Investors Trust
There are 6 variations of the insurance bond broken down into three Platinum versions; Platinum, Platinum Select and Platinum Plus, and three Access Portfolio versions; Access Portfolio 5000, Access Portfolio 8000 and Access Portfolio Plus.
Open architecture investments with links to 14 fund houses. The Cayman Islands Government has constructed a regulatory regime that is highly favourable to offshore operations with no taxation in the Cayman Islands other than stamp duty and import duties.
Eligibility: ITA is of course regulated and licenced by the Cayman’s Islands Monetary Authority. It is also licensed in Labuan and the DIFC for our business in those areas.
Minimums: Platinum 10,000 USD/EUR/GBP ( top ups 2,500 USD/EUR/GBP)
Select: 50,000 USD/EUR/GBP ( top ups 10.000 USD/EUR/GBP)
Plus : 100,000 USD/EUR/GBP
Access 5000 : USD 75,000 / EUR 75,000 / GBP 50,000
Access 8000 : USD 75,000 / EUR 75,000 / GBP 50,000
Access Portfolio Plus 5000 : USD 75,000 / EUR 75,000 / GBP 50,000
Charges: This will depend on the type of plan you take out it is stated on the website the charges. At base cost the Assess 8000 will cost 0.25% plus admin charges.
Platinum: Admin Charge 0.13% monthly (1.6% per annum), years 1 – 5
Policy Fee USD/EUR 7.00 (GBP 4.5) Monthly
Asset Management Fee 0.125% monthly (1.5% per annum)
Platinum Select: Admin Charge 0.4% quarterly (1.6% per annum), years 1 – 5
Policy Fee NIL
Asset Management Fee 0.3% quarterly (1.2% per annum)
Platinum Plus: Admin Charge Nil
Policy Fee Nil
Asset Management Fee 0.125% monthly (1.5% per annum)
Access Portfolio 5000: Admin Charge: 0.45% quarterly (1.8% per annum) during the first 5 years. This charge will be calculated based on the higher of the premium paid or the account value.
Policy Fee USD 180 / EUR 180 / GBP 112.5 Quarterly
Establishment fee: Nil
Access Portfolio 8000: Admin Charge 0.30% quarterly (1.2% per annum) during the first 8 years. This charge will be calculated based on the higher premium paid or the account value.
Policy Fee USD 180 / EUR 180 / GBP 112.5 Quarterly
Establishment fee: Nil
Access Portfolio Plus: Admin Charge 0.25% quarterly (1.00% per annum) for the duration of the Policy, based on the account value.
Policy Fee USD 90 / EUR 90 / GBP 55 Quarterly
Establishment fee: Nil
Other Charges: There are also fund management charges, usually, 1% to 2.5% pa each year- depending on the funds chosen. There is a dealing charge made for each sale and purchase that is made within the Access products of 20GBP so if you sell one fund and buy another.
The Platinum products have the first 15 dealing transactions on the policy free of charge. Additionally, there may be an adviser charge to manage the portfolio, this typically can be between 1 to 1.5% per annum depending on the chosen advisers charging structure and service provided.
Pensions (QROPS and SIPP) – If the Platinum and Access Bonds are used within a QROPS or SIPP then there can (and most probably will) be additional set up and ongoing fees for the life of the policy. This is arguably an unnecessary cost given that, where the adviser has an investment intermediary’s licence, it is possible to invest directly in funds without the Investors Trust policy.
Second, with the product not being regulated in the EU, we are unsure why anyone would be using them within EU based QROPS, ROPS or SIPP investing, when (even if you want to use an insurance wrapper within your pension) there are other wrappers that are more transparent for the EU market? We do not recommend this product for any form of pension investing.
Are charges explicit: The charges are somewhat clear if you are to go on the website to be fair to ITA they do illustrate all the costs. If they are deemed cheap or not is another matter.
