Alexander Forbes Integrated Annual Report 2016



  • AFFS Institutional client retention remained high at 98.5%
  • Increased client cross-sell for AF Life group risk into the institutional client base
  • Tax-free savings account – the first fully online product – successfully launched during the year


  • Growth in public sector revenue slowed to 4% (2015: 12%)
  • Spiking call centre volumes during times of client initiatives and campaigns
  • Further enhancement of online capability both at institutional and individual client levels

Our approach

Alexander Forbes’s commitment to fulfilling its higher purpose means that we aim to have a positive impact by helping our clients to understand their financial status, implement corrective measures and navigate their financial needs at every stage of their lives. Doing so requires that we abandon our formerly siloed approach to addressing specific needs in favour of a more holistic operating model. We have fundamentally shifted our internal structures to reflect this client-centric approach. Our retail and institutional clusters are therefore intended to encourage a more cross-cutting view of client service in which we can draw on a range of products and services as relevant to meet their needs.


The retail cluster has made significant progress in creating a client-centric operating environment with the creation of an integrated distribution model that allows the cluster to deliver holistic solutions to the client. Furthermore, the cluster has established a business and distribution enablement division to provide training and tools to our distribution channel, ensuring that our consultants are world-class. The division also identifies customer needs, creates value propositions to address them and drives focused campaigns to the market.

Clients are engaged mainly by the integrated distribution channels. This engagement takes multiple forms, including face-to-face meetings, call centre interaction, newsletters, forums such as Hot Topics, Leading Conversations and our thought leadership publication, Benefits Barometer.

The cluster’s focus remains accessing the institutional member base with a complementary focus on the open market.


Within the institutional cluster, engagement is targeted at an organisational level, and managed by senior leadership, consultants and key account executives.

Competition in our chosen markets is intensifying and with the economy and job creation stagnating, growth is primarily in the form of market share. We believe that in serving clients well, market share will follow, and we gauge our success in terms of client retention rates, satisfaction rates, capture and preservation rates, and new business volume.

Stakeholder profile

Anusha Naidoo, Head: AFFS client services

What matters most to us is our clients. We exist because of them. Building lasting relationships with clients is my number 1 priority. I strive to keep it simple by making it easy for our clients to do business with us.

Our performance

Building our brand

Our clients entrust us with both their assets and their financial well-being, and it is therefore essential that we maintain a brand founded on trust and competence, backed by solid performance and service.

Alexander Forbes serves a diverse array of clients, each with unique needs and interests. For example, the institutional market is deeply relationship-based and successfully navigating the retail sector means adapting quickly to fast-moving, rapidly changing consumer demands while managing and deepening relationships with the individual.

We have identified the public sector as a segment with significant opportunity for new business growth. We are cognisant, however, of the unique needs of the sector, which is characterised by long lead times and requires significant investment in relationship-building. During the year we continued to court government and parastatal clients with the goal of building trust and track record in the sector. Our aim is to gain access to key public sector opportunities through our status as a trusted adviser.

In optimising marketing resource, our aim is to reinforce the strength of our brand through targeted and impactful interventions, underpinned by consistent and impactful media engagement. This maintains our thought leadership position within the financial services sector. During the year, we focused on increasing our social media presence and building our reputation within the retail market, primarily through our existing relationships with institutional clients. As a result, the annual media efficacy audit conducted during the period under review confirmed our thought leadership score at 84%, up significantly from 64% in the previous year.

We also build our reputation through the merit of our solutions and service. During the year, we won the following awards in South Africa: the Diamond Award for Top National Fund Administrator for the ninth consecutive year (PMR), the Diamond Award for Top Retirement Fund Consulting and Actuarial firm, also for the ninth consecutive year (PMR) and the Titanium Award for Best Healthcare Advisory Service Provider (Board of Healthcare Funders). In AfriNet, several countries won awards, including in Kenya for the Pension Fund Administrator of the Year, Best Occupational Fund and Best Individual Pension Plan. The MD of the Kenya business won the award for outstanding pension industry contribution and has been appointed chairman of the Africa committee of the IAA. In Namibia, AFI won the Diamond Arrow Award for being the highest-rated short-term insurer in Namibia (PMR Africa).

Delivering a holistic solution

Our strategy is to access retail members through our existing institutional client base. This requires that our institutional and retail teams work together to conceptualise and present the best solutions for both institutional clients and the potential retail members within.

In 2016, our priority was on gaining access to these members by demonstrating our value to the trustees and HR teams in order to reinforce our status as a trusted advisor. Our approach centred on the ways that Alexander Forbes can enhance the members’ entire financial well-being beyond the existing retirement solutions provided.

Our retail and institutional clusters are inextricably linked by our ultimate goal: providing holistic financial advice to individuals.

Entering the retail market in the rest of Africa requires that AfriNet takes a more externalised retail model that focuses equally on growth from existing institutional clients as well as from those new to the group.

In 2016 we began to develop the curriculum for a new retail sales academy, intending to deepen our employees’ understanding of the unique nature of the retail market. For more on the academy, see 'Ensuring continual development'.

