Moving on to the disadvantages of the plan Stevens says: “The with-profits fund appears to be of the traditional sort where the profits may partially depend on gains or losses from other business written by Royal & SunAlliance. General insurance is a risky business, especially in these troubled times. It is also very competitive and margins are thin.”
Cave and Parrott cannot find any disadvantages. Perdisatt says: “The initial investment amount is quite high as are subsequent minima. There is no regular premium facility. It is not clear why there are four versions – this should be explained. Neither the key features nor product guide explain the charges properly.”
Turning to the flexibility offered by the plan, Cave calls it fine, while Stevens feels that it is okay.
Perdisatt says: “Withdrawals require substantial funds remaining invested. The moneyback guarantee is of limited value given it only applies after 10 years. The range of investment links is not particularly exciting.”
Parrott says: “These types of product are fairly simple and flexibility is not normally a major issue. I do, though, like the fund switch options which are offered. My only reservation concerns withdrawals from the unitised with-profits fund, which are not very generous with regards to potential market value reductions.”
When asked about Royal & SunAlliance's reputation Stevens says: “Their administration is awful.” Parrott says they are a well-known provider and have recently built a good reputation for investment management. However, he also mentions that they are let down by their administration.
Cave says: “Poor reputation in SSAS investment market and concerns about future direction.”
Peridsatt feels they have a good track record on investment, but there are uncertainties surrounding the future of the company.
Considering the past performance record of the company Parrott says: “Generally good. The ex Sun Alliance funds and with-profits have been particularly impressive. Some of the ex Royal funds, however, have disappointed.”
Cave feels the past performance is nothing special, while Perdisatt calls it: “Very solid on the unit-linked side.”
Stevens says that the performance of the managed, index-linked, cash deposit, fixed interest and property funds is strong, and the range could be ideal for the risk-averse investor.
Turning to the plans which may provide the main competition, the panel list Axa, Standard Life, Norwich Union, Sun Life and Scottish Equitable. Parrott adds: “Most of the big players are active in the trustee investment plan market and will provide the stiffest competition. However, performance tends to be the main factor for these plans and Royal & SunAlliance should attract their share of business.”
When asked whether the charges are fair and reasonable, Cave simply says: “Yes.”
Perdisatt says: “Yes – seem to measure up well based on the table enclosed. I am not sure it is right to state it is a clean contract given the with-profits penalty. I do think the reduction to annual management charges based on fund size could be improved upon.”
Stevens feels that an annual charge of up to 1 per cent is good, especially as there is no bid/offer spread.
Parrott says: “The charges look particularly competitive and are a strong feature of the product. This is particularly the case with larger investments.”
Considering whether the commission is fair and reasonable, Cave and Perdisatt simply say: “Yes.”
Parrott says: “The product is very much geared to fund-based commission which looks reasonable. I suspect, though, that most business will be done on a fee basis and the product is particularly well suited to this.”
Stevens says: “The fund based option of 0.7 per cent is useful if the adviser can wait five years plus. On-going service is essential so initial commission of say 2 per cent and 1 per cent trail would make it more attractive.”