Scottish Equitable International (SEI) is to replace three of their current offshore bonds with a new offering from early March.
The Wealth Management Portfolio which launches on March 13 will replace its investment portfolio, money market portfolio and private client portfolio, with an open architecture style investment product.
It will have access to SEI’s own Portfolio Funds range with a reduced annual management charge, along with a Preferential range of more than 900 funds from 25 fund managers with preferential terms and customer rebates.
SEI say they are reviewing their proposition as the offshore market is being seen as more “acceptable” with more advisers becoming interested in open architecture products through wraps and fund supermarkets.
It also claims the offshore market is going through a period of strong growth, particularly with the recent entrance of Standard Life International into the arena, along with the changes to pensions post A-Day.
SEI say the annual and lifetime contribution limits which will be in place after A-Day could affect up to 50% of FTSE 100 directors, and around 25% of FTSE 250 directors who may want to put in more than the £1.5m lifetime allowance.
In which case, according to Steven Whalley, head of marketing at SEI, the next best alternative to pensions for saving is offshore as it can be company sponsored and has the next best tax regime.
SEI also claims the Wealth Management Portfolio promotes a clearer and more transparent charging structure, with charges separated between SEI, advisers and fund managers, with advisers allowed the flexibility to create their own bespoke charging structures to meet the needs of their clients.
SEI is also removing the quarterly charge and the removal of buy and sell charges for the first 25 switches. Whalley says this structure promotes simplicity, as opposed to the complexity of the layers of current charges which aren’t necessarily defendable.
With regards to the products the Wealth Management Portfolio will be replacing, the private Client portfolio, which is the closest to the new proposition will be kept open fro a short time over the transition period but all the old products will be closed down.
But SEI does say transferring from an old product to a new one will incur a tax charge, and that the charging structure of the existing products will not be changed to match the new proposition.
David Healy, managing director of SEI says in the past the offshore market has been perceived as a complex environment for advisers when choosing investment solutions for their clients.
He adds: “We now have a product which counteracts this perception, with transparent terms on charges, investment and service. We are confident we are continuing to help the increasing number of advisers find the correct investment solutions for their clients, and to help advisers make the most of this growing market.”
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