Tag Archives: Liberty Life

A gilded cage is not the answer, Liberty and Discovery

I remember, just after 9/11, listening to Clem Sunter speak about the choices that America had in response to the events that had just unfolded. Essentially, they had two choices, and the choice they made would define their future.
Continue reading A gilded cage is not the answer, Liberty and Discovery

At Liberty to do what they like?

It seems that Liberty Life have decided that they can do what they like and ignore written instructions from their clients. They appear to have adopted a policy of sending policy information requested by a non-servicing advisor, on behalf of a client and with the client’s written consent, to the client and not to the advisor who requests it.

This is NOT what the client has requested? How can they get away with this?

It also makes the work of the financial planner so much more difficult to do (and adds to the cost of servicing the client). I’m prepared to venture that this is not in the spirit of TCF!
If Liberty are worried about advisors obtaining information fraudulently then perhaps they need to look at the quality of the average advisor with whom they are doing business and not upset their existing client base either.
Rather than retaining the business, this kind of attitude goes a long way in encouraging clients and advisors to move business away from Liberty Life.




The real advantage of knowing…

Liberty Life is currently running a radio ad about their income replacement product. Income replacement is an essential part of managing your financial risk and for any self-employed person it is almost essential cover. However, not all income replacement cover is created equal and it is essential that before you buy this kind of cover that you make sure that read the fine print and find out what is and what is not covered. In other words, what exclusions and restrictions are there on the cover?
I had heard a rumour about the Liberty Income replacement product not covering depression so I set about to try and find out if this is true or not.
It is quite difficult to get the information when you don’t have a contract with a company but I did manage to find a PDF* document online that details the exclusions on their product…and here it is…no “mental health or musculoskeletal conditions for the first 2 years of eligibility”.
Not 100% sure what that means but I would make sure that I get an answer (in writing) from Liberty before I sign anything. I have written to Liberty to find out more and will update this if/when they reply.
You need to find out before you sign the application form – it is too late to find this out at claim stage. Now that’s the real advantage of knowing!



*Pdf document accessed here: https://www.google.co.za/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0ahUKEwi9ooTnsZTUAhXjD8AKHSjoD3EQFgg6MAA&url=http%3A%2F%2Fwww.liberty.co.za%2FDocuments%2Fincome-protection-plan.pdf&usg=AFQjCNHS-AnnkIIH6y3NOSG5Eg1dszu5qA&sig2=5G_HjJi32FmwITAbCGKcvg

You should be ashamed of yourselves, Liberty Life

I just came across a client who has been sold a decreasing life annuity by someone representing Liberty Life. Yes, I know that there is no such thing (officially) as a decreasing life annuity (no one would buy it if there was) but this is effectively what a non-escalating life annuity is. You have condemned the client to future poverty!

While the initial income may look more attractive, in 20 years time (the guarantee period on the annuity for a 65 year old with stage 3 cancer and no financial dependents?) she will be getting an income which will be less than 1/2 of what she should be getting if there was an inflation linked escalation.

This is the kind of product and advice that gives our industry a bad name. If the insurance companies and ASISA wont act then perhaps it is time that the regulators banned this kind of product.

To pay a penalty or not?

A client of mine presented a potential dilemma to me. He has a living annuity through Liberty Life but also has the bulk of his living annuity funds on a LISP platform. He was wanting to move the Liberty one to the LISP and consolidate his investments on one platform*.
Under normal circumstances there should be no penalty when transferring living annuities. However, in the fine print, Liberty had noted that there would be an exit penalty if the annuity was transferred anywhere else within the first 5 years of the investment. As such he was advised that he was going to pay a penalty of 1.2% (±R6500) to move his annuity and he balked at the prospect.
We told him to find out from Liberty what the total annual fee on his annuity is and it turns out that they are charging him a total of 2.15% pa (admin and fund fee, no advice fee included – the advisor took that maximum upfront fee).
By comparison his living annuity on the LISP has a total annual fee of 1.1% (fund and admin fee, no advice fee). Do the maths – the 1.2% penalty will be covered in the next 12 months and thereafter he will be better off because of the lower annual fee (less than half of the current annual fee and there would still be a penalty to move for the next 24 months).
The real question I have for him is why anyone would ever invest in a product where there is any kind of exit penalty? There is no need to ever pay penalties when it comes to investing – there are far better (and cheaper) products out there than those offered by the life insurance companies. Stay away from them unless it is insurance you need!

*Note: he pays us directly for advice and there are no on-going advice fees on his investments so the advice we give to him is not affected by the desire to grow assets on which we earn fees.

Dear Old Mutual, Liberty, Sanlam, Momentum, Discovery, PPS et al (insert name of insurance company)

Dear Old Mutual, Liberty, Sanlam, Momentum, Discovery, PPS et al (insert name of company)


There is a peculiar thing in this industry that if you are not the advisor on record because you don’t have a contract at a particular company (or the client transfer was not processes correctly) that you cant get information for your client from that company – without a letter of authority that is. But then not just any letter of authority – almost every one of the insurers/investment companies has their own interpretation of what this should be. Some are happy with a generic letter, some want it on their own form, some are happy with a letter that is dated last year others want it dated not more than 30 days ago and even different call centre agents appear to have different interpretations of the internal rules of the company. As a rule, insurance companies are worse than unit trust companies when it comes this this!

On the face of it this might seem reasonable, after all the insurers have a duty to protect their clients’ information from unscrupulous advisors* don’t they (NB see comment below)?

However, consider the medical profession where doctor A calls doctor B about a patient that they have both seen – information is shared freely and easily – even if doctor B is no longer treating the patient. There is an understanding that both doctors are professionals, that both have the patient’s interests at heart and that the information will be used for the patient’s best interests.

In the financial planning industry it appears that the opposite is true – I think that the lowest common denominator rule applies in that insurance companies are so used to dealing with unscrupulous advisors that they have it as their default setting that all financial planners are crooks and therefore must be treated with suspicion when it comes to requesting client information!  (As an aside, in my opinion, The Financial Planning Institute is missing a trick here and should have negotiated with each of the companies that anyone carrying the Certified Financial Planner® designation should be entitled to get any information that they request i.e. the default setting should be “trustworthy” for CFP® professionals).

To the insurance companies – if you want my business then treat me like a professional. I am not a crook – if I request information it is because I have been authorised/mandated by the client to get it. If only you knew just how much I hate having to deal with you and your call centres (or maybe if only you cared about how much I hate dealing with you). When we request client information and I am told (often by a rude agent) that we are not entitled to the information because:

  1. We are not the advisor on record, or
  2. The letter of authority is too old, or
  3. The letter of authority is not in the correct format, or
  4. Think of any other excuse not to give the information!

Every single part of my being has to fight the urge to take the business away from your company. When you won’t give me the information that I need (and am entitled to by virtue of the fact this it is my client) then it gets increasing difficult to recommend that the client stays with your company.

You just don’t get it: you spend millions each year advertising and building brand so that you can attract more customers rather than focus on retaining the ones you already have. It’s all about service!

You have no idea just how badly I want to take business away from you and how hard I have to fight against this desire sometimes when in spite of your rubbish client service, it still makes sense for the client to keep the policy.

But I guess the problem is you just don’t care!


*Unless of course said unscrupulous advisor is the source of much new business for the company!