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Product matters

The penny is dropping. Life offices are beginning to realise that high charges on offshore funds will kill a deal, especially where big sums are at stake.

This latest offering from the stable of the Scottish Equitable International team, offers, in my opinion,an excellent low to medium-risk investment vehicle for people with over £75,000.

As a non-income-producing asset, it should appeal to higher-rate taxpayers, trustees and cash-rich companies. The latter must watch how much they invest to avoid jeopardising taper relief.

Although this product is designed to be a medium to long-term investment, it has no exit penalties and none of those nasty market value adjusters.

It uses the tax efficiency of an offshore investment bond to provide access to the international money markets while still providing investors the security of cash investments in a volatile stockmarket.

It starts as a “clean” product, with the adviser left to agree his own fee for the initial advice. There is no initial charge and the AMC depends on the size of funds invested but a welcome 0.25 per cent trailer is included.

There is a choice of external funds although 5 per cent must be kept in SEI&#39s cash account.

My only criticism is that it does not appear to offer a redemption bond option – suitable for corporate investors, and the only plan currency is sterling.

This is an attractive product for consideration for the cautious investor, with the lack of surrender charges, coupled with the relatively low-charging structure.

Robert Rackliffe is managing director of Jackson Batten Financial Group


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