Documents
Investors Trust Portfolio Bond Brochure
Investors Trust Platinum Brochure
Investors Trust Term Sheet
Surrender of the Investors Trust Investment Bond:
Platinum and Select
End of year 1 – 6.4%
End of year 2 – 4.8%
End of year 3 – 3.2%
End of year 4 – 1.6%
End of year 5 – 0%
Platinum Plus: None but there is a 1.5% Asset Management cancellation fee within the first 12 months.
Access 5000 and 8000: Equal to outstanding administration charges at the time of the surrender, based on the higher of the premium paid or the account value.
Access Plus: None but there is a 1.0% Administration cancellation fee within the first 12 months.
Henrys Verdict
I have written a number of articles on ITA and have a lot of people who like the S&P plan, when in fact it is quite extensive but does offer a set percentage back. People do like this option.
ITA, access portfolio is reasonable at the base cost and I do like ITA technology but I see better options. In regards to the 5-8 years plans, the same with Hansard, I don’t see much point in them over a platform base. But, if for some reason you did want to go into a bond structure for a long time maybe a 5-year plan where you are paying high fees at the start and reducing the admin fees after the 5-year term for amounts over $100,000 might be feasible.
Furthermore the Caymans in recent years has come under the spotlight. For me I don’t see this as an issue, but if the location is important to you maybe look at the Isle of Man or Switzerland.
Utmost
The Utmost Group of Companies is a specialist life assurance group formed by founding directors, Paul Thompson and
Ian Maidens. Its principal business lines are Utmost Wealth Solutions, Utmost Corporate Solutions and Utmost Life
and Pensions, which together are responsible for over £30bn in assets under administration. The Utmost Group of
Companies is part-owned by the founding directors and by funds managed by Oaktree Capital Group LLC
Utmost Worldwide Limited is part of the Utmost Group of Companies. Operating from Guernsey, a premier international financial
centre, they specialise in offering life-assurance-based wealth management and employee benefit solutions to
a global audience, including multinational organisations, international expatriates and local resident populations.
Utmost Worldwide has been assigned a Fitch “A” Insurer Financial Strength (IFS) Rating with a Stable Outlook (2019).
Utmost Worldwide’s products are provided under the Utmost Wealth Solutions and Utmost Corporate Solutions brand
Policy Currency: Portfolio Bond may be denominated in US dollar, GB pound, Hong Kong dollar, Japanese yen or Euro. Benefits will be paid in the plan currency.
Eligibility: Utmost Bond is a whole of life, life assurance contract. And most people, out side of the U.K, U.S, Australia over the age of 18 and under 75 can open a contract.
Minimums: The minimum single premium is USD75,000 with further contributions in excess of USD7,500. However your will pay any initial fund charges on all contributions.
Charges: This will depend like other bonds on third party fee.
Establishment charge: The establishment charge is a percentage of each Investment Amount paid. It is deducted in arrears on each of the first 4 Charge Dates following payment of each Investment Amount. Establishment charges will always be based on the Investment Amounts originally received irrespective of any partial surrenders or regular withdrawal payments previously taken. 0.5% of each Investment Amount on each of the first 4 Charge Dates, following payment of each Investment Amount (total of 2% per annum for one year).
Administration charge: Utmost bond will incur an administration charge an administration charge is a percentage of the higher of (1) each Investment Amount; and (2) its associated Investment Value, deducted on each of the first 20 Charge Dates, following payment of each invested amount. there will be 0.375% on each of the first 20 Charge Dates, following payment of each Investment Amount (1.5% per annum for 5 years).
Other Charges: There are also fund management charges, usually 1% to 2.5% pa each year- depending on the funds chosen.
