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Unlocking greater value for your clients

03 January 2021 Myra Knoesen

Employee benefit funds are crucial to giving businesses a competitive edge in acquiring and keeping their staff.

Currently, 80% of employers find it difficult to choose the best employee benefit funds for their businesses. With huge changes in the umbrella funds markets - it's been hard for clients to keep up.

The need for Independent Employee Benefit Consultants (IEBCs) is now greater than ever, but more so, the need for high quality guidance is tremendous and a vast scope of opportunity to add value to our clients is ready for those who can see it, and are willing to upskill themselves and equip their practices with the right tools and knowledge.

Reluctant to be involved

In the 2019 Sanlam Benmark Survey, Richard van Dijk, CEO of Employee Benefits at BlueStar said that given the technical nature and complexity of employee benefits, compounded even further by compliance and governance requirements, it is not surprising that advisers may be reluctant to be involved and participate in the employee benefits environment.

“Although the reluctance may be understood, it is unfounded and indeed adviser participation is to be encouraged, now more than ever before. The evolving convergence between institutional and retail business has created both challenges and opportunities and advisers who embrace the responsibility of providing holistic financial advice will fulfil their role in delivering the best outcome for all members,” said van Dijk.

“In an ever-changing financial services landscape, smart solutions are required to assist members to maximise their membership, benefits and pre- and eventual post-retirement outcomes and that is where professional advisers play a crucial role. Previously, members merely joined a fund where retirement was the funding goal, with a few options to be exercised at retirement age. With improvements in longevity, the post-retirement period of a fund member now requires lifelong financial planning, as opposed to the traditional and outdated retirement planning paradigm,” added van Dijk.

The ideal value proposition

“The Financial Sector Conduct Authority (FSCA), trustees, sponsors, administrators, joint forums and fund consultants all share the same objective to ensure the best possible outcome for members. In pursuit of an enhanced member services programme for funds, stakeholders should further this by facilitating access to membership of funds to professional advisers to best represent members and lifelong financial planning needs,” said van Dijk.

“Advisers provide unique skills towards achieving the objective member communication and advice. This also extends to investment portfolio advice where this is a fund option, to align with the overall financial plan,” continued van Dijk.

“All stakeholders in the retirement fund industry have specific and specialized roles to fulfil, where the adviser is integral to ensuring a holistic approach towards improving outcomes for members. Partnerships between fund consultants and advisers are the ideal value proposition to fund members as this enables holistic advice, where fund benefits are also considered in the individual financial planning needs of members,” added van Dijk.

So, how do financial advisers choose an independent employee benefits consultant? During the South African Independent Financial Advisors Association (SAIFAA) Independent Employee Benefits Consultant Webinar, Chris Ellis Specialist Independent Employee Benefits Adviser, Director and Business Owner, and Exco Member at SAIFAA said there are a few things to consider.

“There are an increasing number of providers with different value propositions, remember that one size does not fit all. Clients also have different needs. Look at market trends and products and services that show value for money,” said Ellis.

Tap into opportunity

Research based a quiz on the FAnews website, on employee benefits, reveals that 81% of financial advisers believe there are untapped employee benefits opportunities through individual retail clients. Eighty eight percent of financial advisers believe that selling employee benefits is a growth opportunity for their business, and 97% percent of financial advisers believe that it is important to partner with the right employee benefits provider.

“So, how do we explore untapped opportunities and create a continuous business cycle? You need to identify your individual clients who are decision-makers; leverage off existing relationships. Start the conversation around employee benefits, this would entail evaluating existing benefits, drafting a plan, structuring the package, as well as looking at retail opportunities,” said Nashalin Portrag, from Momentum FundsAtWork.

“This is a highly regulated industry, but it is easy for a financial adviser to enter the market. Financial advisers should make use of technology and partner with a progressive, thought-leading employee benefits provider,” added Portrag.

“What does the ideal partner look like? They should be a thought leading, insights driven provider. They should combine innovation, insights and technology for engagement rich solutions. They should offer highly flexible, easy to use, tailored solutions, with value adding reporting capabilities. They should offer complementary solutions empowering your core business,” said Portrag.

“Make a real difference in the lives of clients and their businesses, by unlocking greater value for your clients. Make a meaningful socioeconomic impact. Future proof your own business, unlock the value for you and grow your income,” concluded Portrag.

Writer’s Thoughts:
Because it is so hard for clients to keep up… with the changes in the umbrella funds markets, quality guidance is tremendous. The adviser is integral to improving the outcomes for members, and partnerships are the ideal value proposition. Do you believe that there is untapped opportunity in this market? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected].

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