96 F I N A N C I A L M A I L O C T 2 6 - O C T 3 1 , 2 0 1 2

CORPORATE REPORT GLACIER BY SANLAM

Rich offeringsNiche packages fora client base thatcontrols 80% ofdisposable income

Glacier by Sanlam, the largest linkedinvestment service provider (Lisp) in SA,represents the Sanlam group in the af-fluent market.

Sanlam has traditionally had a strongoffering among people earning up toR40 000/month. But it has only recentlybroken into the more affluent sector thatcontrols 80% of disposable income in thecountr y.

Glacier began as Sanlam PersonalPortfolios and formed part of the Innofinjoint venture with Macquarie bank. Fol-lowing this a decision was made to adoptthe name Glacier by Sanlam, in line withthe “blue” names adopted by Sanlamunits such as Cobalt and Sky, and tofocus the company on the affluent mar-ke t.

Glacier has an investment minimum ofR100 000 for its investment solutions,and R250 000 for the direct share port-folios (depending on the stockbroker se-lected). In the Glacier InternationalGlobal Life Plan there is a minimum ofUS$25 000.

Glacier offers this segment not just alocal investment platform but access tofiduciary services such as estate planningas well as both long-term and short-terminsurance. And two years ago it launchedGlacier International to facilitate invest-ment into foreign funds.

Sanlam Ltd group CEO Johan van Zylsays the move from a pure investmentoffering to a diversified financial servicescompany was not without its challenges.But it has proven to be the right strategy.

“Glacier has continued to grow itsmarket share on the investment side — itcurrently has the largest investment-

Johan van Zyl

Rob

bie

Tsh

ab

ala

la

F I N A N C I A L M A I L O C T 2 6 - O C T 3 1 , 2 0 1 2 97

“Glacier has always focused on thecreation and preservation of wealth in theaffluent market” — JOHAN VAN ZYL

linked living annuity book in theindustry. But we’ve also seen asteady increase in the take-up of thebroader solution offering,” he says.

“Glacier has always focused on thecreation and preservation of wealthin the affluent market. But it be-came increasingly evident that thismarket also has a need for tax andestate planning services as well asniche insurance advice and prod-uc ts.

“From a holistic point of view, itmakes sense to offer these solutionsfrom a single service point and itencourages the different businessesin the Sanlam group to work to-ge ther.”

Says Glacier CEO Anton Raath:“We certainly have no intention oftaking our eye off the investmentball, as the Lisp still provides themajority of our operating profit. Wehave an open architecture philos-ophy and offer the widest range ofunit trusts of any Lisp.”

Glacier’s Investment Channel hasbuilt strong relationships with bro-kers who have traditionally not sup-ported Sanlam in the past. As aresult, between 60% and 70% ofGlacier’s business is now written by in-dependent brokers as opposed to San-lam’s adviser force.

Raath says Glacier is focused on beinga world-class organisation and its corebeliefs include that it exists because of —and for the benefit of —the client.

“We benchmark our-selves against internationalstandards and continuallyseek ways to improve ouroffering and be more in-n o vat i v e .

“In a tough economic environment, wehave to offer our clients affordable, qual-ity products. Glacier has performed welldespite the financial crisis over the pastfew years.

“We believe this is because we takeclients’ needs seriously, we offer a broadsolution set, we’re flexible, consistent andcommitted to being the best. And wenever forget that we’re dealing with peo-ple’s hard-earned savings — in manycases, their retirement money,” he says.

Raath cannot stress too strongly theneed for a responsible and considered

approach to investing. “Long-term wealthis created through hard work,” he says,“not through chance.” He cautions in-vestors to always seek advice from aqualified professional, to avoid anythingthat sounds too good to be true and to

invest only with reputablecompanies. “C o r p o rat egovernance is more impor-tant than ever before.”

In addition to having itsown internal legal andcompliance structures in

place, Glacier is audited by its externalauditors, Ernst & Young. Clients’ mone yis never invested directly into a Glacieraccount. It is deposited into a trustaccount or the retirement fund’s account.

