View more on these topics

Skandia offers distribution choice

SKANDIA

MultiBond &#45 Skandia Distribution Bond

Type:
Unit-linked bond

Aim:
Income and growth by investing in a range of distribution funds

Minimum investment:
Lump sum £5,000

Fund links:
Skandia Axa distribution, Skandia DWS managed distribution, Skandia New Star managed distribution, Skandia Norwich distribution, Skandia Prudential distribution, Skandia distribution portfolio

Allocation rate:
100%

Special offer:
Allocation rate increased to 103%

Offer period:
Until April 6, 2004

Options:
Ability to switch out of distribution funds into 300 other funds
Charges: Establishment charge 1% a year for first six years, annual 0.75%

Commission:
Initial 7%, initial 5%, renewal 0.5%

Tel: 02320 334410

Investment Management Services proprietor John Wright identifies a trend emerging for distribution bonds as a replacement for with-profits bonds among low-risk investors. He points out that Skandia pioneered the use of fund links and he feels the company has arranged some good ones for this product.

When asked what he liked about the bond Wright says: “The ability to change fund managers and the ability to arrange monthly distributions by spreading the investment. This should prove very good for IFAs and their clients.” Wright also thinks the commission arrangement allows IFAs flexibility in that they can tailor it to suit the work they have done.

One of the drawbacks Wright mentions is the inevitable double charging which comes with a unit-linked linked product. He says that with other funds, such as equity and property funds, Skandia&#39s switching facility can make up the additional charges so investors will not lose out. However, he feels that this type of product is a different case.

Wright can see competition coming from other distribution bonds but concludes: “Skandia should be congratulated for bringing its multi-manager approach to this area of the market.”

BROKER RATINGS

Suitability to market Good
Investment strategy Good
Charges Average
Adviser remuneration Good

Overall 8/10

Recommended

Berkeley Jacobs fined for pensions unlocking

Berkeley Jacobs Financial Services has been hit by the FSA with a £175,000 fine for poor advice and misleading advertising in marketing its pensions unlocking service. The regulator has forced the firm to set aside £1m to compensate up to 5,000 consumers who were encouraged to use their cash for short-term benefits such as holidays […]

Miles in turn on churn

Professor David Miles says he did not mean to point the finger at intermediaries and accuse them of churning in the mortgage market. Last December, when he published his interim report on long-term fixed-rate mortgages in the UK, Miles hit out at mortgage brokers, saying they contributed to churn because it is to their advantage […]

1

Home condition report gets strong backing from buyers and sellers

Consumer trials of the home condition report have shown strong support among buyers and sellers. The trials, carried out by the Building Research Establishment, show that 95 per cent of buyers find the HCR useful and 88 per cent of buyers and 78 per cent of sellers believe the HCR accurately reflected the condition of […]

ScotProv increases rates for critical-illness cover

Scottish Provident is raising its rates on on joint critical-illness and life cover policies by an average of 11 per cent. Taking effect from February 23, the change applies to guaranteed and reviewable premiums, with the cost of the cover buyback option increasing to an extra 12 per cent of premium value from 10 per […]

2015: a divergence in economic policy?

As the US continues to confound growth expectations and the eurozone’s ‘will they, won’t they’ saga has finally concluded, what are the implications for global markets? James Dowey, Neptune’s chief economist, puts forward his outlook for 2015 and the key considerations for investors.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment