product to make its debut a month before CMI restructures its trust range
Clerical Medical International (CMI) this week launches an offshore bond offering underlying funds from more than 170 investment houses.
The bond, targeted at high net worth individuals, includes three offshore with-profit opt- ions and access to 33 Clerical Medical funds.
CMI Global Investor, a single premium whole of life policy, has two underlying account types. There is the Privilege Account for UK and overseas investors investing solely in collective investment schemes, and a Personal Account for overseas investors only, with wider investment options.
The minimum investment is £100,000, with additional investments of £5,000 tranches, or $150,000 or e150,000.
The launch comes a month in advance of a revamping of CMI's trust products. At the beginning of June, CMI, which is part of the HBoS group of companies, is to unveil a new range of trust plans including one designed to reduce IHT liabilities within which the Global Investor Bond can be housed.
Regular withdrawals can be taken from CMI Global Investor on a monthly, quarterly, biannual or annual basis and special arrangements can be made for the payment of school fees.
Under the Privilege Account the investment options are unit trusts, Oeics, Sicavs, investment trusts and other types of collective investment schemes as well as deposit accounts. This is a range of investments designed to comply with qualifying rules for UK tax purposes. The Personal Account can hold most asset types with the exception of derivatives, property, unlisted securities, directly held commodities, and stocks from certain unrecognised exchanges.
In order to help advisers sell the product to risk-averse investors, CMI is offering a nil annual management charge for 12 months from the Global Investor launch on its CM Sterling Reserve fund which produces around a 5.12% annual compound return. The bond offers up to 5.25% commission and has three charging structure options.
The level option levies a 0.3% fee as well as a £57 fee, both charged each quarter but has no initial charge. In place of the initial charge, the option has an 8% initial encashment fee dropping by 0.25% per quarter over eight years to 0%.
The initial option features an 8.5% initial fee, which can be reduced by the amount of upfront commission the adviser chooses to waive. It has a service charge of £85 per quarter.
For both options the charges are based on the initial investment value or the current bond value, if greater.
The five-year option charges 0.475% per quarter for five years and has an early encashment fee of 8% reducing by 0.4% per quarter over the five-year term to 0%. There is also an £85.50 fee charged quarterly.
One final level of charging is levied in the bond. Holdings in UK equities, investment trusts, gilts and loan stock carry custody fees of 0.75% per annum per holding and a dealing fee of £20 per deal.
For further details contact: 0845 722 6626.
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