The recent launch of our new group website represents an important step in our efforts to present a single digital interface for our clients. The updated site provides current and potential clients a unified and consistent experience of the group, helping to reinforce our holistic approach to serving our clients.

Ensuring a quality experience

The satisfaction of our clients is linked to multiple factors and these vary according to the products and services they receive. At a high level, the most important factors include the value and quality of advice they receive, pricing, clear communication, excellent service and the returns of their investments. All these factors ultimately combine to support clients’ financial well-being.


The retail strategy places significant emphasis on providing clients with a quality experience. Our financial planning business engages clients on a face-to-face basis, targeting 75% of all client engagements conducted in person each year. Financial planning employees are expected to diligently attend to clients’ needs and requirements. This includes providing written confirmation within a prescribed period of time and meeting expected service levels; as a result, our customer service index result for the year was an outstanding 9.26 out of 10.

Service consultants in our AFI businesses are also guided by a set of tailored guidelines, KPIs and incentives intended to deliver an excellent experience to clients. Our motto'The sun never sets on a complaint' means that employees are expected to respond to all concerns or queries within the same business day, working tirelessly to ensure clients receive the answers and service they require. These efforts are paying off; the business’s churn rate has decreased from 20% in 2015 to 18% in 2016. Its customer service index score was 7.83 for the year.

The same principles have been incorporated into the new integrated distribution model to ensure all our retail clients have a quality experience that is consistent across all our businesses.


Within AFFS, client satisfaction in our consulting businesses remains high. The administration side of the business, however, is a far more complex system to manage. Our call centres field client questions and help to facilitate transactions. During the year, we experienced significant spikes in call volume when clients embarked on special exercises such as the tracing and paying of unclaimed benefits, registering their members for online access or offering alternative fund contribution selections. This impacted agents’ ability to address member queries consistently and at the endeavoured service levels. In the future, we will be working more closely with clients to plan call centre capacity and overflow contingencies in advance of these events.

Both our retail and institutional clusters use net promoter score (NPS) as an indicator of our success in meeting and exceeding clients’ expectations. NPS scores can range from -100 to 100, with scores over 50 considered excellent.

Over the past three years, the institutional divisions generally saw a positive trend in NPS scores as a result of more focused intervention to identified areas of deficiencies in client services levels and relationships management.

Within the public sector, maintaining relationships is key to ensuring satisfaction. As a result, the division is measured on the number of engagements conducted and in 2016, key individuals within the group conducted 38 high-impact engagements and events as well as 138 tactical and strategic engagements with key public officials. These aid in Alexander Forbes’s lead generation, brand positioning, brand presence and media coverage. In addition, the public sector division introduced targeted stakeholder engagement and tactical client engagement plans. We encourage the group’s senior leaders to participate in dialogue with the public sector in order to demonstrate commitment and to lend thought leadership and expertise to issues of importance to the government. During the year, we regrettably lost one major government client in our health management solutions business, with significant impact, when the appointment went to tender in terms of the public sector rules.

Client retention at Investment Solutions remains high at more than 98% of assets under management in 2016. In light of market shifts, clients are looking for alternative solutions, requiring the business to provide a wider range of advice and portfolio options covering different levels of fees. These range from lower-cost options to premium/actively managed solutions and a hybrid model in-between.

Optimising distribution channel strategy

Key distribution channels

  • Tied agents
  • Multi-tied agents
  • Independent financial advisers
  • Brokers
  • White-labelling partnerships
  • Outbound call centre distribution
  • Internet (self-service)

Our products and services are distributed through various channels that are aligned to serve different markets and client segments (see box, above).

In 2016, the retail cluster focused on leveraging the institutional member base with a client-centric approach, distributing and delivering the full Alexander Forbes product offering.

As the group adopts a client-centric view, it is important that the same philosophy is reflected in those who sell our products. No longer will single-product specialisation be sufficient. All consultants are subjected to extensive training to equip them to convey the value represented by the group as an entire entity as opposed to a specific and isolated product or service.

All retail distribution has been consolidated into one central channel to service all businesses within the cluster. This new model is expected to result in a unified sales and services centre, with superior consultants focused on delivering innovative solutions to our clients. Technology is integral to our ability to interact efficiently with current and potential clients.

In 2016, we launched our tax-free savings account, our first fully digital product. The product is available to our institutional member base, who can now learn about the product, sign up for it and transact from the convenience of their computer or tablet. This is an important step in our digitisation and modernisation strategy, and demonstrates the potential of automation and a web-based client interface.

AfriNet introduced dedicated service desks for its larger institutional clients during the year, giving the business better access to the retail base (through these institutional clients) while it also gains a better understanding of clients’ needs. The strategy has also helped to improve the efficiency of resolving client queries, reducing average call times from approximately 15 minutes to three.

Maintaining our position of thought leadership

In a rapidly evolving economic, regulatory and competitive market, maintaining our reputation for thought leadership is an important means to securing client and investor trust.

