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Shareholder Rights Directive

Under EU and FCA rules we provide certain disclosures regarding our UK insurance business, where investment is being made in shares traded on a regulated market. Old Mutual Wealth Life & Pensions Limited (OMWLP) is the product provider for our Collective Investment Bond and Collective Retirement Account. Within these products customers are able to select from a wide range of funds and exchange-traded instruments (ETIs). OMWLP does not have its own investment strategy per se; instead it invests in funds and ETIs in line with the instructions received from its underlying customers akin to a standard platform business.

A. Shareholder engagement policy

OMWLP offers the option for customers using our new technology platform to purchase shares traded on a regulated market. The available range of ETIs includes:

  • Investment Trusts
  • Exchange Traded Funds
  • Exchange Traded Commodities

Our engagement policy below sets out how we comply with relevant points from the FCA’s Handbook (in particular SYSC 3.4):

FCA requirements Our approach
(1) integrating shareholder engagement in our investment strategy;

As a platform business we do not have an investment strategy per se. We do not make investment decisions on behalf of customers; instead most of our customers are guided by professional financial advisers. We also enable customers to make their own investment decisions using the execution only functionality on our investment platform.

(2) monitoring investee companies on relevant matters, including:

(a) strategy;

(b) financial and non-financial performance and risk;

(c) capital structure; and 

(d) social and environmental impact and corporate governance;

While we do not make active investment decisions on behalf of customers and advisers, we do provide them with access to a range of information through our online Fund Centre including fund literature and industry ratings.
(3) conducting dialogues with investee companies;

As per above we do not make investment decisions, however we may reach out to investee companies when exercising voting rights and other rights attached to shares. For example we may ask for additional details on the potential cost implications of a corporate action. In addition we will write to customers in relation to certain fund events and corporate actions as set out in our product Terms & Conditions, for example if a merger of investments is proposed – this enables customers to take action if they wish to do so.

(4) exercising voting rights and other rights attached to shares;

OMWLP offers insurance-based products, which means customers own these products but not the underlying units/shares – these are owned by OMWLP. However OMWLP has a voting policy for fund events and corporate actions which is intended to ensure any voting rights or other rights exercised by OMWLP are always exercised in the best interests of customers. Considerations for OMWLP when voting on fund events and corporate actions include:

  • Whether there are potential benefits to the customer from the changes being made
  • Whether material changes are being made to the investment objective or risk profile of the investment
  • Whether one-off charges are being applied as a result of this event
  • Whether increased ongoing charges will be applied as a result of this event

The above factors and any justification provided by the issuer of the security will determine how OMWLP exercises its voting rights and other rights attaching to shares.

(5) cooperating with other shareholders; When exercising voting rights and other rights attached to shares OMWLP will consider the voting position of other group companies within Quilter plc who may be exercising the same rights.
(6) communicating with relevant stakeholders of the investee companies; and

As per above we do not make investment decisions, however we may reach out to investee companies when exercising voting rights and other rights attached to shares. For example we may ask for additional details on the potential cost implications of a corporate action. In addition we will write to customers in relation to certain fund events and corporate actions as set out in our product Terms & Conditions, for example if a merger of investments is proposed – this enables customers to take action if they wish to do so.

(7) managing actual and potential conflicts of interests in relation to the firm’s engagement.

OMWLP will refrain from voting on fund events and corporate actions where there is a direct connection to the Quilter group of companies, for example we do not vote on fund events involving funds managed by Quilter Investors, which is a sister company within Quilter plc.

 

B. Investment strategy and arrangements with asset managers

Also under the EU and FCA rules we are required to provide the following public disclosures regarding our arrangements with asset managers:

Considerations Old Mutual Wealth's approach
1. How the arrangement with the asset manager incentivises the asset manager to align its investment strategy and decisions with the profile and duration of the liabilities of the life insurer’s long-term liabilities.

OMWLP does not have any bespoke asset management arrangements in place – all funds available to customers are from the general market and have not been set up exclusively for use by OMWLP.

2. How that arrangement incentivises the asset manager to make investment decisions based on assessments about medium to long-term financial and non-financial performance of the investee company and to engage with investee companies to improve their performance in the medium to long-term.

The asset manager is incentivised to grow the fund value as their sole remuneration is obtained from the annual management charges on any client monies invested within the fund.
3. How the method and time-horizon of the evaluation of the asset manager’s performance and the remuneration for asset management services are in line with the profile and duration of the liabilities of the life insurer, in particular, long-term liabilities, and take absolute long-term performance into account.

We offer access to a wide range of funds and ETIs which the customer and their adviser can select for their specific investment purposes. These investments are intended to be compatible with the needs of retail clients investing into our bond and pension products and so are generally long-term investments commensurate with the insurance-based business we are conducting. Short-term investment options which we offer tend to be weighted towards lower-risk investments such as money market instruments.

As noted above the asset manager’s sole remuneration is obtained from the annual management charges on any client monies invested within their fund, and so asset managers are incentivised to either preserve or grow these monies in line with their published investment objective.

4. How the life insurer monitors portfolio turnover costs incurred by the asset manager and how it defines and monitors a targeted portfolio turnover or turnover range.

We do not currently monitor portfolio turnover as this is not subject to limits in our fund agreement with each asset manager.

5. The duration of the arrangement with the asset manager. Our current arrangements with asset managers will continue until such time as the relevant fund agreement is amended.

 

The above statements will be reviewed on an annual basis and updated in the event of any material changes.