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Usher in a new era

22 February 2017 Jonathan Faurie
Dawie de Villiers, CEO of Sanlam Employee Benefits

Dawie de Villiers, CEO of Sanlam Employee Benefits

Viresh Maharaj, Chief Operating Officer of Sanlam Employee Benefits Client Solutions

Viresh Maharaj, Chief Operating Officer of Sanlam Employee Benefits Client Solutions

There needs to be greater collaboration between product providers, intermediaries and clients if we want to be innovative in the employee benefits space.

These were the words of Dawie de Villiers, CEO of Sanlam Employee Benefits, who was speaking to the media at a round table event in what is the lead up to the information gathering for the Sanlam Employee Benefits Benchmarks Survey which will be presented on 24 May.

Talk about town

De Villiers was candid in his speech and made no secret of the fact that he wishes that the subject of employee benefits (EB) would be interesting enough for people to talk about when gathered around a braai while they are waiting for sporting events to take precedence on the television.

“If we want to be innovative in our product design, in the messages that we are sending out to people and in the discussions that intermediaries are having with their clients, we need to make employee benefits more interesting…maybe even sexy,” said De Villiers.

While it is almost certain that this won’t be a topic that will be spoken about every day, it is a topic that needs to be discussed on a more frequent basis. To only have a discussion with an employee or a client on the day they start at a company or on the day they purchase a product is fast becoming an industry challenge as people are discovering that this topic needs more attention.

Focus on the youth

One of the biggest challenges in the financial services sector is that there is growing workforce of younger employees, and some intermediaries do not know how to engage with this group who do not want to hear the same message that was given to their parents and their older siblings. As with every experience that they go through, they are looking for tailored messages and tailored products.

“This is where the industry is falling behind at the moment. I think we are still very far from being able to offer tailored products at the level that the youth is expecting. Product providers need to find out how they can become the Ubers and the Netflix’s of the financial services industry where clients can come to them and have a one-stop-shop that will cater for their needs,” said Viresh Maharaj, Chief Operating Officer of Sanlam Employee Benefits Client Solutions.

More legislation please

A company within the financial services sector that is calling for more legislation; what; can this be true? Actually it is. De Villiers feels that the legislation currently governing the industry is becoming old at an alarming rate and will need to be reinvigorated if we are to create a sustainable industry that achieves goals we set ourselves.

Take for instance financial inclusion. Government has made it clear that is concerned about the number of people who are not able to retire comfortably in this country. Yet, there is still no firm legislation which forces companies, no matter the size, to force preservation upon its employees. As De Villiers pointed out, these companies feel that it is cooler for them to not offer this benefit and focus more on take home salary.

This is where the role of the intermediary comes in. I mean, nobody is stopping these employees from enlisting the services of a financial adviser who will help them save for their future.

This is all very well for those who can afford the advice. What happens to the sector of the population that only earns R15 000 to R20 000 a month and can only afford to save between R500 and R1000?

“A lot of responsibility is being placed on employees in this situation, the majority of these employees are not aware of the risks that they face. This is where legislation can play a role. It may not result in the mass savings needed for retirement as you or I now it, but at least there is some saving – which is earning interest – being done,” said Maharaj.

Sleepless nights

Clearly there is a lot more to the EB debate than we would care to admit. There are even issues which are important enough to keep De Villiers up at night.

The current economic cycle is one challenge that is becoming a major issue. During these times, money needs to be prioritised, and savings are never at the levels as they are when the economic cycle is on the upturn. If there greater savings, there will be more funds in the system which can then be used to strengthen the economy. This is unfortunately not the case at the moment.

One of the other challenges which is concerning to De Villiers is corruption within the EB industry. He hinted at the fact that fees are extremely high in some cases and that the best people are not necessarily assigned to the best positions.

Editor’s Thoughts:
We are all guilty of not thinking about our current actions until they are too late. Unfortunately, the discussions we fail to have now impact us during what is supposed to be our golden years. Do we have the will to change this? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected].

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