Units in the collective investmentschemes are held on behalf of clients inthe name of the nominee company. Sep-

arate boards of trustees that includeexternal representation govern all theretirement funds on the Glacier platform.

All investment-linked living annuityinvestments are invested into a Sanlamlife policy that forms part of the Sanlambalance sheet. Glacier is 100% owned bySanlam and investors are assured at alltimes of the backing of the larger group.

The business remains committed toworking through financial intermedi-aries. “Investment decisions can be com-plicated and investors can benefit fromadvice as a wrong decision could becos tly,” says Raath.

The team at Glacier believes it is inclients’ best interests over the long termto invest a portion of their savings off-shore. “To build a world-class organ-isation we have to be a part of theinternational arena.” ■

WHAT IT MEANS

> New packages forforeign investment

> Focus on affordable,quality products

Anton Raath

Het

ty Z

an

tma

n

98 F I N A N C I A L M A I L O C T 2 6 - O C T 3 1 , 2 0 1 2

CORPORATE REPORT GLACIER BY SANLAM

At first glance, the affluent marketlooks like a small niche in a developingcountry such as SA, and one with intensecompetition. But Donna Barnes, Glacier’shead of marketing, says it is an area ofstrong growth.

Glacier has worked with Ramsay Me-dia and UCT’s Unilever Institute of Mar-keting to better understand its marketand their lifestyle. According to theirstudy, the number of people in the toptax bracket has grown by 25%/year overthe past four years.

The company is already a powerfulp l ay e r in the affluent market. And it isstrengthening its hold through its “T hinkWorld Class” marketing and advertisingcampaign. This campaign is also used todrive best practice throughout the busi-ness, influencing all interactions betweenemployees, clients and business partners.

Barnes says people in the affluent mar-ket think less about financial productsand more about meeting financial needs.“They like to be self-directed, but stillneed the assistance of a financial in-termediar y,” she says.

There is a widespread understandingthat saving for retirement is imperative.

GLOBAL REACH

A l l - ro u n di nvest m e ntGlacier International was launched twoyears ago as a division of Glacier bySanlam and is headed by Marcel Brad-shaw, a veteran in the field of inter-national investing.

It offers portfolios based in sterling,dollars (US or Australian) or euros. It isdomiciled in Bermuda and plans areissued by Sanlam Life’s Bermuda branch,which is regulated by the Bermudianauthorities as well as by the FinancialServices Board in Pretoria.

As a specialist business, Glacier In-t e r n at i o n a l has its own team headed byfour regional managers.

For now its only focus is on SA-basedclients, which differentiates it from itscompetitors. It caters for the entire rangeof investors, including those looking for aone-stop single-fund solution; to mix andmatch a focused range of funds; a widechoice of funds; and share portfoliosmanaged through a stockbroking account.

Glacier International has contractswith a range of stockbrokers, includingPictet, a strategic partner of SanlamPrivate Investments; Collins Stewart;Merchant; Credo; Savoy International;and Saxo Capital Markets. Local outfitssuch as PSG Online also offer stock-broking services.

For those who want growth assets butwould like some downside protection,Glacier has its unique P2 Strategies,managed by Milliman in Chicago, US.

There are other conservative optionssuch as funds of hedge funds run byStenham, Aurum and GAM. But head ofproduct & investment Andrew Brotchiesays that range has been kept tight, andmore speculative hedge funds have notpassed the due diligence test.

Glacier International has a sensibleoffering with 300 funds, including thethree risk-profiled funds run by SanlamInternational Investments.

Bradshaw says at Glacier the stock-broker portfolios are proving to be pop-ular with investors.

He says Glacier International’s offeringhas, until now, been aimed mainly at the

MARKETING

An area of growth

DonnaBa r n es

In fact, 72% in a recent survey consideredit to be a primary goal, right through tothe very top end of the market.

And it is also a segment of the marketthat doesn’t simply buy brands based onadvertising alone. It considers word ofmouth to be even more important.

“This meant that our approach to mar-keting and communicating our valueproposition has had to change,” s ay sBarnes.

