Manning up to the difficult conversations


Floris Slabbert, National Sales Manager for Ecsponent Financial Services, talks about the
approach to financial planning, which is delivering positive results for the company

Please provide an overview of your background and how you came to be part of the financial services industry?

After matriculating, I wanted to study law. My father offered me the choice I could either get a new car and pay for my own studies, or a second-hand car, but then he’d pay for my studies. I was more interested in a new car, and so I obtained a bursary from the Department of Labour to study Community Development and Practises at Wits. I will never forget the look on his face when I told him; I think he was surprised about the money he would have to fork out for a new car but also, at the time, not many companies were offering bursaries. While studying, I met a number of businesspeople and was influenced by their guidance to go into the retail market and financial services—financing franchises to be specific. The field fascinated me and I started studying towards a in Financial Planning through Milpark Education.

What were your first investments as a child and were you good at managing your financial affairs from a young age?

I was still in high school when I convinced my mother to pack additional lunch bags for me every day, which I then sold at school for extra cash. When I went on a rugby tour in matric, I was in a position to pay for a number of things with the money I had saved, but found that, having made an effort to put money into my savings account, I was reluctant to take it out. That is really where the drive to save and invest started.

What are some of the key developments or major changes you have observed in the financial services sector in the past few years?

Clients have become more educated and informed. There are still those who feel financial planners are simply out to make a buck and, unfortunately, history has contributed to that, but it is perception that we are trying to change at Ecsponent. So, I prefer my clients to be financially informed because this enables them to understand the strategy as well as the commitment that’s required to build wealth. There are so many financial planning calculators, marketing tools and tips out there that anyone can learn the basics of savings and investment. One thing I have been concerned about for many years is poor tax planning; clients who have been with me for more than five years have been able to see first-hand, the benefits of tax planning. Additionally, investment fees are very important. Recently, a study by the National Treasury showed that, even if you save 2% in fees per annum, your investment will be 60% better off over a 40-year period.

What are the ideas you like to highlight for clients in terms of sensible investing and planning for the future?

Start with something the first step is to start with something, even if it is small the first step is always the most difficult, but pay yourself in the form of retirement savings first. There is a practical example I like to use; depending on the area in which they live, a typical South African family of four may go through two loaves of bread per day and, by switching from white to brown bread, they will save R6 per day. If the children are still young enough and the money saved is invested for their education, over 12 years, it might be enough to cover the first year of tertiary education tuition. Additionally, we need to re-educate ourselves. While saving for a goal like buying a house is important, we must start thinking of investment as an exercise that can generate returns.So, instead of saving to buy and consume something, save to invest so that your money can grow. It’s a subtle yet powerful mind-set change.

What are the different attitudes you have noticed among your clients, particularly with regard to older clients and younger clients as well as male clients compared to women clients?

I’ve noticed that the younger investors want to move more quickly and are not as patient as a senior investor. The second thing I’ve noticed is exceptionally concerning; you see an increasing number of older investors living for their children. Called the “sandwich generation”, the average 45/55-year old is now trying to provide for their own parents as well as their children.

Sometimes I have to have tough discussions with clients who want to help their children finance their first houses or cars, when they are not in the financial position to do so. 60% of Ecsponent’s clients are women and we have noticed that our younger investors often relate far better to female financial planners.

What is your approach to engaging with new clients and retaining existing clients?

We have an advantage; I would say seven out of 10 of our new investors are referred to Ecsponent. Furthermore, our client retention exceptional and eight out of 10 clients reinvest with us after they have been with us for five years. As a company policy, we do not do called calling but are active on TV, radio and in print in order to build the brand’s visibility in the market. We are very honest about our approach, and we sometimes turn clients away if we can’t meet their needs. Our brand is very important to us; you can build up a reputation over 10 years but it can be tarnished by one or two clients who are unhappy about an investment that was not suitable to meet their needs.

Client service and personal relationship are of utmost importance. A deal can be made or lost by adhering to diligent turnaround times and being available or providing prompt feedback. An open line of communication is important and we don’t run away from difficult conversations.

Even if the market hasn’t performed as expected, you need to communicate that and proactively manage. There is no computer screen and no hedge fund scenario that can actually compare to sitting in front of a client and asking them questions that will help them face hard facts, and then planning and adjusting a portfolio.

What are Ecsponent’s competitive advantages in the financial sector?

Aside from our low fees and our commitment to building trust and openly communicating with clients, our investment approach is to look beyond the obvious. We’re willing to take a look at the underlying assets and the potential that lies in those assets. We also take great pains to ensure our investments are secure. Investors know that, over the longer term, our returns are likely to be more consistent, as our results over the past six years have proven. Listed preferential shares are our biggest product offering at this stage. Our preferential shares are unique in the market—they are redeemable after five years, but with an accumulative dividend that pays out on a monthly basis.

Obviously, being a niche financial services company means we have agility—we can move out of markets quickly and adapt our strategy when required. We make a tremendous effort to ensure our clients are aware of their exposure and understand why we have taken specific decisions.It takes time to earn respect in this industry and we are careful not to mistreat the trust that our loyal clients place in Ecsponent.


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Issue 72