Old Mutual Insurance Company Review
The Old Mutual is a South African company that offers banking, insurance, and investment services in 33 countries, including the United States. Its subsidiaries include Skandia, United Asset Management Company, and Nedcor Bank, the largest bank in South Africa. In the US it controls a number of investment firms including Thomson, Siegel & Walmsey, commodities trader 2100 Xenon Group, and global bond manager Rogge.
Old Mutual's US division, Old Mutual Management, offers unique investment capabilities. These include small cap growth products from CopperRock and investment portfolios from Investment Counselors of Maryland. Individuals can save and invest in these products through IRAs, traditional IRAs, 401(k)rollovers, and SEP IRAs offered by Old Mutual.
On April 7, 2011, Old Mutual announced that it is selling its US life insurance business to Harbinger Inc. The transaction had been approved by the New York State Insurance Department and involves $350 million in assets. In a press release, Old Mutual CEO Julian Roberts called the move "simplification." The status of existing insurance policies and other products is not clarified at the company's website.
The Old Mutual started in Capetown, South Africa in 1854 as the Mutual Life Assurance Society of the Cape of Good Hope, an insurance company. Over the past century and a half it has grown into a financial services company that operates worldwide. It moved into the United States in the 1990s after the end of Apartheid era sanctions on South Africa. Although its roots are in the insurance business, the company's current focus appears to be investment.
Retirement Products from the Old Mutual
Although it has left the insurance business, Old Mutual Asset management still offers a variety of individual retirement products and retirement plans for businesses. Individuals can buy into these through Traditional, Roth, and SEP IRAs.
It also offers an e-rollover IRA which is designed to transfer funds into a new account while preserving the tax-deferred benefit. This looks like a good product for an individual who is moving funds from a previous employer's IRA, or somebody who is trying to get out of an annuity. Direct and indirect rollover is also available.
The traditional, Roth, and SEP individual retirement accounts appear to be fairly standard instruments that afford some flexibility. Individuals are able to invest in some these directly through the Old Mutual's website. The SEP IRA is designed for the self-employed and small business owners.
The big advantage to these products is that they give investors access to the Old Mutual's unique investment capabilities. These include direct investment in such vehicles as commodities and global bonds. Some of these could give investors much higher returns than normal products. It goes without saying that these investments also involve more risk.
Commodities and global bonds are specialized investments that carry more inherent risk and require special knowledge. Average investors may feel intimidated by these products.
Other Old Mutual Products
The Old Mutual lists a number of other products on its site including mutual funds. The list of available funds is long but it looks to be quite specialized. Many of these funds are specialized vehicles that appear to be managed by boutique investment firms such as Dwight Asset management.
A number of these are actually money market funds that offer a higher level of growth. There are some unique products such as the Asset Allocation Moderate Growth Portfolio that bills itself as a fund of funds. This seems to have been designed for institutional investment but it appears to be open to individual investment as well.
Most of Old Mutual's funds are managed by the fund management companies owned by the Old Mutual. Quite a few of them are focused on various areas of investment. The list of funds does not contain Mornigstar or Lipper ratings and some other information commonly made available by fund companies. Fund performance is outlined, but not in any sort of chart or easy to read resource.
Old Mutual offers another class of investments called Pure Portfolios. Which invest in a number of different funds at once,. These products look like combinations of several different funds. They are managed by Ibbotson Associates Advisors, LLC, an asset allocation company that is a subsidiary of Morningstar and not the Old Mutual.
Investing with the Old Mutual
Old Mutual's products seem to be aimed at a more sophisticated class of investor with more income. They offer quite a bit of professional management but it is unclear whether they are superior to comparable products offered by other carriers.
There is also a possibility that Old Mutual could sell more American assets and abandon other segments of its business. Such moves would seem be in line with the company's strategy of simplification.