Zurich's International Wealth Account is put under the scrutiny of the product crunchers
The International Wealth Account (IWA) is a single-premium investment bond that offers a wide range of international investments within a flexible offshore wrapper. It was originally launched in July 2002, and has undergone several revisions over the years in order to make it more relevant and appropriate in the different target markets - UK, Hong Kong/Asia, Middle East, and more recently in Europe and Singapore.
The IWA is targeted at internationally minded local and expatriate investors, generally aged between 40 and 50, who have substantial money available to invest, and who may have a need for such a flexible international investment with particular needs such as international funds, tax efficiency and portability.
The IWA differentiates itself from its competitors in a number of important ways:
- Fund choice - the IWA gives the investor the choice to invest in up to 30 funds at any one time, selected from a range of over 300 funds. The fund range covers a broad selection of the most popular investment styles, asset types, currencies and risk levels.
- Regular fund reviews - we review our fund range on a quarterly basis ensuring that popular themes, sectors and funds are available to our investors.
- Reduced fund costs - due to the purchasing power of ZIL, Zurich has negotiated the initial investment charge for many of our funds down to zero.
- Lower charges as investment increases - the IWA charges are designed so that as the total investment value in the bond increases - through fund growth or top-up savings - the effect of the policy charge deductions reduces.
- Free switching - on the IWA, it is possible to sell 30 funds and buy 30 different funds in one switch. This can be performed 25 times each year without incurring a charge.
- Zurich Fund Centre - we provide a one-stop website in conjunction with Morningstar that gives the investor/adviser all of the fund information that they require - from fund prices and performance analyses, to prospectuses and the portfolio x-ray tool.
- Zurich Investment Club - The Investment Club provides education and resources for financial advisers, helping them to improve their investment knowledge and personal selling skills, and consequently enhancing their business. It has proved to be extremely popular over recent years - even becoming compulsory professional development for several brokerages. These events have become synonymous with stockmarket education, face-to-face contact with high-quality investment experts, and reinforcing financial advisers' knowledge with the latest investment intelligence. The Investment Club is seen as a key differentiator in terms of the range of value added services offered by Zurich International Life.
- Minimum initial premium $60,000.
- Minimum top-up premium $7,500.
- Up to 2 planholders aged 18 or over, with no maximum age.
- Up to 5 lives assured aged 2 or over, with no maximum age, on the life assurance version.
- Capital redemption version available with no lives insured suitable for corporate investments.
- 101% life cover on the life assurance version, or double the total investments less withdrawals after 99 years on the capital redemption version.
- Flexible access to capital - either ad hoc withdrawals, or regular income paid either monthly, quarterly, half-yearly or yearly.
- Yearly plan management charge of 0.5%pa, reducing for higher premiums.
- Yearly plan administration charge of $150pa.
- Establishment charge of 7% taken over 5 years following each investment.
- 12 free additional valuation statements each year (plus free automated valuations every six months).
- 25 free switches each year.
- Over 350 funds from 30 fund managers.
THE PRODUCT CRUNCHERS
Tim Searle, managing director, Globaleye
Almost all of the nearly 400 funds on the platform are available with no initial charge. This, coupled with the fact Zurich allows for 25 free fund switches every year, makes it an economically attractive option for the active investor over the medium to long term. All the major fund managers, asset classes and themes are represented and the fund range seems to be refreshed regularly to include new opportunities. A reasonable fund of funds selection provides the option to delegate portfolio management decisions where appropriate.
Subject to a comparatively low minimum balance, investors can access a high proportion of their investment without incurring exit penalties during the first five years. While this is not generally encouraged, this liquidity ensures clients in genuine need are not penalised.
Some room for improvement. We have been advised of tangible investment in people and processes, which is encouraging. Marked expansion in Dubai office, locally.
Dedicated relationship manager and new business support. Web-based fund analysis tools assist in pre-sale research of recommendations and tailored client-facing portfolio documents. Policy information such as valuations and payment history also available online.
VALUE FOR MONEY
The best product of its type among its peers for active investors wanting a flexible lump-sum solution.
Nick Plumb, investment adviser, Bright Financial Planning
Pretty good choice of funds from the usual Zurich group partner fund managers but inability to use 'off panel' collective funds could be limiting for some advisers and investors.
The product has most features and options one would expect from a good offshore wrapper. Option to have wrapper set up as a life bond or a capital redemption bond will be useful for IHT planning version.
Zurich is one of the few companies where good service seems to be part of the deal. If Zurich International maintains the service standards of ZIFA in the UK, investors and brokers should have no major issues.
The companies within the Zurich group have access to a huge team of experts that can answer any technical question I have ever put to my broker consultant.
VALUE FOR MONEY
OK charging structure but not the best out there in the marketplace for this type of wrapper.
Kelvin Wong, director, Taifook Lexton Wealth Management
Very good fund choice. More than 350 top funds covering different regions, asset classes and sectors. Alternative investments (hedge funds) are also included but the choice is quite limited in this area.
Quite flexible. Regular withdrawal can be up to 10% of contribution or fund value each year. Ad hoc withdrawal is also allowed. For both cases, amount left after withdrawal must be at least £10,000 (US$15,000) or twice the current surrender penalty, whichever is higher.
Very good service standards especially taking into account the practice of fund switching. When a fund switch request is placed, both sell and buy prices will be fixed using that day's prices - essential for portfolio management in a volatile market. Fund portfolio service (portfolio reviewed and rebalanced automatically) is also available.
Good technical support. Friendly online system for advisers to check clients' status, get information of each fund and design portfolio for clients. However, online fund switching is still not ready yet.
VALUE FOR MONEY
As a whole, very good value for money for long-term investors interested in fund investment. Charges are reasonable and there are two charging structures meeting different investors' needs. Charges will also be lowered in line with higher contribution levels.
EIS and Seed EIS sectors
'Truly making a difference'
Avoidance, evasion and non-compliance
From 6 April 2019