Standard and Liberty launch new wealth management platform

Standard Bank and Liberty Group yesterday (Wednesday May 15) launched a major new force in wealth management - STANLIB.

The new company integrates all the asset management, unit trust, linked product and investment marketing businesses of the two groups. The deal also gives STANLIB a ready-made springboard for African expansion as one of the founders, SCMB Asset Management, already manages R2.5 billion in African assets via subsidiaries in Namibia, Swaziland, Lesotho, Botswana and Kenya.

STANLIB is the latest example of strategic collaboration by two of the strongest brands in the financial services industry and follows joint-studies by the Groups which indicated that a full bancassurance merger was not warranted, but amalgamation of their wealth management businesses certainly was.

The new group and its two operational arms, STANLIB Asset Management and STANLIB Wealth Management, were introduced to investment professionals and the business media at a launch event in Johannesburg.

The R1 773 million STANLIB transaction creates an asset and wealth manager with R135 billion in funds under management and R13 billion in funds under administration.

Roy Andersen, head of the new business, pointed out that the company begins life with a 400 000-strong client-base, the most powerful distribution network in its industry, the most comprehensive product range and a team of investment professionals who represent some of the best brains in the industry.

Andersen said lack of duplication in the management of large client portfolios and the tight cultural fit of the merging entities meant few job losses and a seamless transition in the management of portfolios.

STANLIB Asset Management, headed by Alan Miller, brings together Libam and SCMB Asset Management.

Miller said the net effect was that high performers at Libam were being further strengthened as the SCMB AM integration gave them access to more good people.

He assured the investment community that the people, the process and the philosophy that had driven Libam's success would continue to be applied.

Miller leads a team that has achieved unprecedented industry success in several areas;
for example …

• Top quartile placings in the retirement arena have been secured over one-, two- and three-year timeframes for management of outside clients' segregated funds.
• Top quartile performance over these timeframes has also been achieved in the Life Funds sector and management of Preferred Assets pooled portfolios.
• In the Unit Trust industry it has won the Raging Bull Plexus Award for best overall performance over the last one, two and three years.
• The last Large Manager Watch from Alexander Forbes report placed the team top of South Africa's 10 leading fund managers over the year to 31 march 2002.

STANLIB Wealth Management, the marketing, distribution and product development arm of the business, becomes the largest provider of wealth management in South Africa from the day of launch.

It is also South Africa's largest unit trust company with R28 billion under management.

The new company, headed by John Liackman, is designed to accommodate the new world trend toward convergence of the institutional and retail markets for wealth products and wealth management.

"The amalgamation created a larger pool of top, technically accomplished investment professionals," said Liackman. This enabled the creation of unique technical support structures which would add value in relationships with consultants, asset managers and clients. An e-commerce platform would distribute best advice to centres nationwide.

Operations are facilitated by the industry's most extensive distribution network.
This comprises …

• 800 independent financial advisers;
• 4500 brokers who are part of the Liberty distribution network;
• 950 Liberty franchise consultants;
• 400 members of Standard Bank sales teams;
• 900 Liberty agents;
• 380 Standard Bank branches.

This network would enable STANLIB to pursue a multi-branding strategy that leveraged the strengths of the Standard and Liberty brands. It also facilitated the marketing of offshore options made available by STANLIB's strong international partners.

Gradual product rationalization to facilitate smart investment choices would be undertaken in consultation with the regulatory authorities.

STANLIB executive chairman Roy Andersen revealed that African expansion is on the cards for the second half of the year.

STANLIB plans to launch JVs in association with Stanbic Africa in Nigeria and Uganda. In addition, a new multi-currency fund will be available throughout Africa.

Empowerment was a priority both across Africa and within South Africa, said Andersen. An early manifestation locally would be focused assistance to empowerment partners at Simeka Holdings to help them develop new capabilities in the realms of passive investment management.

• The bancassurance relationship of Liberty and Stanbic has also been extended via a 10-year contract that bestows management responsibility for Standard Bank Financial Consultants on Liberty. This leverages Liberty's distribution skills in the realm of financial product marketing, said Roy Andersen.