The Professional Provident Society (PPS), today announced the launch of its new financial division, “glu”. The new glu, a new development in the mutual financial entity, has been developed to extend mutuality-driven benefits to a wider audience across South Africa, than their existing portfolio of graduate professionals.
The history of mutual societies in South Africa, goes way back to 1845, when John Fairbairn founded the Mutual Life Assurance Society of the Cape of Good Hope. This company is now known as Old Mutual
What is a Mutual Society?
In essence, a mutual society is a business that is owned and run by its members, rather than by shareholders. mutual organizations, run on the basis of membership that can be open or limited, and who are also the customers of the organisation.
The benefit of a mutual society, is that the profits generated by the entity are shared amongst the members, or reinvested in the entity and/or invested for future dividends shared by the membership.
Members also have a say in how the mutual society is run and the management of a mutual society is accountable to the members.
New Entity Needed to Extend Market Reach
PPS was established in 1941 and has been a successful and key mutual society, exclusively serving the graduate professional market in South Africa.
However as pointed out by glu CEO Michelle Jennings at its launch today, “We needed to do something different. We also knew that we couldn’t just open up the eligibility criteria of PPS, … so that we could accept more than just graduate professionals”.
Essentially the principle of a graduate mutual society could not reasonably be extended to a broader market and so the management team decided to do something completely fresh, something that would innovate and create a brand-new, ring-fenced entity
The result is that glu, will go live from 30 January 2025, and is expected to bring a fresh approach to financial security, furthering PPS’s commitment to financial well-being. glu now opens the door for more South Africans to enjoy the benefits of mutuality, and specifically the sharing in the annual profits of the business by the members.
This is a unique business model where, unlike listed companies who share their profits with shareholders, PPS and glu share their profits with members as a reflection of their mutuality model.
glu will according to Jennings, cater to those who value straightforward, transparent financial solutions to help them plan effectively for their futures. The business’ inclusive approach, described as “Financial Togetherness™,” is inspired by ubuntu, creating a supportive financial ecosystem that empowers members to achieve their financial goals confidently, while benefiting from shared success.
Glu Aims to be a Financial Partner
Jennings, expanding on this says “glu is more than just a financial services provider; it’s a partner in one’s financial journey. In our world, customers are more than just policyholders, they are members who form part of a community that shares in the benefits of mutuality. Our purpose is clear: to be the companion that takes the anxiety out of our members’ financial journeys. We aim to simplify financial planning and empower members to make informed financial choices.”
glu promises to offer a simple and effective product offering to meet the evolving financial planning, insurance and investments needs of members. Their range of solutions focuses on simplicity and ease of doing business.
Izak Smit, CEO of PPS Group, says, “glu was conceived from a simple yet powerful idea within PPS – to extend the benefits of mutuality to even more South Africans. With glu, we’re building on PPS’s legacy of helping individuals lay a firm foundation for their financial futures. It’s about offering more people the opportunity to share in mutual success while creating a community where financial planning feels less overwhelming and more empowering.”
The glu brand is pitched to South Africans, with a core focus on middle-upper income individuals aged 25 – 55 with a minimum household income of R30,000 per month, ideally with a diploma or degree, or a connection to an existing PPS member.
The profit sharing structure for the new entity is as follows:
- After 10 years of membership with glu, its members can access 20% of their profit share balance, and an additional 20% every 5 years thereafter.
- This is until a member reaches age 65, or has been with glu for 25 years (whichever happens first), at which point 100% of their remaining profit share balance is available