“I don’t respond well to someone else’s authority.” This is an unsurprising comment from Magda Wierzycka, whose company Sygnia has been challenging the status quo in South Africa’s investment market since she started it with just R2 billion in assets under management 10 years ago.
“I don’t respond well to someone else’s authority.” This is an unsurprising comment from Magda Wierzycka, whose company Sygnia has been challenging the status quo in South Africa’s investment market since she started it with just R2 billion in assets under management 10 years ago. Today Sygnia manages R158 billion and has shaken up the industry with its low fee, high tech products. And she’s just getting started.
Wierzycka’s plan had always been to start her own business. It’s why the University of Cape Town actuarial graduate spent time getting hands-on experience in different aspects of the financial sector. And why, after heading institutional business at Coronation Fund Managers and leading African Harvest as CEO, she took the leap to start Sygnia when African Harvest was sold to Cadiz.
Wierzycka and seven colleagues bought licenses from the African Harvest group, as well as a new multi-manager administration platform she had been investing in, and launched Sygnia. That was in 2006 – two short years before the market crash that took legacy financial services firms down with it, but the fledgling Sygnia survived. “We kept telling ourselves that if we can survive in these market conditions, we can survive anything,” recalls the CEO.
Ruffling feathers
It was more than a stroke of good luck that Wierzycka brought a new multi-manager administration platform to the company – over the last 10 years there has been a move by institutional investors to automated platforms that offer convenience and cost-efficiencies. The move also allowed Sygnia to offer something no other company could: customised multi-manager products.
Retirement funds liked the platform and Sygnia’s offering – it was more cost-effective, flexible and transparent than the alternatives. This was Sygnia’s first market disruption, and it wasn’t a happy accident. “Fundamentally, we wanted to disrupt the existing status quo of the staid financial services industry by simplifying products, lowering costs, bringing transparency and, in the process, educating clients about investments and savings,” explains Wierzycka.
When Sygnia moved into the retail space they found another sector to shake up. The company did just that with the launch of savings products and its Skeleton Funds – passively managed unit trusts with an all-time low fee of 0.40% per annum (including VAT), up to 2% less than what other players were charging. The 2016 launch of the Sygnia RoboAdvisor, a digital financial planning system which provides financial advice at no cost, was yet another disruption of the financial manager-dominated market.
Wierzycka and her team turned their focus to umbrella funds next: “I never knew how much of a rip-off umbrella funds were until I looked more.” Sygnia responded with an umbrella fund that they describe as a Rolls-Royce benefit design, but at 70% less than the usual cost.
New tech, lower cost
Today, Sygnia has grown into a JSE-listed financial services group that offers asset management, stockbroking, savings products and administration services to both institutional and retail clients. But Wierzycka says Sygnia is essentially a fintech company that is constantly leveraging technology to launch new and improved products at lower costs to clients. As she points out, “the biggest division in our company is the software development team.”
Wierzycka says the long-term game for Sygnia is to disrupt how the financial industry operates in South Africa. That means simplifying products, making investments and savings more accessible and understandable to the man in the street and lowering costs to consumers. “We can’t resist the challenge of taking the big players on.”