It is much lower risk than income bonds with capital returns based on stockmarkets and is particularly attractive to IFAs because it pays trail commission.The capital return depends on a portfolio of insurance companies’ corporate protection policies. These are taken out by companies to insure against key staff members or shareholders. Unlike the UK, these US and Canadian policies are whole of life, so when they are no longer needed, they can be sold. All contracts have a minimum credit rating of A on Standard & Poor’s and 90 per cent of them are AA or above. The security is based on an actuarial model devel- oped by KPMG and a leading US institutional actuary. The risks are widely spread. HSBC oversees the trading of the contracts and assesses their credit rating and a leading Luxemburg bank acts as custodian. Deutsche Bank provides a facility to lend cash against the policies to provide the cashflow. Because of all the parties concerned and the strong security behind the bond, this is by far the best income contract available and has attracted a great deal of money so far. A second tranche is now open and will close on November 4 with Pep transfers closing on October 21. It pays 7.5 per cent annual income over five years. The income can be reinv- ested for growth and give a return of 43.5 per cent.
Investment Management Association chief executive Richard Saunders has called for the fund management industry to step forward as the provider of individual pension savings schemes. He says A-day changes represent a historic opportunity for the fund management industry to provide products to the mass market and suggests the industry can cut charges to nearer to […]
Pink Home Loans appoints Janet Johnson as operations manager in its packaging department. She joins the operations team having worked at Pink for over 5 years. The role will involve overseeing the management of the operations function at Pink.Johnson started her career at Pink as a mortgage adviser in the mortgage desk team. More recently […]
The FSA chairman has warned the financial industry to learn lessons from the 7 July London bombings and be fully prepared for future attacks. Speaking at Mansion House earlier this week Sir Callum McCarthy urged businesses to ensure they have adequate back up arrangements. He also said too much comment was guilty of “gross oversimplification” […]
Standard Life is introducing a select property fund offering global commercial property exposure after its UK property fund got too popular. The firm’s UK property fund is 11 per cent invested in cash, with inflows of 50m a month and Standard is struggling to invest the money in what it describes as a competitive UK […]
As more and more employers reach their auto-enrolment staging date, thousands of HR, pensions and finance professionals have been tasked with navigating the minefield of ongoing scheme governance and auditing with little support.
- Top trends
News and expert analysis straight to your inboxSign up
Latest from Money Marketing
A majority of independent financial advisers think there should be a single rate of tax relief according to this week’s Money Marketing poll. More than 120 advisers took part in the poll with 77 in favour of a single rate of tax relief, 39 against and six undecided. Yellowtail Financial planning managing director Dennis Hall […]
The FCA has issued a warning over ‘commoditised’ defined benefit pension transfers running the risk of unsuitable advice. In a letter sent to advisers holding pension transfer permissions, the regulator reminds planners that a “key area” of its focus is on pension transfers, and that it will later this year be contacting all firms to […]
Problems look set to arise for pension schemes operating relief at source