I was certainly back on home ground in Braamfontein this week. I’m not that familiar with the Stellenbosch wine route, but I am certainly an old hand at the Braamies wine route, a famous pub crawl which usually concluded at SAB chair Meyer Kahn’s office at 1 Jan Smuts Avenue.
That office isn’t even used any more by that dull conglomerate which took over SAB. I can’t remember the name offhand.
But I was surprised to see the Liberty Life building was still a hive of activity. The Liberty brand is still around, but only just. I thought what was left of the business would be hiding away in a corner of the Standard Bank offices in Rosebank.
Standard Bank CEO Sim Tshabalala describes Standard Bank as the “hero brand”. On the Liberty advertising it says “Standard Bank Group” below Liberty. At least the flame logo has been maintained.
When I got to the Liberty office I went up to the attic and was intrigued to see a picture of founder of Liberty Life Donald Gordon out of the view of most of the staff such as the “Picture of Dorian Gray”.
It is quite an irony. The week before I went to Liberty I went to the Allan Gray offices at the V&A Waterfront. It has a portrait of the founder at the top of the escalator.
Yet Gray was an intensely private man who was rarely photographed. In contrast Gordon liked nothing better than to be stalked by the paparazzi wearing his bowler hat in London.
The good news, at least if you are not one of its competitors, is that Liberty is in decent shape. It can pay out policies, it still has a good agency force and it won’t give any sleepless nights to the regulator now that the bank owns it 100%.
Liberty is starting to leverage the relationship with the bank more rationally — the executives seem to like each other, a long way from the days when Gordon and bank chair Conrad Strauss were engaged in a very public feud.
For example, rather than just watching Capitec dominate the direct funeral policy market, Liberty has launched Flexi products, which offer considerably more cover than classic funeral policies if customers answer three questions correctly.
There is a goal to distribute 1-million Flexi funeral policies over the next year and 100,000 Flexi life policies. And this is on top of all the “embedded” products sold through the bank via credit life.
According to David Jewell, who is in charge of the Liberty agency force, there will still be a role for the high touch role which Liberty agents play. He says Liberty is second only to Sanlam when it comes to the size of its complex life policy sum assured — which it markets primarily under the Lifestyle Protector brand — Old Mutual is still the market leader in funeral policies and other “simple” products.
Liberty agents are experienced at dealing with clients when they are in a crisis, when they are widowed or find out that they have a critical illness.
Increasingly, the bank wants Liberty agents and its own relationship managers to work as a team. Bankers often get squeamish when they have to ask personal questions about sensitive topics such as the client’s HIV status but this is all in a day’s work for the agents.
Jewell points out that Liberty agents are very loyal — they have a proverbial Liberty tattoo on their bodies. There was some skulduggery a few years ago when some of them were persuaded to move to a competitor in Sandton with financial inducements. But the regulator clamped down on this.
The biggest blow to group distribution recently was when some of the Standard Bank brokers moved to discretionary fund manager Adviceworx. But by all accounts the Liberty agency force itself is rock solid.
This is probably the main rationale for keeping the Liberty brand. It is certainly an also-ran in the employee benefits market. It is focused on the SME market where it is one of the big four umbrella funds. But overall it is a distant fifth in umbrella pension funds behind Old Mutual, Alexforbes, Sanlam and Momentum.
Perhaps even Discovery, the enfant terrible of the life industry, will overtake it in the umbrella retirement fund sector within a couple of years.
• Cranston is a former associate editor of the Financial Mail.
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