The company thinks the bond will be particularly attractive to people who are likely to spend time abroad, those planning for inheritance and people looking for an alternative to a pension. It could also be of interest to companies as a corporate version is available.
Flexibility and transparency were the most important features to Standard Life when designing the bond. It is up to the adviser and client to decide on how the commission is funded, which will influence the charges and allocation rates.
Initial commission of up to 8 per cent is offered and this can be taken as a one-off charge at the outset or through an establishment charge of 0.2 per cent a year for every 1 per cent of commission paid during the first six years. Renewal commission of up to 1 per cent is also available and this will mean a 0.1 per cent charge a year for every 0.1 per cent of commission paid. A mixture of both is available and the charging and commission structure will be taken into account when the allocation rates are decided. The allocation rate also depends on age, so will be reduced by 1 per cent for people aged 75-79 and 2 per cent for those aged 80 and above.
The bond provides access to 46 funds managed by Standard Life and external fund management groups including Gartmore Jupiter and New Star.
Standard Life International says traditionally offshore bonds were seen as niche products but it believes this is no longer the case because the introduction of wrap accounts has brought offshore investment into the realm of normal investment and tax planning.
While investors may find the 46 fund links on offer and see the appeal of a flexible charging structure, which is negotiable with their adviser, some investors may find it a little confusing. It could also be expensive for some investors, particularly those in the older age groups who choose the establishment charge option and may make one-off withdrawals in the first six years. Not only will their allocation rates be reduced because of their age, they will also be subject to an exit charge, along with the usual annual management charges for the underlying funds.