#19 Riaan Singh – Transcript

SUMMARY KEYWORDS

people, advisors, advice, financial services, whatsapp, clients, products, financial, industry, decision, south africans, interesting, channel, consumers, report, bit, robo advisors, terms, engage, impact

SPEAKERS

Riaan Singh, Louis van der Merwe

Louis van der Merwe 

Welcome to another episode of financial planners, South Africa. Today, I have the pleasure it to announce to you that we have Riaan Singh, Riaan is a partner at strategy. And that’s part of the PwC group, and is part of the digital transformation team. Riaan, thank you so much for joining us today.

Riaan Singh 

Perfect, thanks very much. Very, very, very happy to be here.

Louis van der Merwe 

Now, Riaan, you have quite an interesting background. So before we jump into some of the work that you’re doing within the PwC team, at the moment, maybe give our listeners just a bit of a background of kind of how you stumbled on financial services and how you got to where you are at the moment.

Riaan Singh 

Sure, no problem. It’s I mean, I think, a very long time ago, I studied actuarial science. And that was a kind of a legacy of, of not wanting to do law and not wanting to go into accounting or being an engineering. And so actuarial science was pretty, pretty much everything that was left over. So stay natural sciences. UCT graduated, then decided not to become an actuary, however, I went into consulting, spent 14 years in consulting, working all in financial services at banks and insurance companies in South Africa, did some work in the UK, in Spain, in the US and Indonesia. And then after, after that stint, and then came into industry for the first time, and spent about a total of six years, working at momentum, and then Alexander Forbes. And broadly, both of those two organizations, I was head of digital digital strategy in the different areas. And then after sort of six years in industry, he rejoined PwC, then to focus on on digital strategy.

Louis van der Merwe 

Wow, that’s wonderful. And really kind of how we managed to connect was around the report that you published earlier this year, that’s called the future of advice and engagement in industry, you know, and with your background in digital advice, it would be great if we can unpack this report a little bit today, and maybe, you know, zoom in on some of the topics that would be applicable to financial planners that are listening to this not necessarily the larger financial corporations that are typically targeted with these and more in the demand industry delivering advice to individuals.

Riaan Singh 

Yeah, perfect. Yeah, happy happy to do so I think the the the background to the report is that, whilst I was at those two different organizations that I mentioned before, you know, we would do a lot of work on building new experiences, trying to digitize processes, and sort of good digital agile practices, we did a lot of user testing. So there was a lot of research that we did in terms of putting things in front of clients in front of intermediaries and brokers getting there getting their perspective and opinions and, and over the six years, that was all there was a lot of insight, a lot of interview that we did, where we got learnings from what worked, what didn’t work, and what were some of the trends. And so I think what we did then was I use some of those trends that that we that we’ve seen, and also sat down with some of my other colleagues from PwC, who equally been involved in building and launching different financial services and advice businesses. And so we’ve sort of put all of these learnings into mix and trying to draw out some of the trends that we think are happening in the industry today.

Louis van der Merwe 

Yeah, yeah, really. And so as a consumer yourself, also of financial services. Maybe if we start then to kind of look at your biggest frustration that you can see just personally dealing with financial services institutions, like where does that sit? And where does it hit home?

Riaan Singh 

I think from from myself as a consumer, and it’s one of the trends that we we’ve highlighted in the report, it’s around the the lack of personalization, I think there’s a lot of columns that I get, which were just sort of targeted and you can sort of see that they’re trying to be helpful. But because of the lack of personalization and and ability to understand who I am, you know, everything that makes up my financial life, it often misses the mark. So my bank has an example. Now, whenever I log on, they have this entry screen on eba on the online banking where they kind of show you your net worth. And it’s based on what they know about you, which is fair enough, but it’s it’s completely wrong. And so as a is not even the option that I have to go and add in, you know, one of the other holdings and products that have with other financial institutions. So maybe it’s just me, I just look at it and go, not useful next, and click through. So I think, I think being able to understand everything about me, allowing me to provide all of my information and then play back, kind of this holistic picture that’s personalized to me, I think That’s one of my frustrations, and it’s something that we talked about in the report.

Louis van der Merwe 

That’s so interesting. And it sounds like a, you know, it’s almost detracting value by trying to personalize but not using the data that they might already have on, you know, so thinking of this as a financial services firm with, you know, as so much information about our clients, like, why do you think it is that the institutions get it so wrong?

