Skandia International unveils new RDR ready offshore bonds
20 December 2012 Skandia International
Skandia International, the international business of Old Mutual Wealth, today announces the launch of a new generation of portfolio bonds for UK customers on 31st 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 31st 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 30th 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 31st December 2012, new business and top up instructions received up until 5th April 2013 will be treated as pre-RDR business and continue to facilitate the payment of commission.
Transition to RDR for existing products
After 30th 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 30th 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 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.’
North American equities top the offshore investment trends year to date
29 November 2012 Skandia International
The volume of money invested into North American equities has surpassed all other fund sectors during the first ten months of 2012, according to data from Skandia International, the international product provider of Old Mutual Wealth.
The company’s analysis into money movements between funds available for its offshore bonds shows that, for the best part of the year (January – October 2012), international investors have been removing money from Cash, Emerging Markets and Commodity funds in favour of North American equities. Specialist funds such as Technology, Health, Russian and Latin American Equities also proved popular. Whilst the previous front runner, Fixed Interest, continues to remain in favour, there are signs that appetite for bonds may be starting to weaken. Money invested into the Global Bonds has remained stagnant between July and October, although demand for UK Fixed Interest – High Yield and Inflation Linked bonds in particular, as well as Emerging Market Debt funds has seen a moderate increase over this period.
Cash has continued to remain the most unpopular investment so far this year, indicating investors are, perhaps, starting to accept the need to take on equity risk in order to seek above cash returns. Funds investing in Asian Equities, India, China and less surprisingly, European Equities, have also experienced outflows, likely due to the ongoing heightened volatility of these asset classes. Investor sentiment on Commodities seems to be split, with physical gold still strongly favoured over resources and energy funds, which have seen money switched out over the period.
Interestingly, according to the latest International Adviser Confidence survey*, the opinions of international advisers on Gold itself seem to be divided. Respondents from Hong Kong and the Middle East believe the metal will remain highly attractive over the next three months. At the same time, advisers in Singapore, Europe and the UK voted in favour of equities as the asset class they are most likely to recommend for inclusion in their clients’ portfolios over the shorter term.
Phil Oxenham, marketing manager at Skandia International comments:
'Earlier this year we predicted that the ‘wall of money’ – the consequence of high Cash holdings built up over the previous months, would start pouring into equity funds. It appears this prediction has, in part, come true, as cash holdings within our offshore bonds are now at an all year low and investors are opting for North American equity funds in particular.
'However, given the significant proportion of money still invested in Fixed Interest funds, it appears investors are lacking the confidence that stock market volatility may be coming to an end any time soon. Fundamentally, despite the prevailing weakness, global stock markets are, at present, highly undervalued and underinvested. This provides the perfect opportunity to boost the equity holdings within portfolios in order to benefit from their growth over the longer term.'
* The quarterly international adviser confidence barometer was conducted by Skandia International, part of Old Mutual Wealth, in Q3 2012 and attracted responses from 348 advisers from around the world – Hong Kong, Singapore, UAE, UK, Europe, Africa, Latin America and Thailand.
The price of happiness is US$162,000
13 November 2012 Skandia International
A recent study of over 5000 consumers across four continents has revealed the amount of net annual income needed for people to feel happy is an imposing US$161,810 – 15 times the global average* for an individual’s income. Overall, some 80% of individuals believe that earning this amount each year would make them feel really happy. This is according to the findings of the Wealth Sentiment Survey**, a study commissioned by the international investment company Skandia International, part of Old Mutual Wealth.
The research, conducted with 5000 people across 13 territories, found that the highest levels of aspired income were quoted by individuals living in Dubai who would need more than a quarter of a million US$ to feel happy - or US$276,150 to be precise. The next highest financial aspirations were recorded in Singapore and Hong Kong, where the levels of desired annual income are as high as US$227,563 and US$197,702 respectively. Generally, respondents from Europe feel that much less is required to keep them satisfied, with people in Germany reporting the most modest needs of all countries surveyed (US$85,781). The UK has the second highest price of happiness in Europe at US$133,010, behind Italy at US$175,825.
How much personal annual net income would you need to earn for you to be really happy?
Interestingly, in some territories women reported having higher ambitions than men in order to feel content. For example, in Hong Kong, Italy and Brazil women say they desire 13% (US$207,924), 11% (US$187,036) and as much as 55% (US$192,929) per annum respectively in excess of the amounts quoted by men in order to feel happy.
This extensive study, which looked to explore and understand people’s feelings towards wealth, found that globally, only three in twenty individuals regard themselves as wealthy and that to qualify for the status, an average of US$1.76m in disposable assets is required.
In Singapore, the average figure quoted was an ambitious US$2.9m, whilst Dubai and Hong Kong cited the next highest levels at US$2.5 and US$2.46 respectively. Europe, on the other hand, reported relatively modest, and lower than the average, requirements needed for somebody to be considered wealthy. People living in Austria and Germany stated they would need just US$0.9m and US$1m to call themselves wealthy.
How much wealth does a person need for you to consider him/her to be wealthy?
Interestingly, people in Austria and Germany also reported a higher than average sentiment of feeling ‘wealthy’, with over one in five stating this to be the case for them. Overall, the highest wealth sentiment was recorded in Brazil, where more than a quarter of people said they feel affluent.
Phil Oxenham, marketing manager at Skandia International comments:
'There are many more things in life that can make people happy but there is no doubt that money can help. It is fascinating to see the regional differences in levels of income and capital that people think they need to feel happy and wealthy. These figures are, of course, aspirational and for most of us the important thing is to have a financial plan and make sure that we are saving as much as we can to give us financial security.'
* Based on IMF’s assessment of individual economic output in 2012 adjusted for Purchasing Power Parity.
** Skandia International has commissioned CoreData Research to carry out a global study of wealth sentiment to gain a better insight into the issues that are impacting savings, investing and spending decisions of people across a range of geographic territories.
