Alexforbes flexes muscle
Financial services group Alexforbes will soon launch a discretionary fund management (DFM) capability as it looks to up the ante in the independent financial adviser market, a space in which it has been increasing its workforce.
The company said it will launch the service in the latter half of the financial year.
“Our DFM is built from the group’s existing investment management platform. This represents an opportunity to participate in the growth of the DFM market off a stable existing base at marginal additional cost,” CEO Dawie de Villiers said.
“We are planning to provide more detail in the new year.”
The group reported growth in interim profit in the six months to end-September as it reconfigured its core business away from insurance, bought new ones and sold off others, while growing its assets under management (AUM).
Started in 1997, Alexforbes offers retirement, investment, life and insurance solutions.
Business Day reported earlier in 2023 that the group, valued at about R6.7bn on the JSE, aims to more than double the rand value of its in-house financial adviser book over the next three years by increasing its number of advisers from 200 to 400 over the same time period.
The company on Monday said it had recruited 15 advisers since March, taking the total number to 239.
Over the past few years, Alexforbes has moved away from insurance as it sold off most of these assets to Sanlam, resulting in a leaner company with money to spend on acquisitions.
In June, it announced that it would buy insurance administration services company TSA Administration and said in November that it will acquire Outsurance’s underperforming investment unit OUTvest.
“Alexforbes views the acquisition of OUTvest as an opportunity to accelerate our technology development and enhance its digital interface with its retail members,” De Villiers said.
The group’s operating income from continuing operations rose 13.3% to R1.9bn, helped by new acquisitions.
Investments is the group’s largest segment by operating income, generating 41.9% in the latest reporting period.
Profit for continuing operations jumped 66.2% to R339m, total profit 94.4% to R348m and headline earnings per share rose 96.5% to 27.7c.
The interim dividend was hiked 33.3% to 20c per share.
AUM improved 10.5% to R455.5bn.
Alexforbes’ AUM in its umbrella fund increased 14% year on year to R117bn due to positive market returns and net cash inflows.
The group said it was primed to win market share. “Several large umbrella fund quotes and stand-alone funds are under review. Our recent track record places us in a position of strength to compete aggressively for such appointments. We are confident in our ability to keep on winning market share from our competitors.”
Under De Villiers’ leadership, the company exited the insurance businesses and became a truly advice-led business.
He said the change in strategy is paying off.
The share price lost the most in three months, falling 11.8% to R5.07 on Monday.