Product Spotlight: review of Old Mutual Int’l Wealth Mgt Plan

By Brian O’Neill

Added 10th November 2016

In the third of a series of three independent reviews of international life products, Brian O’Neill, consultant at Isle of Man-based actuary and consultancy firm Boal & Co, puts the spotlight on Old Mutual International’s Wealth Management Plan.

Product Spotlight: review of Old Mutual Int’l Wealth Mgt Plan

Old Mutual International (rebranded from Skandia International in 2014) are a leading provider of offshore bonds and investment solutions in the global market. They have been operating from their Isle of Man office since 1984 and their Hong Kong office has been open since 1991.

OMI expanded their Asia hub in 2008 with the establishment of a Singapore branch. This local presence in Asia has enabled OMI to post consistently strong sales figures for the single premium business in the Far East, especially in Hong Kong. This review will look at one of the products they sell in Hong Kong and delve into why their bonds are proving so popular there.

The Wealth Management Plan (WMP) is a single premium investment-linked assurance scheme, which OMI sell exclusively in Hong Kong. It is part of the offering that was recently awarded “Best Trust and Estate Planning Product” for Hong Kong at the International Adviser International Life Awards 2016.

The main features of the WMP are:

  • Over 600 investment choices
  • Available in ten currencies
  • Free online fund switching and up to date valuations
  • Facility to accept in-specie fund transfers into the policy
  • Option of paying regular premium amounts after the initial single premium

A lot of the product attributes are standard compared to similar products in the market – 100% premium allocation, 105% death benefit and policy segmentation. But it does have other aspects that sets it apart from the competitors.

OMI’s online system, called Wealth Interactive, allows clients to perform a host of tasks at their own convenience. They can place switch instructions free of charge, view up to date valuations of their investments, request withdrawals from their policy and update their own personal details if anything changes. They can also access a library of all of the correspondence that OMI have sent to them regarding their policy, and view factsheets for the assets that they are holding. This is an important feature that would be of high significance to a lot of clients.

A wide choice of investments is also key for clients, and the 600 funds available to Hong Kong resident clients is a vast range to choose from. This range increases if the client leaves Hong Kong to reside elsewhere. If the client already holds Hong Kong approved funds, then there is the possibility of adding these funds to their policy as an in-specie transfer. This can cut down on costs for the client.

The product charges that apply to the WMP are fairly typical of this product type in this market, but they are applied slightly differently compared to many of the competitor products:

  • 7% Establishment charge, which is based on the premium amount and is flexible and can be taken over any period between one year and four years
  • Surrender charge of all outstanding Establishment charges
  • Fixed Administration charge of $300 (£241, €271) per annum
  • Tiered Management percentage charge which is dependent on the fund value

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