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Product matters

It is always interesting to see a new product from a major provider. Clerical Medical has the name awareness in the UK and the offshore markets to ensure its products must be considered. Clerical Medical International&#39s global investor bond is a distinct offering of two products within the one wrapper which covers the market for UK and non-UK investors.

The extensive range of funds available, allowing investment in around 170 management groups, will cover most clients&#39 requirements. The ability for non-UK investors to hold quoted equities in the account will also be of interest to many wealthy clients who already hold a share portfolio, where a share-exchange facility may be of interest.

The charging structure has the potential to be confusing. There are three different charging structures, each with additional layers of charges being applied for service, additional investments and additional valuations. It may be difficult to compare the cost-effectiveness of this product against competitors due to this layering. The “initial charge” option is at the top end of the market at 8.5 per cent.

However, the “investment credit” feature, where rebated management fees are credited to the account, is an interesting feature and may overcome client resistance to costs. Again, it would be difficult to quantify the value because of varying levels of rebates paid by management groups.

Overall, the global investor bond is an interesting product and warrants consideration for offshore investments that exceed the minimum of £100,000.

Robert Rackliffe is managing director of Jackson Batten Financial Group


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