Gordhan Gunning for the High Profits in the Retirement Industry

ZA Confidential attended the ‘Alexander Forbes Leading Conversations’ event in Sandton this morning with Finance Minister Pravin Gordhan.   Not much of what he said took us much further from last week’s budget presentation, but we were interested to see that he was repeating one theme from the budget – the need to make it easier and cheaper to save for retirement. 
Gordhan joked to the smartly dressed business audience that they were the type of people who would most interested in the taxes on booze and cigars, and he suggested that it is time for the financial sector to make a more positive contribution to society.  He echoed his budget suggestions that over next 5-10 years we need to move to a regime for mandatory retirement savings in ZA. Gordhan suggested that the charges extracted by the financial sector from retirement savings are inordinate, and said he expects some boldness in making changes.   He warned that it is only fair that the financial sector relates to the citizens of this country in a way that will optimize retirement finds and retirement benefits, although he did caution that this could have an impact on the earnings of financial institutions.
Gordhan’s host, Alexander Forbes’ CEO Edward Kieswetter, responded that the industry is aware of the challenge and is looking at ways of offering more affordable products for the lower end of the market.
 
Conclusion:
 
Visitors looking around the corporate HQs of financial services companies will be aware that they are wealthy, and may be forgiven for thinking that some of this could come from healthy profits on the products they offer.  Gordhan is clearly keen to see more South Africans being better able to look after themselves in retirement, and this will bring both opportunity and cost to the financial sector.   
 
Tweet of the day:  
Easy Cooking Guide (@EasyCookGuide):  Strength is the ability to break a chocolate bar into four pieces with your bare hands and then eat just one of those pieces. – Judith Viors