Riaan Singh 

Um, I mean, it’s an interesting one. And I think there’s there’s a, there’s a number of different components that I think the one of the big pushes that that we’re trying to advocate for, is Iran trying to provide much more holistic advice. Going forward, I think, if we take a step back and look at the industry, there’s a and we’ll certainly came through and a lot of the discussions that I sat in on watching clients interact with intermediaries, there’s a there’s a distinction between advice and advice. So there’s financial advice, as the industry has defined it. And, you know, face has has, there’s a whole bunch of regulation that set out and it’s and it’s legislated. And there’s a, there’s a, there’s a very strict process in terms of doing the needs analysis, what’s the documentation, the recommendation, etc, etc. What an advisor can and can’t say, etc, etc. And then if you if you sit down and you ask South Africans, what do they consider to be financial advice and asked them an open ended questions around that, you find that a lot of the help that they consider advice isn’t covered at all by what we call advice. So they’re often asking for, you know, plain English explanations of what do these different products actually mean? They’re asking for visualizations, they’re asking to, to speak to other people that have bought this product and have claimed from the product and can actually, you know, provide them, you know, relay an experience that they’ve been through before, I mean, all of these things, are elements of what South Africans considered to be advice and help. And I think, I think the the intent behind feiss and was to improve the quality of advice and to try and improve outcomes. But I think in many ways, it’s it’s forced us it’s kind of put a straitjacket on to the industry around, you know, trying to be very strict and proper, and, and all of that, right. But I think we just need to think a little bit more holistically around what what do people actually want? And what are those other things that could be valuable, even though it’s not strictly covered on the regulated definition of advice,

Louis van der Merwe 

I completely agree with you, you know, using regulation as a blueprint for how your advice should be distributed, and how it should reach your end client is probably not the best business strategy. I love this concept of being able to talk to people that previously claimed or kind of thinking of advice in a in a different way. Tell me a little bit more about these interviews that you had with kind of monitoring, our advice was given and how clients receive that, what are the other interesting things that stood out for you.

Riaan Singh 

I mean, we talk about this as one of the trends in the report and we call it an enabling nonlinear purchase decisions. And, and really what this is about that was kind of an insight that, especially when it comes to big purchasing decisions across any industry, people don’t think in a straight line. And if you think about the metaphor is uses the changes that have occurred in the travel industry. So 20 or 30 years ago, if you had to book you know, holiday to Thailand, you would speak to the travel agent. And that travel agent would be the sole point of information, you know, they would book your flights book your hotel, they would book your activities when you got to Thailand. And now with you know, the explosion of information, the internet, there’s no longer that asymmetry of information. So you might still use a travel agent, but you’ll be going on to Instagram and you’ll see pictures of the beach of the hotel, you’ll go on to TripAdvisor and read what other people have said you’ll go on to Airbnb and read reviews and you’ll you’ll take a whole bunch of information into account to then say, Okay, I now want to do this and you may use like I said, a travel agent accordingly. And I think I think we see the same change happening with with the financial services and buying financial products. People increasingly favored the the wisdom of the crowd over the wisdom of the expert. So very clearly, I’m not saying get rid of the advice I think and you’ll see in the report we talk a lot about the role of the advisor is here to stay and, and we don’t think that we you know, it’s always going to be needed. But I think it’s understanding that with with no longer having this asymmetry of information, people are going to want to be able to to get insights and advice. You can put it in inverted commas or help from other parties and so as an as an advisor, I think the The challenge or the opportunity is to recognize it’s not a one to one conversation that you’re having in terms of someone making that decision, they’re going to be speaking to their husband, their uncle, their aunt, their kids, you know, wherever it may be, they’re going to be trying to read reviews on Hello, Peter or some other, you know, platform. And so how do you orchestrate this process of them getting multiple inputs, and then guiding them to a decision and recognizing that, that you’re not going to be the sole arbitrator of, of their purchase decision?

Louis van der Merwe 

I guess, before Google, know your advisor was your gatekeeper to information. And then it became your advisor as your gatekeeper to access to your product. And what you’re saying now is that it’s kind of this mesh of information from different sources. And I’m wondering, you know, like, what things can we implement to make that a little bit easier for your client? Is it around, you know, communicating? Or is it just trying to preempt some of these things, saying, hey, use some reviews that you might find helpful, or here’s, you know, examples of what other clients have found helpful, because there’s also a big study around how financial advice received from family members actually had a negative impact on the financial outcomes? So kind of how do you balance that?

