Discover how black shareholding in South Africa's life companies and asset managers has surged to 38% and 27% respectively, surpassing B-BBEE targets, while challenges in leadership representation remain. Picture: Pexels.com.
Life companies and asset managers have reported significant growth in black shareholding over the past six years, surpassing key Broad-Based Black Economic Empowerment (B-BBEE) targets, according to the latest transformation progress update from the Association for Savings and Investment South Africa (Asisa).
In 2023, black shareholders owned 38% of asset managers, up from 22% in 2018. Asset managers had already reached the 25% net value target in 2020. In life offices, black South African shareholders owned 27% of the companies in 2023, exceeding the B-BBEE target of 25% net value for the first time. The unencumbered black ownership of life offices was just 14% in 2018. The net value target measures the debt-free shareholding of black shareholders and is a key indicator of the ownership element of the B-BBEE scorecard.
The data, collected from members representing 98% of assets under management (AUM) for life offices and 87% of AUM for asset managers, was part of Asisa's third transformation progress update, which provides a six-year trend analysis since the Amended Financial Sector Code (FSC) was implemented in December 2017.
Kaizer Moyane, CEO of Asisa, said the progress made by members over the past six years is significant, especially given the country’s challenging economic climate. "The numbers for 2023 reveal that life offices and asset managers met or exceeded all B-BBEE ownership targets," Moyane said. "This confirms the financial sector’s commitment to transformation."
In addition to ownership gains, Asisa members have supported small, medium, and micro enterprises (SMMEs) with an average of R772 million in loans, investments, and grants annually over the past six years. Between 2018 and 2023, socio-economic development initiatives received R2.4 billion in funding, with R644 million dedicated to consumer financial education.
Moyane said the efforts of the Asisa Academy, Asisa Foundation, and Asisa’s Enterprise and Supplier Development (ESD) initiative in driving sector transformation.
Despite the progress, the Asisa Board acknowledged that there are still areas requiring more focus. "While our industry does not yet fully reflect the demographics of the people it serves, our members are fully committed to transformation," said the Board.
According to Asisa, while black ownership in the sector has seen remarkable growth, black representation in executive leadership roles remains a key challenge.
Lister Saungweme, Asisa’s senior policy advisor for transformation, skills development, and education, said that although black ownership has increased, the representation of black people in executive director roles has not kept pace. "This is true for life companies and asset managers," Saungweme said.
However, there has been encouraging progress in executive management. Black people’s representation in executive management at life companies rose from 29% in 2018 to 46% in 2023, though still short of the 60% target. The number of black women in executive positions more than doubled over the same period, from 8% to 22%, though still below the 30% target.
Similarly, asset managers saw black executive representation increase from 39% in 2018 to 59% in 2023, nearly reaching the 60% target for the first time. The number of black women in executive roles grew from 15% to 26%, against a 30% target, the group said.
Saungweme also said that while there was a slight decline in the number of black people in junior management positions at asset managers, black representation in middle management has increased, particularly in critical skills areas. This shift is supported by increased investment in skills development, with life companies and asset managers collectively spending R12 billion over the past six years on workforce capacity building.
"The momentum towards investment in skills development spans various employment levels and reflects a comprehensive approach to workforce development," Saungweme said.
Looking Ahead, Asisa said the 2024 Transformation Report paints a picture of consistent progress but also underscores the ongoing challenges in achieving full transformation in the financial sector.
"While the 2024 Transformation Report reflects consistent progress over the past six years, we must also acknowledge the ongoing challenges," Moyane said. "The targeted goal has not yet been fully achieved, and there is still work to be done."
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