This single premium investment bond is available to investors with at least 5,000 and offers over 100 fund links from various managers. It was designed with flexibility and transparency of charges in mind.
Consequently there is a commission menu for IFAs that relates to the allocation rates. It allows for initial commission of up to 7 per cent or initial commission up to 4.25 per cent plus renewal up to 0.5 per cent. Commission can be rebated one a one-for-one basis, which can boost the clients initial investment.
There is no initial charge for most investors, but allocation rates for policyholders aged 70-85 will be reduced by up to 3 per cent where the IFA takes full commission, so in effect they will pay an initial charge.
The allocation rates depend on the amount invested, the age of the policyholders and how much commission is taken by the IFA. Standard allocation rates are between 97 per cent and 110.22 per cent but the 2 per cent enhancement will boost these for a limited period.
In addition, a loyalty bonus of 0.5 per cent in extra units will be added from year six.
There is also no explicit annual charge for the bond wrapper – the cost of this is included in the annual charges on the fund links. which are 1.55-2.48 per cent, depending on the fund chosen.
In keeping with the products focus on flexibility, regular withdrawals can be made one month after the policy has been in force. Up to 7.5 per cent can be withdrawn each year without penalty on a monthly, quarterly, termly, yearly or half yearly basis. Income can also be taken where investors choose the Standard Life distribution fund, although termly withdrawals are not available on this fund.
Fund switches are also free which also promotes flexibility within the bond. However, this is undermined by the fact that although investors can choose up to 12 funds at once, the current limit for the duration of the bond is 20.