Life offices and asset managers represented by the Association for Savings and Investment South Africa (Asisa) had made “encouraging progress towards achieving transformation targets” set by the Amended Financial Sector Code (FSC) and have exceeded ownership targets, the association said yesterday.
However, reaching management control and employment equity targets remained a challenge for an industry dependent on scarce specialised skills such as actuarial and asset management expertise, said Asisa senior policy adviser for transformation, skills development and education Lister Saungweme.
“While we are not where we want to be, we are seeing progress, albeit slow progress, towards meeting management control, employment equity and skills development targets,” she said.
The Amended FSC came into effect on December 1, 2017, and measures financial sector transformation using a balanced Broad-based Black Economic Empowerment (B-BBEE) scorecard. Life offices are measured against targets for eight scorecard elements, while asset managers have six.
Asisa yesterday released an overview of the collective transformation progress made by members over the five years to the end of 2022. This after Asisa’s board had commissioned the research to measure the transformation progress of the savings and investment industry, to help members identify areas that require more focus.
The report represents 97% of assets under management (AUM) for life offices and more than 85% of AUM for asset managers.
Saungweme said the report showed that the most notable improvement was recorded for the ownership element of the FSC scorecard, which measures the extent to which black people own equity in a company.
Overall, life offices and asset managers exceeded most B-BBEE ownership targets in 2022.
Asisa member contributions towards Enterprise and Supplier Development (ESD) exceeded the targets in 2021 and 2022. ESD contributions by life offices and asset managers came to R617 million in 2022.
Socio-economic development and consumer education targets were also surpassed in 2022, with a total spend by life offices and asset managers of R483m.
Saungweme said of concern was that there was no significant improvement in the number of female portfolio managers, which stayed static at 17%.
There was also only slow progress in the advancement of black women across junior, middle and senior management both for life offices and asset managers.
However, a better picture was emerging in the management control scorecard element, where the percentage of black women in life office executive management increased to 21.19% in 2022 from 8.23% in 2018.
In the asset management space, the representation of black women in executive management increased to 20.83% in 2022 from 14.93% in 2018.
Saungweme said the Covid pandemic affected the industry’s skills development efforts negatively.
The financial impact of Covid on companies resulted in reduced spending on skills development. Also, the shift to remote working environments slowed the skills development of junior black employees and the onboarding of black interns.
Asisa members spent R9.6 billion on skills development over the five years from 2018 to 2022. In 2022 alone, skills development spending by life offices and asset managers amounted to R2.1bn.
BUSINESS REPORT