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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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Presentation Transcript
slide1

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

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

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
slide9

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
slide10

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
slide11

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
slide12

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
slide13

How Sanlam are positioned to respond

  • De-risking
    • Building process with advisers
    • Managing funds to risk categories
slide15

Recognising the shift in the value chain

  • Joint venture discretionary fund management businesses
  • Investment partnerships
  • Product design
slide16

Specialisation

  • Technical
  • Tax
  • Business consultancy
slide17

Cost

  • Lack of legacy
  • New entrants
  • Niche
    • Self select
    • Section 32
slide19

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
slide20

The winners will be…

  • …“Those that align closest to distribution”
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