AIG Life has established the premier trustee bond, which aims to provide pension trustees with low-cost access to a range of internal and external funds.
AIG Life already has a trustee investment bond aimed at trustees with small portfolios but this bond is aimed at those with portfolios of at least £250,000. It is available in three currencies US dollar, sterling and euros.
Trustees can construct an investment portfolio using AIG's range of guaranteed and protected funds, as well as 60 external funds from fund managers including Fidelity, Jupiter, M&G and Newton.
The bond has no initial charge, but has an annual management charge of between 0.25 and 0.5 per cent, depending on the value of the investment. But where external funds are chosen, extra charges are incurred. These range between 0.5 per cent and 1.2 per cent, depending on which funds are chosen.
The product could be useful for trustees who want the security of AIG Life's guaranteed funds while economic conditions are volatile, with the potential to make unlimited free switches into actively managed external funds when conditions improve.
Compared to other trustee investment products from Royal & SunAlliance and Scottish Mutual, the AIG Life bond has a much wider investment choice. The Royal & SunAlliance trustee investment plan is limited to 12 internal funds, while the Scottish Mutual classic flexible trustee investment plan has 20 internal funds and four external funds.
However, the AIG Life plan's annual management charge may exceed 1 per cent, even where external funds are not selected, while the charges on both rival products are capped at 1 per cent.