Riaan Singh 

And that’s a great point, I think, I think we’ve we’ve seen that quite often that you’re right. There’s many, there’s many cases where people will check advice with people that are close to them. Family members or friends to get advice. And I mean, the big joke that we had was, you often hear the comment that, Oh, I’m gonna speak to my insert family member ex, because they’re in a content or they’re a lawyer. And there’s the assumption that because you educated, you automatically, you know, qualified to give financial advice. But but we’ve definitely seen it in conversations that we’ve had with, you know, qualified, and highly educated individuals, often they they don’t understand the basic concepts, either around, you know, their financial planning, or their or their financial future. And so I think the, I think, I think it’s key to be able to understand and to highlight, you know, what are the trusted sources information, and how to facilitate a discussion. Because I think one of the, one of the interesting experiences that we both kind of digital experience for, for, for individuals to explore by themselves, and just to get a better view of, of where they were, and we allow them to, to then share that with, with their advisors, or whoever they wanted to share it with, with, and was really, really interesting, because one of the biggest insights we got when we did user testing afterwards, people said, let’s actually understand what the digital tool produced, I just wanted to talk to someone about it. And some people said, I want to talk to an advisor. And other people said, I wanted to talk to my spouse, I want to just talk to my dad and my kids, and just, you know, just use someone as a sounding board to kind of work through what’s in my head, and then commit to kind of a decision. And so I think for for advisors, also what we’ve seen in the industry, typically, from the insurance and savings companies perspective, they produce documentation that’s very difficult to share. I mean, it’s, it’s, I mean, yes, you can share it, but it’s not easily digestible to people to actually understand what’s in this document, and what are you actually covered for? And so I think, I think the role that advisors need to play is, yes, engage with their clients, but then help facilitate the discussion that they’re going to have in any event with people that they trust, to make sure everyone’s on the same page around what’s covered, what is the path that you’re on? What are the trade offs? What are the implications? What’s the impact of those decisions, rather than letting that conversation happen anyway, and, you know, somehow living in prejudice, what the decision is,

Louis van der Merwe 

okay, so it’s not fighting against those conversations, it’s actually trying to be included in those conversations. And you know, from this, the research that we’ve seen around the use of robo advisors, is that the confidence that someone has to actually implement a financial product tends to be quite low. And that last step really becomes really difficult. Because they just don’t have the self confidence to take that step. And then the role of the advisor, or, you know, like you’re saying in this, in this case, it might be family members could get you over the line.

Riaan Singh 

Now 100%, and then actually touches on one of the other trends that we mentioned in the report, which was around what we call hybrid advice models. And so I think there’s been a lot of discussion over the last five years, which talks about, do you go Robo advice or direct advice, or do you go, you know, traditional advice process and to us, that’s a false choice. I think the answer is that it’s a it’s blended model, because 100% I think, as I was mentioning earlier, I don’t think you can ever take away the human component of the of the advice such purchase this process, you know, what you can what you can use robo advisors or digital platforms, you can use it for, you know, capturing information, financial education to get people to understand some of the basic concepts. And you can do it for actually, you know, providing a lot of those recommendations the the high level recommendations, but but typically what’s going to have to happen is there’s gonna have to be a human conversation and, and what was probably going to happen as my evaluating prospective advisors are hopefully gonna be able to change their, the balance of their time where from my experience, a lot of advisors time is spent in grunt work, where it’s, it’s capturing information, filling out forms, answering basic questions, etc, rather shift then come in and say, I’m going to spend most of my time then in terms of someone having gone through a process, and then helping them be that sounding board to say, okay, so we see these are the recommendations for you, let’s talk this through, that’s humanize this a little a little bit, and let’s make you comfortable around what the what the what the what the platform is saying or recommending and help you to get to the point where you can make a decision. And I think that’s needed, because I think, as we’ve seen, we need to provide financial advice to a much larger set of, of South Africans. And it’s going to be difficult to double or triple the number of advisors that we have. So we basically need to make the existing advisors much more productive, you know, you need to be able to almost set the goal to say, How can the the advisors that today service and see 5x, or 7x, as many clients in a week as they are currently, and the answer to that is, you know, working with some of these digital technologies and Robo advice to do some of the grunt work. And then just allowing the human advisors to play a very high value added service in terms of almost being like an emotional coach, a blend between an emotional coach and someone who obviously has lots of product knowledge to get people over the line.

Louis van der Merwe 

Yeah, real. It’s so interesting, you mentioned that because a lot of the previous episodes on this call this podcast, we unpacked the role of an advisor as a coach and you know, touching on the emotional side, and then it’s less important to only have the technical skills you need birth, I want to expand a little bit on what you mentioned, because, you know, the cost of advice has really increased and it’s made it unaffordable for, you know, the average person to seek out independent financial advice or, you know, proper holistic financial planning. And so with these trains that you’re seeing, like, is there a way that you know, that that market can be served? Or do you just see that, you know, the the businesses become more profitable? Now? How do you balance the kind of, I guess, reducing the cost of advice, and also just not eating into the profit margins?

