The Wealth Management Plan is a single premium product, but will accept non-contractual recurring premiums after 12 months.
Both regular and ad hoc withdrawals can be made from the product at any time.
It has access to approximately 650 Hong Kong Securities and Futures Commission-authorised mutual funds and exchange traded funds, and also provides access to a range of investments outside of Hong Kong.
The product has been launched on Wealth Interactive, Old Mutual International’s new online service which aims to increase the window of time in which financial advisers can service their clients beyond normal working hours.
The plan has been approved under the new Hong Kong Guidance Note 15 (GN15) which was enforced at the beginning of the month with the aim of improving customer treatment throughout Hong Kong.
It set out principles that will shape the design of products in the jurisdiction and any associated remuneration going forward.
Rather than receiving their entire commission up front, an adviser will now receive a portion of their commission at the time of a policy’s purchase, with the rest being obtained at regular intervals throughout the rest of the policy’s duration, provided certain customer standards are met.
Mass affluent
Mike Leeson, head of sales, Hong Kong and North East Asia at Old Mutual International, said the plan is aimed at the “mass affluent” Asian market, which consists largely of young professionals who have accumulated wealth, are beginning to acquire capital, and have a desire for more income.
The banning of indemnity commission payments to advisers selling Investment Linked Assurance (ILAS) products, which was first announced in July by the Office of the Commissioner of Insurance, is expected to have a knock-on impact on many advisory firms in the Hong Kong region.
However, Leeson said he feels that the changes “foster long term relationships and ensure customer needs are met and received on an ongoing basis”.
He added that regulators need to “ensure a level playing field” across distribution channels and products by eventually adopting similar regulations to those on ILAS products throughout the rest of the industry.
“We see the Hong Kong advice market changing and believe from our market testing with clients and advisers that the Wealth Management Plan has an important role to play in helping customers to achieve their financial goals,” he said.