The research was carried out in Q3 2012 online, and involved more than 5,000 people (5,007) with net disposable incomes of £1000 (or equivalent) drawn from 13 territories across Asia, Europe, Latin America and the Middle East.
To view the full report highlighting the key findings please click here.
Skandia International launches Risk Profiler iPhone app
29 October 2012 Skandia International
Skandia International, part of Old Mutual Wealth, today announces the launch of a new Risk Profiler iPhone app to complement its existing online Portfolio Builder tool.
The app, which is designed to help advisers with the first part of the portfolio building process, assesses a client’s attitude to risk without the need for online access. Advisers ask their clients 11 questions which, once evaluated, will produce a score between 1 and 5, with 5 representing the highest risk level. The app quantifies each risk level by showing the range of potential investment returns that are likely to occur for each specific risk profile. This output is designed to help advisers explain in real terms the most likely scenarios associated with their clients’ perceived appetite for risk, enabling them to recommend investment solutions based on the levels of loss or gain their customers are willing to accept.
The Risk Profiler app can be downloaded from the Apple App store as well as via the Portfolio Builder online. Once downloaded, a secure link is created between the adviser’s Skandia International online profile and the app on their iPhone. This enables the risk assessments carried out remotely to be uploaded to the adviser’s Portfolio Builder online profile automatically, allowing them to complete the remaining part of the portfolio building process at a time that suits them and their client.
Skandia International’s Portfolio Builder tool can help financial advisers identify their clients’ attitude to risk and build investment portfolios that directly match that risk level. Investors can opt for a complete investment solution, where the asset allocation as well as the underlying investments, have been selected on their behalf to match a specific risk level. Alternatively, they can choose a model portfolio with a pre-defined asset allocation which matches their risk score and, with the help of their financial adviser, identify a range of underlying investments to create a portfolio bespoke to them.
Phil Oxenham, marketing manager at Skandia International, comments:
‘Our Portfolio Builder is enjoying a great deal of success and is currently used by almost 9000 advisers worldwide. Over the past year, user feedback has confirmed the importance of developing an application which could enable the risk assessment process to be carried out outside the adviser’s office environment – where online access may not be available. The Risk Profiler app has been developed in response to this feedback, initially for iPhones, although depending on demand, we may look to extend its availability to users of other smart-phones. We remain firmly committed to improving the overall investment experience for both advisers and their customers, saving both parties time and making the overall process as efficient and convenient as it can be.”
Skandia International launches Risk Profiler iPhone app
29 October 2012 Skandia International
Skandia International, part of Old Mutual Wealth, today announces the launch of a new Risk Profiler iPhone app to complement its existing online Portfolio Builder tool.
The app, which is designed to help advisers with the first part of the portfolio building process, assesses a client’s attitude to risk without the need for online access. Advisers ask their clients 11 questions which, once evaluated, will produce a score between 1 and 5, with 5 representing the highest risk level. The app quantifies each risk level by showing the range of potential investment returns that are likely to occur for each specific risk profile. This output is designed to help advisers explain in real terms the most likely scenarios associated with their clients’ perceived appetite for risk, enabling them to recommend investment solutions based on the levels of loss or gain their customers are willing to accept.
The Risk Profiler app can be downloaded from the Apple App store as well as via the Portfolio Builder online. Once downloaded, a secure link is created between the adviser’s Skandia International online profile and the app on their iPhone. This enables the risk assessments carried out remotely to be uploaded to the adviser’s Portfolio Builder online profile automatically, allowing them to complete the remaining part of the portfolio building process at a time that suits them and their client.
Skandia International’s Portfolio Builder tool can help financial advisers identify their clients’ attitude to risk and build investment portfolios that directly match that risk level. Investors can opt for a complete investment solution, where the asset allocation as well as the underlying investments, have been selected on their behalf to match a specific risk level. Alternatively, they can choose a model portfolio with a pre-defined asset allocation which matches their risk score and, with the help of their financial adviser, identify a range of underlying investments to create a portfolio bespoke to them.
Phil Oxenham, marketing manager at Skandia International, comments:
‘Our Portfolio Builder is enjoying a great deal of success and is currently used by almost 9000 advisers worldwide. Over the past year, user feedback has confirmed the importance of developing an application which could enable the risk assessment process to be carried out outside the adviser’s office environment – where online access may not be available. The Risk Profiler app has been developed in response to this feedback, initially for iPhones, although depending on demand, we may look to extend its availability to users of other smart-phones. We remain firmly committed to improving the overall investment experience for both advisers and their customers, saving both parties time and making the overall process as efficient and convenient as it can be.”
Skandia businesses to merge into Old Mutual Wealth
September 12 Skandia International
The Skandia businesses within the Old Mutual group will be merged into a single business called Old Mutual Wealth. The consolidated business’ vision is to combine asset management capability with UK platform strength and offshore expertise to grow into a leading provider of wealth management solutions in the UK and internationally.
Old Mutual Wealth (previously Old Mutual Wealth Management) has a single senior management team led by Paul Feeney as chief executive. Peter Mann will become managing director for the UK market and Steven Levin will become managing director for international markets.
The merger of the Skandia businesses into Old Mutual Wealth will create a simplified and improved customer proposition that helps people manage their wealth and will enable Old Mutual plc to invest in a single brand globally. In addition, the sale of the Skandia Nordic business by Old Mutual plc to Skandia Liv earlier in 2012 makes now the ideal time to make this change. This will avoid any confusion created by the Skandia brand being used by two separate companies - Old Mutual and Skandia Liv.
Skandia UK, Skandia International and the Skandia European businesses outside of the Nordic region will adopt the Old Mutual Wealth brand in a controlled programme over the next 24 months in order to minimise disruption for customers and financial advisers, as well as completing the necessary regulatory procedures where applicable. Old Mutual Wealth’s offshore products will be marketed under the Old Mutual International name to differentiate them from onshore products.
The recently merged asset management business, comprising Skandia Investment Group and Old Mutual Asset Managers (UK), is part of Old Mutual Wealth but will retain a distinct asset management identity as Old Mutual Global Investors. This business will continue to be led by Julian Ide, reporting into Paul Feeney. Julian Ide will announce further details of the strategy for Old Mutual Global Investors within the next few weeks.
