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A key business partner in uncertain times

01 June 2016 Walter van der Merwe, FedGroup Life

In a world where the consumer is either uneducated about the financial services industry or does not inherently trust products and services, brand loyalty is hard to come by.

FedGroup was recently awarded with a Gold Arrow Award by Professional Management Review (PMR) Africa. FedGroup won the award in the Employee Benefit Administrators and Consultants offering Group Life/Risk Products category.

FAnews caught up with Walter van der Merwe, CEO of FedGroup Life, to discuss the importance of this award and the role intermediaries play in the growth of the business.

Working behind the scenes

We take it for granted that the people within a company will work hard in order to make that company successful. But are we fully aware of the efforts that it takes to transform a successful company into an award winning company?

“FedGroup’s product design results from a process involving extensive market research, encompassing industry experts, customer feedback, new research, and market indicators. This research informs us of customer wants and needs and market challenges. Innovation is key to any product design in the industry, but once brought to market, we refine and hone products to ensure they remain relevant and add value,” says Van der Merwe.

The major role player

In a world of disintermediation, where the public places significant trust in Google and its services, robo-advice is threatening to overtake the industry. While aware of this, Van der Merwe points out that there will always be a role for the intermediary in companies that strive towards true consumer excellence.

“In the age of peer-networks and internet sages, financial advisers and brokers are often erroneously undervalued. The significance an adviser plays in the creation of sound, personal financial independence cannot be stressed enough. Our advisers are highly esteemed and a critical element in the business model. Their educated and trusted feedback plays a crucial role in how FedGroup roadmaps product development and upgrades. Criticism, both good and bad, is a vital indicator to the business, and is valued, taken on board, and implemented in strategy,” says Van der Merwe.

He adds that the role of intermediaries is almost being lost in the industry. “This is unfortunately true, especially among the millennials who have a deep mistrust of the financial services industry and who are culturally more inclined toward online and social networks, rather than face-time with flesh-and-blood advisers.

However, individuals simply do not have the requisite experience, time, and dedication to evaluate adequately not only the products available, but to read markets, and ascertain investment levels and product performance.”

The product life cycle

While technology is a growing phenomenon in the industry, we must be careful that it is not something that completely overtakes the industry. At its core, the financial services industry has been built on the basis of trust and human relationships which this trust is dependent on. Intermediaries have a significant role to play in FedGroup’s business and in the overall future of the industry. And their role is important.

“Consider ordering in a restaurant where you may have an idea of the menu, and know your personal preference. Advice from the chef could however make you change your decision. As an expert, who knows that your satisfactory experience is of mutual benefit, the chef will provide options that meet your needs,” says Van der Merwe. The role of an adviser is the same – a client may know what cover he needs, but a well-informed adviser can ensure that the client select the best available product.

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