Gearing a portfolio of traded endowment policies has become increasingly popular in the United Kingd...
Gearing a portfolio of traded endowment policies has become increasingly popular in the United Kingdom and a new guide for IFAs makes it even easier.
TEP market maker Policy Portfolio has produced the guide and the company's managing director Brian Goldstein says it "will help financial advisors understand gearing, how it works and more importantly how it can help their clients".
Offshore and UK banks will often lend up to 90% of the surrender value of TEPs enabling investors to combine their investment capital with a bank loan, secured against the portfolio of TEPs.
Gearing therefore allows investors to buy a larger number of policies than would otherwise be possible and in addition provides an opportunity to build more wealth over a shorter period of time.
"TEPs provide safety and security and particularly suit the needs of those who require a flexible, low risk investment with the potential for high returns.
"The average annualised growth for all TEPs bought from Policy Portfolio that matured during the twelve months ending April 2001 was 10.26% which investors could obtain tax free by making used of their capital gains allowance."
Key features of TEPs include strong stable growth and no set up costs. As policy set up costs have been paid by the previous owner, TEP investors derive full benefit from the high growth rate of the policy during its final years.
TEPs have a fixed amount of money determined at the outset and will be paid at maturity. Investors choose how much to invest and when they want the policy to mature, making TEPs an ideal planning tool. They also choose the balance they require between capital investment and ongoing premiums.
For a copy of the guide phone 020 8343 4567 or visit www.policyportfolio.co.uk
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