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Royal London wants life of Riley for IFAs

Royal London is setting up its first retail investment plan aimed at the IFA market.

The product, called Riley, aims to offer investors access to stockmarket gains through either active or passive investment strategies, with a variable amount of capital protection built in.

The capital protection element is provided by putting some of the investment into a fund holding protection contracts provided by Goldman Sachs. This can be raised or lowered at any time and used to lock in stockmarket gains.

The growth will come from the portion allocated to either a FTSE 350 tracker fund, managed by Royal London Asset Management, or the active FTSE 350 managed fund, which will be outsourced to Schroders fund manager Andy Simpson, or a split between the two.

The product also offers regular withdrawals.

Royal London head of marketing development Roger Edwards says the product was three years in development.

He says: “It is likely to suit people who have a reasonable sum of money in a bank or building society account and who are looking for the potential of better returns by getting at the stockmarket while controlling the risk at a level they are comfortable with.”

However, the product’s charging structure has come under fire. It has a 6.75 per cent initial charge or alternatively 0.125 per cent paid every month for five years. The insured element costs 1 per cent of gross fund value while the tracker charges 1 per cent annually and the managed fund 1.3 per cent.

Hargreaves Lansdown invest-ment manager Ben Yearsley says: “It looks expensive and complicated. If you want protection, you can put money in cash and not be charged for it.”

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