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PPS is taking a pioneering approach in this interconnected
age by tapping into the spirit and collegiality of the academic
years to create a community environment for our members.
By going back to our tertiary education roots, we intend being
as much an interactive forum for professionals as a provider of
financial services.
In recent years newly graduated or younger professionals
often did not see the immediate value in joining PPS, as their
profit-sharing rewards seemed so far into the future. We have
launched PPS recruitment campaigns at universities to explain
how PPS can look after their financial interests throughout
their careers and beyond, with the profit-sharing payout as the
cherry on top. Younger people have started joining in numbers
and the age demographic within PPS is swinging steadily
towards the millennial generation.
Millennials often prefer digital communication as a precursor
to face-to-face consultation, while the preceding baby boomers
would generally opt for a personal discussion first. The self-help
digital channels we are rolling out are designed to familiarise
younger graduates with financial advice and good investing
habits as they grow their investment portfolios. We expect
these members to supplement these self-help channels with
personal discussions in future as their portfolios and personal
circumstances develop to become more mature.
The 2018 financial year will be about rolling out a PPS digital
engagement strategy in line with global best practices.
We are developing digital platforms and apps for members,
intermediaries and agents to easily access their financial
planning, evaluate investment opportunities and calculate tax.
Later in 2018 we aim to launch digital tools for members to also
evaluate their life and insurance policies.
PERFORMANCE
During the year under review, we made certain management
changes and recruited additional top-level skills. We also
identified unnecessary costs in our distribution system and
phased out management levels that had become redundant.
The management team is now settled and energised by the
new growth strategy that has been put in place.
PPS recorded a healthy profit this year, despite the unfavourable
business climate. Although claims increased considerably, PPS
is well provisioned for paying out claims and was able to set
aside a worthwhile distribution for members.
In 2017 PPS won the long-term insurance category at the
prestigious Financial Intermediary Association (FIA) awards -
a major vote of confidence in the business, as the ‘judges’ are
financial intermediaries themselves. Given our strong focus on a
narrow market segment - the professionals - winning this award
when being judged against rivals operating in multiple market
segments was especially pleasing.
SNAPSHOT OF
DIVISIONAL PERFORMANCES
•
PPS Short-Term Insurance’s
performance shows that
professionals in general continue to manage their risks
responsibly. Claims received were well within budgeted
assumptions, supporting our belief that our members are a
better risk pool, which bodes well for the future in terms of
premiums and profit. This new unit’s cash reserves remain
substantial.
•
PPS Investments
performed particularly well and grew
assets under administration to R28.6 billion, with the number
of individual members participating increasing by over 5,300.
This growth is particularly pleasing as many rival asset
managers have stopped growing in the current environment.
This unit’s excellent performance was underpinned by
prudent expense management.
•
PPS Financial Planning
supports our members and their
financial advisors with specialised interventions and advice.
The model is fee-based, which enables our consultants to
provide professional advice in a non-sales environment.
We deliver on two fundamental promises: (1) being advised
by competent professionals, (2) without pressure to purchase
specific products. Any necessary product implementations
are typically referred back to the member’s broker or agent,
who implements decisions competently.
•
PPS Healthcare Administrators’
recent investments into
systems upgrades have sharply improved operational
efficiencies. These are now paying off in heightened service
levels and reduced costs.
•
PPS Mutual (Australia)
was launched in February 2016 after
a rigorous viability study, was able to make its first profit
distribution to its members in 2017. The costs of operating
our Australian business are reduced by running much of its
back-office administration through our Johannesburg facility.
It also supports profit generation for our South African
members.
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