Skandia International, the international business of Old Mutual Wealth, today announces the launch of a new generation of portfolio bonds for UK customers on...

20 December 2012

Skandia International, the international business of Old Mutual Wealth, today announces the launch of a new generation of portfolio bonds for UK customers on 31 December 2012 and outlines its approach to existing and pipeline business in the UK. The new bonds will be compatible with the RDR requirements and will be powered by Wealth Interactive, Skandia International’s new wealth management service.

New generation of Portfolio Bonds

Skandia International will launch a suite of new portfolio bonds on 31 December 2012 comprising the European Portfolio Bond, offered by the Dublin-based Skandia Ireland, and the International Portfolio Bond, available in either life assurance or capital redemption options, offered by the Isle of Man based Royal Skandia.

The products will retain the key features and benefits of their predecessors. In addition, they will facilitate the payment of a range of fees covering initial advice, ongoing service as well as ad-hoc fees - all of which can be reviewed and adjusted throughout the lifetime of the bond. Investors will have the choice of paying for initial advice either before the premium is applied to the policy, or afterwards.

The new bonds will offer a range of charging options, which can be adapted to fit the client circumstances as well as the adviser’s business model. Where fund rebate arrangements exist, these will be returned in full to the customer’s bond.

The new generation of Portfolio Bonds will be powered by Wealth Interactive, the new wealth management service launched earlier this year by Skandia International. Wealth Interactive provides advisers access to tools and services that enable them to manage client investments online, thus saving valuable time. Customers can use the service to track performance and access up to date information in relation to the status of their investments at the touch of a button.

Pipeline business

Up to 30 December 2012 advisers can continue to submit applications for new business as well as top-up requests for existing portfolio bonds in the usual manner. Furthermore, on provision of evidence that advice has taken place before 31 December 2012, new business and top up instructions received up until 5 April 2013 will be treated as pre-RDR business and continue to facilitate the payment of commission.

Transition to RDR for existing products

After 30 December 2012, all existing portfolio bond products sold by Skandia International in the UK will close to new business, although the option to make top-ups will remain available. Any trail commission payments due on investments made pre-RDR will continue. However if a top up is received after 30 December 2012 any existing trail commission will cease and initial commission will not be payable; fund switches within the existing portfolio bonds will not trigger adviser charging even if these occur in 2013.

There is no obligation for advisers with existing customers to surrender the current bonds and replace them with the new products in order to comply with the RDR requirements. During 2013, all Skandia International portfolio bond policies taken out by UK customers in the pre-RDR regime will be upgraded to adopt the Wealth Interactive functionality and existing customers will benefit from the enhanced services at no extra cost.

Michelle AndrewsMichelle Andrews, marketing director at Skandia comments:

‘Whilst making our proposition ready for R-Day in the UK, we have also been working hard to deliver additional benefits to advisers and customers alongside the new regulatory requirements. Our new Portfolio Bond proposition in the UK will not only facilitate a range of adviser charging options and pass rebates back into customer’s bonds, it will also provide many additional features and value-add services to benefit both advisers and customers. These include the ability to manage investments online, straight through processing, access to sophisticated investment tools and detailed fund information.’

This press release is for journalists only and should not be relied upon by financial advisers or customers.