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Mutual appreciation

National Mutual – Executive Retirement Portfolio

Type: Occupational pension scheme for executives with insured, partly insured, and self-administered options.

Minimum investment: Insured and partly insured options – single and annual £2,000 per member, monthly £200 per member. Self-administered option subject to no minimum investment.

Investment choice: Up to 10 of the following unit-linked funds: fixed interest, deposit, index limited, SafetyFirst, UK equity tracker, North American equity tracker, European equity tracker, balanced managed, UK equity, stockmarket managed, property, global equity managed, North American equity, Japanese equity, European equity, Far East equity, UK equity select, North American equity select, European equity select, Japanese equity select, Far East equity select, with-profits.

Allocation rates: Insured and partly insured options only – 102 per cent for initial regular contributions, 100-102 per cent for additional contributions. Single contributions 100.4-103.9 per cent.

Options: Self-administered, fully insured, partly insured.

Charges: Self-administered option for investments below £6,000 – initial £1,000, annual £900; for investments between £6,000-£11,999.99 – no initial charge, annual £700; for investments between £12,000-£17,999.99 – no initial charge, annual £500; for investments of £18,000-plus – no initial charge, annual £300. Insured and partly insured options – annual 0.36 – 0.96 per cent depending on unit-linked funds selected, no charge on with-profits fund.

Commission: Subject to negotiation.

Tel: 0845 601 2524.

Broker Panel:-

Keith French – managing director, French & Associates

Helen Richardson – managing director, Bell Financial Planning

Barry Laymond – senior practitioner, Barry Laymond Financial Services

Stuart Baker – financial planning manager, Hillier Hopkins

Broker Ratings (ave. marks out of 10):-

Investment options: 7.8

Flexibility: 7.8

Past performance: 5.3

Charges: 7.0

Commission: 6.5

Product literature: 8.3

The National Mutual Executive Retirement Portfolio is an occupational pension scheme for executives. It has fully insured, partly insured and self-administered options with a choice of up to 10 funds from a range of 22.

Assessing how the product will fit into the pension market, French says: “It will fit in very well as it offers fully insured, partly insured or fully self-administered options. National Mutual continue to distribute through IFAs, thereby ensuring that the clients receive independent financial advice.”

Laymond thinks it will compete with major insurance and non-insurance SSASs for clients who are seeking a professional service and unrivalled advice. Barker believes it is similar to other executive personal pensions.

Commenting on the range of investment options, Richardson says: “National Mutual has included a range of active and passive funds managed by four leading global specialists. This extra spark is needed to set it aside from little baby stakeholder and because its own fund has underperformed.”

French says: “The investment options are only restricted by regulations so, apart from the wide choice of internal funds, the clients may invest in all other approved investment vehicles. National Mutual not only offers a wide choice of unit-linked funds but also with-profits. This might be of interest as National Mutual may change structures with the possibility of windfall payments.”

Turning to the marketing opportunities the pension will provide, Laymond says: “Num- erous marketing opportunities will arise following the new Inland Revenue regulations which may force some smaller existing providers of SSAS plans out of the SSAS marketplace.”

Richardson says: “The mar- keting opportunities are reasonably good alongside cheap, no-frills stakeholder as an alternative scheme for directors or top management.”

Identifying the type of client the plan is most suitable for, Barker says: “Someone who is employed and preferably wanting part of their overall remuneration to be deferred.”

Richardson says: “High-net-worth corporate clients who are willing to pay for extra benefits and service from their IFA and insurance company.” Laymond says: “It will also appeal to clients who are not satisfied with the level and standard of service provided by their existing SSAS providers.”

French identifies controlling directors, small family businesses and high-net-worth individuals.

Identifying the main useful features and strong points of the product, Laymond points to highly competitive charges, a flexible approach and a professional service. He is impressed by the feasibility guide and property purchase cash flows.

French thinks the reduced trustees&#39 fees is a strong point. He also mentions good allocation rates for regular premiums, the full SSAS option and National Mutual&#39s experience in the market.

Richardson says: “The choice of income types within one product, the fully insured, partly insured and full SSAS services. Support can be geared to cater for individual client needs. I like the feasibility report and the notes to help IFAs with the inevitable bulk of forms.”

Barker mentions the “tidy application form”.

Turning to the disadvantages of the product, Barker says: “This plan, like any pension scheme, has disadvantages. But it will be a reason- able product where the advantages, as perceived by the client, outweigh the disadvantages.”

The panel are split when considering the product&#39s flexibility. Richardson thinks it is good and Laymond agrees.

French points out that contributions can be varied without penalty and that flexibility is offered through the fully insured, partly insured or fully self-invested options.

Barker takes a different view. He says: “This plan has no real flexibility but it is less inflexible than some of its peer group.”

Commenting on National Mutual&#39s reputation, Barker says: “It is mysterious – there are other firms who have a more robust reputation.”

Laymond thinks its reputation is unmarred. He adds that it only sells pensions and has sold only through IFAs since 1988.

French says: “With over 20 years&#39 experience in SSASs and Sipps, it is certainly a company that IFAs should consider. Unlike some of its competitors, its administration is sound. But some may be reluctant to recommend them while there is a poss-ibility of a takeover or change of structure.”

Richardson says: “It is excellent as a corporate pension specialist. It will be great as long as it ensures it stays a niche player with the support and expertise at branch and head-office level to pack their innovative products.”

Moving on to National Mutual&#39s past performance record, Laymond says: “Following its appointment of external managers for equity funds in October 1998, it has removed some volatility and its tracker funds are doing well. Its own funds are now recovering from a bad period which has helped them turn the corner and improve performance over the last five years.”

On the issue of which plans are likely to provide the main competition, Barker says “proper SSASs”. Richardson suggests Axa Sun Life and “anything CGU might do.” French mentions Axa Sun Life, pensioneer trustee firms and other executive personal pension plan providers.

Laymond cites Axa Sun Life, Standard Life and Scottish Equitable. He thinks National Mutual&#39s specialisation in pensions and its unrivalled service gives it a lead over these competitors.

The panel agree that the commission is in line with the market but are split when assessing whether the charges are fair and reasonable.

Richardson says: “The charges are typical of National Mutual – low but variable according to fund selection. Is this because managers get better paid in these higher risk funds? Generally, you get what you pay for but I&#39d like to get a live quote to assess the charges properly.”

French and Laymond agree that charges are fair and reasonable, but Barker believes they are not.


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