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L&G majors on choice and flexibility

Legal & General has established the Portfolio Bond, a unit-linked bond which provides access to 208 fund links from 43 management groups including Legal & General, New Star, Jupiter and Schroders.

The bond has a minimum investment of 5,000 and investors can choose up to 10 funds at the same time. Legal & General designed the fund range with the aim of meeting the risk profiles and investment aims of the majority of IFA customers. It wanted to include all major sectors across a range of investment management groups. Consequently multi-manager funds and specialist funds are represented in the range.

Legal & General also felt the charging structure should be simple and transparent, so there is no initial charge for investors under the age of 75. Investors who fall within this bracket will also benefit from enhanced allocation rates, which depend on the amount they invest. For investors between the ages of 75 and 89, there will be an initial charge of 1.25-2.5 per cent, which will be made through lower allocation rates of 97.5-98.75 per cent. There is no annual charge for the product wrapper but annual charges will be made for each fund and will depend on which funds are chosen.

Investors can make regular withdrawals of at least 20 a month or 50 for other frequencies up to made up to a maximum of 7.5 per cent a year. They can also make 12 free fund switches a year in any 12-month period..

FundsNetworks new investment bond may provide competition to this product. It is currently running a launch offer of a 2 per cent enhancement to allocation rates until further notice, which gives it higher allocation rates than Legal & Generals product. However, when the promotion ends the allocation rates will not necessarily remain higher if IFAs take full commission, but this will vary according to age and amount invested.

FundsNetwork offers 114 funds from 34 management groups which is not as extensive as L&Gs product, but some IFAs may feel this is more than adequate.


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