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Clerical Medical plan nicely turned out


Retirement Options Plan

Income drawdown plan

Minimum investment:

Minimum age:

Investment choice:
21 Clerical Medical funds,14 external funds from Newton, Schroders and UBS, balanced, cautious and defensive fund collections

Self-investment, phased retirement

Allocation rates:

Annual up to 1. 8%,
annual 1.25%-1.6% for external funds,
additional charges for self-investment

Initial up to 5%,
fund-based renewal up to 1%

Tel: 0870 602 2244

Clerical Medical&#39s retirement options plan is an improved version of its previous income drawdown plan.

Duncan Clark pensions director Bob Lawrence feels this product is particularly good for IFAs and high-net-worth clients. He says: “This is another insurance company product with a Sipp wrapper provided by James Hay. It could be good for smaller cases, say of less that £250,000 if James Hay&#39s annual fees are waived where only £30,000 is invested in Clerical Medical funds. It is nicely presented but I am not too impressed.”

Lawrence would prefer to use directly placed Sipps rather than insurance company products which bolt on a self-invested option. He does not like the £100,000 minimum investment as he believes drawdown could be suitable for a £50,000 fund in some circumstances. However, he thinks it is quite nicely packaged and could be suitable for small- to medium-sized income withdrawal or phased retirement plans.

Turning his attention to the plan&#39s negative features Lawrence feels the charges are a little unclear. He says: ” The IFA guide is standard stuff and somewhat patronising &#45 a good IFA should and could be aware of all that is in it.” He regards the brochures as out of date and feels they should mention simplification. He says: “For high-net-worth clients, most IFAs should use directly held Sipps for maximum flexibility, transparent charges, supermarket investments and trustee investment plans.”

Lawrence feels Clerical Medical will face competition from full Sipps which offer great flexibility, clear explicit charges and links to wrap accounts. He also feels other insurance company products with open architecture funds and similar commission options will compete.


Suitability to market: Average
Flexibility: Good
Charges: Average
Adviser remuneration: Average

Overall 6/10


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