The is a dealing charge made for each sale and purchase that is made within bond of £35.00. Additionally there may be an adviser charge to manage the portfolio, this typically can be between 1 to 1.5% per annum depending on the chosen advisers charging structure and service provided. Page 12-13, explain the fees as well as going over surrender fees. https://utmostinternational.com/wp-content/uploads/2020/09/UWWS-FOCUS-Intl-Life-Prod-Tech-Broc-FINAL-0320-CMYK-1.pdf
Are charges explicit: Yes, they are explained. But, like other bonds the fees can be significantly higher depending on the third party involvement. Documents https://utmostinternational.com/wp-content/uploads/2020/09/UWWS-FOCUS-Intl-Life-Prod-Tech-Broc-FINAL-0320-CMYK-1.pdf https://utmostinternational.com/wp-content/uploads/2020/12/UWWS-Prof-Port-Intl-Brochure-FINAL-1120-CMYK.pdf https://utmostinternational.com/wp-content/uploads/2021/09/Professional-Portfolio-International-Terms-and-Conditions-1120.pdf
Surrender of the Bond: Early Discontinuance Charge – If the Plan is fully surrendered, early discontinuance charges may be deducted from the Investment Value. The charges are charged like any bond based on the establishment period and fee. So, for example, you took out a 10 year establishment period you were paying 1% (including admin charges) and you surrender your policy after the 5 year. You would have to 5% (the remaining fees), to Utmost. Here is a statement from Utmost “If the Surrender Value is less than this, following the deduction of fees due on full surrender (see section 13‘What are the Fees?’) there will be no payment due to you. If you surrender your Plan within your Commitment Period, you will forfeit your Commitment Reward (see section 5 ‘What are the Plan Benefits?’).”
Henry’s verdict
I seem to be repeating myself but this is an expensive product that has very little use. If you are or have been advised one of these, it would be best to seek a second lower cost option unless you have specific reasoning for going in this. The brand and set up is fine and have no problem with the jurisdiction or the company but for modern day investors look for flexible low cost options and don’t believe this is a good product for that, similar to alot of bond options is feasible.
FPI bond
Policy Currency: The FPI Reserve Bond may be denominated in US dollar, GB pound, Hong Kong dollar, Japanese yen, Swedish krona (SEK) or Euro. Benefits will be paid in the plan currency.
Eligibility: FPI Reserve Bond is a whole of life assurance contract issued by Friends Provident International. It is available to most international investors outside of main regulated territories such as the UK, the U.S.A. and Australia.
Minimums: Your lump-sum payment can be made in any freely convertible currency and has a minimum of £50,000 You can make additional lump-sum payments into your policy at any time. The minimum additional payment is GBP 5,000 or GBP 10,000 for the annual policy charge option. You can pay additional amounts via a number of different methods including credit card. There is no additional cost if you do choose to pay by card. You will be able to select from more than 150 funds from some of the world’s leading fund managers, and you won’t pay any initial fund charges.
Charges: There is a choice between an “establishment charge structure” and an “annual policy charge structure”. https://www.fpinternational.com/documents/ge-r-ch.pdf
Establishment Charge Structure: If the establishment charge structure is chosen, the establishment charge will apply. This can be 1% per annum for 10 years which means that on a £500,000 investment the charge will be £50,000 even if the fund decreases. There will be surrender costs of 10% reducing by 1% per year if the policy is encashed before the end of the 10 year establishment period.
Annual Policy Charge Structure: If the annual policy charge structure is chosen, then the initial charge or an annual policy charge will apply. The options are detailed below:
Option 1: You can opt to pay an upfront 7% initial charge (£35,000 on a £500,000 investment)
Option 2: You can opt to spread the initial charge over 5 years at 1.506% per year which equates to 7.53% (£500,000 x 1.506% x 5 years = 7.53% = £37,650.00). Both options also have 0.25% per annum, which means £1,250.00 for the life of the policy, although the actual amount is dependent on the initial investment or the value of the policy, which ever is the greater. Therefore over a 10 year period assuming no growth, the cost may be between £47,550 to £50,150.
