By Lehlohonolo Lehana.
Financial Services Group Alexander Forbes produced a strong set of financial results for the year ended 31 March, with headline earnings per share up 15% year-on-year.
The delivery of strong results coincides with the company’s 90th anniversary.
This translated into a higher average assets under management, which was coupled with enhanced client retention. Total assets under management and administration closed at R599 billion, up 14% year on year.
The board declared a final gross cash dividend of 33 cents per share, up 10% from the prior year, taking the total dividend for the year to 55 cents. A special dividend of 10 cents per share was also declared, linked to the successful conclusion of litigation around the enhanced transfer values (ETV) liability matter.
Alexforbes CEO Dawie de Villiers said, “What excites me about Alexforbes is the way we have punched above our weight for 90 years and the impact we’ve had on the financial services industry. We have influenced and led real change and continue to do so and most importantly, we secure the financial well-being of members in the retirement funds that we serve.
De Villiers says the group remains capital-strong, with a regulatory surplus of R1.35 billion and a cover ratio of 2.3 times — well above the target of 1.2 times.
De Villiers notes that the group’s strong results for the period under review were underpinned by positive market growth, which resulted in higher average assets under management, inflationary increases from within its retirements and healthcare consulting client base, and high client retention.
“In addition, consolidation of acquisitions completed in previous financial years and higher than expected two-pot claims volumes also contributed to our top line.”
The company also shows no sign of slowing down, with new institutional business flows for the year amounting to R35 billion.
The institutional product offering (assets under management) was up 11% while the platform administration offering (assets under administration) grew 26% year on year.
New retail business flows increased 34% to R28 billion, including R2.2 billion in assets under advice for the recently launched discretionary fund management offering, Investment Solutions by Alexforbes.
Closing retail assets under advisement are up 12% year on year to reach R112 billion. Additionally, retail assets under management are up 11% year on year to reach R107 billion.
Alexforbes also revealed how it is managing to benefit from the implementation of the two-pot retirement system, with it actually improving its top-line revenue from the fees charged for withdrawals.
For the period of 1 September 2024 to 31 March 2025, Alexforbes processed over 480 000 claims from the savings component under the two-pot retirement system.
These claims amounted to a cumulative gross withdrawal of R7.7 billion, of which R5.5 billion was from Alexforbes portfolios (assets under management and administration).
“Evidencing the group’s careful and considered approach to the two-pot implementation, 95% of normal benefit payments were processed within standard servicing levels despite the additional complexity of managing such claims in a post two-pot environment,”De Villiers notes.
The group anticipates that the two-pot system will improve retirement outcomes for new members by up to 2.5 times on average over the long term.