Central to Old Mutual Wealth’s strategy will be to expand the asset management capability of Old Mutual Global Investors in order to deliver investment solutions that are aligned to the changing needs of investors and financial advisers post RDR. It will look to combine these investment solutions with its UK platform to further develop a sustainably profitable and competitive UK platform business and it will look to expand its product range both in the UK and internationally.
Paul Feeney, chief executive of Old Mutual Wealth, comments:
“This is an important development for the business. We are no longer simply owned by Old Mutual, we are Old Mutual Wealth and an integral element of the group’s growth strategy. We are combining all the talents of the Skandia businesses to create a single, stronger company with one brand, one strategy and one vision. This vision is to become a leading provider of wealth management solutions both in the UK and across our international markets. We will do this by expanding our asset management capability and combining this with our unrivalled UK platform strength and offshore bond products to create investment solutions that our customers value.”
Investors missing out on above cash returns
17 August 2012 Skandia International
Investors seem to be suffering a crisis of confidence, desperately trying to find a safer haven for their investments when, in fact, it would have paid off to retain their investment choices. This is according to analysis into money movements within its offshore products* by Skandia International, the offshore business of Old Mutual Wealth Management.
Despite the busy movements in and out of asset classes, based on returns alone, most investment decisions would have paid off during the first half of 2012. However, investors have remained cautious, choosing to move money away from equities.
Mixed asset funds, Indian, Asian and, not surprisingly, European equities proved unpopular in the first half of 2012, as did Commodity funds – although demand for physical Gold has seen a strong return in June. Both, the UK and Global property sectors have seen steady outflows too, indicating investors are feeling nervous about the state of property markets, despite steady returns thus far into 2012.
Yet the charts below illustrate that all but two – Commodities and Energy, sectors that saw significant outflows during the first half of this year had, in fact, delivered positive returns over and above what can be achieved on cash deposits. Moreover, six out of 17 would have rewarded investors with higher returns than their favourite bet, Fixed Interest – albeit with higher volatility.
Fixed Interest has remained the asset class of choice for most although North American equities stayed in favour for the second consecutive quarter in Q2 2012. Latin America, Global and Russian Equities, as well as some of the more specialist equity sectors such as Technology and Health also benefited from slightly higher investment levels during the first half of this year.
This evidence backs up the opinions of overseas advisers polled in the latest international Adviser Confidence Survey**, that investment opportunities can currently be identified across most investment sectors, with as many as 20% believing that every sector represents a buying opportunity at present. The study also showed that over the coming months, advisers expect the best returns to come from equities – in particular North American and Emerging Markets. Interestingly, only 9% of those surveyed believe Fixed Interest and Gold to be a good long term bets.
Phil Oxenham, marketing manager at Skandia International comments:
‘What is evident from this analysis is the fact that investors are still nervous about investing, trying to identify a safe haven where they could at least preserve, if not grow, the value of their investments. It is encouraging to see demand for equities emerging – and clearly investors have a higher conviction in North American equities than in other equity sector. However, the most significant finding is the fact that international advisers are feeling upbeat about the prospects of investing, with as many as a fifth believing that investment opportunities exist in all sectors at present. Although short term volatility may persist for a little while yet, this is no longer a phenomenon but rather a new reality which investors should take in their stride and, with advice from their financial advisers, use to their full advantage’.
Skandia International strengthens presence in ASIA to fuel growth
16 August 2012 Skandia International
Skandia International, the offshore business of Old Mutual Wealth Management, today announces a number of senior appointments in Singapore and Hong Kong as it looks to capitalize on the strong growth prospects it sees in the region.
In Singapore, Craig Ellis has been appointed Head of Region and Principal Officer for Royal Skandia in Singapore and SE Asia with responsibility for operations, regulatory functions and strategic relationship development. Previously working at Allianz as Regional Head of Asia, Life and Health, Craig brings significant commercial experience of the region and will focus on ensuring the business continues to meet the needs of the local market and regulatory regime. Craig will join Skandia International’s Sales Leadership Team reporting to Sales Director, Victor France.
At the same time, Chris Ivinson has been appointed Head of Sales for the region and will report to Craig. Chris has been part of the Royal Skandia team in Singapore since 2006 and in this new role will have responsibility for expanding Skandia International’s distribution base across the region.
In Hong Kong, Alan Leung has joined Royal Skandia as Head of Strategic Development for the Hong Kong region.
In this newly created role, Alan will focus on supporting the local Hong Kong and Chinese distribution partners as well as identifying new opportunities to expand sales across the region. Alan joins from Swiss Privilege where he held a number of strategic roles since 2006 and will report directly to Mike Leeson, Royal Skandia Head of Sales for Hong Kong and NE Asia.
Victor France says: “These appointments reinforce our commitment to working ever more closely with quality distribution partners across the Asia region, supporting those who want to develop their businesses and grow.
“Skandia International has invested in its proposition, people and support functions in order to benefit from a changing market where customer centric investment solutions, commercial sustainability and transparency are key”.
Earlier this year, Skandia International announced that it is to transform its offshore product and investment proposition by launching a new, end-to-end wealth management service – ‘Wealth Interactive’. More recently, it confirmed that Singapore will be the first market to benefit from the new service which will be introduced via an innovative, online product offering.
Skandia International launches ‘The Best Start in Life’ Trust solution
3 August 2012 Skandia International
Skandia International today announces the launch of a new, highly flexible tax planning solution designed to enable the transfer of wealth on to the next generation in an IHT (inheritance tax) efficient way.
Called ‘The Best Start in Life’ Trust, the arrangement will appeal to those individuals who wish to pass part of their wealth on to the next generation and thus reduce the inheritance tax liability on their estate. Provided the individual lives beyond seven years from the outset of the Trust the proceeds may even qualify for complete exemption from IHT.
