Old Mutual Representatives Granted Exemption

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Board Notice 273 of 2013, published in December last year, provides details of an exemption granted to certain Old Mutual representatives in respect of the experience and qualification criteria applicable to:

  • Collective investment schemes products: they only require six months experience (instead of 1 year) and
  • as far as qualifications are concerned, only require a qualification applicable to Category B2, rather than that required for collective investment schemes.

This applies specifically to two products only, which are defined as follows in the BN 273:

“2-IN-ONE SAVINGS products”, means the 2-IN-ONE SAVINGS 4 EDUCATION product and 2-IN-ONE SAVINGS 4 MY GOAL product issued and marketed by Old Mutual Life Assurance Company that consist of a combination of an insurance policy referred to in the definition of tong-term Insurance subcategory B2′ and a participatory interest in a collective investment scheme;

The Board Notice places very specific obligations on Old Mutual in so far as the exemption is concerned:

Old Mutual Life Assurance Company must-

  1. provide an intermediary with appropriate, relevant and adequate training on the features, benefits and structure of the 2-IN-ONE SAVINGS products;
  2. assess an intermediary on his/her knowledge of the 2-IN-ONE SAVINGS products and his/her ability to apply such knowledge in the rendering of financial services to clients;
  3. maintain records of the training and assessment referred to in paragraphs (a) and (b) above; and
  4. immediately advise the Registrar of any change to the particulars furnished in the exemption application including but not limited to the information in respect of the product.

This exemption should be welcomed as a step towards making more sophisticated products available to consumers at the lower end of the market. The Long-term Ombud recently made some scathing comments about two products he came across which held no benefit for clients in this market segment. See our article Charges in respect of Investment Policies on this.

The granting of these exemptions, together with the obligations on the product provider to ensure proper understanding before representatives are allowed to market it, shows a flexibility which can only benefit consumers in the long run.