RL360 Insurance Company Personal Investment Management Service

An independent review by our team of experts.

Review summary

RL360 Insurance Company Personal Investment Management Service

PIMS is a single premium offshore savings policy issued in the Isle of Man by RL360 Insurance Company Limited (RL360). It has a wide range of tax efficient investment options available which offer the potential for growth, over the medium to long term.

RL360 PIMS is a portfolio bond offering a choice between fully open and guided architecture. It is available in seven policy currencies.

PIMS can be used in a trust and also offers the ability to appoint a discretionary fund manager or an investment adviser.  The investment options cater for almost all attitudes to risk.

Overview

The establishment charge is taken either on the start date of the policy or on the first day of each calendar quarter during the establishment charge period. A further establishment charge is made on each additional premium paid into the bond. The actual charge varies depending on the charging structure that is chosen. One option for example for investment amounts up £1,000,000 is 8.5%, so this means that a charge of £85,000 will be charged against your RL360 PIMS portfolio bond.

Alternatively if the option of paying the establishment charge over a 10 years is selected, then the charge is 1% per annum over the 10 year period i.e. £1,000,000 x 1% for 10 years = £100,000. If the policy is encashed early, then the whole amount of the establishment charge is deducted from the account.  You have the availability of partial or full encashment at any time (however an Early Encashment Charge will likely apply depending on the term and commission taken).

Since RL360 was subject to a management buy-out and private equity cash injection it has arguably had more ambitious international distribution policies which include the payment of very high levels of adviser commission. This may bring with it a number of risks which potential clients should consider prior to policy inception.

PIMS Policy basis

PIMS can be issued on a life assurance or capital redemption basis.

1. Life assurance

A PIMS policy on a life assurance basis can be set up in one of two ways:

Single life - There is only 1 life assured and when they die the policy comes to an end.

Joint life last death - There can be up to 6 lives assured on the policy, and it comes to an end when the last life assured dies.

2. Capital redemption

A PIMS policy on a capital redemption basis will remain in-force for a total of 99 years at which point it will mature and we will pay out the surrender value plus a guaranteed amount of GBP100 (or currency equivalent).

You cannot change the basis of your policy after it has been issued. 

Sub-policies

PIMS can be structured in up to 100 sub-policies. This is for added flexibility and may provide tax advantages depending on your location.

Fewer sub-policies may be chosen if required, but unless this is detailed in your PIMS application RL360 will automatically set up the policy with 100 sub-policies.

Policy currencies

There are 7 PIMS policy currencies to choose from:

Pounds Sterling (GBP), US Dollar (USD), Japanese Yen (JPY), Euro (EUR), Swiss Franc (CHF), Australian Dollar (AUD) and Hong Kong Dollar (HKD).

The currency of your PIMS policy cannot be changed after issue.

Your policy will be valued in this currency and fees will be deducted in this currency.

Initial and additional premiums paid into PIMS can be made in any currency that is acceptable to RL360.

Premiums are subject to the minimum premium levels for your policy currency which uin GBP are £50,000 initial and £5,000 additional.

 

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
FAQs
What's the difference between PIMS Focused and PIMS Flexible?

PIMS is available in 2 versions, PIMS Focused and PIMS Flexible

1. PIMS Focused policyholders are able to invest into a defined range of investment funds

2. PIMS Flexible policyholders are able to invest into any investment acceptable to RL360.

PIMS has been designed with a charging structure that can be tailored to best suit your needs. allegedly.

There are 3 main elements to the charging structure that can be used separately or in combination:

• allocation rate

• establishment fee

• percentage administration fee

Am I eligible for RL360's PIMS?

PIMS is available to individuals, companies and trustees provided they are not subject to any legislation which prevents them from making an investment.

Individuals need to be 18 years of age or older to apply for PIMS.

Where the policy basis is life assurance, RL360 cannot accept the application if the youngest life assured is 85 years of age or older.

