IAF Securities, a new player in the wealth management arena, has today launched a natural resources plan in conjunction with structured product specialist, Investment Design and Distribution.
IAFS claims the Natural Resources Enhanced Return Plan, which has been developed specifically for distribution by IFAs, is rare amongst structured products because it offers advisers a trail commission option as well as initial commission.
The natural resources plan will invest in a basket of resources consisting of brent crude oil, copper, nickel and zinc – each of which will have a 20% exposure – and will allocate 20% to four international utilities companies.
IAFS says growing demand from China’s manufacturing industry is driving demand for a variety of natural resources and the country is responsible for 20%-30% of demand for base metals.
The plan lasts for six years and investors will receive 100% of their initial investment plus four times the growth of the investment basket, up to 25%, at maturity. Investors can also benefit from 100% of growth in the basket over 100% should the investments perform exceptionally.
A spokesperson for IAFS comments: “It is likely many natural resources will be consumed at a faster rate than can, in the shorter term, be replaced. Consequently it is likely for them to become increasingly valuable, during the life of the launched plan.”
The minimum investment is £7,000 and IFAs can receive initial commission of 4% or 1.25% initial commission plus 0.5% per annum trail.
IAFS says: “The trail commission option is unusual in the structured product market, but there’s strong demand for this facility and we’re happy to work a bit harder in support of our distributors.”
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