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Old Mutual, South Africa’s largest asset manager by size, launched Private Wealth Management (PWM) in 1999 to meet the need for a distinctive value proposition for its high income clients. PWM is part of Old Mutual’s Retail Affluent segment. Retail Affluent is a team of 5 000 people, who aim to serve the needs of affluent clients earning more than R12 000 a month.
Iain Williamson, head of Old Mutual Retail Affluent, says: “We researched and designed an offering that presents the target market with exactly what it was asking for.”
When it comes to financial planning, what this target market wants, in addition to objective, independent advice, is a face-to-face relationship with a single, comprehensive adviser and access to specialists for complex situations, such as tax and law.
“PWM is very much part of Old Mutual,” emphasises Williamson, “and relies on Old Mutual’s powerful administration and distribution network.”
PWM’s entry criteria are an income of R40 000 a month, net investable assets of R1m or being a graduate professional. Williamson describes this as a segment of the market that is looking for genuine, quality advice, tailored to its unique needs.
“A fee-based model makes a lot of sense to that market segment. Coincidentally, we acquired acsis, which has a fee-based model as well as a lifestyle model that entirely complemented PWM. So to ensure we didn’t create confusion in the wider Old Mutual group with this new fee-based model, we placed it in PWM.”
A fee-based model is by no means universally sought-after in financial services. Williamson says: “There’s a part of this market that does not like to pay fees and would rather the broker’s remuneration be incorporated into the product.”
He points out that unless a fee-based model becomes regulated, as is occurring in some countries, it is unlikely to dominate the industry.
“The bigger issue today is around the quality of advice rather than the remuneration model and today South Africa is in a progressive state in terms of client service,” he says.
Those who prefer a fee-based model want certainty of costs and the assurance of absolute objectivity in advice.
Most of PWM’s clients are young, in the 35-50 age category, about 60% earn salaries and are mostly professionals, such as lawyers and accountants, and 40% are entrepreneurs.
This market segment expects multi-channel access to the service, via the internet and phone. When accessing call centres, they expect priority access to high-calibre, friendly consultants. They expect a professional relationship, with regular contact and updates, from highly trained advisers who are knowledgeable about their financial products.
Iain Williamson, head of Old Mutual Retail Affluent, says: “We researched and designed an offering that presents the target market with exactly what it was asking for.”
When it comes to financial planning, what this target market wants, in addition to objective, independent advice, is a face-to-face relationship with a single, comprehensive adviser and access to specialists for complex situations, such as tax and law.
“PWM is very much part of Old Mutual,” emphasises Williamson, “and relies on Old Mutual’s powerful administration and distribution network.”
PWM’s entry criteria are an income of R40 000 a month, net investable assets of R1m or being a graduate professional. Williamson describes this as a segment of the market that is looking for genuine, quality advice, tailored to its unique needs.
“A fee-based model makes a lot of sense to that market segment. Coincidentally, we acquired acsis, which has a fee-based model as well as a lifestyle model that entirely complemented PWM. So to ensure we didn’t create confusion in the wider Old Mutual group with this new fee-based model, we placed it in PWM.”
A fee-based model is by no means universally sought-after in financial services. Williamson says: “There’s a part of this market that does not like to pay fees and would rather the broker’s remuneration be incorporated into the product.”
He points out that unless a fee-based model becomes regulated, as is occurring in some countries, it is unlikely to dominate the industry.
“The bigger issue today is around the quality of advice rather than the remuneration model and today South Africa is in a progressive state in terms of client service,” he says.
Those who prefer a fee-based model want certainty of costs and the assurance of absolute objectivity in advice.
Most of PWM’s clients are young, in the 35-50 age category, about 60% earn salaries and are mostly professionals, such as lawyers and accountants, and 40% are entrepreneurs.
This market segment expects multi-channel access to the service, via the internet and phone. When accessing call centres, they expect priority access to high-calibre, friendly consultants. They expect a professional relationship, with regular contact and updates, from highly trained advisers who are knowledgeable about their financial products.
