Positioned as a financial services company for the affluent individual, Glacier by Sanlam embarked on a diversification strategy five years ago. FAnews caught up with Glacier’s CEO, Anton Raath, to find out whether this approach is paying off.
Glacier by Sanlam, the largest linked investment service provider (LISP) in the country with in excess of R65 billion assets under administration, implemented a new business model over the last few years. From offering purely investment solutions to the affluent market, the company has evolved into a provider of a range of financial products, including local and international investments, short-term insurance, life, dread disease and disability cover, as well as a range of fiduciary services such as estate planning, trustee services and wills.
Holistic approach
Glacier anticipated that, in order to meet their clients’ financial planning needs, financial intermediaries would need to offer a “private banking” experience - providing clients with a holistic view of the financial planning process. As a result, Glacier now offers intermediaries and their clients a comprehensive solution set, also encompassing investments; stockbroking and bespoke asset management (through Sanlam Private Investments); estate planning and fiduciary services; life, disability and dread disease cover; and short-term insurance through Associated Insurance Brokers (AIB).
All of these new offerings are provided at the same service levels intermediaries have come to expect from Glacier, and this diversification was achieved while improving the investment offering by bringing a number of firsts to the market.
Enhanced investment offering
“Last year we launched a new division, Glacier International, offering clients an innovative way to invest offshore,” says Anton Raath, CEO of Glacier. “Glacier International partners with USA-based Milliman, one of the top risk management companies in the world, to provide South African clients with the opportunity to use an investment strategy that cushions returns in collective investment funds in the current volatile international equity and bond markets. Glacier International is currently the only product provider in South Africa offering Milliman’s investment strategy.”
Earlier this year Glacier International also partnered with leading Swiss private bank, Pictet & Cie, enabling clients investing in Glacier’s offshore endowment to include a global share portfolio within the tax effective international endowment. Glacier is also the first international platform to bring this service to local investors.
In touch with clients
The profile of the typical Glacier client is evolving due to changes in the market and due to its diversification strategy.
“We’re seeing that our diversified solution set is attracting a much younger client base,” explains Raath. “As an example, many affluent clients in their 30’s are taking out life cover through Glacier and then later investing in one or more of our wide range of investment products. We expect this trend to continue, going forward.
“Reflecting the changes in the broader consumer market, in particular the emergence of the black diamond market, we’re also seeing a trend of more black brokers and advisers entering the market.”
In response to these changes, Glacier has taken a proactive approach to educating and empowering their clients and potential clients. “Investors – even in the affluent market – underestimate the amount of money they will need to maintain their current lifestyle after retirement. The current low return environment is most likely going to persist for many years to come and this will exacerbate the problem. We believe that clients need more education in this regard. This is one of the reasons we decided to sponsor the Retirement Expo to be held in Johannesburg during October this year. We’ll also be running workshops at the Expo where we’ll look at the fundamentals involved in retirement planning.”
Everyone benefits
“Although we knew the implementation of the diversification strategy would be challenging, it has proven to be the correct course of action,” says Raath. “Affluent clients want their financial intermediaries to be able to handle more of their financial affairs, and to look at their situation holistically. It also serves the intermediaries well, as they are able to diversify their practices away from relying on a single product. They’re able to satisfy more of their clients’ needs, while diversifying their income-earning capacity at the same time. So, ultimately, everyone benefits.”
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