Riaan Singh 

Um, so I think I think there’s a lot that needs to be done. And there’s a there’s a couple of elements that question I think there’s, there’s, there’s definitely something that the insurance and the kind of savings industry needs to bring to the party, in terms of, you know, digitizing those processes, reducing kind of the cost per policy or the monthly and admin fees. And simplifying the products as well, I think there’s a, I think we’re seeing as a message, drive around product simplification, which then ends up in in making those products much more accessible to to to consumers. And then I think there’s, like I said, I think there’s a, there’s a new generation of tools and experiences that are needed, in terms of allowing people to provide their information in a platform that they trust, that can then consolidate, give a picture themselves, you know, provide some recommendations, and then that is very easily shareable, to an advisor, for an advisor to come in and say, Okay, let’s now sit down and talk through talk through his experience, because I think, you know, a lot of the, a lot of the cost structure behind the current advisor model is driven by the amount of people that advisors can currently see, and because they’re forced to spend a lot of time on weapon called admin. So I think I think as we can remove some of the admin out of the system, and, and, and use technology to make some of that disappear. I think it helps solve, you know, getting the the economics right in terms of making access to advice more scalable.

Louis van der Merwe 

Yeah, it’s reducing these legacy issues. And these are old systems that we start to have the large client base that someone might be sitting with and kind of trimming that away so we can deliver advice at scale to the people that really He did. And this is what this is about. It’s kind of moving financial planning forward so that we don’t get stuck in in the old ways. And tell us a little bit about about some of the other themes that came out because these eight and you’ve touched on quite a few of them. Yeah, what are the other ones that dude want to chat about?

Riaan Singh 

Sure. I mean, so I think one of the other ones is Ron would be seen, and will be called being more authentic, be purpose driven. So I think it’s been really interesting in this pandemic, there’s been this realization that we’re all in this together. And, you know, cross industry, the brands and the companies that have done the best throughout the pandemic, have been the ones that have been, you know, very clearly been able to articulate, what is their societal purpose, what is the impact that they’re trying to achieve, but have also been to demonstrate how they’ve helped achieve that impact. And I think the lesson for me, if you look at the South African financial services landscape, most of the companies have some variant that they talk about, like financial health, or financial well being or financial wellness. And I think the challenge is when you when you peel it back, mold becomes a bit nebulous, it’s all a little bit vague. So I think, I think what what’s required is for the organization’s to be very clearly able to articulate when we talk about financial well being this is actually what it means this is, this is how we’re going to measure it. And this is how we’re going to show that we’re actually demonstrating it and helping people improve their financial futures. And if you can be seen to be, you know, authentically living that and authentically driving people’s financial financial purpose, then I think we’re seeing evidence that that those type of brands will resonate a lot more with consumers, I think some of the, you know, when we get into when we’ve had interviews with clients, around the perceptions of advisors, etc, there’s often a question around the the role of debt versus buying financial products, and how, you know, in many cases, the best financial advice you can give to someone is to pay off, you know, high interest bearing debt, you know, get a credit card, or whatever. But very rarely do consumers complain, very rarely do they get that advice, it’s almost always, you know, by this financial product, whereas, I mean, we’ve seen examples where ad companies and organizations that are really committed to improving long term financial wellness, were the first step has been dead counseling. And and, and then we see once people have gone through that process, and then it’d be able to free up, you know, six 700 grand a month, based on on getting their debt in order, they talked about how that money is actually being transformational for their life, without them being able to, you know, buy other financial services products. At a secondary step, once they once they resolve that resolve, they’re dead. So I think it’s, it’s an interesting thing, because you always get into these conversations around, you know, where the incentives what what do you What’s the long term play? What do we push now, etc. So I think, I think the more and more clearly, individuals and organizations can can articulate what their purpose is, and show that they’re actually living in it. It’s not just a logo, I think, the more likely chance of success you’ll have because because we’ve definitely seen that consumers are reacting to that. Now, I

Louis van der Merwe 

really love that idea of not only thinking of aligning incentives, no, because the typical approach is to say, Oh, this person is remunerated through the product. You know, that is the outcome. But what it sounds like is these companies have added additional pieces to kind of cultivate their clients to a stage where, you know, becomes the basis for them to at that point, deal with them, but they take them through this this journey. What are the examples that you’ve seen, you know, maybe across the globe, or even locally, have companies that have managed to do that? Well.

