Prudential is to launch a with-profits bond aimed at bondholders stuck in closed with-profits funds....
Prudential is to launch a with-profits bond aimed at bondholders stuck in closed with-profits funds.
The Prudential Prospect Bond is to be launched in October and will offer a higher allocation rate than the existing Pru bond for a higher annual management charge.
The product will have an allocation rate of 105% for policyholders aged under 75, increasing to 106% for those investing £50,000 or more.
This product will carry no explicit initial charge as with the Pru bond, but the AMC will be higher. Investors will have the choice of income or growth options, which will have different charging structures. The growth option will carry an AMC of 1.55%, compared to 1.2% on the Pru bond. Charging details were unavailable for the income option at time of going to press.
Hugh McKee, business development director at Prudential, said the bond is aimed at investors who find themselves in funds with little chance of making decent returns in the future.
'We are aiming to attract those who are stuck in a fund with poor performance and offer them long-term solid returns,' he added.
Commission on the product is 4% initial or 2.75% plus 0.25% trail. The overall reduction in yield is set to be around 1% after 10 years. There is a surrender penalty of 11% in the first year reducing to 2% by the seventh year.
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