Making it count in an important year

Dawie de Villiers

In September 2018, Alexander Forbes made headlines when it announced that it had fired its CEO Andrew Darfoor. A few weeks after Dafoor’s dismissal, Naidene Ford-Hoon, Alexander Forbes CFO, handed in her resignation.

Ford-Hoon’s resignation was followed by the resignation of Leon Greyling (CEO of Alexander Forbes Investments), Vishnu Naicker (Alexander Forbes Group Chief Risk Officer), and Christian Schaub (Alexander Forbes Chief Human Resources Officer) who all resigned in December 2018. This was the unprecedented departure of almost all of the company’s executive staff members. 

Darfoor was replaced by Dawie de Villiers who joined the company from Sanlam EB where he played a similar role. 

While De Villiers commenced his duties at Alexander Forbes on 1 November 2018, his leadership in 2019 will be crucial as the ship needs to be steered in a new direction. FAnews caught up with De Villiers to find out how he will approach the challenge that has been presented to him. 

What do you hope to achieve as the CEO of Alexander Forbes?

Firstly, I want to stabilise the company, attract new talent into the company and create a positive atmosphere within Alexander Forbes. There will be a significant focus on creating a good culture within the company. 

In the longer run, as a business, we want to get individuals to retire with dignity and more money. As an institutional business, we can create opportunities for a larger part of the population to save in a transparent, cost effective and value-added manner. This will be the main goal of the business in the long run.  

In the past, the barriers to entry were costs and member education. Millennials make up the majority of our current member base and they do not relate to the traditional concept of retirement. We always say that people do not save and that it is a cultural thing; I feel it is more a question of providing innovative solutions that will encourage saving. 

What are some of the different challenges that you will be facing in your new role?

Change is always a challenge. New leaders will always want to implement change, but the business cannot afford to change just for the sake of changing. 

The business needs to change because there are changing needs in the industry. Clients want innovation. Alexander Forbes needs to get the balance right between changing to realise the vision of a new leader and to change because of a new demand in the industry, and to get this right is critical for the business because change will not be appreciated by the staff or members if the company changes for the wrong reasons. 

Default Regulations promises to be a challenge for some companies, but we see it as a massive opportunity. I feel that the Default Regulations will be beneficial to members because it is going to create an opportunity for members to (on a very low-cost basis) be able to preserve their money and to annuitize in a way that will make sense to them. 

The Default Regulations will also bring back an element of the Defined Benefits mentality back into the industry is a sense that trustees and knowledgeable advisers will make important investment decisions for people who do not always have access to advice. 

What are the top risks retirees face in South Africa today?

Clearly the risk of rising medical costs and the uncertainty surrounding funding these costs into the future is a big burden that retirees will face in the future. 

People also really underestimate how long they are going to live in the future and this has a big impact on retirement savings. I think the concept of retirement is changing; however, people’s mindsets haven’t changed. They still want to retire earlier and live happily ever after. If you are approaching 55 and facing the prospect of living for another 45 years, retirees will not have enough money to fund this. At the end of the day, people do not only have to worry about saving more, but also about readjusting their lifestyles. 

We also talk a lot about the sandwich generation. But it is not the fault of parents, which is the current narrative. The reality is that because people are living longer, there are bigger families to support. 

What role will technology play in Alexander Forbes business model in the future?

Technology is not just a nice to have; it is a ticket into the game. 

I think it is non-negotiable that your basic systems and your basic data is in pristine condition. My view on technology is that incremental improvements need to happen on a continuous basis. If it does not, a company will fall behind and then they will need one big bang approach which will not work. 

I think the more important point when it comes to systems is the engagement model that companies use. Where I would spend money when it comes to systems and IT is directly related to how we engage with the client. This includes individuals, funds, advisers, trustees and the company itself. 

There is a cost involved with technology investment. But it is a short-term sacrifice for long-term gains.

 Editor’s Thoughts:
It is safe to say that 2019 will be a massive year for Alexander Forbes. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.