The trust, which can invest in a choice of Royal Skandia offshore investment bonds - thus ensuring that any growth sits outside the individual’s estate and is not subject to IHT, is set up at the outset as a Discretionary Trust with the legal ownership of the assets handed over to the Trustees. A Discretionary Trust is a powerful and highly flexible financial planning arrangement, which does not place an onus on the settlor to nominate beneficiaries at the outset or specify the levels of entitlement that are to be paid out in the future.
The settlor is able to complete a ‘letter of wishes’ which, although not legally binding, can be used by the Trustees as guidance to make decisions about the provision of benefits from the Trust. For example, the settlor may indicate that he or she wishes to fund university education for grandchildren yet unborn, or that part of the benefits could be used as a deposit for a house for one of the existing grandchildren.
It is up to the trustees to determine when and how benefits will be paid to the beneficiaries. ‘The Best Start in Life’ trust provides added flexibility which allows them to assign the trust assets to the beneficiary absolutely and therefore it is the beneficiary who the taxable event gain is assessable on. Provided the beneficiary has no other income, the tax liability can either be mitigated if the amount is within the individual’s personal allowance limit, or significantly reduced. Examples provided below*.
Rachael Griffin, head of product law and commercial development at Skandia International, comments:
‘This area of financial planning can be perceived as somewhat complex, which often results in individuals not realising what options could allow them to legitimately optimise and mitigate potential future tax liabilities. The ‘Best Start in Life’ Trust illustrates that by planning how a withdrawal is taken, the trustees can reduce the tax liabilities on the settlor or the beneficiary by using just one tax-efficient solution. I cannot stress enough that individuals and trustees should not be deterred by the complexity and instead, with the help of a professional adviser, use the available options to their full advantage.’
* When the trustees decide to appoint benefits to a beneficiary, they complete a ‘deed of appointment’ to appoint policies from a discretionary trust into a’ bare trust’ before these are subsequently surrendered by the bare trust trustees. The surrender of policies is treated as a chargeable event, and any resulting tax liability will be assessed on the rate applicable to the beneficiary, who could be a minor or a student in full time education. Where a minor, the chargeable event will be assessable on the parents, where they are settlors of the trust and benefits in excess of £100 are paid to their minor children by the trustees of the trust.
Alternatively, where the trustees want the chargeable event gain to be assessable on the settlor of the trust, they would just fully surrender a certain number of policies or partially surrender the plan.
The remaining policies within the Trust are retained within the Discretionary Trust structure, and provided the settlor survives for more than seven years after setting up the trust, the value of the assets would sit outside their estate for IHT purposes, as would any investment growth on the assets.
Adviser confidence in global economy has hit a 12 month low
24 July 2012 Skandia International
Financial advisers’ sentiment towards the state of the global economy turned negative in Q2 across all regions surveyed, with confidence levels falling to a below average score of 4.9 out of 10. This is the lowest score recorded in the last 12 months, according to the International Adviser Confidence Barometer conducted by Skandia International, the offshore business of Old Mutual Wealth Management.
The Eurozone crisis resulted in European and UK advisers both reporting a sharp drop in confidence levels, with those based in the UK noting the biggest decline, averaging a score of just 4.8 out of 10 – down from 5.5 last quarter.
Europe and UK also reported below average confidence in their local economies compared to advisers in Asia who are significantly more confident in their local economies than the global economy. Advisers in Singapore report the highest confidence levels with a score of 6.8 out of 10.
This sentiment is reflected in advisers’ confidence in asset classes with Emerging Asia Equities being most likely to deliver the best investment returns over the next year. Other Emerging Markets Equities was the second most popular investment sector followed by North American equities.
Continuing volatility and the unpredictable behaviour of the global stock markets in Q2 also affected investor behaviour with over half the financial advisers surveyed reporting that their clients had become more risk averse and invested less during the period. As in the previous quarter, the European Debt crisis was cited as the biggest threat to economic growth with almost three quarters of advisers sharing this view. Rising unemployment and government spending cuts were considered the next most likely factors to contribute to further stalling economic growth.
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Confidence scores for the global economy:
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Q2 2012
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Singapore
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5
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Asia
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5
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Europe
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5
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All regions
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4.9
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Hong Kong
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4.9
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UK
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4.8
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Confidence scores for local economies:
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Q2 2012
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Singapore
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6.8
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Asia
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6.5
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Hong Kong
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6
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All regions
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5
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UK
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4.8
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Europe
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4.2
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Phil Oxenham, marketing manager at Skandia International, comments on the findings:
“Overall, these findings reflect the current subdued state of the world’s major economies. However, it is encouraging to see that advisers in Singapore remain upbeat about the prospects of their economic region. Clearly, the fears of global contagion and the continued instability within the Eurozone are troubling investors far and wide, including in Singapore - despite the healthy state of their region. However, it is important to recognise that depressed markets create investment opportunities which can reward those willing to accept some short term volatility.”
Singapore to be first market for Skandia International’s new ‘Wealth Interactive’ service
25 June 2012 Skandia International
Today, Skandia International, the offshore business of Old Mutual, announces that Singapore will be the first market where it will launch ‘Wealth Interactive’. This new, end-to-end wealth management proposition constitutes a significant enhancement to the service offered to advisers and customers alike and is being introduced in Singapore via a new investment bond* product. Over the coming weeks, Skandia International will begin showcasing 'Wealth Interactive' to financial advisers and will launch the new product according to demand from advisers and their customers.
The new product, which is known as the Flexible Investment Account, is an online investment bond that allows lump sums, regular premiums and ad hoc investments, subject to the initial investment totalling US$ 60,000 or equivalent. Investors will be able to make contributions into the account in a wide range of currencies and, with the help of their financial adviser, choose from hundreds of MAS**authorised or recognised assets to build portfolios that match their personal investment objectives. These could range from short or medium term goals such as saving for one-off events - for example a wedding or deposit on a property, to longer term financial planning needs such as providing for dependents’ education or investing for retirement. To support them with the investment process, advisers and their clients will be able to use tools and services offered through ‘Wealth Interactive’ to undertake goal planning, risk profiling, portfolio building, monitoring and review processes online.
