in the business, so we could run fullon discretionary [annuity income as opposed to advice] portfolios for clients. That R19bn is now 120bn, of which R44bn are full discretionary assets and there is a further R120bn in international businesses of which R49bn is discretionary and the rest advice.”
There are now j ust over 400 employees, 185 of which are in South Africa, and the division has increased its profit contribution tenfold. SA still accounts for 60% of profits, but as the business grows offshore that should change. The decision to change to wealth management, especially fiduciary and tax, allowed Sanlam to play in a higher segment of the market.
It timeously identified the swing to international assets for its South African client base, following relaxed exchange controls and the increasing sophistication of local investors. It is now active in numerous countries including SA, the UK and Australia and has a client base spread across Western Europe and Asia.
“Ten years ago, being a life assurance brand in the middle market, no one thought we could be successful in the high-net-worth market.”
Kriel attributes this success to building the right team in the right structures, a relentless focus on clients (over 50% of new inflows came from existing clients or referrals from them) and consistent strategy.
“One must not underestimate the power of the Sanlam business model − the federated model. We are empowered to run the business, while two things controlled by the centre are capital and brand.”
While the group i s focused on expanding to emerging markets, Sanlam Private Wealth’s expansion has been against the trend, to the UK and developed markets. But this has been client-driven − South African clients don’t want diversification into emerging markets.