It’s not a secret that South Africa has low financial-literacy levels and doesn’t have a savings culture, and this is precisely what Old Mutual’s Financial Wellbeing Programme (FWP) is designed to change.

“We recognised that among our clients, in most instances, retirement funding is the biggest part of their employees’ retirement planning,” says Selina Govindasamy, Head of Financial Wellbeing Programme at Old Mutual Corporate, about the reasoning behind the idea. “We also recognised that we needed to equip members and create awareness around financial planning outside of the retirement fund. That was the primary motivation for the programme.

“Of course, our business is pension and provident funds, but there’s more to financial management – budgets, wills, risk management, investments, etc. It’s about creating awareness around those broader financial needs.”

Education, enablement, and empowerment is the mantra behind FWP, she says, and that the programme is built around the idea that tomorrow belongs to those who build today.

“Though our primary focus is the members of pension and provident funds who we provide services to, we also make portions of the FWP available on our website, and those educational opportunities are available to any South African who happens to visit the Old Mutual website – irrespective of their financial standing and at no cost,” says Selina.  

The benefits of FWP for employers and employees

The FWP offering includes retirement-planning tools, decision support, individual financial advice and face-to-face workshops at clients’ premises.

“There are several advantages for employers,” says Selina. “They offer a pension or provident fund to their employees, and we want to make sure that those employees are as well informed about their pension fund as possible and their broader financial needs.

“We believe that does three things. First, it has an impact on productivity. When people feel comfortable about their benefits, they can get on with their day jobs. Second, having been offered a pension fund that will enable members to retire in a comfortable position creates a sense of loyalty and commitment. Third – and most important – if members are properly educated, they can manage the inevitable financial ups and downs as they go through their lives. So, it’s an important part of the employee value proposition.”

There are also benefits for intermediaries, she points out. Because members are better educated, there are fewer queries about how their fund works, saving precious time. Also, raising awareness around broader financial needs creates opportunities for those intermediaries who offer individual advice to engage in more comprehensive financial planning with employees who request it.

What financial advisors think about Old Mutual’s FWP

Financial adviser Vivan Moodley has had first-hand experience with the FWP. “One of the most important factors, especially when dealing with large employee groups, is having ease of communication between the provider and our client’s employees,” he says. “More often than not, we get lost in translation, either by information overload or by the information being too complicated for all to understand.

“In my experience, the most impact on my business by Old Mutual’s FWP has been the capability to help employees understand everything in a much simpler way. This is exactly what is needed to assist employees in understanding the true value of what is on offer. Whether accommodating them in their home language, simply slowing down the pace, or being patient enough to understand their real needs, Old Mutual has nailed its approach.”

Marianne Bezuidenhout, a Manco representative for an Old Mutual Corporate client, says: “I’ve attended a few of the sessions with our members, and some of them subsequently added additional contributions and asked me for more information.

“They were very engaged in the sessions, and I believe that each person increasing their monthly contributions to save more for retirement is a step in the right direction, because that’s our objective. Many members closer to retirement said they wished these sessions had been run years ago because it was almost too late for them.”

FWP and the Fin360 programme

Selina reports that the FWP has two legs: the first covers basic money-management skills and the second is the Fin360 programme. The latter is made up of six modules, one of which includes a workshop called Member Education. “Those workshops are effectively customised around the benefit structure of a specific fund,” she explains, “and they look at the specific benefits particular companies have chosen for their employees.”

The rest of the programme is geared towards the principle that even though it’s a tough economy currently and you may feel unable to put money aside for longer-term needs, you can afford to put something extra towards your retirement and even build up some emergency funding if you manage your money well.

“Financial guidance and education are paramount,” adds Vivan. “Having Old Mutual’s FWP in my corner for both my and my client’s journey keeps us ahead of the pack.”

“It’s just a great value-add for clients and intermediaries alike,” Selina concludes. “Financial education for employees, at no cost, that’s available to everybody in the fund. It’s a win-win all around.”

FWP currently has the capability to present sessions nationally in all 11 official languages. Slide packs and brochures are currently available in English. Learn more about Old Mutual’s Financial Wellbeing Programme here.