A key benefit of the Flexible Investment Account includes the ability to make withdrawals at any stage, free of charge, either as lump sums or as regular payments at a choice of intervals to suit individual needs. There is no fixed investment term or maximum limits on contributions. And with the added ability to increase, reduce or stop regular premiums penalty-free, the product is designed to offer maximum flexibility to investors in Singapore.
The Flexible Investment Account is only available through financial advisers and will facilitate a choice of charging structures enabling clients to pay fees either up front or over a set term – depending on their individual needs and preferences. Customers will be able to keep track of their investments online via Wealth Interactive whilst continuing to entrust the day to day management of their portfolios to their financial adviser.
Built in response to investor and adviser demand, ‘Wealth Interactive’ is set to transform and re-engineer the way Skandia International interacts with investors and advisers by automating key processes and enabling greater control and interaction online. Customers and their advisers will also benefit from increased support locally with technical experts at hand ready to assist them with the adoption of the new online service.
Michelle Andrews, commercial director at Skandia International comments:
‘From the research conducted before we embarked on the build of ‘Wealth Interactive’, we have learnt that both customers and advisers expect savings and investment product providers to be easier to deal with. In response to this feedback, we are enhancing our proposition by introducing an innovative online product - the Flexible Investment Account, to complement our existing offering in Singapore. Powered by ‘Wealth Interactive’, it will provide the much sought control and flexibility online’
* The Flexible Investment Account is classed as a Portfolio Bond (an open ended unit-linked life assurance policy) issued by Royal Skandia Life Assurance Singapore Branch
** Monetary Authority of Singapore
Skandia International unveils new QROPS strategy
18 June 2012 Skandia International
Skandia International, the offshore business of Old Mutual plc, today announces it is teaming up with a select group of QROPS providers with whom it will be working to offer simplified QROPS arrangements across multiple jurisdictions.
This novel approach to offering QROPS solutions will facilitate a range of preferential pricing terms, providing advisers with a choice of different arrangements to help them meet the individual needs of their clients. By working closely together this will also ensure that the application and ongoing administration processes are greatly simplified, reducing the burden on both advisers and their clients. The arrangements work by utilising the Skandia International offshore bonds as investments vehicles to house the underlying assets.
The range of trustees will initially comprise of providers who offer QROPS schemes based in Malta and the Isle of Man - the jurisdictions voted most popular by advisers in the latest Skandia International offshore adviser confidence survey*, conducted in Q2 2012. The choice of jurisdictions, as well as the range of providers are not exhaustive and will evolve over time depending on customer needs and feedback from financial advisers.
The first entrants are Malta-based MC Trustees (Malta) Limited and the Isle of Man’s leading QROPS provider Boal & Co together with Momentum Pensions, who offer authorised schemes out of both Malta and the Isle of Man. Advanced discussions are also underway with a major international pension provider to join the range.
Rachael Griffin, head of product law and commercial development at Skandia International states:
“Over the past two years, we have been monitoring closely the sentiment of advisers globally towards the QROPS market and the evidence gathered so far has consistently shown that QROPS continue to remain at the forefront of expatriate investors’ financial planning considerations. This has, once again, been backed up by the findings of our recent survey* which confirmed that 40% of those advisers who generate QROPS business are expecting to write at least the same amount over the next 12 months whilst a further 40% believe the number of cases will increase.
‘As one size doesn’t fit all, it makes complete sense to offer advisers a range of options to ensure advisers can match their clients’ needs appropriately and as closely as possible. We are delighted to be joining forces with a selection of QROPS trustees and are confident that our collective capabilities in our respective areas of expertise will be of benefit to advisers and make this proposition a great success.”
* The offshore adviser confidence barometer was conducted by Skandia International in Q2 2012 and attracted responses from 449 advisers from around the world – Hong Kong, Singapore, Dubai, UK, Europe, Africa and Latin America.
North American equities back in favour with global investors
31 May 2012 Skandia International
International investors have been fleeing cash funds during the first four months of 2012 and looking for buying opportunities in depressed equity markets, according to Skandia International’s analysis of money movements within its offshore products*.
Cash and Money Market funds accounted for nearly half of the amounts moved out since January through to the beginning of May, with over a fifth being removed from Mixed Asset funds. Over 7% of money switched out was from Commodities, specifically gold funds, perhaps signalling that investors are now becoming seriously concerned that the price of gold may finally be reaching its all time peak. Asian Equities, including Hong Kong, India and China equities, also proved fairly unpopular accounting for a combined 12% of outflows. This came as a slight surprise, given that the Asian markets demonstrated a fairly robust performance over the period, albeit with the heightened volatility which is fairly typical for the region.
It has been good news, however, for US and North American equities, which took in a third of new investments over the first four months of this year. Investors allocated a further 28% to Global Fixed Interest funds, with the rest of new investments going into Technology, Latin America and Russian Equities. UK and Emerging Markets fixed interest funds also saw positive, although modest, inflows.
The data backs up the findings from the most recent Skandia International adviser confidence barometer survey**, which established that North American equities were voted as the sector most likely to be favoured by advisers for their clients’ portfolios over the next three months.
Emerging Market equities and Asian equities were voted as the next most popular choices considered by advisers as having the potential to offer attractive returns.
Phil Oxenham, marketing manager at Skandia International comments on the findings:
“The findings are interesting and illustrate that the wall of cash built up as a result of the nervousness investors have been experiencing in recent months is, as predicted, now being directed into equities. The ongoing and potentially worsening turbulence in the Eurozone is perhaps making investors feel that North American equities may be a safer option – not that an ocean is enough to remove the risk of global contagion completely. Clearly the nervousness has not yet totally subsided, as a significant proportion of new money is still being invested into Fixed Interest funds, but this also demonstrates that clients are becoming increasingly aware about the importance of diversification and how it can help keep portfolio risk in check.”
* The analysis is based on funds comprising Royal Skandia’s unit linked fund range.