Riaan Singh 

I think in financial services, there’s there’s a couple of interesting examples. So there’s been a number of investment managers who’ve decided to invest in ESG only compliant funds. So for example, BlackRock, I think, probably the most prominent fund, and they’ve made a they’ve taken a very clear stance to say they’re only gonna invest in new energy, or renewable energy rather, and it’d been quite clear that they’ve disinvested, around coal and all fossil fuels, etc. Because and they’ve, and they’ve been rewarded by the shareholders in the market for for doing so. There’s a really interesting example in Sweden, where there’s a new startup called the economy, they’ve launched a credit card called do black. And what’s interesting about this card is every time you swipe the card calculates the carbon impact of your purchase. So you know, the carbon impact of that coffee of that Uber trip of that flight, and then it actually cuts you off at the end of the month. Once you’ve exceeded A personal carbon limit for for the month. And so that that service resonates quite heavily with what is generally the young population in Sweden, who are more progressive and more environmentally conscious, because it’s they’re saying, it’s important to me not to only manage my finances, but to make sure that I’m doing so in a way and I’m doing my part in terms of protecting our future, etc.

Louis van der Merwe 

Well, you’d have the traditional economists, with the rational human trying to limit themselves, but it’s so true. They’re just saying I think people resonate to this authentically purpose driven outcome, and you know, if that’s aligned with their values, and just makes the purchasing process that much easier, and the engagement around that easier?

Riaan Singh 

No, absolutely. It can we

Louis van der Merwe 

talk a little bit about the kind of the next one that you have, which is around engaging in the in the channels of choice, we tend to default back to face to face meetings or, you know, emails these days, it’s it’s zoom meetings or Microsoft team meetings. Like what are the things that you see in the companies that are really successful? How are they reaching, specifically, older clients, you know, that might not be engaging in the channel than let’s call it newer age channels. However, they accommodated them.

Riaan Singh 

Yeah, so it’s really interesting, I think what we saw, as once the pandemic struck was, across the industry in South Africa, we look at all the insurance and asset management companies, but 95%, sometimes as high as 98%, of all of their new sales came through face to face channels. And so once the crisis struck in March, last year, you know, all of their sales basically fell, fell off a cliff. And, but rebounded quite quickly after one quarter, where a lot of them sort of switched to the digital channels, the zooms the teams, the Google Hangouts, etc, and we’re able to then kind of get themselves back to the same level of productivity. So I think I think there’s been quite a lot of adoption of those sort of virtual channels in terms of in terms of getting people to, to communicate with people. And I think some of the advisors that I spoke to actually said that they were more productive, you know, post this pandemic, because I remember the one advisor I spoke to said, you know, actually spent half of my week in the car driving somewhere, because this particular advisor was based in Stellenbosch. So, you know, all the different clients for Arjun farms, etc. So he spent a huge amount of time in his week, actually just physically driving hard to see all of his different clients. And he said, Now I can move from where I used to see two or three clients a day, I can easily see eight and a day now, you know, using using zoom. So I think I think people have responded quite well. And everyone’s adapted to this bit of a cliche, new normal that we’re in. I think what we also talked about in the report was that South Africa on the whole is quite a young population, I think that we know I mean, 70% of the country are millennials or younger. And when you when you start getting into the details around, you know, whilst data costs are quite high, we still see your and your increases in internet penetration, smartphone usage, etc. And pretty much every adult will have a smartphone, I mean, it’s not going to be the the latest iPhone or Samsung visit. There’s a lot of rudimentary smartphones, but but it’s more access to data. That is the that is the issue rather than the device itself. There’s been some really interesting stories where we’ve, we’ve spoken to two individuals in the lower lsms. And they have the they have a basic smartphone, and they talk about data rationing, where they’ve got, you know, sit them onto data for the month, and then they were very careful around what they use their data for. And to make sure it lost the entire month. And so I guess the, I guess what we’re saying there is most of the population does have access with increasing having access to the internet increasing as a smart device. And people are actually quite comfortable having these multi channel omni channel experiences, where they want to engage with an insurance provider, you know, start in one channel and finish in another channel, you know, Converse on Facebook, to to WhatsApp to then go to a call center and expect the golden thread to be kept throughout they for this young center of the market that’s actually assumed to be a hygiene factor. It’s not a luxury, being able to service these, this omni channel approach. And I mean one of the interesting things that we’ve thought about I think, you know, Whatsapp at the moment is deaf. Probably the most prevalent channel in the country that’s being used. I know. Was it December last year when there was the, you know, the furor around the privacy changes and there’s all that stuff that was going around. But that mean that caused a small blip in terms of WhatsApp usage. But three weeks later across the country was back to the same levels of WhatsApp usage that was before because it has critical mass, you know, lots of people and friends that started telegram accounts, but there wasn’t a critical mass there that was just in by themselves. So everyone’s carried on using WhatsApp and WhatsApp is actually the cheapest channel to communicate in South Africa. And it’s even cheaper than ussd. Because uses he uses airtime. So there’s, there’s no channel that’s cheaper than WhatsApp on a per message basis. And so you’ll see increasingly many of the banks and insurance companies are saying, you know, can we use WhatsApp as a tool for sales and servicing to to engage with clients, because the challenge with an app is, but apps were great when you’re the high touch engagement. So if you think about social media, which you use every day, your internet banking app, which you probably use a couple times a week, but once you get onto, like I said, these rudimentary smartphones, because there’s so little memory, you really competing for space in their phone with Candy Crush. So if you’re going to put an app on their phone, it has to be something that’s, you know, you get the users getting a lot of utility from. And so we’re definitely not saying it’s wrong for insurance companies and banks to be warm, especially on insurance, and asset managers to to focus on apps. But just be cognizant for a large section of the population, they’re only gonna engage with you once or twice a year, to get a benefit statement to get a tax certificate to do a fun query or service request. And so rather than try and get them to download an app, or to log into a website, which is something that they’re going to do once or twice a year, and probably forget the password to rather engage them in the channels that they’re really engaging now, which is WhatsApp to I think 90% of South African adults. And there’s some interesting ideas around I mean, we floated. And we’ll see what the WhatsApp for business feature map looks like. But you can almost imagine, he is setting up a whatsapp group. And the same way that you’ve got tons of WhatsApp groups in your phone where it’s all of your family members, your financial advisor, and the insurance company or the or the savings provider. And that way, you know, you’re having this conversation where everyone has full sight of what’s going on all the documents, you know, what’s up can handle PDFs, etc. So you can see all the PDFs that are being the benefit statements that come through, when people ask questions, everyone can see, okay, this was the answer. And you’ve got that full history across the the entire life that the entire family that has access to that’s it makes it very, very easy to share and to digest. I think I think the hypothesis I think we can do as WhatsApp matures, I think, especially WhatsApp for business matures, and companies build out some of these robo advisors, I think you will increasingly some see more of these kind of new type of WhatsApp groups emerge.

