A new dawn for Alexander Forbes Namibia
Financial service providers are facing a challenging landscape. Stefan du Preez, the new chief executive officer of Alexander Forbes Namibia, sat down with Business7, touching on issues ranging from the regulatory environment to the national pension fund.
14 August 2019 | Business
To be able to survive and move forward, things we did today in one way will have to be done differently tomorrow.
SdP: There were a lot of changes over the past few years, not only within Alexander Forbes Namibia, but also within the Alexander Forbes Group, our parent company in South Africa. This led to a lot of uncertainty and loss of clients and staff members.
For me the most important thing is to bring back stability and trust - not only within the company, but also to our clients. We have dedicated and well-trained people within Alexander Forbes Namibia. We have the required systems - all we need to do is to focus our energy towards what is best for our clients in an organised manner.
We know where we want to be. We want to provide a complete value proposition to our clients which results in their financial well-being. We want to be in pursuit of certainty – our client’s certainty – and want to be the partner of choice.
My vision to put it short is – Let’s do what we do best, do it efficiently and do it correctly, the first time. Once we’ve achieved this, we can review the vision for the extended future.
B7: Alexander Forbes is a household name in Namibia. What has set the company apart from its competitors so far?
SdP: I think it is the way we try to be on the forefront of the industry, to set the tone for others to follow.
Looking at the investment side, there are quite a few arguments for and against single- and multi-managers, but given the size of the Namibian market, multi-management, which is an implemented solution, makes sense to most of the retirement clients. Our initial ‘Life stage’ model, which was recently updated or replaced with our ‘Goals based’ investing, is testament of being at the forefront.
On the technology side we continue to roll out our AF-Online platform that eases the administration burden for all who interact via the platform with us.
But ultimately it is the Alexander Forbes ‘Best Advice’ approach, combined with its people, its passion for employee benefits, and investments focussed on increased financial security for the future, that differentiates us from the rest. We offer our clients complete advice-driven solutions from the day they start working, straight through into and during retirement.
B7: What is the prevailing landscape for financial services providers in Namibia currently?
SdP: We are faced with a very competitive landscape, imminent regulatory changes and a devastating drought that is not conducive to the financial services industry. The possible client base is limited, which makes it tough for any industry player. To be able to survive and move forward, things we did today in one way will have to be done differently tomorrow, and we need to be able to adjust quickly to any changes, of which regulation is probably the most important.
B7: What are the major challenges the industry faces and how should it be addressed?
SdP: The regulatory environment will change. We are waiting for the Financial Institution and Market Bill (FIM Bill) to be promulgated. This will have a definite impact on the way the industry will be regulated, and changes will be required to the current way of conducting business. We will have to start planning/adjusting our methods of doing business to prepare ourselves for the promulgation of the FIM Bill now already.
Literacy levels and level of income influence the ability of people to save and to understand the need to start saving early. We need to continually try and educate our people and provide them with value for money products that will allow them to save from day one, even if it is N$10 at a time.
The imminent national pension fund can also have a huge impact on the future of the pension fund industry and related service providers such as asset managers and insurers. We will have to see whether any exemptions will be given (or not) to existing pension funds before the real impact can be determined.
B7: What are the growth opportunities for the industry?
SdP: I think we need to start doing things differently and more efficiently. We will then have time to focus on new business, client retention and servicing our clients more effectively.
The implementation of the FIM Bill will lead to new opportunities like compulsory preservation.
And, we need to become more digitally focussed, with easier access to services for our clients. If 80% of our client base can be serviced electronically, then we can give personalised attention to those in need of it, thereby increasing business from those who would normally just walk away.
B7: Focussing on the retirement industry, how is the landscape changing?
SdP: Increased and more focussed regulation will have an impact on our day-to-day jobs.
There are the changes to our underlying local investment requirements encouraging us to invest 45% of the assets locally and thereby uplifting the economy. It does help that all role players are impacted by this, but it does create difficulty in achieving the same returns as before. We thus need to think of ways to increase local performance so that our members don’t loose out, as they are the ones that is ultimately paying for this increased requirement.
We also have the pending tax legislation which will focus on the preserving of money for retirement, and together with the possible increased tax-deductible amounts, will bring new opportunities to the market.
Over time we may also see a move towards umbrella funds with only a few funds remaining as standalone funds.
B7: It is often pointed out that Namibians don't save enough, especially for their golden years. How can this be turned around?
SdP: This is and has always been a difficult one.
It comes back to the literacy levels referred to earlier, but then also our standard of living. We need to educate our people around the benefits of long-term savings together with the effect of compound interest. The relative effect remains the same, irrespective of the size of the savings, whether it is a N$10 contribution, or a N$1 000 contribution.
Based on certain assumptions, you can achieve the same result with N$10 per month saving over a 40-year long career compared to a N$300 per month saving over the last 10 years of your career. And the N$10 per month will cost you N$4 800 from your pocket compared to almost N$40 000 if you need to contribute the N$300 per month. Surely the N$10 per month make sense.
We need to educate people to have a balance between the real cost of living (where N$10 can make a difference), and the ‘not so real’ need where they want to replace an existing cell phone with a newer model or buy other nice to haves – rather save that N$10 ... and they must preserve!
B7: Tell us more about yourself: your early years and your career.
SdP: I first visited Namibia in 1987. Later, I got married to my lovely Namibian wife. I thus prefer to refer to myself not as a born Namibian but as a bred Namibian.
I started my career with Sanlam in Cape Town in 1993 and was seconded to Sanlam Namibia from 1999 till 2006 during which period 2 of my 3 children were born here in Windhoek. I eventually resigned from Sanlam after 26.5 years to join Alexander Forbes Namibia.
I qualified as an actuary in 2001 and during my career I was involved in most areas of the life and pension business.
I’m looking forward to giving back some of the experience I’ve gained up to now until such time that I retire here in Namibia.
What an awesome privilege to spend some more years staring over red dunes or sitting next to the ocean with a line in the water … watching the sun set in the west!