** The offshore adviser confidence barometer was conducted by Skandia International in Q1 2012 and attracted responses from 445 advisers from around the world – Hong Kong, Singapore, Dubai, UK, Europe, Africa and Latin America
Confidence in local and global economies starts to rise
1 May 2012 Skandia International
Financial advisers from around the world are, on average, more confident about the global economy than they were in Q4 2011, according to Skandia International’s latest Adviser Confidence Barometer*. Overall, confidence has risen by 10% from an average of 5 to 5.5 out of 10. The survey also indicates advisers are slightly more upbeat about their local economies with confidence levels increasing from 5.3 to 5.6 over the last quarter.
Financial advisers in Asia remain the most confident in their local economies with an average score of 6.6, with respondents from both Hong Kong and Singapore having the most positive outlook, reporting a confidence level of 6.7 out of 10.
Adviser’s confidence in their local economies has seen a rise in all regions other than Europe, where ongoing uncertainty around the debt crisis has seen confidence levels fall to an average of 4.4, from 4.6 in Q4 2011. This is in stark contrast to their outlook on the global economy where respondents from Europe exhibited the highest confidence score at 5.7 out of 10, representing an increase of 8% since the previous survey. In fact, of all the advisers surveyed only those from Europe and the UK had more confidence in the global economy than their own.
Over two thirds of financial advisers surveyed believe that the European debt crisis is the biggest threat to their local region, this in contrast to the previous two quarters where global contagion was seen as the biggest potential issue. Unemployment was selected as the second biggest threat by advisers with 36% believing this may negatively impact their local region.
Confidence in investment sectors seems to broadly mirror the advisers’ confidence in their local economies with nearly a third saying that emerging market equities and emerging Asia equities are the sectors most likely to offer the best investment returns over the next 12 months. Less than 1% of advisers believe that European equities (ex UK) will offer favourable returns, which reflects the unease about the current crisis in Europe - despite the strong run seen by European equities (ex UK) during the first three months of this year, returning 9.75%** over that period. However, UK fixed interest was the least popular investment sector for advisers with just 0.4% selecting it to provide the most profitable returns over the next year.
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Investment sector likely to offer best returns over the next 12 months
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Percentage of respondents
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Emerging Asia Equities
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17.5%
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Other Emerging Markets Equities
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14.4%
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North American Equities
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13.0%
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Asian Equities
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11.7%
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Gold
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9.9%
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Metals and Mining
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6.1%
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Emerging Market Debt
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5.8%
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Agriculture and Resources
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4.9%
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Other
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4.7%
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International Fixed Interest
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3.4%
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UK Equities
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3.1%
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Property
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2.0%
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Cash
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1.1%
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Japanese Equities
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0.9%
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European Equities (ex UK)
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0.9%
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UK Fixed Interest
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0.4%
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Phil Oxenham, marketing manager at Skandia International comments:
“The European debt crisis continues to have a significant impact on adviser sentiment. The findings of this survey clearly show that financial advisers globally are concerned about the continued effects of this on their own regions. This is reflected in the advisers’ choices of where to recommend investments during the next 12 months, as European equities remain very unpopular. The selection of emerging Asia equities and other emerging markets equities as the sectors likely to offer the best returns over the next year demonstrates the wide spread belief that emerging markets offer the best potential for investment areas - although these are also likely to be more volatile. As always, it is important that investors select a balanced portfolio of assets and sectors that is aligned with their individual risk profile.”
*The offshore adviser confidence barometer was conducted by Skandia International in Q1 2012 and attracted responses from 445 advisers from around the world – Hong Kong, Singapore, Dubai, UK, Europe, Africa and Latin America.
** Source: FinEx Analytics, 31.12.2011 – 31.03.2012 in EUR.
Profits up 16% at Skandia International to £78 million
9 March 2012 Skandia International
Skandia International, part of Old Mutual Wealth Management, saw IFRS Adjusted Operating Profit increase by 16% to £78 million during 2011 (2010: £67 million) driven largely by delivering its planned product mix, with increased focus on higher-margin portfolio bond products, and lower costs.
Net client cash flows remained positive at £0.5 billion (2010: £0.6 billion) with gross sales decreasing slightly to £2.7 billion (2010: £2.9 billion) amid challenging market conditions for single premiums. Funds under management stood at £16.1 billion as at 31st December 2011 (£16.8 billion as at 31st December 2010).
Europe, UK and the Middle East were the top three regions by sales volume (on an APE basis) although Asia, Latin America and South Africa continue to feature heavily and represent strong growth opportunities for Skandia International.
New product developments from Skandia International during 2011 focused on wealth management, a Discounted Gift Trust and a portfolio builder tool with two new global managed funds as well as a continued focus on providing strong investment solutions for the QROPS market. Skandia International is today announcing that it is to transform its offshore proposition by introducing a new, end-to-end wealth management service during the course of 2012. To see the full press release click here.
Steven Levin, chief executive at Skandia International, comments:
“2011 saw challenging market conditions so it is very encouraging to report robust sales and improving profit. We have a well diversified geographic footprint which gives us access to both established and growing economies. Retail investors remain cautious around the world but with conditions and sentiment improving this year we are well positioned to meet their needs. We continued to evolve our proposition during 2011 and this year we will roll-out a significant step change in the way we do business with financial advisers and customers.”
Skandia International unveils plans for new wealth management service
9 March 2012 Skandia International
Skandia International, the offshore business of Old Mutual Wealth Management, today announces that it is to transform its offshore investment proposition by introducing a new, end-to-end wealth management service during the course of 2012. Skandia International will have invested over £21 million in order to re-engineer the way it works with financial advisers and customers.
Called ‘Wealth Interactive’, it is being built in response to a number of converging factors, including demands from advisors and investors for more seamless interaction with product providers and changes in regulatory environments around the world. Wealth Interactive represents a significant transformation for Skandia International, to ensure that as a business, it can respond quickly to investor needs across multiple territories. Specifically it will power Skandia International’s offshore proposition into the UK by facilitating solutions that are compliant with the new Retail Distribution Review requirements that come into effect on 1st January 2013.