Louis van der Merwe 

This ties in so nicely with the analogy that you had around your bank, you know, giving you useless information, make sure your back office is digitized so that you can start using these tools. I’m wondering what the channel not the typical channel that someone engages with does to the expectation in terms of the speed that they expect response? Because we’ve seen that so much that, you know, typical email people are still okay with, you know, maybe a 24 hour reply. But as soon as you are used to getting an instant response, like what is that done to the structure of these larger businesses, where now all of a sudden, they have to bring speed into the element as well.

Riaan Singh 

So I mean, this is more for more for an implication for the for the insurance providers themselves than then advisors. But I think it has a huge amount of benefits because I think, you know, when you when you’re speaking on web chat, or at a call center, you know, you expect an immediate response. But But WhatsApp is almost designed for asynchronous communication, you know, you can, you can take someone, you’ll see that there’s no blue ticks, you’ve got confidence that it’s red, and you get you think, okay, I’ll wait a little bit, and then a little bit later point in time, you’ll see that it’s been red, and then you get an answer. And it’s got, you’ve got a full history, right? It’s what we call session list. So whenever you go into WhatsApp, you can see the full history of the conversation going all the way to the beginning. So what we find is that people are actually happy to engage in WhatsApp and not get instant responses because they can see the full history and they know that you’ll eventually get a response and the whole, you know, great text, blue text thing, etc. And the benefit for insurance companies. I mean, if you’re running a contact center or call center where people are calling in, you know, you have To be able to capacitate for the peak, so you know, whether it’s over lunch hours, you know, you have to be able to answer all those calls at that time. And whereas if you, if you’re able to move more volumes to WhatsApp and to enter the email channels, you can actually spread on answering those queries over a slightly longer piece of time. And, you know, just being able to delay the response an hour or two, has a huge implication from a from a provider perspective, and actually doesn’t, doesn’t worry the customers too much. If you if you if they know that you will respond within the next hour or so

Louis van der Merwe 

I guess you could also bring in, you know, prioritization of this line might be on this status. So therefore, the speed of the response is much faster. So it’s great to see businesses engaging with it. But yet, there’s so many that are not getting the CRM component, right, that’s not getting one central place of data. And, at the same time, the lack of software for a smaller or medium sized business to integrate with these, these things are kind of a little bit behind. Can we maybe talk a little bit about the tools and the kind of software that you’ve seen businesses use? Is that something that you explored within, in your studies in this report?