“The way people consume and evaluateis changing, and so we need to changetoo. We partner our financial interme-diaries to help them to serve their clients’needs and we also need to ensure thatthe end investor has a clear understand-ing of our offering.”

Glacier aims to be relevant and visiblethrough niche brand associations such asthe Glacier by Sanlam Storms River Tra-verse mountain biking race and its highlysuccessful Glacier Junior Series golf foreight to 18-year-olds, which helpsde velop future professional golfers.

“Both have helped entrench our brandin our niche market and contributed totheir respective communities, which is atthe heart of who we are.”says Barnes. ■

Het

ty Z

an

tma

n

Het

ty Z

an

tma

n

F I N A N C I A L M A I L O C T 2 6 - O C T 3 1 , 2 0 1 2 9 9

Strong focus on c l i e n tsGlacier regards service as one of itskey differentiators in the market. Thebiggest part of its staff complement isthe 165 people engaged in serving thefinancial intermediaries and buildinglong-term relationships with them toensure that their clients’ needs are met.

The team comprises a mix of newgraduates and experienced communi-cation centre staff. Client service headMichelle Möller says in line with the“Think World Class” positioning, thecompany benchmarks itself against in-ternational standards.

“This means having the right peopleon board and providing intensive, on-going training to ensure we remainrelevant. Administrative functions suchas the buying and selling of units in afund can be performed by any numberof companies, but it’s how you do itthat counts,” she says.

Glacier already has a reputation for

excellent service and, to maintain thisstandard, the company constantly seeksways to raise the bar. One of the waysit does this is to provide the inter-mediaries with software and tools toassist them. For example, this entailsportfolio construction and determiningthe monthly or annual contributionsclients need to invest in order to ac-cumulate a certain level of investment.

Glacier’s Research team also makesavailable publications such as the flag-ship Shopping List — a commentaryon the top collective investment fundsin each of the categories.

The Client Services managementteam as well as many of the servicingconsultants recently wrote the regu-latory examination set by the FinancialServices Board. “It ’s imperative that weunderstand the world in which ourintermediaries operate so that we canrespond accordingly,” says Möller. ■

more seasoned investor.But the team noticed a demand for a

simpler option, with a select fund choiceand at a lower cost. This resulted in thelaunch of Navigate by Glacier Interna-

a life licence, the Navigate solution caninclude managers that the SA authoritieswill not allow local retail investors to buyas “n a ke d ” unit trusts. These include theBlackRock Global Equity Income Fund,the Pimco Global Real Return Fund andthe Schroder Global Equity Alpha Fund.

There is a good blend of managersalready familiar to local intermediaries,such as Coronation, Sanlam and Ned-group and newer names such as Hen-derson and Jupiter.

Bradshaw says as investors are buyingan offshore life plan from an SA company,the investment forms part of the client’sSA estate, saving the complications ofhaving part of the estate located offshore.In fact, there is no requirement to repa-triate the funds on maturity or death.

No tax is incurred for income or cap-ital gains within the plan. The only tax isa capital gains tax of 10% when money iswithdrawn from the plan.

Glacier also takes a lot of the ad-ministrative burden away from clients asit helps them to get tax clearance cer-tificates. It also helps with currencytransfers or asset swaps and following upwith outstanding documentation. ■

M a rce lB ra d s h aw

MichelleMöller

tional earlier this year.Navigate has 17 fund options to choose

from and a lower platform fee of 0,3%(the normal charge is a sliding scalestarting at 0,65%). As it is offered under

A n d rewB rotc h i e

Het

ty Z

an

tma

n

Het

ty Z

an

tma

n

1 0 0 F I N A N C I A L M A I L O C T 2 6 - O C T 3 1 , 2 0 1 2

CORPORATE REPORT GLACIER BY SANLAM

J ea nLo m ba rd

Extra care goes into planningWealth accumulators usually have aclear idea of what they would like thevarious elements of their estate plan toachieve during their lifetime and atdeath — the common ideal being tak-ing care of their family.

