ATOM:Adviser Target Operating Model

Version 201 September 2014

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Content

WIMI DistributionWhat is ATOM?Before & After ATOMWhy a transformation?The ChoiceThe Construction of ATOMThe Planner ModelDevelop a Good Training Environment:

AcademyBusiness School

AIFA SuitesNew Remuneration ModelProduct Providers PanelBuilding Block 6: Introduction of Controls:

DAC (Distribution Administration Capability)

House SolutionBAR: Business Architecture RoadmapLeads ManagementBancassuranceEmployee Benefits

TOP10

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WIMI Distribution

TOP10

bancassurance

by

2015

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ATOM (Adviser Targeting Operating Model)

What is ATOM?

ATOM was launched to restore the adviser value proposition. We want to radically transform the business into aninnovative, modern financial services distribution house that offers an outstanding value proposition to planners.

The ATOM journey

COMPLETE IMPLEMENTATION

The ATOM story is characterised by the shift from an IFA model to an institutional model.

ATOM (Institutional Model)

2012 2015IFA

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Before & After ATOMBEFORE ATOM AFTER ATOM

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No central advice

Broker is asset manager

Leads flow not optimal

Master of own destiny

No single view of client

No socialisation

Low trust between Adviser & banker

No centralmiddle office

No central promises -service model

No House Solution

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Centrallygeneratedsolution

Adviser appliesrecipe from ABSA

Optimal leads flowand utilisation

Team players

Single view of client

Strong socialisationand training

Increasedcollaboration

Central middleoffice DAC

Strong institutionalisedclient service model

House Solution

11Optimal footprint –roll out a tiedplanner model.

12Implement a newremuneration modelfor advisers.

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Finalise & implementPractice Management2015.

Have win-win partnershipswith external productproviders (i.e. Momentum,Sanlam and Liberty).

Launch AIFA Suites.

Retailisation ofEmployee Benefits

Fully embed BAR(Business ArchitectureRoadmap).

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Why transform the business?

The regulatory environment has changed (eg: FAIS)

Advisers leaving the industry and/or Absa - Demand > Supply• Needed further qualifications, some did not have these• Poaching of advisers by competitors• Absa employee value proposition was not good enough for some

advisersAge of consumerism increased the cost of doing business• Clients needed further protection• Rising consumer demands• Cost of integration – IT, compliance

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The Choice

Shut down completely...and start afresh with a new model• Not good for internal product providers who depended on AIFA• Some advisers may not like the new model• Big disruption

Change manage the transformation - ATOM• Not as disruptive• The preferred choice for internal product provider• Requires an effective change management process

The choice to go with ATOM was made in June 2012A new management team was appointed, with new ideas, fresh thinking.

The Construction of ATOM

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The Planner Model

This is the first building block towards an institutionalised model

Absa for Absa – sell more Absa products; internal advantage

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Good Training Environment: AIFA Adviser Academy

The AIFA Adviser Academy is housedwithin the Business School. *

After the initial training periodof 6 months, advisers are placedinto Absa branches or AIFA Suitesfor 6 additonal months, to ensuresuccessful transition into theexciting world of financial planning.

We had the highest intake ofgraduates in the history ofthe AIFA academy in 2014.

The purpose of this academy is toattract, develop and retain talentedindividuals who are aspiring tobecome intrapreneurs in thefinancial services industry.

The academy is an institutionwhere all new advisers(green fields and experienced)will be socialised. All employeeswill spend a minimum of 1 weekin the school whether they aregraduates or advisers.

* The AIFA Academy has evolved to form the Business School, expanded on the next slide.

These individuals are trained,mentored, coached anddeveloped as professionalfinancial advisers or planners.

In future, bankers will besocialised here as well, bridgingthe cultural divide between theadviser and banker.

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Good Training Environment: Business School

Provides continuous professionaldevelopment, both in the form ofmacro events such as ‘boot camps’,and individually customiseddevelopmental training.

Upskilling of our people. Everyonejoining WIMI will go to the businessschool. Go through the socialisationprogramme. People will spend timeat the school learning about ourenvironment, our value chain,our houseview, goals, vision, etc.

We have developed, arguably thebest Socialisation programme inthe country.

Continual development for advisers

The Business School aims to become a Global Learning Organisation (GLO) that places a high premiumon the acquisition, creation, transfer and retention of knowledge and skills delivered through its corridors.

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AIFA Suites

2014

There are a number of AIFA suites across the country (all developed in 2014).

