Old Mutual plans are on track for new Commission Regulations

Old Mutual announced that its plans are o­n track to comply with the new regulations o­n commission and early termination values gazetted by government for implementation o­n 1 January 2009.

The savings and investment company said it welcomed government initiatives aiming to strike a balance between consumer protection, the provision of excellent products and the encouragement of a vibrant advice industry.

Old Mutual had participated fully in industry body discussions with the Financial Services Board and National Treasury, and believed that the process had resulted in a dispensation designed to align the interests of consumers with those of financial advisers and the industry.

Old Mutual is finalising changes to its commission and benefit structures o­n its savings products to be compliant with the new regulations by the implementation date.

Said Peter de Beyer, Managing Director of Customer Solutions at Old Mutual, ‘We recognise that financial advisers and brokers have played a pivotal role in helping South Africans to realise their financial goals based o­n a holistic plan.

‘Old Mutual actively supports its financial advisers and brokers to ensure that they are able to continue to provide invaluable advice to consumers, and to comply with the new regulations.’

To support its sales teams and contracted brokers, Old Mutual is equipping its intermediaries to deal with the impact of the new regulations which are intended to move the industry from a mainly upfront commission structure to a combination of lower upfront commission and commission earned as and when premiums are paid.

In addition to the changes in commission, the regulations stipulate new minimum early termination values o­n recurring-contribution savings plans commencing after the implementation date.

Old Mutual cautioned consumers to bear in mind that although early termination values have been improved, investing over the long term brings the best results.

Old Mutual recommended strongly that consumers develop comprehensive financial plans in conjunction with accredited advisers, to be better equipped to deal with sudden, unforeseen financial pressures.

Concluded De Beyer, ‘Old Mutual remains committed to giving its customers greater value for money and to enabling financial advisers and brokers to build deep, meaningful and lasting relationships with investors.’