More often than not the variouselements of their estates are not insync with each other, resulting in afailure of the wealth accumulator’sgoals. As Glacier is closely involved inhelping clients to accumulate wealth, itis only logical that it has set up its ownfiduciary services department to assistclients in the preservation of wealth forfuture generations.

Glacier Fiduciary Services’ philoso-phy is “life planning”. It looks at thefour core elements of a client’s estate asbeing personal assets, trust assets, con-tractual agreements and retirementfund benefits.

Fiduciary specialist Nokuzola Cossiesays the role of the fiduciary specialistis to assess each of the elements in theclient’s estate. It is also to providetailor-made recommendations that arespecific to the client’s circumstances toensure that all elements of their estateare congruent and assist them inachieving their personal objectives.

“Estate planning is not a one-offevent and should be reviewed when aclient’s circumstances change,” s ay sCossie.

Glacier Fiduciary Services has foundthat four out of every five clients thathave a trust deed have either not readtheir deed or are not administeringtheir trust correctly. This has led the

fiduciary team to expand its services toprovide trust deed audits, trustee con-sulting services and a corporate pro-fessional trustee service.

All services offered by Glacier Fidu-ciary Services are charged at a fee. Thedistinguishing feature of the team isbeing able to assist clients with theimplementation of the plan. This in-cludes the service of the drafting ofwills, trust deeds and buy and sellagreements as well as the adminis-tration of estates. This is in addition tothe team’s ability to provide clientswith tailor-made strategic estate plan-ning. ■

N o ku zo l aCoss i e

RET IREMENT

Target ongood returnsAs a large player in the retirementarena, the team at Glacier is quick topoint out the need for growth assets,such as equities, in investors’ por tfolios.This is because these assets are vital ingrowing their capital over the long termand in outperforming inflation.

“We ’ve done research on optimal assetallocation and we believe that on averagea post-retirement investor should havebetween 40% and 60% of their portfolioin equities,” says head of business in-tegration & research Jean Lombard.

“Obviously, this depends on the in-dividual’s circumstances, but this is anaverage. Retirees today are living longerand it’s quite possible that retirementsavings accumulated over a 30 to 40-yearworking career will need to last an ad-

ditional 30 years to see the investorthrough to the end of his life.

“Added to this, we are now also seeingmuch lower returns than we have in thepast. This puts even more pressure oninvestors to save more, for longer, and inthe correct vehicles. This means having acertain portion of your investment ingrowth assets to ensure growth abovei n fl at i o n , ” he says.

“Investors, understandably, focus on therisk of capital loss. But in the process,

they often also overlook the fact that theirsavings need to outpace inflation for theduration of their retirement so that theycan sustain their income level.

“The best way to do this is by holdinginflation-beating assets such as equitiesin your portfolio. Retirement is a journey,not a destination, and as with all jour-neys, one needs one’s cash to last thedistance. Investors who invest too con-servatively may not be able to realiseinflation-beating returns, leading to cap-

Tre

vor

Sa

mso

n

Het

ty Z

an

tma

n

F I N A N C I A L M A I L O C T 2 6 - O C T 3 1 , 2 0 1 2 1 0 1

ital depletion,” says Lombard.Patrick Sheehy, head of product man-

agement, is concerned that there is atendency for investors to move awayfrom growth assets as they approachre tirement.

This drove Glacier to bring the P2Strategies solution to the market. Es-sentially, Glacier P2 Strategies is an in-vestment option overlaid on funds thatgives investors the option to invest ingrowth assets while limiting the down-side in volatile markets. This reassuranceis welcome as clients retiring now or overthe past five years have experienced first-hand the effects of volatility on theirretirement savings.

In keeping with Glacier’s commitmentto world-class solutions, the investmentis managed by Glacier under advice fromexperts at Milliman, one of the world’slargest risk management firms, and withmarketing and systems support fromBermuda-based P2international, Ltd.

In addition to having a low equityexposure, another problem is that in-vestors aren’t saving enough. Sheehy saysif investors haven’t saved enough duringtheir working careers, nothing they dopost-retirement will solve the problem.South Africans, on the whole, retire ear-lier than their international counterpartsand tend to save less.