All planners and advisers will be anchored either in a bank branch or bank suite,

or in an AIFA suite. This is an environment where new planners and advisers can receive

mentorship. It will also provide a home for our experienced advisers with big books who

do not want bank constraints like office hours and other rules, but a professional office

where they can maintain and further build their client base.

Adviser Planner

Branch Suite AIFA Suite

or or

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New Remuneration Model

Developing, socialising and implementing a new remuneration model.

Launched in June 2014

Old Model• Production was the only driver

Our new remuneration model will allow advisers to earn more, provided the right agenda is driven.• Keep an eye on regulations - RDI; treating customers fairly• Behavioural levers: mentoring; leads conversion• Barclays Values

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Construct a win-win partnershipmodel with selected external supplies(Sanlam, Liberty & Momentum),that includes Absa Life white-labeledsolutions supplied by FMI (IncomeProtection Specialists) and AltRisk(offering specialised underwritingsolutions for non-standard lives).

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Product Provider Panel

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DAC (Distribution Administration Capability)

These are centralised middle offices, servicing advisers and planners across the country.The objectives are:

Efficiencies by better centralised processes(removing certain administration tasks from the front end)

Better compliance, audit and control(focusing on records management and business process reviews)

Better client value propositions(by making sure that certain promises to clients are executed centrally)

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House SolutionLaunching in Q4

We believe that, in future,

there will be relentlessdownward pressure onfees and costs that

clientspay for investment

solutions;businesses will not be

ableto survive if they do notoperate in strong HouseSolution frameworks.

We will develop an Absa

House Solution and a trusted

investment framework that

governs all advice in the

face-to-face channels, using

the skills of Gl&S (Global

Investments & Solutions).

The adviser’s job is toadvise the client to

savemore, cover themselvesfrom risk, etc.(but they are not asset managers)

› We will also have astandardised fee model(a house Solution on fees)

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BAR (Business Architecture Roadmap)

BAR will ultimately deliver

an operating platform that

can compete with thebest in the industry.

The project is all aboutimproving and optimising

processes and systemcapabilities within WIMIDistribution which will

enhancethe customer experience.

Before BAR (and ATOM)advisers used a numberof systems that did not

integrate into one another,

and also did not necessarily

perform the full functionality

required to service the client.

As a business, we struggled

to keep up with competitors.

BAR is a ongoing journey, as we continually try to stay ahead of our competitors.

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Leads Management

Develop a state-of-the-art leads process.

We have an excellent ability to mine big data and to channel it to the right sales environments,using our leads engines. In other words, we have developed all the building blocks to generatebusiness from our vast data. We must now use it as a competitive differentiator.

Ideally, our new business should come from:

Pure data leads Bank collaboration

Own prospecting

Internet, etc

30%

30%

30%

10%Big data

Bank

Customer

Adviser

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Bancassurance

What is Bancassurance?Bancassurance is the partnership between WIMI & RBB to provide complete solutions to our bank customers.The importance of bancassurance to the bank: What is key for bancassurance to

work:

Stickiness – the more we cement our customers to us with many different product relationships,the more difficult it is for them to leave us. It has been proven in many studies that the attrition of clientswith bancassurance relationships in addition to their transactional or borrowing products is much lower.And in this day and age of being multi-banked and consumerism when consumers easily leave a businessand move on due to the smallest service failure, (low) attrition is very important for banks.Banks sit with very expensive assets and infrastructure, both bricks and mortar and virtual, and they needto sweat those assets to be able to earn a sufficient return on capital. Bancassurance is one of the bestways to do this (use same infrastructure and channels).

The bank needs to protect its assets.Hence it needs insurance on the houses and other assets that act as security for loans.

Finally, and most importantly, from a customer perspective, it is absolutely the right thing to do.If we are true to our mission of helping our clients achieve their ambitions the right way,we must help them to invest for and protect their dreams. There is a world out there in direneed for what we offer.

Collaboration: Cohesion and collaboration is the name ofthe game in the future. Our biggest competitive advantageat Barclays Africa is the ability to offer a holistic solution toour clients. For this to happen there must be a good trustrelationship between banker and adviser.Leads management has a huge role to play here.

Bankers must be socialised,cross and up-skilled, bridgingthe cultural divide betweenthe adviser and banker supportinga one stop, holistic customervalue proposition.

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Employee Benefits

We aim to retailise Employee

Benefits, to create a sustainable

and thriving business.

The business intends to use the

opportunity provided by the exitof employees from retirement

funds,to customise solutions and

renderfinancial advice.

Thank You