What is the charging structure for RL360's Personal Investment Management Service?

Are you sitting comfortably?

PIMS Focused

PIMS Focused policyholders are able to invest into a defined range of approximately 1,000 investment funds.

Accordingly, PIMS Focused has a lower charging structure than PIMS Flexible which is fully open-architecture.

This could make PIMS Focused the ideal vehicle where you simply require access to conventional investment funds and recognised management houses.

But should you require access to an even broader range of investments in the future, you can simply convert your PIMS Focused policy to Flexible for a one-off fee.

The one-off fee is known as the ‘Conversion fee’ and is equal to 1.25% of the premiums paid.

You cannot change back to PIMS Focused from PIMS Flexible.

PIMS Flexible PIMS Flexible policyholders are able to choose from any investment acceptable to RL360.

Charging elements

No matter which version of PIMS is selected, the charging elements remain the same, although lower fees are applied to PIMS Focused policies.

There are 3 main elements to the charging structure that can be used separately or in combination:

• Allocation rate - this is the rate at which your premium is applied to the policy. This can be below, equal to or above 100% of your premium if other charging elements are chosen.

• Establishment fee - this is a fee that is taken over a set period of time – 5 years, 8 years, or 10 years – as a percentage of your premium.

An early surrender fee will apply during the same period.

• Percentage administration fee - this is a fee that is taken throughout the lifetime of your policy as a percentage of the higher of your premium or its current policy value.

An early surrender fee will apply and you can choose from 8 years or 10 years.

Allocation rate reduction

It is possible to reduce the allocation rate of a PIMS policy so that all fees relating to the initial premium are deducted on the policy start date.

If you invested a GBP300,000 premium into a PIMS policy at an example allocation rate of 91.50%, this would leave GBP274,500 (GBP300,000 x 91.50%) available to link to investments.

Alternatively, rather than reduce your premium at the start of the policy, you can pay fees over a period of time through the establishment or percentage administration fees.

By doing this you can enhance your allocation rate beyond 100%, but only up to a maximum of 112.25% for PIMS Flexible policies or 113.50% for PIMS Focused policies (this also depends on your premium amount).

Establishment fee

An establishment fee can be paid over 5, 8 or 10 years.

If we continue using the previous example, if you would like to invest a premium of GBP300,000 into a PIMS policy, but at an allocation rate of 100%, then there is an establishment fee to be paid (100% - 91.5% = 8.5%).

5 year establishment fee period

If you choose to pay this fee over a 5 year establishment fee period RL360 would multiply it by 1.2.

The percentage is then divided by 5 (for the 5 year period) and this is the percentage of your GBP300,000 premium you would pay each year.

8 year establishment fee period

If you choose to pay this fee over an 8 year establishment fee period RL360 would multiply it by 1.25.

The percentage is then divided by 8 (for the 8 year period) and this is the percentage of your GBP300,000 premium you would pay each year.

10 year establishment fee period

If you choose to pay this fee over a 10 year establishment fee period RL360 would multiply it by 1.3.

The percentage is then divided by 10 (for the 10 year period) and this is the percentage of your GBP300,000 premium you would pay each year.

If you were to invest a GBP300,000 premium into a PIMS Flexible policy and choose an allocation rate of 100.00%, this would provide GBP300,000 (GBP300,000 x 100.00%) to link to investments.

Alternatively, rather than pay fees over a fixed period of time through an establishment fee, you can pay fees over the life of the policy through an ongoing percentage administration fee.

Percentage administration fee

A percentage administration fee can be taken over the lifetime of the policy with either an 8 or 10 year early surrender period.

Continuing the previous examples there will be a percentage fee involved in doing this (100% - 91.5% = 8.5%).

8 year early surrender period

If you choose to pay the percentage administration fee with an 8 year early surrender period RL360 would multiply the fee by 0.14375 and you would pay that percentage as the higher of your GBP300,000 premium or its current policy value each year.

