SA’s retirement reality: brand innovation needed to turn the current model on its head

Yegs Ramiah, chief executive of brand at Sanlam.

A recent retirement study has revealed that 84% of respondents dismissed a comfortable retirement as nothing more than a romantic fantasy. A possible reason for this view is that the retirement industry has so frequently broadcast the message that fund members won’t have enough money to retire on, that many no longer try to save.

“The industry will have to rise to this challenge and come up with innovative initiatives to turn this perception around,” says Yegs Ramiah, chief executive of brand at Sanlam. She was the keynote speaker at the recent 2015 Sanlam BENCHMARK Symposium, at which the results of the 34th Sanlam BENCHMARK Survey were released. The survey is a comprehensive annual review of South Africa’s retirement industry – this year, over 1000 retirement fund members, pensioner, trustees and principal officers were polled.

Ramiah suggests that financial services firms must adopt unconventional approaches and implement these with a common purpose if they hope to secure the country’s retirement future. One such approach might be to apply the lessons learnt by the world’s leading brands to the local retirement savings industry.

Today’s up-and-comers interact with brands and products differently to those in preceding generations. Consider the taxi-substitute Uber as an example. At the touch of a button, you can get a vehicle to pick you up and take you wherever you want – there is no need for a car, no need for ‘cash’ and no need to make plans before the time.

Savings products currently don’t offer the simplicity and ‘ease of use’ that technology-enabled lifestyle solutions such as Uber and SnapScan do. Yet this is the space that investment firms should occupy if they wish to assist people in suppressing their urge to spend in favour of saving.

“A Harvard Business Review reported a study among 7000 consumers and found that the one thing that engages consumers in choosing a brand or product is simplicity in the decision-making process,” says Ramiah. “The future retirement product must therefore be easy to find, understand, evaluate and buy.”

The annual benefit statement is a case in point. Imagine if instead of a page littered with numbers, the statement provided an answer to one simple question: will I have enough money to fund my preferred lifestyle in my later years?

With a bit of planning, the industry could enable savers to benchmark their savings against a lifestyle dream by informing them of the type of lifestyle they are on track for. Their future could then be defined by saving for a lifestyle in retirement rather than accumulating a notional capital lump sum.

Against this backdrop, financial services brands should investigate how to ‘turn their clients’ money into meaning’ by showing respect for what went into making this money and sharing with them what can become of it.

“At Sanlam, our measure of success is not solely about how much money we make. It also includes our ability to impact the lives of our employees, our clients, our communities and the country at large,” says Ramiah.

The key is to move from a world of fear to one of optimism by setting aside ‘the orange that will cost you $68’ or the ‘gourmet cabbage dining’ advertising campaigns in favour of campaigns that reinforce the lifestyle benefits of sensible saving.

How can the industry accomplish this? The lesson from leading brands is to create a movement consisting of individuals whose desires resonate with that of the brand. The retirement industry should identify a market segment that has the potential to influence the generations that precede and follow it.

“The best group for the retirement industry to focus on is the so-called Millennial Generation – persons born between 1982 and the early 2000s – who are known to be keen to save and have both the attitude and desire to change the world,” says Ramiah.

“Our challenge is to influence the generations to come, but the real opportunity lies in attaining the nirvana where retirement is bought and not sold.”