In this Q&A interview with Sanah Gumede, Head of Wealth & Investment, South Africa for High Net Worth (HNW) individuals in Standard Bank’s home market, she discusses the help she provides to aid generational wealth transfer, which has become more challenging as interest rates (IR), inflation and commodities rise in the face of geopolitical volatility. The married mother of two children who loves golf, food and the bush countryside of her native South Africa is convinced getting closer to the client and improving their experience (CX) is always the right response to overcoming any challenges.
Q1. What are your short- and long-term hopes & fears?
A1. Well, personally I obviously want my family to always be safe and happy. Professionally speaking, I worry about wealth leaching away from the HNW individuals and families that I and my team at Standard Bank Wealth and Investment in South Africa (SA), serve. Research has shown that:
70% of generational wealth gets depleted by the second generation;
& 90% is gone by the third generation.
It’s my job to prevent that happening. Succession planning and assistance is vital for HNWIs. My ambition is to partner with clients in creating, managing, and preserving generational wealth by equipping them with the necessary knowledge, structures, and tools. That way you can overcome any challenges.
Q2. How can you protect your clients’ wealth against your fear of it leaching away?
A2. I believe Standard Bank can do that by focusing tightly on the client experience (CX), by understanding their needs and advising them well, in a deep relationship that offers solutions to suit their particular needs. There are always investment and succession options from private market bonds to equities, offshore options, trusts, tax advice and other means of growing, preserving, and transferring wealth but each case is different, so you need to understand what options to select from the toolbox for each client.
At Standard Bank Wealth and Investment SA, the unit I head up, we focus on delighting our clients and delivering superior CX. That is always our aim as I believe it delivers the best results. If you align the people (training and staff), technology (data, context, and presentation) and the strategy for growing and protecting wealth with a laser-like focus on the client’s well-being, then you cannot go wrong.
We are therefore investing in bespoke CX using our people and data to ensure we understand the passions and interests of our clients. We can then curate events aligned to meet their interests and advise them accordingly about relevant strategies.
Q3. What challenges do you face in delivering CX, & indeed from the wider market overall?
A3. Recruitment is always an issue. It is difficult to find the right people with the necessary on and offshore financial services (FS) exposure and experience that we want. They must be able to interact with our profile of client but finding them is not easy as many have gone offshore themselves and not returned. We train people accordingly and are always on the lookout for the right individuals, but it is something we continuously have to monitor to ensure we have the best people in order to deliver the best CX.
We also need to ensure that mobile access and technology solutions that offer self-service and analytics updates are available if the customer wants them, while simultaneously ensuring that deeper data can be got from our IT systems for relationship managers (RMs) to engage clients proactively. This requires flexible IT, which we’ve invested in.
In regard to the wider market and general challenges, well, a more cautious approach to investment is necessary at the moment in light of the severe economic changes that are arising from the present geopolitical turmoil.
Q4. What geopolitical and macroeconomic challenges do you face?
A4. Globally speaking, we have had the Covid-19 pandemic of course impacting supply chains and now there is the war in Ukraine. This is pushing up global energy prices and food and commodities, impacting inflation and therefore interest rates (IR), which are on the rise around the world.
The US Dollar’s (USD) appreciation is also impacting foreign exchange (FX) calculations. The risk environment has fundamentally changed. As always, this presents opportunities as well as threats, but a more cautious approach is valid at the moment.
Rising IR has an impact on disposal investable income from a cost of debt viewpoint as well as a cost of goods perspective, due to the inflationary pressure, so a lot of things are interacting at present. Not to mention the climate change / net zero policy framework, farming impacts and well-being aspects of the environmental, social, and governance (ESG) agenda in mines, factories and elsewhere, which is also altering traditional investment approaches.
We need to be on top of all these things at Standard Bank Wealth and Investment, SA – and we are. We also face local macroeconomic factors such an expanding population that need jobs, and an expanding middle and upper class that need wealth advice. The latter may well face a squeeze in the years ahead, so our advice will be needed more than ever as ultra HNWIs accelerate away and the rest struggle.
I have noticed a worldwide trend recently, in the face of all these pressures, for clients to keep funds received in cash and only gradually phase that capital into equity markets. Where clients’ intention is towards a longer-term equity investment there is understandably no rush on their part to put the majority of their money into equity markets at the moment. Clients are instead spreading their risk around and only drip-feeding money into the equity arena when and if they see long-term opportunities.
Q5. Tell us a bit about yourself: your career progression and personal interests?
A5. I am a seasoned banker and executive with over 17 years in the financial services industry. I worked at Investec Private Bank (PB) and ABSA Wealth in South Africa before joining Standard Bank in 2017 as the Head of Wealth Management for Johannesburg.
I attained my present position as Head of High Net Worth at Standard Bank SA in January 2021. In this role, I am responsible for a team of RMs, loan and fiduciary specialists and wealth managers. Our vision is to be the financial partner of choice for Africa’s HNWIs, managing, growing, and protecting the generational wealth of our clients and their families by offering tailored, integrated solutions, that deliver because we understand the client and have deep intelligent relationships. Superior client experience ultimately delivers superior results.
I started out at Ernst & Young (EY) in January 2001 at the dawn of a new millennium as a junior auditor and was subsequently an analyst at the South African Empowerdex Ratings Agency, before entering the FS sector where I’ve remained ever since.
My experience spans to include private banking, wealth and investment, strategy development, leadership, building networks and client value propositions, plus client relationship management and marketing strategies.
My education begun in Pretoria in South Africa at school and deepened at the University of Kwa-Zulu Natal, Durban, where I graduated in accounting. Additionally, I completed the Global Executive MBA at INSEAD Business School, Fontainebleau France, and I’ve also completed a Finance Executive Development Programme at the London Business School. I am an alumnus of the Institute of International Finance where I was part of the Future Leaders Class of 2019, held in both Shanghai, China, and Washington DC in the US.
I use all this knowledge I’ve obtained in the service of our clients, and in overcoming the challenges I’ve outlined from war to climate change, to changing demographics and technology. Change is constant. Customer excellence must be too.