are temporary Disposable goods are commonplace

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SHIFT HAPPENS!

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WORLD ECONOMIC FORUM DEFINITION OF 4IR

“…fundamental change in the way we live, work and relate to one another. It is a new chapter in human development, enabled by extraordinary technology advances… commensurate with those of the first, second and third industrial

• revolutions. These advances are merging the physical, digital and biological worlds in

ways that create both huge promise and potential peril. The speed, breadth and depth

• f this revolution is forcing us to rethink how countries develop, how organisations

create value and even what it means to be human. The Fourth Industrial Revolution is about more than just technology-driven change; it is an opportunity to help everyone, including leaders, policy-makers and people from all income groups and nations, to harness converging technologies in order to create an inclusive, human-centred future. The real opportunity is to look beyond technology, and find ways to give the greatest number of people the ability to positively impact their families,

• rganisations and communities.”

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DIGITAL REVOLUTION

Cyber resilience Operational resilience Cost efficiencies Connections Individualisation Customer Experience Drivers Relevance Security Continuity Value for money Engagement Satisfaction Member Centricity

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NTT Global Threat Intelligence Report

CYBERSECURITY

Most attacked sectors in South Africa … Insurance 50% Finance 44% Retail 3%

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Consultant Survey Pre-Covid

BIGGEST RISKS

0% 5% 10% 15% 20% 25%

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SO DO THEY …

Change to ‘Work from Home’ Appetite for information and news Innovative threat actors Pattern of Life

WHO Updates Mandatory email to all staff Safety measures Treatments

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Mimecast ‘100 days of coronavirus’ report

CYBERSECURITY

26% increase in spam detections 30% increase in impersonation detections 35% increase in malware detections 56% increase in blocking of URL links Sanlam Cyber Resilience Benchmark

Figure 5: Rejected Spam Volume per User

Europe

USA

UK

NEW PHRASES

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LIFESAVERS

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EFFICIENCIES – ENABLE THE HUMAN

Automate the routine Enable the human Robotics Robo-Counselling HR burden Consultant time

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CONNECTING THROUGH LOCKDOWN

0% 5% 10% 15% 20% 25% 30% 35% Email Telephone WhatsApp Other SMS Intranet Webinar Social Media Did not communicate Unsure

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CONSULTANTS’ TOOLKIT

20 40 60 80 100 120 140 Zoom MS Teams WhatsApp MS Skype Webex Linked In None of the above

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CONSULTANTS’ EXPERIENCE

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% Communication to you from service providers Communication to members from service providers The operational resilience of your service providers The appropriateness of your clients' investment strategies on average Retirement benefits counselling provided to members The digital capability

• f your service

providers Support provided to you by service providers during the lockdown Ineffective Neutral Effective

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FUND / EMPLOYER EXPERIENCE

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% Communication to you, your Retirement Fund

• r Employer from

service providers Communication to members / employees from service providers The operational resilience of your retirement funding service providers The ability of services providers to engage you digitally The appropriateness of your Retirement Fund's investment strategy Retirement benefits counselling provided to employees / members Ineffective Neutral Effective

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Consultant Survey Pre-Covid

CHANGING NATURE OF ADVICE

0.00% 5.00% 10.00% 15.00% 20.00% 25.00% Member Communication Member Engagement Impact Members Use Data to Impact Members

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Consultant Survey Pre-Covid

ADVICE STRATEGY

Own Advisor Panel of Advisors Salaried Advisors No Strategy Unsure

Bulk of members do not have access to ‘Own Advisor’ Experienced significant benefits of employer vetted advice structures High Quality Financial Advice adds tremendous value NB link in Member-centric strategy

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ALL TOLD COVID-19 SURVEY

ADVICE STRATEGY

Bulk of members do not have access to ‘Own Advisor’ Experienced significant benefits of employer vetted advice structures High Quality Financial Advice adds tremendous value NB link in Member-centric strategy

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Consultant Survey Pre-Covid

DOES FINANCIAL LITERACY TRAINING ADD MEANINGFUL VALUE?

Yes No Unsure

Overwhelming support Execution

Generic Information Empowering Opt In for Advice Feedback Loop

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GENERATIONS

0% 10% 20% 30% 40% 50% 60% Baby Boomers Gen X Millennials Gen Z

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GENERATIONS

0% 10% 20% 30% 40% 50% 60% Baby Boomers Gen X Millennials Gen Z

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Sanlam Benchmark Focus Group

MILLENNIAL VIEWS

Lived experience of parents Balancing act of spending on education … children’s needs takes priority Property due to influence of parents Lack of focus on emergency savings … make a plan!!! Request more than paper statements Need help with Debt Access to advice

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INDIVIDUALISED MEMBER SUPPORT

Information at Critical Points

Withdrawal Pre-Retirement

Written / Electronic / Telephonic / F2F FinTech

Apps Portals WhatsApp SMS

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PROACTIVE COUNSELLING

Market downturn due to Covid-19 Increase in switching activity Engage members to inform them of risk of switches Living Annuity Drawdowns Engage annuitants electing to increase Inform them of impact

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Sanlam RFA Data

MEMBER SWITCHING BEHAVIOR

100% increase in requests for debt counselling 300% increase in request for will drafting and estate planning

ICAS FINDINGS OVER LOCKDOWN

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CREDIT MANAGEMENT

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WILL DRAFTING THROUGH EXISTING MEMBER ENGAGEMENT PLATFORMS

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TELEMEDICINE

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NOW IS THE TIME TO ACT!

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Members & Decision Makers Financial circumstances Education level The age of decision makers

millennials are more than 50% of membership Joint forum / Trustee representation is <10%

DISCONNECTED

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“It is now in your hands”

MARCH 24 ADDRESS