Pension Trustee Bond
Type: Unit linked bond.
Aim: Growth by investing in unit trusts, Oeics and investment trusts.
Minimum investment: £3,000.
Fund links: 222 funds from Aberdeen Asset Management, ABN Amro, Alliance Capital Management, Baring Asset Management, Baring, Houston & Saunders, BlackRock International, Credit Suisse Asset Management, Deutsche Asset Management, Dresdner RCM, Fidelity Investments, Foreign & Colonial, Framlington, Gartmore, Henderson Global Investors, ING Investment Management, Invesco Perpetual, Investec Asset Management, JPMorgan Fleming Asset Management, Jupiter, M&G Investment Management, Merrill Lynch Investment Management, Newton, Schroders, Societe Generale Asset Management, Threadneedle Investments, Wellington Management LLP.
Allocation rates: 100 per cent.
Charges: Initial 5 per cent, annual 0.75 per cent.
Switches: Unlimited free switches.
Commission: Choice of initial 4 per cent or initial 2.25 per cent plus fund based 0.5 per cent.
Tel: 02380 726597.
John Bumford – Client manager, Gee & Compay
Alan Reid – Director, Peter Ruddy & Partners
Jonathan Elms – Partner, Teare Rose
Bonus rate: 6.0
Company's reputation: 7.7
Past performance: 7.5
Product literature: 7.3
Skandia's pension trustee bond is a unit linked bond that invests in unit trusts, Oeics and investment trusts.
Considering how the bond fits into the market, Elms says: “With the fund choice and access to their with-profits type guaranteed pension fund, this offers real choice to trustees without the admin hassle of multi-providers.”
Reid says that the concept has been around for years, and is something that he has regularly used.
Bumford says: “With the increasing popularity of self-invested personal pensions, this product will provide a useful vehicle to consolidate collective investment holdings under one contract. The majority of trustee bonds have up until now provided access to the providers in-house funds only. This contract will therefore give the opportunity to achieve much greater diversification, and also to re-position fund holdings to take account of poor performance, an important issue as clients will increasingly require investment managers to take action on funds where returns do not meet the agreed benchmark.”
Looking at the type of client that the bond may be suitable for, Reid says: “A client who wants access to the whole market but does not wish to actively manage a portfolio containing lots of small holdings. Good for drawdown cases allowing simple re-weighting of holdings following encashment for income.”
Bumford feels that it would be suitable for collective investments, especially those with funds of less than £250,000.
Elms says: “As it says, Sipp and Ssas members, particularly those who want diversified investments cost effectively through insured funds.”
On the subject of the marketing opportunities that will be provided by the bond, Elms says: “The usual situations where funds are held on deposit – guaranteed pension fund, and where the client wants the benefit of diversified investment without the hassle of self-investment.”
Reid feels it will provide no additional marketing opportunities for his firm.
Bumford says: “The provision of consolidated investment statements and simple switching procedures will give investment managers the opportunity to simplify their Sipp and Ssas administration. This will also reduce the volume of paperwork that is often sent direct to clients by the fund managers. Any product that streamlines administration and makes this more user friendly in the hands of the consumer must succeed.”