Skandia has launched a withprofits bond analysis tool to help identify penalty-free exit opportunities and compare performance against alternative tax wrappers.
The With-Profits Analyser gives advisers an overview of each with-profits fund on the market, with data from Cazalet Consulting, including the asset allocation and annual gross returns of underlying assets.
It also details the latest annual bonus rate, the availability of penalty-free regular withdrawals and when the next market value adjustment-free date occurs. Advisers can compare the potential future performance of investing through a pension, Isa, onshore or offshore bond, collective investment or any mix of wrappers.
Research from the firm predicts that up to £8bn could exit with-profits bonds in the next few years.
At least 390,000 policies, or £11.5bn in assets, are estimated to contain MVA-free spot guarantees, meaning investors can exit without penalty on the policy’s 10-year anniversary. Based on these figures, Skandia says as many as 273,000 bonds could be surrendered within the next three years.
Head of proposition marketing Peter Jordan says: “The onesize- fits-all nature of with-profits means they simply cannot be right for every investor.
“However, the opaque nature of with-profits makes the adviser’s task of reviewing policies complex and time-consuming. This tool is designed to support them through that process.”
Director of retirement planning at The Retirement Adviser, Nick Flynn, says: “People are already moving out of the with-profits market due to taxation and the fact that such offerings are perceived to be a thing of the past, and this will only continue.”