Alexander Forbes’s research and development (R&D) unit fulfils three important roles: ensuring best practice, research for group publications and product development. The first two of these are discussed in this section, with the last covered in developing innovative financial products and services to meet clients’ needs, below.

Clients expect advice and products that are in line with the latest developments. We therefore invest in ensuring best practice, both with regards to intellectual content as well as the delivery method. For example, the retail investment process is embedded in our advice framework, which is designed and maintained based on thought leadership on best practice.

The financial services sector encompasses a complex range of products and services and we understand that navigating these can be a daunting proposition, particularly amid significant regulatory changes. Our series of thought leadership publications helps current and potential clients to understand the latest developments and the associated implications. Benefits Barometer, for example, provides an annual review of South Africans’ savings, particularly the role that employee benefits play in social protection and financial well-being.

Developing innovative financial products and services to meet clients’ needs

Remaining competitive requires that we continually adapt our products and services to the changing environment, and develop new solutions to meet new opportunities.


The retail cluster’s newly created business and distribution enablement team is responsible for developing comprehensive client value propositions. Market segmentation and research will be integral to creating niche products and services that meet specific client needs.

AFI continues to work with its clients to provide more affordable insurance solutions. During the year, it introduced a number of affordable products, ensuring clients’ assets remain protected and improving retention rates within the business.

Our new tax-free savings account launched successfully, with nearly 100 institutional clients enabling salary deductions for the product. Furthermore, a new suite of innovative life products were launched during the year as well as a simplified life product and a funeral product that helped to fill gaps in our retail product portfolio.


In 2016, the institutional cluster reviewed the pricing and service levels of its umbrella fund, ultimately adopting a more holistic end-to-end pricing model between Financial Services and Investment Solutions.

Investment Solutions launched a range of competitively priced lower-cost investment portfolios across the risk/return spectrum for individuals and institutional clients to cater for preferences across the fee spectrum. Various investment portfolios were revamped or closed in response to emerging trends in investment management and to meet client needs. The business also introduced a product targeted specifically at Stokvels that was named by Moneyweb as one of the top 10 innovative financial products launched in 2015.

In the rest of Africa, our growth strategy has centred on winning business by introducing new products to the markets in which we compete and – where certain products are already embedded – winning clients from competitors. We do this by offering additional products and services, competitive pricing and strong client service.


In 2016, our new innovation programme yielded a number of game-changing business innovations that increase revenue, decrease costs and streamline processes. Among these are:

  • Auto escalation: When retirement fund members receive an annual salary increase, a selected portion is automatically added to their retirement contribution. This boosts their savings, the health of their retirement monies and their replacement ratios.
  • One Premium: An institutional product with one monthly fee for group life and health risk consulting.

In addition, we have also implemented several cost-saving and process innovations during the year with positive results.

Looking ahead

Going forward, our focus will be on conducting extensive market segmentation and research to properly understand client needs and to create products that are tailored to meeting them. Solutions will be focused on supporting the entire financial well-being of the client, including financial planning, wealth creation and protection, and financial risk management through the provision of short-term and long-term insurance.

Our piloted financial well-being days reinforced our drive to access individual retail clients; however we plan to do so through more scalable channels in the coming year. The retail strategy will be focused on accessing the top clients in the group’s institutional base through careful analysis of their unique needs and targeted engagement with trustees. Follow-up financial well-being days will focus on these unique needs and circumstances.

Following the successful demonstration of self-service technology with the tax-free savings account, we plan to further roll out automation technology in the areas that stand to gain the most from the technology. This will focus on the areas with the highest volume of transactional processes in the business such as AFFS’s claims processing and client onboarding in the retail business. The improved efficiency of these and other such processes will help us to decrease our cost base and reduce the risk of human error.

Our modernisation strategy will entail the further roll-out of web, online and mobile functionality. This will improve the user experience in line with our clients’ evolving digital preferences and expectations.

In the coming year, AFFS will launch in-fund solutions for its umbrella funds. This will mark a significant evolution for its umbrella funds, allowing members to preserve and annuitise their money within the fund despite changes in circumstances. This will provide substantial benefit to clients, who will now have one solution providing holistic and lower-cost support across multiple life stages as they change work, build up their savings and eventually retire.

The current lower return and volatile investment environment for investment management and consulting services is expected to persist into 2017. As a result, clients’ fee sensitivity will continue. Our focus will therefore remain on offering a wide range of investment options across the fee spectrum supported by competent advice.

Due to tepid returns from local markets and the expected currency depreciation, clients will continue to move more assets into harder currency jurisdictions thereby requiring expertise in looking after global investment portfolios. Our relationship with Mercer will be instrumental in enabling us to provide global solutions for our clients.

Finally, in 2017 the group’s operations and technology cluster will embark on a process of consolidating the view of our clients across the group. This will entail combining the various CRM instances and implementing processes for master data management. Ultimately, we expect this will give the group a better understanding of the various ways we currently serve our clients, while highlighting areas for further opportunity in the future.