Other Charges: There is also an administration charge of £98.00 per year for the life of the policy and a dealing charge of £29 for each purchase and sale of a fund. If you pay an additional amount into your FPI Reserve bond in a different currency, then there is a charge of £100.00 per transaction.
Each change made within the policy once it has been established will incur a charge of £144.00. If the account is overdrawn, then FPI will make an interest charge of 2% above the three-month London Interbank Rate (LIBOR). There can be stockbrokers fees when you buy and sell certain assets, you will not see them listed on the valuation however. The stockbroker’s fees are included in the total value shown for each sale or purchase and will be reflected in the trade contract note.
There will be external fund fees, these depend on the actual fund chosen and can be as high as 2% per annum. Additionally there may be an adviser charge to manage the portfolio, this typically can be between 1 to 1.5% per annum depending on the chosen advisers charging structure and service provided.
If the FPI Reserve Bond is used within a QROPS or SIPP then there will be additional set up and ongoing fees for the life of the policy.
Pensions (QROPS and SIPP) – The FPI Reserve Bond should not be used within a QROPS, as when you start to drawdown your pension then the charges on the FPI Reserve Bond may remain based on the original investment, which means that charges will rise pro rata as the capital decreases and therefore will erode the remaining capital at an exponential rate. EME does not recommend this product for QROPS or SIPP investing.
Hansard
Based in the Isle of Man, founded in 1987, part of Hansard Global. Listed on London Stock Exchange since 2006.
Over 1 billion USD under management with over 40,000 clients with a worldwide following.
Hansard has 3 types of Bonds similar to ITA, it has the Z5 and Z8 year plan and The Universal Portfolio.
https://www.hansard.com/~/media/Files/H/Hansard-V3/documents/HIL-Malaysia/HO2473O.pdf
Policy Currency: The Hansard Capital Investment Bond may be denominated in US dollar, GB pound, Hong Kong dollar, Japanese yen or Euro. Benefits will be paid in the plan currency.
Hansard Universal bond features: The term date on the Universal bond, with the Z5 its 5 years and 1.7% and 8 years Z8 and 1.2% while the Hansard 1Z is 1% and 400 GBP or currency equivalent.
Eligibility: Hansard Capital Investment Bond is a whole of life, life assurance contract issued by Hansard. It is available to most international investors outside of main regulated territories such as the UK, the U.S.A. and Australia.
Minimums: Beginning with a minimum of USD 25,000 for Z5,Z8 and Z1 is USD 50,000
Charges: This will depend on the type of plan you take out from Hansard as they offer different charging structures.
Establishment charge example: With the Hansard Z5 is 5 years and the charges, are 1.7% for 5 years and the admin charge of 420 GBP. And any other fees for funds charges including for Hansard own funds. Z8 is 1.2% for 8 years, and admin charges of 420 GBP or currency equivalent Z1 is 420 GBP and 1% initial that is put in the cash account
Are charges explicit: The fees of the Z1 can vary depending on how much IFA charges at base cost is 1% in the cash management account but can go up to 5% depending on how much the IFA charges all other charges are pretty clear in the PDF link below.
Documents: https://www.hansard.com/~/media/Files/H/Hansard-V3/documents/HIL-Malaysia/HO2473O.pdf
Surrender of the Hansard Capital Investment Bond:
Henrys Verdict
With the Z5 and Z8 I am not too keen and they are very much like ITA bonds but in the Isle of Man. And again, with out seeming like a broken record you have cheaper options open to you in platform options.
The Z1 option for high net worths can be a feasible option, as when its stated, at 400 GBP a year (I confirmed its not 420 GBP), and 1% in cash management. Its not a bad option, for a bond. As you have flexibility, to withdraw and unlike other bond structures.
Having this as private banking option it has seen some UHNWs put USD $25 Million to $100 Million in the bond. If you figure out the structure, it can be sub 0.1%< if higher than $2 million. And do personally, like this.
