Dial-in savings by going direct
Only the crank calls take the edge off the growing field of direct telephone sales in SA, writes TERRY BETTY
Local companies report that between 20% and 80% of the calls they receive each day on their toll-free lines are from crank callers. Compare this sorry figure to the international norm of between 10% and 20%.
Direct selling of financial products is a global trend, but one which started in SA only a few months ago.
Local companies who beat the rest into offering direct and discount financial products are Cortal Direct, Hollard Direct Solutions, Old Mutual Direct and Pick 'n Pay Financial Services.
The accompanying table lists the products they offer and the cost savings.
The way direct sales differ from the many products sold via the Internet is that they are available at a lower cost - because they are sold commission-free and other initial charges may be reduced.
The cost saving on insurance investment products translates into a higher return to the investor in the long run. Old Mutual Direct says the surrender value on their endowment policy is boosted by 35% in the first year.
Dialling a company's toll-free number will connect you with a central call centre, which is staffed with people qualified to give you information on all the products they are offering.
Nicky Bicket, managing director of Pick 'n Pay Financial Services in Cape Town says the number of crank callers has increased dramatically since their product became available in Gauteng last week.
On a more serious note, he says South Africans have taken to discount banking in a big way. While Bicket declines to disclose how much money their savings/transmission bank accounts have attracted, he says it is double their initial expectations.
While most people can quote the price of a loaf of bread, few realise how much they are spending on banking, says Bicket. He reckons that based on a basket of costs, banking through Pick 'n Pay costs you about 20% less than through the traditional banking system.
In addition, the supermarket chain offers higher interest rates on your account balance, and the money can be drawn without notice.
Robert Swart of Cortal Direct says that apart from the last few days - which been quiet following the market crash - Cortal has been attracting up to R1-million on some days, and has already amassed R50-million of assets under management.
Bradley Goldschmidt of Hollard Direct Solutions says the target market for their direct business are people earning R3 000 to R5 000 a month. "This market has been inadequately serviced by the broker community, and customers aren't afraid to buy direct.
"Our product is a lot cheaper because we pass on the commission savings and do not load the charges upfront, so there is no surrender penalty."
Carin van Vuuren of Old Mutual Direct says they are fielding between 2 000 and 9 000 calls a day, depending on the level of advertising. Van Vuuren declines to reveal the total sales made since they launched in August this year.
She says that calls are digitally recorded, eliminating the need for paperwork. "Within 10 minutes you can own a policy and within 48 hours the contract and policy information is on its way to you via Fastmail."
Old Mutual also gives policyholders 21 days to change their minds.
Van Vuuren estimates that within three to five years between 10% and 15% of Old Mutual's premium income will be generated through direct sales.