Retirement is something that some people look forward to, and others are very scared of it.
Yes, there are a lot of benefits to harvesting the fruits of all the years that you spent working. However, when approaching retirement, there are a lot of questions that retirees have.
Some of these issues were discussed at the launch of the 2018 Sanlam Benchmark Survey.
Navigating key decisions
The Humber is a large tidal estuary on the east coast of Northern England. The estuary is full of sandbanks and shallow channels as it narrows and feeds into the mouth of the river Hull. At the Humber bridge, ships must dock at a port station and the ship’s captain, no matter how experienced he or she is, needs to surrender control of the ship to an experienced pilot who knows where these sandbanks and shallow channels are. These ships then make their way up the Hull river.
There is a parallel in the retirement industry. Traditionally, retirees are left to their own devises after they make the decision to retire. These retirees hope that they have received good enough advice during their working life and that their advisers helped them build up a significant asset base to see them through retirement.
“Not every person has the skills to make financial decisions without the help of an adviser. Financial planning post retirement is just as important as it is during retirement,” said Rhoderic Nel, CEO of Sanlam Employee Benefits Investments.
Guiding hands
It has become clear over the years that retirees need as much of a guiding hand than those who are actively saving towards retirement.
“There needs to be a serious intervention in this area,” said Nel, “the current status quo that exists in the industry is not optimal. There is a serious gap in the advice process. Written interactions are becoming wholly inappropriate and expensive in an industry where retirees want to engage with advisers and insurers on a face-to-face level. This is not the realm of high net worth clients any longer,” said Nel.
Begging for innovation
Engaging with clients differently is one of the major challenges that the retirement savings industry has been facing over the past five years. Clients are begging for customisable interactions and insurers have been trying to find a way to roll this out.
David Gluckman, Head of Special Projects at Sanlam EB, said that the company is well advanced in rolling out its call centre and integrated online platform which will hopefully help clients to answer the burning questions that they have both leading up to retirement as well as in retirement.
“There has been a complete reinvention of the digital interaction that Sanlam has with clients. Sanlam will be personalising each client’s digital portal so that they are looking at the statistics and numbers which are relevant to their specific portfolio. If clients have a query, they can contact the call centre which will be manned by professional counsellors who will be able to answer any questions the client may have,” said Gluckman.
Knowledge is power
It is no secret that the current levels of financial literacy in the country, and the country’s education system, is problematic now and needs urgent measures of intervention.
Dawie de Villiers, CEO of Sanlam EB, said that while there are a lot of good initiatives in the country to improve education, a lot more needs to be done.
“Ensuring that the public is financially literate is an important component in financial planning. Not only does it take some weight off the shoulder of advisers, it allows them to have different conversations with clients. Now, the industry is very good at making complex issues sound more complex. We need to simplify things,” said De Villiers.
In an education based TED Talk (which was presented in 2000), guest speaker Ken Robinson said that there is a very simple problem with the current global education system. “We currently have kids who are starting school today who will retire in 2065. We are expected to prepare them to save towards a future that’s 65 years away when we don’t know what the future will look like in 10 years’ time. Creativity in teaching is as important as teaching literacy. We need to approach problem solving from different angles,” said Robinson.
De Villiers feels that creativity is just as important in financial planning now than what literacy is. “We need to develop the capabilities and capacities to be more creative, this will help us build a solid foundation whereby insurers can add innovative solutions,” said De Villiers.
Engaging with clients differently is an important goal that insurers and advisers need to work towards. Millennials make up 30% of the South African workforce and this number will grow every year.
Millennials expect more from insurers and advisers than any previous generation. They are emotionally invested in everything that they do, yet, they feel that the conventional concept of retirement is inherently flawed.
They also feel that for them to relate with the concept of retirement on a meaningful level, insurers and advisers need to engage with them differently than they have in the past.
Editor’s Thoughts:
Meaningful engagements can only benefit the industry, but there are many challenges that need to be addressed before this can take place. Technology will be a major role player in this. Are we ready to embrace these challenges to work towards a better future? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.
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