Hansard International Capital Investment Bond

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Review summary

Hansard International Capital Investment Bond

Hansard International

Hansard International is part of the global Hansard Group which has been providing life assurance and investment solutions since 1987.

Hansard now has over GBP 1.06 billion of assets under administration and provide servicing for over 40,000 clients across the globe.

From their base in the Isle of Man, Hansard provides a range of life assurance products for internationally based individuals, trustees and companies. 

Hansard Capital Investment Bond

The Hansard Capital Investment Bond is a unit-linked contract for single, ad hoc or regular contributions.

Overview

The Hansard Capital Investment Bond is designed for building up a lump sum over the medium to long term beginning with a minimum of USD 20,000 in the first three years, without the need to commit to a defined regular contribution. 

It is written on a capital redemption basis (this means there are no lives assured, so the investment does not end on death - so it can be passed down through families for Estate Planning purposes if written in trust) and is available on a single or joint ownership basis.

The Hansard Capital Investment Bond is no longer actively marketed by Hansard. 

It was however, available in a number major currencies.  Contract holders may change the currency denomination of the contract at any time, at the exchange rate then prevailing.

It will mature on expiry of the 99 year term unless fully surrendered prior to the end of the term.  At the end of the selected term, the value of the Hansard Capital Investment Bond will be the value of the portfolio.

Hansard Capital Investment Bond holders may make single contributions at any time subject to a minimum of USD 2,000.  Regular contributions can also be made, subject to a minimum of USD 600 per month or USD 1,800 per quarter. 

Contributions equal to the minimum contracted contribution of USD 20,000 must be made within three years of commencement of the contract. 

If the minimum contracted contribution is not received by the third anniversary of the commencement of the contract, an additional charge, currently GBP 420, will be applied by cancellation of units.

On the death of the life assured (or the first life assured to die in the case of a joint-lives first-death contract, or the second-life assured to die in the case of a joint-lives second-death contract) before the agreed maturity date, the standard sum assured is 101% of the value of the initial and accumulator units.

The value is calculated using the applicable bid price of units.

Hansard Capital Investment Bond Key Features

Over 170 international funds available - with access to external equities, bonds and collectives at an additional charge.

Choice of Currencies - The Hansard Capital Investment Bond may be denominated in US dollar, GB pound, Hong Kong dollar, Japanese yen or Euro.

Eligibility - The Hansard Capital Investment Bond is a whole of life, life assurance contract. It is available to most international investors outside of main regulated territories such as the UK, the U.S.A. and Australia.

Charges - The product facilitates a range of charging structures linked mainly to the amount of commission being taken by your adviser of salesman.  See the FAQ for detailed information.

Pensions (QROPS and SIPP) – If the Hansard Capital Investment Bond is used within a QROPS or SIPP there will be additional set up and ongoing fees for the life of the policy.

We do NOT recommend this product for QROPS or SIPP investing.

WARNING

Early Surrender Penalty:  A full encashment results in penalties being applied in the early years through surrender charges.

In effect this means that on polices the first 5, or more typically 8 – 10, years may have quite high surrender charges imposed.

It is important to be aware that the Hansard Capital Investment Bond is a long term plan, if you decided to cancel the plan early you could lose a considerable proportion of the money you have invested; it would not be uncommon to see as much as 8% of the value of the plan value being lost by surrendering the Hansard Capital Investment Bond early.

The pros

  • Popular expat investment plan
  • Preferred choice of expat financial advisers
  • Strong brand of parent company

The cons

  • Risk of hidden commission
  • Potentially inflexible
  • Commonly mis-used
  • With commission this is an extremely expensive option
  • Partial withdrawals can increase real costs
FAQs
What are the fees and charges on Hansard's Capital Investment Bond?

Establishment charge:

The Hansard Capital Investment Bond 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.

0.6% of each Investment Amount on each of the first 4 Charge Dates, following payment of each Investment Amount (total of 2.4% per annum for one year).

Annual management charge:

An annual management charge of 1% of the value of the plan applies.

