Impact of regulation on the shape of IFA distribution and strategic opportunities pursued by Sanlam
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Impact of regulation on the shape of IFA distribution and strategic opportunities pursued by Sanlam. Regulation will change significantly. Overview of RDR Implications. How RDR affects Product Design. RDR – the direct impacts: Remove commission bias Transparency and disclosure

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Regulation will change significantly

Impact of regulation on the shape of IFA distribution and strategic opportunities pursued by Sanlam


Regulation will change significantly

Regulation will change significantly


Overview of rdr implications

Overview of RDR Implications


How rdr affects product design

How RDR affects Product Design

  • RDR – the direct impacts:

  • Remove commission bias

  • Transparency and disclosure

  • Increase professionalism of advice

CONSUMER AWARENESS & TRUST

  • AND Indirect impacts:

  • Capital and Value flow

  • Use and role of Platforms

  • New routes to market

  • From Products to Propositions

RE-ENGINEER

THE

MARKET


Advice models and standards

Advice models and standards

Product design must be tailored to the channel & the advice model


Changing business models

Changing Business Models


Product to proposition

Product to Proposition

  • Proposition

  • Focus on life cycle needs

  • Distributor and Customer needs

  • Whole value chain, how is the product generating its return and how is the distributor generating theirs?

  • ‘Marry’ the product with the advice

  • Stay focused on needs

  • Product approach

  • Focus on acquisition

  • Distributor versus Customer needs

  • Only part of the value chain, focussed on product returns

  • Narrow definition

  • Leads on features and benefits

  • Products supplemented with commission and wider support to distributors


Focus on acquisition

Focus on acquisition


Regulation will change significantly

What do IFAs want?

  • To deliver on promises to clients

  • Cost efficiency

  • Sustainability

  • Building value

    • Demonstrate assets under influence

    • High proportion of reoccurring income

    • Profitability

  • De-risking

  • Guarantees

  • Expertise

  • Training

  • Marketing

  • Business support

  • IT support


Regulation will change significantly

What will be the drivers moving forward?

  • Guarantees

    • At a sustainable cost

    • That are safe

    • Reduce risk not increase it

    • Post retirement market

    • With profits? Will the Pru win?

  • Cost

    • Building the scale


Regulation will change significantly

What will be the drivers moving forward?

  • NMG Survey

    “The lack of ‘cost leader’ in the UK Wealth market demonstrates the difficulty of achieving cost efficiency with complex legacy books”

  • Barriers to entry

  • Transparency

  • De-risking

    • Building process with IFAs

    • Managing funds to risk categories

    • Sharing risk


Regulation will change significantly

What will be the drivers moving forward?

  • Value

    • Recognising the shift in the value chain

    • Proctor and Gamble to Tesco

    • Effect of regulation

  • Distribution

    • Different channels

    • Value of independence

  • Specialisation

    • Tax planning

    • Differentiation


Regulation will change significantly

How Sanlam are positioned to respond

  • De-risking

    • Building process with advisers

    • Managing funds to risk categories


Regulation will change significantly

Recognising the shift in the value chain

  • Joint venture discretionary fund management businesses

  • Investment partnerships

  • Product design


Regulation will change significantly

Specialisation

  • Technical

  • Tax

  • Business consultancy


Regulation will change significantly

Cost

  • Lack of legacy

  • New entrants

  • Niche

    • Self select

    • Section 32


Regulation will change significantly

Brand


Regulation will change significantly

Ambitions

  • Partner with up to 50 FA businesses in the post RDR world

  • 10 joint ventures building to £500m per relationship

  • 40 investment partnerships

  • Niche products – app on iphone


Regulation will change significantly

The winners will be…

  • …“Those that align closest to distribution”


Regulation will change significantly

Energising Together


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