Celebrating three decades of advice and fund management excellent
Over the past three decades, a handful of leading financial services and investment firms have fundamentally changed how South African households view wealth and savings. Pieter Koekemoer, Head of Personal Investments at Coronation Fund Managers, believes that his brand, together with PSG Financial Services, has helped to engineer significantly better investment outcomes for clients.
A hunger to change the world
“In 1993, Coronation was founded as an independent asset manager, one of the first of its kind in the market; two years later, PSG was formed,” Koekemoer said. “Even though we had nothing to do with each other at the time, we had a common hunger to change the world, and a shared conviction that things could be done better.” His presentation to the 2026 PSG Conference, titled, ‘The hunger that got us here’, documented the fund manager’s journey from a fledgling start-up to an industry leader.
Coronation launched its first retail investor-focused funds in 1996, and its Balanced Plus and Equity Funds still feature in financial adviser solution sets to this day. Two years later, PSG started working on the Konsult brand, out of the Overberg region. “We looked at the way the market works from completely different perspectives, but came to the same conclusion,” Koekemoer said. Primarily, the realisation was that focus leads to discipline, which leads to long-term commitment, which delivers a compounding advantage over time.
A shared realisation does not result in cloned businesses. In this case, the fund manager set off on the path of producing better investment returns whereas PSG chose the path of being an advice-led business focusing on advice excellence. The presentation showed stark differences between South Africa’s 1997 and 2026 savings landscape.
Around 1997, life insurance assets totalled around R520 billion with up to 95% of solutions bundled as risk and savings or ‘with-profits’ policies. Assets under management (AUM) in the unit trust industry totalled just R55 billion.
A three-decade metamorphosis
“Through most of the late 20th century, the conventional thinking was that product providers had to be somewhat paternalistic; insurers had to take risk away from investors and protect them by underwriting some of that risk, by removing it and smoothing returns,” Koekemoer said.
This bundling of risk and investment solutions was baked into the distribution model too. Agents received up-front commissions from product providers, creating debts against a client’s savings that had to be repaid if the client wanted to terminate. The marketplace was ripe for innovation; but that did not mean new entrants had an easy go of it. Koekemoer commented on the challenges of launching an unknown brand that had to build up credibility and trust client by client.
“You also start off with a massive scale disadvantage [beset by] limited capital, small assets under management and low fee bases, meaning there is limited margin for error,” he said. He attributed the brand’s success to being true to the ‘investment performance first’ mantra, and to making a long-term, multi-decade commitment to it. In this context, it made sense to align an advice practice’s or fund’s investment strategy with that of a typical household, allowing for 30 to 40 years pre-retirement and another 20 to 30 years in retirement.
Investment and advice excellence
The unit trust industry started growing from the early 2000s, fuelled by independent asset managers’ track records and the growth of platforms for fee-earning advisers running market-linked investments.
Koekemoer described these dual journeys as “investment and advice excellence … working hand in hand to deliver better outcomes for clients.” He mentioned Coronation’s 2003 JSE listing, and PSG’s acquisitions of Appleton Limited, around 2002/03, and Advance Wealth Management in 2006. PSG Konsult shares traded privately from 2005, before the firm listed on the JSE in 2014.
Corrections are part and parcel of the financial advising and investment landscapes. The audience was reminded of the 1998 emerging market crisis, which saw the JSE All Share Index lose about a third of its value between May and August of that year. Koekemoer offered a tangible recollection of the shock, saying that Coronation’s unit trust assets fell from R5 billion to R4 billion in a single month. “By remaining committed, by holding the line, by properly explaining to clients what was going on … we managed to survive that early test,” he said.
Markets and investors’ resolve was tested again by the dotcom collapse in 2000; the Global Financial Crisis of 2008/09; the Euro-area sovereign debt crisis of 2011; and the COVID collapse, since recognised as the fastest bear market in history, in 2020. “The pandemic collapse was a test of business resilience; it tested whether we could maintain our momentum and provide clients with the service that they were used to while everyone was physically disrupted,” Koekemoer said.
Reaching AUM parity
Today, life insurance assets are closer to parity with unit trust assets. Quoting statistics from the Association for Savings and Investment South Africa (ASISA) and South African Reserve Bank (SARB) Quarterly Bulletin, the presenter showed that assets in the former category had grown 10 times since 1997, to R5.4 trillion, compared to an 82x growth in unit trust assets, to R4.5 trillion.
“You have close to parity at headline level, but we have also fundamentally changed the way that the incumbents did business,” Koekemoer said. The fact is that around 70% of the total activity underpinning life company assets is now in investment administration.
As firms enter their fourth decade, they face a new and unfamiliar challenge of navigating an intergenerational shift. The presenter explained that the first generation’s race was all but run, and that new people have to step up to carry the business forward. There are risks in becoming complacent or taking a more conservative approach. Asset managers advisers can address this problem by always innovating; by identifying and solving the challenges facing South Africa; and by staying true to the purpose of enhancing the client experience.
Koekemoer steered the conversation back to the Coronation and PSG brands. He said the financial advice brand would retain its edge by “unambiguously defining itself as an advice-led business” and continuing to invest in the right technology platforms. “The next frontier is to figure out how to use artificial intelligence (AI) as a force multiplier for what you need to achieve right now,” he said.
Embedding legacy advantages in AI
Financial services providers are already wrestling with this emerging technology, experimenting with ChatGPT, discarding that a few months later, and then embarking on a search for the best solutions among the 80-plus tools offered by Anthropic alongside its Claude large language model. Those with established track records will have to figure out how to embed their existing decision-making and competitive, human-based edge within the AI solutions they eventually adopt.
“Purpose beyond performance remains relevant,” Koekemoer concluded. “We cannot forget that we live in South Africa, where societal issues are always going to be important and are going to have a bearing on the policy and regulatory environment that gives us our licence to engage in business.” Aside from a call to be realistic about the business environment, the parting message to attendees was to rethink their succession strategies to span both practice and client base.
Writer’s thoughts:
Discipline, excellence and purpose beyond performance are traits that can take a financial or risk advice practice to the next level. What other traits are you building into your long-term business strategy to secure a competitive edge? Please comment below, interact with us on X at @fanews_online or email us your thoughts [email protected].
