NEWS & OPINION
31 January 2020
Assisting clients with education goals
T
he recent twitter hashtag Sometimes apathy is a symptom #SalaryDepression was of being overwhelmed. Financial an apt illustration of the intermediaries have the challenging collective low mood many people task of cutting through this by are experiencing when it comes to making educational savings goals money matters, as we feel financially tangible and attainable for clients. stretched to the limits. Sanlam has introduced Sanlam While a recent Sanlam survey Goal Manager to help. It enables shows most South Africans do intermediaries to assist people to prioritise saving set clear education for education, it’s goals and track their THE SURVEY WE often the end goal journeys to achieving COMMISSIONED that can seem these goals. insurmountable. Here, Magosha CLEARLY SHOWS This is exactly outlines five steps for SOUTH AFRICANS intermediaries to make where a financial intermediary can KNOW THE VALUE saving for education play an invaluable less overwhelming, so OF EDUCATION role in guiding dreams become reality: people with a plan and tools to track 1. Start with the goals. Multiple education savings goals. reports suggest many of the Prioritisation is critical. So is jobs of tomorrow don’t yet exist. simplification. When we’re feeling However, today’s qualifications overwhelmed, most of us want can serve as a guide to estimate clear, step-by-step directions and what savings your clients will need reassurance along the way. Kenosi to give their children options. Magosha, Head of Client Solutions The Sanlam survey suggests most Savings at Sanlam, says, “The survey South Africans want their children we commissioned clearly shows to have a university qualification. South Africans know the value If this is the case with your client, of education. Almost all of the respondents said they believe people will need to upskill and reskill in the future. About 9 in 10 believe their children will need more than one qualification to get ahead in tomorrow’s world of work. It can easily be overwhelming for parents as they consider how they will fund the future skilling and education for their children and possibly for themselves as well. We want the best for our children; we want them to thrive – whether working for someone else or starting their own thing. We want them to have options.” FPI-advert-PR.pdf
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start with this goal, then work backwards to unpack the journey to get to university. Ask whether they want to go the public or private school route. Then advise on what’s feasible in terms of what they can afford. Sanlam Goal Manager illustrates the cost of different types of school and tertiary institution courses. This gives a good guide to today’s cost of education and what you need to save each month to prepare financially for future costs. 2. Simplify, simplify, simplify. Set up an education goal for each child and, if you would like to save for high school and tertiary education, set up separate goals for those as well. These separate goals will break down a larger education savings pot into individual goals, which can also be seen as more achievable and helps with prioritisation. 3. Build in flexibility. Curveballs are common. Ensure that people know there’s flexibility to adjust goal amounts and monthly payment plans, should their circumstances become more favourable or unfavourable. Work through financial contingency plans to stay on track, e.g. contribute extra savings when you can without changing your goal. Sanlam Goal Manager will help you see the impact on the end goal in cases where you adjust contributions towards the goal. This can help with difficult decision-making as it makes goals more tangible. 4. Keep an eye on the prize. A Harvard Medical School article cites a study that shows how people who regularly kept an eye on daily food intake lost nearly
twice as much weight as those who didn’t. Keeping an eye on the prize – the goal – helps to keep a goal top of mind. The same psychology applies to an education savings goal. Monitoring progress towards a goal helps people feel more invested. There’s also an aspect of reassurance – nothing is left to chance. For example, Sanlam Goal Manager has a functionality to check progress made towards a goal, and automatically sends annual updates and recommended next steps for clients to stay on track to achieve their goals, e.g. monthly contribution adjustment if education inflation is very high. 5. Be human. It sounds strange, but even in an age of robots – perhaps more so because of it – people are seeking real human connection. One of the most valuable services you can offer is an empathetic ear. Seek out what drives clients, their aspirations and dreams to help them set goals and keep them motivated on their journey. Look for opportunities to understand what aspect of their educational savings journeys they’re most daunted by, and help with words of reassurance, plus a plan that feels doable. Check in regularly – a simple phone call or WhatsApp message goes a long way!
Kenosi Magosha, Head: Client Solutions Savings, Sanlam
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