Standard Life brings out its first ever with-profits bond on 1 August offering an allocation rate of...
Standard Life brings out its first ever with-profits bond on 1 August offering an allocation rate of 102%.
It has a minimum investment of £10,000 and a maximum of £500,000. Top up contributions must be in tranches of £1,000.
The product carries a bid/offer spread of 5% with no explicit annual fee. Advisers have the option of taking 6.25% initial or 4% initial with 0.5% renewal. They can also take a combination of these two.
Standard Life believes its financial strength, as an AAA-rated institution by Standard & Poor's, means the bond will have a higher exposure to equities than those of competitor products, giving the opportunities for enhanced long term returns.
The group, which has just successfully defended it status as a mutual, also argued its mutuality means it can generate better terms for policyholders than are available through quoted life companies.
Investors with Standard Life will have to sign a declaration waiving any windfalls that may arise in the next three years. After three years the investor will then become a qualifying member.
Current annual bonus rate on the bond is 4.5% but Standard Life said there is no guaranteed rate of growth. A terminal bonus may be added when the customer cashes in the bond, makes a withdrawal or dies.
The bond allows for regular withdrawals to be made every month, three months, four months, six months or year, although an MVA may apply to withdrawals in excess of the annual bonus rate.
The maximum age for an investor in the bond is 75.
Annuity market worth £4bn in 2017
For ‘distress’ caused
Oversees £30bn of advised and D2C assets
Less than a third of top paid employees are women
£1bn business since inception