Wealth Interactive will facilitate on-going and flexible product and proposition innovation from Skandia International. Not only will it be used to tailor new products to the needs of advisers and customers, the service will also power the existing Skandia International offshore portfolio bond products in due course.
Financial adviser benefits
The design of Wealth Interactive takes into account views of advisers from around the world. It will improve Skandia’s speed and quality of responsiveness as it will automate many key processes thus buying financial advisers precious time. The service will enable financial advisers to manage their Skandia clients’ investments online throughout the entire customer journey, supported by enhanced levels of servicing available locally in the region in which they operate.
The new services will enable advisers to transact online on behalf of their clients and will provide information on many levels – from illustrations and a snapshot of applications waiting in pipeline to their clients’ latest investment values, details of correspondence, switching activity and full transaction history. They will have a fully customisable dashboard of all their Skandia International portfolio bond business together with new risk profiling and portfolio building services.
Customer benefits
Research with customers around the world has shown that there is an increasing need to provide a simple, clear and transparent way to keep track of their wealth. Wealth Interactive will enable that by providing them with instant online access to information about their investments which will include details of all transactions carried out as well as performance and valuations.
Customers will also benefit from the additional support and services Wealth Interactive will provide to their financial adviser to help them manage their investments.
Wealth Interactive will launch via a phased programme on a region by region basis starting in Q2 2012. Over time, all of Skandia International’s existing portfolio bond business will become integrated with the new proposition and benefit from the services and online functionality that comes with it.
Steven Levin, chief executive at Skandia International, comments:
“Historically customers have had a rather fragmented view of their offshore wealth and the international nature of our industry has inhibited the development of really efficient business models. We believe this needs to change in order to cater for evolving adviser and customer requirements. ‘Wealth Interactive’ is a significant investment for Skandia International, and one that I believe will raise standards across the markets in which we operate. It will certainly transform the way we are able to work with advisers and customers, significantly improving quality, reducing turn-around times and providing a flexible and scalable business platform for the future.”
'Wall of money' waiting to flood equity funds
7 February 2012 Skandia International
Investors sought safe haven in Cash and Global Fixed Interest funds largely at the expense of equities during 2011, suggesting that there is a wall of money waiting to be switched into equity funds as confidence returns, according to Skandia International’s analysis of its customers’ investment behaviour.
Cash and Global Fixed Interest funds accounted for half of all money invested* into Skandia International’s investment products on a global basis** during 2011. For those investors who chose to place their money in these two sectors, this decision may have paid off as the average performance of these asset classes remained positive last year, unlike any other asset class in the analysis.
These figures show a significant proportion of savings currently sitting in cash and fixed interest whilst investors wait for the ‘right’ signals from the markets in order to move into equities, or other asset classes, and participate in the rally when it happens.
In third and fourth positions of popularity during 2011 were Pacific Equity and Commodity funds respectively, which won a combined 25% of investors’ money, whilst Japanese Equities accounted for the smallest proportion of inflows, taking in a mere 0.09% of total net flows.
In terms of investment returns, the next best performing funds behind cash and fixed interest were North American Equity funds, although still falling by over 4%, followed by Property funds which dropped by over 8%. The worst performers with a loss of almost 31% were Emerging Europe funds which suffered to the greatest extent as a result of the Eurozone debt crisis.
Looking at withdrawals, Mixed Asset funds proved to be the least attractive last year, with almost a third of investors choosing to move their savings out of these funds. Almost 13% exited Aggressive / Global Equity funds, a decision which may have been influenced by the performance of global indices such as the MSCI World Index, which lost almost 7% in USD terms last year.
A further quarter of the money removed was from Latin America, Hong Kong & China and BRIC funds - not surprising, given that the average fund in these three sectors lost in excess of 20%; they also proved to be the most volatile sectors for investments last year. Perhaps the most disappointing investment last year was India, which saw both very high volatility and some of the worst investment returns.
Phil Oxenham, marketing manager at Skandia International comments:
“Following a sustained period of unpredictable market movements, investors are naturally showing signs of nervousness. It is impossible to predict exactly when markets are likely to rebound but unless they are already in the market, investors will be unlikely to benefit from the best part of the rally, which tends to bring with it the most dramatic returns.
“Those who are already invested in assets which, on paper, seem to have lost value should sit tight, as the wait is likely to pay off when markets return to a growth cycle. On the other hand, investors holding cash should, with the help of their financial adviser, re-assess the suitability of these large positions and review their investment strategy.
“It is back to that old adage, which rightly says ‘it is not about timing the market, but about the time in the market’.“
Source for all investment return figures - FinEx, Gross Total return in USD, 31/12/2010 to 31/12/2011
* Money invested is measured by net sales into each fund, i.e. total money invested minus money withdrawn
** The analysis is based on funds comprising Royal Skandia’s unit linked fund range.
Skandia International launches Protected FTSE 100 fund for UK focused investors
26 January 2012 Skandia International
Skandia International, the offshore business of Old Mutual Wealth Management, announces the launch of the Royal Skandia GBP Protected FTSE TM 100 Fund. The aim of the new fund is to offer full capital protection and an investment return of 152% of the average growth of the FTSE 100 index when held for five years until maturity. The fund, which is predominantly aimed at Sterling investors, could be attractive to those concerned with the current volatility in world stock markets but still want the potential to benefit from any future increases in valuation levels.
In a recent study* conducted by Skandia International, a significant 80% of financial advisers stated that as a result of the ongoing stock market volatility they are more likely to recommend protected products to their clients now than they had ever done before. Almost 20% indicated they would allocate up to 20% of a client’s portfolio to these vehicles, whilst over 15% felt they would advise as much as 30% of clients’ assets is placed in protected funds. Over 81% of respondents believe the most appealing feature of structured products to be the protection of capital.
The Royal Skandia GBP Protected FTSE TM 100 Fund is available exclusively through the Royal Skandia Executive and Collective Offshore Bond products.
