This month our experts scrutinise the Royal Skandia Collective Investment Bond, which allows investors to spread their money across a range of funds
Royal Skandia's Collective Investment Bond is a flexible lump sum investment. It allows investors to take advantage of a wide range of investment opportunities with the convenience of holding all their funds in one tailor-made portfolio.
Through the bond, investors can spread their capital across a wide range of different funds from many of the world's leading fund managers. Investors have access to Royal Skandia's own funds as well as external collective investment funds. Existing fund holdings can be transferred into the bond, and a third-party discretionary fund manager can be appointed to manage the portfolio directly.
The bond provides an opportunity to achieve capital growth with the minimum amount of administration as Royal Skandia manages the paperwork and record-keeping on clients' behalf. It is appropriate for UK, international and expatriate investors.
A variant of the bond - the Collective Redemption Bond - is also available. This has a 99-year term which means it doesn't automatically end on the death of the life assured, offering advantages for trustee investors.
Given the different time zones we operate in, online access to up-to-date reports consolidating all investment holdings is important. In 2006, we added a comprehensive deal-tracking service.
We also offer other complementary services such as our dedicated dealing team geared up to deal with servicing our markets worldwide or linking an offshore bank account to the bond.
We offer flexibility and choice for all our key markets - individuals, corporate and trustees. A comprehensive range of trust facilities for estate planning and asset protection is also available. Investors can choose from a wide range of charging structures, allowing them to tailor their bonds to suit their individual needs.
A wealth of experience
With over 20 years' experience, Royal Skandia is one of the most experienced organisations with established relationships with fund managers and stockbrokers. Our dedicated team on the Isle of Man places 2,500 trades per week on average.
We aim to provide accurate and timely dealing in the major markets, carrying out currency conversions, purchases and sales at often preferential rates.
We keep advisers and clients regularly informed about the value of their portfolios by sending a valuation statement each quarter. This shows the opening and closing value of the portfolio for each quarter, plus any premiums and benefits paid and the charges we have deducted. In addition, Insite, our password-protected website for financial advisers, offers many services: for example, advisers can view consolidated valuations online, including downloading data into back office systems and printing bulk valuations locally.
- Available to investors aged between 18 and 89;
- Choice of any major currency;
- Whole of life;
- Death benefit of 101% of surrender value;
- Available on a single, joint or multiple lives assured, last death basis;
- £25,000 minimum investment (or currency equivalent);
- £2,500 minimum additional investment (or currency equivalent);
- Total or part surrender at any time;
- Optional regular withdrawals;
- Choice of charging structures;
- Wide range of trust facilities.
THE PRODUCT CRUNCHERS
Peter McGahan, director, Worldwide Financial Planning
As with most portfolio bonds the fund range is not restricted so we have the option to choose pretty much any collective available in the market. 10/10
There are numerous options. The contract allows various charging options as well as penalty-free access to capital as long as 25% of premiums received are maintained. The plan also allows the cash account to go overdrawn with no overdraft charges. 8/10
Royal Skandia has an excellent service and technical team that continues to maintain high standards. They are also well represented within the industry and most noticeably the ABI taxation committee. Any issues with service are resolved quickly. 8/10
Excellent technical support from the team leaving them comfortably as one of the top three providers of international technical assistance. Most advisers will find the answers they need within their technical team, who are surprisingly accessible. 9/10
VALUE FOR MONEY
Advisers should carefully choose their cost option. Some of the charging structures are a little hefty but the adviser can structure the costing appropriately by realigning the price accordingly, such is the flexibility. 7/10
Mike Larbalestier, managing director, Rossborough Financial Services
The Collective Investment Bond is truly open architecture, providing access to discretionary investment management and the entire universe of collective investments.
Although the Collective Investment Bond offers a multitude of structures we would argue that there is perhaps too much flexibility of charging with not enough clarity, and we have therefore marked them down as this can tend to cause more confusion for advisers. 5/10
Royal Skandia employ a strong team in the Isle of Man who provide a seamless and speedy administrative service. However, for specific help and advice regarding suitability for certain jurisdictions or clients they prefer enquiries to be directed solely through their appointed sales representative, which can be extremely frustrating when they are not available. 8/10
Within the Skandia group there is a wealth of extremely competent technical individuals. Technical support has recently been enhanced further following the merger with Old Mutual. 10/10
VALUE FOR MONEY
Royal Skandia are on a par with their competition in this respect. One recent improvement is that trail commission will soon be rebated to investors. 6/10.
Andrew Merricks, head of investments, Skerritt Consultants
The Collective fund choice is very good, the Executive exceptional, offering the opportunity to invest in just about anything allowed mainstream investing. 8/10
The usual restrictions, except in the lower allocation option, where encashments are penalty-free. However, withdrawals are subject to a minimum amount remaining in the bond at all times. Internal switches can be made so the bond is flexible, but less so than a comparable wrap account. 7/10
Service levels from Skandia are good, with quarterly statements better than the more common half-yearly or annual ones. They state at outset what is required in order for instructions to be carried out, so much of the onus is on the adviser to get it right in the first place. If the adviser does their bit, one would expect Skandia to do theirs. 8/10
They have a good enough back-up team to deal with queries on their trusts and so on. 8/10
VALUE FOR MONEY
It appears to be expensive in terms of initial and ongoing charges, but much of these will depend upon how much the adviser wants to keep. It's not clear exactly how much on top of these charges will be demanded by the various investment vehicles they offer. Compared with a wrap account it appears quite expensive. 5/10
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