Additional Charges:

Service charge: GBP 27.25 per month

Switching charge: GBP 90

Withdrawal charge: GBP 29

Additional charge (if minimum contracted contribution is not paid within three years) GBP 420

Additional unit allocation statement charge GBP 32

Adviser fee: Between 1% and 1.5%

Who is eligible for Hansard's Capital Investment Bond?

Note, this product is no longer widely marketed.

However, Hansard says:

Applicants must be aged 18 or over at the date of commencement. Applications cannot currently be accepted from residents of the United States of America, U.S. Persons and residents from most European Union Member States.

Can I surrender or withdraw from my Hansard Capital Investment Bond?

Yes you can - but you will be stung by fees and charges - as outlined below. If you want a plain English summary of what you will have to pay, request an X-Ray Review™ and we'll be able to break down exactly what you will pay when and why.

Withdrawals:

Withdrawals may be made on a regular or ad hoc basis to provide an income, subject to normal withdrawal rules and charges, provided contributions totalling at least USD 20,000 have been received. There is a charge, currently GBP 29 per withdrawal, which is waived, depending on the amount of the total contributions paid and the frequency of income payments.

Surrender and withdrawal:

Withdrawals can be made at any time, for the value of units cancelled less the balance of the year’s management charge on the amount withdrawn and the discontinuance charge - if appropriate.

The value is calculated using the applicable unit bid prices.

The minimum withdrawal at any time is USD 200.

On full surrender, the balance of the year’s annual management charge, the balance of the year’s service charge and any establishment charge due but not yet applied to the contract will be applied in addition to the discontinuance charge if appropriate.

Units relating to contributions which have been allocated for less than seven years are subject to a discontinuance charge on withdrawal or full surrender.

This charge is 7% of the value of the units if the related contribution has been allocated for less than 12 months, reducing by 1% for each complete year the related contribution has been allocated.

If only one contribution has been paid, all of the units relate to that contribution.

If subsequent contributions have been paid, the number of units related to each additional contribution is calculated by applying a factor to the total number of units (after the contribution has been applied to the contract).

The factor is equal to A/B, where A is the amount of the contribution in question and B is the total fund value immediately after that contribution has been applied.

This discontinuance charge is waived when units are sold which relate to contributions that have been allocated for between five and seven years, provided that the amount withdrawn does not exceed 10% per year of the sum of those contributions.

If the contract is fully surrendered within three years and the minimum contracted contribution has not been received, the additional charge, currently GBP 420, is applied by cancellation of units. 

Where a withdrawal takes place within that period and before the minimum total contribution has been received, if the value of the units remaining allocated to the contract after the withdrawal will be less the additional charge, the contract will be surrendered in full.

Customer reviews
Sold this as an estate planing solution?

Given this 3 stars as if it does what I was told it will do, in terms of allowing me a tax efficient way to bequeath to my heirs - job done. Need to get it reviewed though as I'm not sure after reading this review?

Editor: Please request an X-Ray Review™ and we'll be glad to help and advise.

More expensive than I thought

Stand-alone, the fees all sound small - add them up - and they DO add up...

Expert verdict
Expert Assessment of Hansard International's Capital Investment Bond

There are two major disadvantages if you hold an existing Hansard Capital Investment Bond. 

Firstly, although their IT system is excellent, Hansard does not have a strong reputation for dealing with licensed intermediaries.  If you are advised via one of these distributors it is likely that the outcome you receive will be substantially different to the one you expect because of the well concealed high product charges used to fund this adviser's commission. 

Secondly, this product type is fairly inflexible and simply put there are more cost effective, more flexible products with a wider range of better investment options available for the discerning international investor.

Our verdict is that this product is out of date - which probably explains why it is no longer actively marketed.

If you already have a Capital Investment Bond from Hansard we recommend you have a free, no obligation X-Ray Review™ conducted to give you the information you need to make a decision on the best way forward.

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Kristian Petersson

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Jake van den Dries

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Jackie Pym

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