Riaan Singh 

Yeah, something something interesting platform that we that we’ve seen, have really been some of these profile builders, a world builders, that have kind of hinted about at the beginning, where, where people are able to build up a full picture of themselves. Because as a company, you know, we’ll have a partial snapshot of who you are, what your life looks like, and what some of your financial products and holdings, so we can definitely take the first pass of pre populating some of that. But then we have to allow you to be able to to fill in all the blanks, because there’s very few South Africans that are mono banked, or mono insured, or will get all their financial services products from from one entity. And once the first capability is being able to very easily add in all those other missing pieces of your financial life. Then build up a picture of what your expenses look like, what does your life currently look like now, and then be able to fast forward or run different scenarios, different moments in time to say, you know, what would your life look like at age 60? What are the trade offs that you’re going to have to make when you retire? Based on all the choices that you that you’ve made? Now? You know, do you need to work longer? Do you need to save more, etc, etc? What How would you react under these types of shocks? If If there was these kinds of events where, you know, something unfortunate happened? Let’s simulate that, what would your life look like then what what mitigating action Do you need to take to that now, and that ties in as well to one of the themes that we talked about, which was around connecting to future self, because I think there’s often as an industry, when we talk to customers about the benefits, it’s done in, you know, quite technical legalese. And people don’t always I mean, they know they’re getting something, but they’re not always like 100%, crystal clear on what it is that they get it. And there’s a lot of experience that we’ve seen that when people can very viscerally connect to and visualize the impact of those decisions that the moment they making the decision they make, you can call it better financial decisions. In terms of saving or protecting themselves, I think what often happens is, we’ll do financial education. And we’ll do at a particular moment in time. And generally, what we’ve seen is that financial education is pretty ineffective, it kind of you know, people look at it, and then forget about it. And then at a completely different time, we then ask them to make some sort of decision around an insurance product, a savings product, and they they’re they’re not inhabiting, you know, what they should have retained from their financial education. So the the winning formula, what we’ve seen is at that moment of making the decision, using all this information that we have about someone is to be able to get them to connect to their future self given to visualize, how is this actually going to impact me? What are the trade offs that I can that I can pull? Or what are the leaves that I can pull that can impact this picture, and allow me to do that easily at the moment of making the decision. And when you get that product, we’ve seen evidence that that people do do make much better decisions.

Louis van der Merwe 

It’s that concept of a kind of just in time, like we would use in logistics to say, okay, just in time when you needed this advice, it showed up and now as you talk through this rianne there’s this concept of cash flow projections that a lot of financial planners do when they look holistically at someone’s finances and they actually pull these pieces together because it can be so overwhelming. But at the same time, I’m realizing that you know, the competition for financial advisor might not just be another advisor, it might be an app on your banking profile or it might be an app on your your Nearby shops that you regularly buy from. So it’s not just necessarily the threads that are they and the channels of communication probably is therefore that much more important to be able to support your client at that time when they need to make a decision through that network of people that guide them.

Riaan Singh 

Yeah, I think I mean, there’s, there’s a lot of apps and tools that are out there that can help you with, with different components around doing the modeling and projections and stuff. And I think, I mean, the important role that advisors can play is number one, making sure you have a holistic view, because most of these solutions emanate from a banking perspective, or an insurance perspective or some other perspective. So there’s a, there’s kind of a inherent bias or myopic view, or they don’t consider the full spectrum. So there’s, there’s value in saying, I can help you, I can check to make sure that you’ve covered everything that you haven’t figured anything out. And then there’s kind of all the things that, you know, the ticket tricks of the trade that that people have to watch out for. So, I mean, what the one of the big examples that we often use is around, you know, medical, medical inflation post retirement. You know, once you once you get to 6065. And then once you retired, being part of a medical aid and and the costs of medical care for most pensioners, I mean, it goes through the roof. You know, medical costs are probably one of the biggest reasons for bankruptcy in retirement. But most people don’t know about I mean, a lot of people have this inherent assumption around, you know, inflation will just carry on. at the same pace, you know, my time I walk, a lot of people don’t factor inflation into the decision around when they retirement, we seen this. There’s a lot of people that need to be educated around just really understanding how erosive the impact of inflation is, those that do factor it in often don’t realize that that medical inflation is actually a big thing. And so, you know, conveying what to watch out for, yes, you might have your picture now. But you know, are you really thinking through all the things that could that could trip you up? I think those are some of the roles advisors need to play?

