Neville James has introduced a portfolio management service that deals with traded endowment policies (Teps). This enables IFAs to choose how much input they have and how much administration work to do.
The service is designed to make it easier for people to invest in Teps by reducing the administration and helping investors set up a portfolio of Teps. The service has four options and investors can choose any combination of them.
Under the pre-paid premiums service, a lump sum is invested and Neville James pays an ongoing premium of at least £300 a year out of this. The investors benefit from getting a discount on the ongoing premiums instead of inteerest being paid on their lump sum.
The Neville James Administration Service deals with all the legal and administrative work that comes with the transfer of Teps from one owner to another and will also calculate tax liability.
The Neville James Investment management advice service helps investors build their portfolio, either on a bespoke basis or according to Neville James' own investment strategy.
The Neville James Gearing facility allows investors to borrow money from a bank to buy more Teps. They can borrow up to 90 per cent of their Teps' surrender value. Selecting this option allows the administration service to be used free of charge.
This product could suit high-net-worth clients looking for a low-risk investment now that zero-dividend preference shares are recognised not to be as low risk as some investors believe. However, Patrick Connolly, Managing Director of IFA Chartwell points out that Teps are unlikely to deliver spectacular growth. he says: “We previously offered a Teps fund to our clients about two years ago but it did not take off. We get clients coming to us who want to invest in Teps, but not regularly.”