Along with investing conservativelyand not saving enough, some retirees aredrawing a too high percentage of income,placing their capital at risk. Lombard

having the tough conversations with theirclients. We’ve seen an increase in thenumber of investors drawing between2,5% and 3,5% income per annum,which we view as healthy and sustain-able,” he says.

National treasury is particularly con-cerned about the longevity risk (risk ofoutliving one’s capital) and lack ofpreservation of retirement savings whenchanging jobs. Discussion papers thatlook at the possibility of compulsorypreservation have recently been released.These are also looking at making mem-bership of a retirement fund automaticfor those in formal employment.

Lombard acknowledges that preserva-tion of retirement savings on changingjobs is a burning issue. “By cashing inthese savings early in their career, in-vestors deprive themselves of the benefitof compound interest. This is one of themain reasons why people reach retire-ment with insufficient savings,” he says.

“We understand the pressures and con-straints consumers are facing, but wesupport the notion that retirement sav-ings should be preserved at all costs.”

He foresees much change in the post-retirement space. “Sanlam has represen-tatives who, via Asisa [the Associationfor Savings & Investment SA], will pro-vide input into national treasury’s pro-posals for retirement reform.

“Ultimately, the end goal for the play-ers involved is a secure future for all thecitizens of our country,” he says. ■

ASSET PROTECTION

Covering all the risksGlacier believes that life insurance isan investment by the client in theirfamily and in the future financial securityof their business. National manager fordistribution Andre Krause says an in-dividual’s biggest asset is their ability toearn an income.

“Many life cover products offer similarbenefits that may lead consumers to themistaken conclusion that the provider ofthe cover is not an important consid-e rat i o n , ” he says.

To achieve a comprehensive and ac-curate needs analysis, an intermediaryneeds to collaborate with a highly skilled

Andre Krause

Pa t r i c kS h e e hy

says since introducing tools to assistfinancial intermediaries with optimalportfolio construction and income levels,Glacier has seen the median level ofincome taken by retirees decrease overthe past three years.

“This means people are making toughchoices and financial intermediaries are

Het

ty Z

an

tma

n

Tre

vor

Sa

mso

n

F I N A N C I A L M A I L O C T 2 6 - O C T 3 1 , 2 0 1 2 1 0 1

1 02 F I N A N C I A L M A I L O C T 2 6 - O C T 3 1 , 2 0 1 2

CORPORATE REPORT GLACIER BY SANLAM

Putting value in peopleOver the past six years, Glacier hasestablished itself as an important busi-ness unit within the Sanlam group, anda leading brand in the affluent market.Human resources head NomzamoNgqulana-Kasana says it was impor-tant that the culture of high perfor-mance and a strong service ethic bemaintained. This is why Glacier in-corporates its “Think World Class”ethos in all it does.

“We can only be seen as world-classexternally if we practise a world-classapproach internally,” she says. Thecompany aims to be world-class in itsselection process, in performance eval-uation, in its reward practice and in itstraining and career development ac-tivities.

Due to its growth, Glacier will soonbe moving to new premises in TygerValley, where Santam, another world-class business, will be its neighbour.The energy- and resource-efficientbuilding incorporates design, construc-

tion and operational practices that sig-nificantly reduce or eliminate negativeimpact on the environment. The pro-gressive building, a first in the area,has been awarded four stars by TheGreen Building Council of SA.

Glacier recently achieved its overallemployment equity target and its em-ployee base is now almost 56% fromthe designated groups. It has manytraining options available for new re-cruits and those who wish to developfurther. “Skills in our industry arescarce so it makes sense to developpeople who show promise and drive,”she says.

“We ’re working with investors’ lifesavings, and therefore honesty, in-tegrity and respect are nonnegotiablequalities in the people we hire.

“We encourage people to take own-ership of their roles and their careers— that way the company and theindividuals both benefit,” s ay sNgqulana-Kasana. ■

underwriter. This is why Glacier Top-cover products are underwritten by San-lam Life Insurance, whose underwritingquality was commended by three in-ternational re-insurers last year.