Louis van der Merwe 

How great would it be if your bank would give you your own personalized inflation number to plug into your financial plan? Because they have all this data? Right? Don’t give me my net worth. That’s off incorrect. Give me data that that I can use around this hyper personalization to say, the reason this is the number for you that you need to plug into, into your planning. The last Yeah, and

Riaan Singh 

I think what Yeah, so one interesting thing, I think, South Africa is the ninth most diverse country in the world. So out of the UN, I actually always have this action to go and see who are the other eight countries that are ahead of us, because I can’t believe there’s eight countries that are more diverse than us from a cultural perspective, from a language perspective, etc, etc. But the key point here is that there is no such thing as the average South African you know, if you there’s this great discussion about the mean versus the mode, etc. If you had to put up to say, typically people like you do that, that doesn’t exist in South Africa, you know, there’s, we’re with such extremities and there’s such differences that you can’t rely on, on talking to people about these averages that don’t exist, because like I mentioned early on in my, my banking example, when people look at it, they just, they just don’t engage, they go, that’s not me, don’t understand me. And then move on. So to your point, I mean, you really have to work at trying to understand who you are holistically, and what are your specific goals. Because the other thing I think we’ve seen is people and South Africans will define financial well being or whatever you want to call it in very different terms. To some people, they will say, being financially healthy for me is about making sure I’ve got a you know, paid for retirement. Other people might say it’s about being able to travel twice a year, I spoken to people who said, financial well being for me means I’m able to put my children through university and you know, get them standing on their feet. Like if I can do that, then you know, I’ve I’ve lived my financial goals, he she has to be able to kind of take that all into account.

Louis van der Merwe 

This is a great teacher name’s bill Bacharach. And he talks about values based financial planning, an equation that they’re often asked clients is what’s important about money to you. And so that elicits this emotional response in what it sounds like this financial well being is actually just at the root of, you know, what is what is important about money to our clients, and figuring that out and supporting them through this journey. And then the last piece, you know, in your report talks through, experimenting with these remuneration models, which is a topic that we can To end debate without end. So I’d love to hear kind of what what you explored within that section.

Riaan Singh 

So I think the better run the experiments were renumeration models, I think, you know, as we all know, there’s our job legislation that has been passed. And there’s more legislation that is that is pending in the works and and whilst we are not 100% sure exactly what the final regulations will be from an audio perspective, I think we do know that there’s going to be a move away from from, you know, commission Based Payment forms or renumeration models across the patch, and that is going to be more focused on activity based fee models. And there’s going to be I think, once that comes into, into into play, you know, advisors and the industries is going to have to pursue certain products, I don’t think will be for all products, but for certain products, you’re almost gonna have to give a menu around, you know, these are the potential services I can help you with. And and these are the fees for it. And it’s going to be an interesting discussion to see, you know, do the consumers rate the the service advisors provide at the same hourly rate of a plumber or an accountant or a lawyer? You know, how do they What value do they do they actually attach to those? So I’m not sure what the answer is on to that. But I think what we say it’s, it will be good for providers to start experimenting now and trying small little pilots to see what resonates, what doesn’t resonate, so that once the legislation does come to account into account that you’re that you’re ready and able to take full advantage.

Louis van der Merwe 

It sounds like that also fits under that hyper personalization, you know, now we have a pricing model that fits your preferences as well. Irrespective of, you know, your views on it on lead up, you can opt into that pricing model and not just, you know, commission or assets under management, there’s more options. So the, from this report, the future looks quite exciting for financial services, given how you’ve laid it out, and we’ll definitely link to the report for someone that wants to read through all of it. What was your take home? And how was the feeling or how you feel about financial services specifically in our country?

Riaan Singh 

I think it’s like you said, it’s a very exciting time, I think I think there’s a huge amount of opportunity. And I think with so much change going on now. I mean, what what’s also been really interesting throughout this pandemic, is if you listen to the insurance companies when they did their results presentations, at the beginning of the year, what what surprised many insurers was how good the persistency was on many insurance products. And I think one of the insurers said they often payment holidays to their staff and not to the staff to their customers. And 90% of people who took out those payment holidays paid back the premiums in full, and many then went on to take out extra products. So I mean, this this crisis has definitely negatively impacted us. I think one of the silver linings is that there’s been a renewed appreciation for for having the right level of protection. And that’s kind of really prevalent in people’s minds. And and people different be one help. And like I said, I don’t think it’s ever going to get to a point where you can take the human out of the equation, unless it’s for super, super simple needs. And so I think it’s just, you know, a massive opportunity going forward, it’s going to be a really interesting space. And I think the nature of advice will be kind of fundamentally different in five to 10 years time than it is now an interesting to see how it plays out.

Louis van der Merwe 

Brian, thank you so much. This has been a great conversation. I want to thank you for compiling this awesome report. Definitely highly recommended that you read to this. Read through this. And yeah, thank you so much for your time today. Where can people reach you if they if they want to have a further conversation?

Riaan Singh 

You can hit me up on my LinkedIn so my name is Riaan Singh. Or you can email me on Riaan Singh at PwC comm

Louis van der Merwe 

so thank you so much, man. Thanks so much.