Alexforbes aims to double retail business by 2027

Alexforbes plans to double its retail business over the next five years by capitalising on a new, slimmed down structure and consulting expertise to add customers.

“The growth areas for us is to at least double our retail business in three to five years,” Alexforbes CEO Dawie de Villiers said in an interview in Johannesburg.

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The company’s retail consulting and advisory business is worth R90 billion.

The asset manager and fund administrator backed by South African billionaire Patrice Motsepe, manages R435 billion and wants to overtake PSG Financial Services, which is the market leader in retail business consulting.

Legislative changes 

Alexforbes wants to take advantage of legislative changes that now allow pension fund administrators to communicate and advise members directly. Previously, they remained in the back office with access limited to human resource departments and not members.

“That is the massive opportunity,” de Villiers said, adding that the changes could bolster growth in its retail base. “We have solutions that our clients have invested in throughout their savings life and now they can continue in those solutions with us post retirement,” he said.

The pivot to growth follows the implementation of a turnaround strategy established after de Villiers joined the administrator from Sanlam four years ago. Alexforbes has since sold its short-term insurance business to Momentum Metropolitan Holdings and disposed of its life insurance unit to refocus on consulting and advisory.

The company used those proceeds to acquire Sanlam’s retirement fund administration business for R154 million in 2021, which is expected to boost client numbers by 40%, and also bought an IT company EBS International Proprietary.

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The Sanlam deal will add as many as 400 000 new members to the firm, according to de Villiers.

Alexforbes also wants to increase its market share as a fund administrator by using EBS’s online platform to support self-run funds like the Eskom Pension and Provident Fund, as well as Africa’s largest pension fund, the Government Employees Pension Fund, he said.

“The strategy around acquisitions is to build scale on administration — the more members you have under administration, the more overheads it covers and the more scale and synergy benefits you get,” de Villiers said.

© 2022 Bloomberg

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