The range includes life cover, lumpsum disability and impairment, dreaddisease cover, future cover — giving theability to take out cover at a future datewithout additional medical underwriting— and sickness benefit.

Krause says clients value premium in-creases that they can predict and control.Topcover does not change the risk profileof the client if their health deterioratesafter a few years. Sanlam has a strongreputation for honouring claimspromptly. It pays 99% of death claimsand 85% of disability claims.

Short-term insurance, also a vital partof a holistic financial plan, is a spe-cialised area requiring expertise and adetailed understanding of many aspectsof business. This led to Glacier pur-chasing a majority share in AssociatedInsurance Brokers (Cape) 2006 (AIB),one of the largest independent broker-

ages in the Western Cape.The Glacier Asset Protection offering

now has a national footprint with officesin Gauteng and KwaZulu Natal. Pur-chasing a stake in AIB has given Glacieraccess to skilled personnel in sales, claims,administration and risk assessment.

The Glacier Asset Protection offeringgives clients access to a wide range ofshort-term insurers as well as personalisedadvice throughout the claims process.

Business development manager Anne-Marie Gous says Glacier does not set outto provide the cheapest cover. The valuecomes from quality, flexibility and choice,and in line with the Glacier philosophy, itis an intermediated offering.

Financial intermediaries who prefernot to deal with short-term insurancecan refer their clients to Glacier AssetProtection. This ensures they get thecorrect advice and access to the bestsolution for their needs.

Glacier Asset Protection offers accessto a number of specialist insurers, in-cluding niche offerings such as art, 4x4,yacht and small craft cover. ■

Nomzamo Ngqulana-Kasana

Anne-MarieGous

Het

ty Z

an

tma

n

F I N A N C I A L M A I L O C T 2 6 - O C T 3 1 , 2 0 1 2 1 03

the client has to draw less income. Thisis a difficult discussion because investorshave become accustomed to a certainincome level.”

The team works with their interme-diaries to demonstrate the value of thetools and software developed and madeavailable by Glacier. These tools can as-sist with, for example, tracking invest-ments, creating a portfolio showing theasset class allocation as well as illus-trating which funds work well together.

One of its most important uses is todetermine the appropriate amount ofincome withdrawal so that the client’scapital is not depleted.

“An intermediary may not have thetime to research almost 1 000 funds,”says Lessing, “and this is where we comein. We free up time for the interme-diaries to focus on serving their clients.”

Coetzee explains that there are threeparties involved — the client, the in-termediary and Glacier — and thereneeds to be value for all three. He saysGlacier will never pursue anything that isnot in the best interest of the client. ■

Corporate Report written byStephen Cranston

Advertising executive: Kay Naidoo

I N T E R M E D I A R I ES

A vital support systemGlacier’s highly qualified and skilledsales team has almost daily contact withits financial intermediaries (both Sanlamadvisers and independent brokers) tooffer support and help them help theirclients.

Because Glacier offers a one-stop shopfor affluent clients through its inter-mediaries, the team always ensures theintermediary has access to the relevantspecialists, where necessary. The fidu-ciary, short-term insurance, risk coverand international offerings all have spe-cialists in their respective fields to pro-vide guidance and input.

“We assist the intermediary to providea financial solution that best suits theneeds of a client,” says manager forbusiness development (South) KritzCoetzee. “Sometimes that means we’remerely a sounding board. Clients arefaced with increasing uncertainty andcomplexity and the intermediary oftenhas to provide a solution.”

Manager for business development(North) Martin Lessing agrees. He says

the plight of investors reaching retire-ment is something that the sales team isconfronted with on a daily basis. “Whenlooking at the capital the client hasaccumulated at retirement and the in-come they require, we essentially havetwo options,” he says.

“We can either assist the intermediarywith portfolio construction to include acertain allocation to more risky assets, or

“Clients are facedwith increasinguncertainty . . .the intermediaryof te n has toprovide aso l u t i o n ”

— KRITZ COETZEE

Kritz CoetzeeMartin Lessing

Jere

my

Gly

n

Tre

vor

Sa

mso

n