The protection element is provided by Morgan Stanley, renowned for its expertise in the structured products sector and currently rated ‘A-’ and ‘A2’ respectively by the Standard & Poor’s and Moody’s rating agencies.
The fund, which is available to new and existing investors, is open for investment from the 25th January 2012 for a period of eight weeks at the end of which the proceeds will be invested for five years. At maturity, the value of the holding will be switched into the Royal Skandia GBP Deposit fund and thereafter, investors will have access to the full range of assets available to the Royal Skandia Executive and Collective Bond products.
Phil Oxenham, marketing manager at Skandia International, comments:
"The current economic predictions seem to suggest that 2012 may prove to be yet another unstable year for investors. The continued volatility in global stock markets is adding to the prevailing investor nervousness and this can be detrimental – especially when markets stabilise and settle on an upward trend.
‘The ideal choice for many investors is a vehicle that allows them to enjoy growth should markets rise, but which is designed to protect and return their original capital should markets fall.
‘The Royal Skandia GBP Protected FTSE TM 100 Fund has been designed with the aim of meeting that need. This fund aims to capture the positive performance of the FTSE 100 Index while returning at least 100% of the contribution at the end of a five-year term.
‘We are delighted to be enhancing the range of Portfolio Bond assets further by offering new and tailored protected investment options."
*The Offshore Adviser Confidence Barometer research was conducted by Skandia International in Q4 2011 and attracted responses from over 450 advisers from around the world – Hong Kong, Singapore, Dubai, UK, Europe, Africa and Latin America.
Tax increase represents an opportunity for tax-compliant bonds in Spain
17 January 2012 Skandia International
On 1 January 2012, the Spanish personal income tax regime was temporarily modified resulting in a rise in income tax for 2012 and 2013. This increase, however, will have little or no impact on tax-compliant bonds sold in Spain if they are not encashed until 2014 - according to Skandia International. This is in contrast to non tax-compliant bonds which are required to withhold tax each year.
Following these changes, from 1 January 2012 until the end of 2013 gains on tax-compliant offshore bonds will be taxed at a flat rate of 21% (as opposed to the normal rate of 19%) which is automatically withheld by compliant product providers. There will be no further personal income tax liability for the policyholder if the gains amount to less than €6000 savings income in a tax year; this includes interest earned on savings accounts and dividends received in the same tax year. A further 4% personal income tax liability will need to be accounted for by the policyholder on the next €18,000 savings income and a further 6% if the overall savings income for that tax year is above €24000. If the policy suffers a loss over the tax period, the loss can be offset against other income tax liabilities.
Whilst the increase in taxes will apply to all offshore bonds, tax-compliant policies will be affected to a lesser degree if the surrender of the policy is deferred to 2014 – as it only becomes subject to tax in the year in which policy proceeds are paid out.
This is in contrast to non tax-complaint, or ‘foreign’ policies, which are required to withhold tax every year and so will be further affected by the increase during the next two years. Additionally, in instances where the provider of a non compliant policy fails to withhold tax correctly and in a timely manner, policyholders may become subject to penalties for non-reporting, and these can range from 50-150% of the tax due.
There are generally 3 types of tax-compliant policies available in Spain: with profit policies, policies where the insurer restricts the assets available to EU domiciled UCITs (excluding bank deposits) and policies where the insurer restricts the assets available to internal funds (including cash funds). If a policy does not meet one of these requirements then it is likely to be a non tax compliant policy.
However, non tax-compliant policies have their merits, as such policies can offer other features which can make them attractive to certain types of investors – for example, access to a wider investment universe of assets and the ability offset losses on an annual basis.
It is, however, important that clients understand what type of policy they hold in order to satisfy the Spanish tax authorities’ rules and account for the correct tax liability.
Rachael Griffin, Head of Product Law and Commercial Development at Skandia International, comments:
"In today’s world, the choices available to investors can be overwhelming. It is crucial that they understand the implications of choosing the right product in order to utilise the available tax advantages to the full.
"For example, tax-compliant bonds reduce the burden of reporting on individuals classed as tax-resident in Spain and can be affected by changes in tax regimes to a lesser degree than non tax-complaint alternatives. The recent changes introduced on 1st January 2012 illustrate these advantages perfectly."
For more information contact:
Victoria Spanner
Skandia
t: 02380 729 355
e: victoria.spanner@skandia.co.uk
Henry Chan
Skandia
t: 02380 726 519
e: henry.chan@skandia.co.uk
Skandia International notes to Editors
Skandia International specialises in offshore cross-border products and services for the Old Mutual and Skandia Groups. It brings together a number of regulated offshore businesses with bases in a variety of jurisdictions, and builds on an exceptional offshore brand developed over 25 years.
Skandia International currently comprises: Royal Skandia, Skandia Life Ireland and Old Mutual International (all of whom are offshore cross border manufacturers). Skandia International is also responsible for Skandia Life sales to local nationals in Finland.
Royal Skandia is the Isle of Man-based offshore arm of Skandia International. A leading life company in the offshore investment market, Royal Skandia offers a range of tax-efficient investment products aimed mainly at expatriates and international investors.
Skandia Life Ireland is the Dublin-based part of Skandia International. Skandia Ireland was launched in 2003 to provide European advisers with Skandia life assurance products following the Insurance Mediation Directive (IMD). Skandia Ireland is regulated in Ireland with authorisations in a number of EU/EEA countries.
Skandia International is a part of the worldwide Skandia Group, itself owned by Old Mutual plc. Old Mutual plc is an international savings and wealth management company based in the UK. Originating in South Africa in 1845, the group has a portfolio of businesses offering asset management, life assurance, banking and general insurance services in over 40 countries in Europe, the Americas, Africa and Asia-Pacific.
Old Mutual plc is listed on the London Stock Exchange and the JSE, among others.
This press release is for journalists only, and its contents should not be relied upon by financial advisers or customers. Please visit our main website at www.skandiainternational.com if you need further information.