Scottish Widows has launched a flexible investment bond that will offer enhanced commission terms fo...
Scottish Widows has launched a flexible investment bond that will offer enhanced commission terms for a limited offer period, writes Kira Nickerson.
The lump sum, single premium bond features no bid/offer spread and allows for the partial or total investment into Scottish Widows' with-profits fund or a range of unit linked portfolios.
Investors may choose to split their investment in whatever portion they wish between the with-profits and the choice of 15 of the group's funds, or a range of seven unit-linked products run by external managers.
The seven consist of Fidelity, Gartmore, Newton, Schroders, Flemings, Perpetual and Mercury. The bond includes a guarantee of no market level adjustment on death claims and will allow for regular withdrawals of up to 7.5%pa of the amount invested.
Charges include an annual management fee of 0.75% plus an initial fee of 1% for the first five years of the bond. Standard commission is 6.25% of the premium, however, the group is planning to have a launch offer of enhanced terms, although the details of this have not been finalised. Scottish Widows is allowing four free switches between funds in any one year, including changing where the bond is invested.
Bob Gibson, head of IFA marketing and product management at Scottish Widows, said: "This is aimed at the IFA market which prefers no front-load bonds. We are starting to see a polarisation between IFAs who want front-end load and those that don't so we are trying to develop products that meet both markets.
"The main aim of the product is to give capital growth over the medium to long term. It is suitable for lump sum investment and tax planning and with the ability to switch from unit linked to unitised with-profits, it is also suitable for lifestyle planning. The flexible nature of the bonds will allow subsets of the full range of options to be marketed separately, such as a portfolio which invests 50% with-profits, 25% consensus and 25% environmental, for example."
Minimum investment is £5,000 and minimum top up is £1,000. There is no maximum on the unit-linked funds but there is a £500,000 investment ceiling for the with-profits fund.
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