Business strategy, in our experience, needs to be equal parts planning and ability to adapt, nowhere more so than in sub-Saharan
Africa, where plans and life can change with remarkable volatility and frequency.
Looking at the events of the past 12 months, we have seen an outbreak of the deadly Ebola virus, insurgent activity and widespread kidnapping, political upheaval and collapse of commodity prices, bringing many economies in the region to a standstill or near collapse.
Sierra Leone went from one of the world’s fastest-growing economies to one of its most stagnant, and it is this sort of upheaval and dynamic change we have to account for, not only when assisting clients with planning but also internally in terms of cashflow and resource management.
Flexible thinking
Aston tailors its advice and business to reflect the uncertain nature of life in the region.
Jobs are subject to a wide variety of influences, so at every step of the way we have to make sure clients do not paint themselves financially into a corner.
As a result of this sort of approach, we traditionally opt for shorter terms on regular savings, keeping clients as flexible as possible.
We take the same approach with prospective lump-sum business, preferring to use offshore banking platforms for investment as they do not come with costly tie-in periods or exit penalties, allowing the clients the greatest freedom possible while still taking advantage of their offshore status.
Within any advice has to be recognition of the sometimes uncertain nature of employment and life in the region.
This has inevitable consequences for internal cashflow.
Focusing a large amount of direction on fee-based over commission-driven advice delivers great value for the client and an excellent client retention level but has inherent limits.
Combine this with the high turnover of expatriates within the region and it becomes hard to model your income levels.
As a result, we recognised we needed to build some redundancy protection into our plans and widen our income streams.
We purchased an existing UK-based and FCA-regulated foreign exchange company and rebranded as Aston Currency Management.
We focused instead on offering this facility to our international clients, 90% of which had a continuous currency exposure and cost.
This allowed us to service a far wider client base, provide a visible value added service and vastly improve our client sign-up ratio.
It became unheard of to have a client meeting and not, at the very least, have them sign up for this in-house facility. Referral rates went through the roof.
Moving target
This change in strategy proved well timed as the Ebola crisis shut down two of our most exciting and developing markets, Liberia and Sierra Leone, neither one of which has yet recovered in terms of jobs.
This also caused genuine instability and concern over the management of local currencies, allowing us to build up an expertise in managing risk and transaction costs across the region.
When the perfect storm of political change, religious-based violence and a drop in oil price hit Nigeria it resulted in a reduction of the amount of well paid expatriate positions.
We remained unaffected as the level of success within our currency business meant our income stream remained strong and diversified as we moved into targeting corporate business for Aston Currency Management.
We soon realised on the balance of payments from both sides of the business that Aston Currency had more scalability and growth potential than Aston Wealth.
We aggressively expanded the team and ceased accepting new clients into the wealth business as we wanted to offer other IFA companies our services for their own private clients.
We created a new revenue stream for them, increasing client communication levels and referrals, which we have now achieved with a large number of IFA firms.
Ironically, it was our background in wealth management that allowed us to understand what IFAs are looking for in terms of service provision from us and for their end clients.
Business in Africa is challenging at many levels but reinforces the lesson that out of adversity comes opportunity.