10 year early surrender period

If you choose to pay the percentage administration fee with a 10 year early surrender period RL360 would multiply the fee by 0.11 and you would pay that percentage as the higher of your GBP300,000 premium or its current policy value each year

Combining elements

Most will find that choosing just one charging element suits their needs; however, PIMS can be tailored using a combination of all three charging elements if required - isn't that nice!

In effect this would result in the fees being split between the various charging elements.

Flat administration fee

In addition to the 3 main flexible elements there is also a flat administration fee. This is a fixed amount that increases each year with inflation.

It is taken from the cash account on the quarterly anniversary of the policy start date. The fee continues to be taken until the policy comes to an end.

RL360 measure inflation based on the Isle of Man Retail Price Index.

Further information can be found at www.gov.im/ treasury. This may change in the future.

The flat administration fee is applicable to the following charging elements and is £100 or currency equivalent:

• Reduced Allocation

• 5 year establishment fee

• 8 year establishment fee

• 10 year establishment fee

• Percentage administration fee with an 8 year surrender period

If the percentage administration fee with a 10 year early surrender period is chosen, as part of any combination, then a higher flat administration fee will be applied (£125 or currency equivalent).

The flat administration fee is applicable to the following charging elements:

• Percentage administration fee with a 10 year surrender period

• Any combination of charging elements that includes the percentage administration fee with a 10 year early surrender period

PIMS additional fees

(You didn't think we'd finished did you!)

Dealing fee

A dealing fee of GBP20 (or currency equivalent) is deducted for each purchase, sale, transfer or exchange of an investment linked to a PIMS policy.

The first 10 transactions (1 buy and 1 sell = 2 transactions) are free from dealing fees.

For cash deposit accounts (only available under PIMS Flexible) there is a GBP20 (or currency equivalent) fee for each deposit placed or each withdrawal taken from an account.

Where a discretionary manager has been appointed to your policy, RL360's dealing fees will not apply.

But ask your discretionary manager about their dealing fees!

Investment fees

The investment fees applied will depend on the investments to which your PIMS policy is linked.

Fees can include, but are not limited to, initial and annual management charges, performance fees and exit fees.

Fees are determined by the investment manager.

In some cases RL360 will receive institutional discounts not available to individual investors, meaning that the initial charges that you have to pay will be lower than via direct investment.

Where a discretionary manager has been appointed to your policy, RL360's institutional discounts will not apply.

You should ask your discretionary manager about expected investment fees.

It is your responsibility to ensure you are happy with the level of charges being deducted by the investment provider.

Custodian fees

These are charged to cover the costs of safekeeping records relating to linked investments.

Custodian fees can vary depending on the type of investment, however, to keep charges clear under PIMS (!!!) RL360 charges a flat fee of GBP40 (or currency equivalent) per each purchase, sale, transfer or exchange of an investment.

Where a discretionary manager has been appointed to your policy, RL360's custodian fee will not apply.

You should ask your discretionary manager about their custodian’s fees.

Stockbroker fees

Where a chosen linked investment requires, it may be necessary to buy or sell the investment through a stockbroker, any fees will be deducted from the PIMS cash account.

The current stockbroker fees are available from RL360 on request.

Where a discretionary manager has been appointed to your policy RL360's stockbroker fees will not apply.

You should ask your discretionary manager about their stockbroker’s fees.

Advice fee

If you choose to appoint an investment adviser, their fees can be paid directly from the PIMS cash account.

An investment adviser fee up to 1.50% of the policy value, payable quarterly, can be requested.

The amount available may be lower than this depending on other charges taken.

Discretionary manager fees

If you choose to appoint a discretionary manager to manage the investments linked to your PIMS policy, their fees will be deducted at source.

Discretionary managers may also have to pay custodian and stockbroker fees for some investments.

Foreign exchange

Where RL360 is required to perform a foreign exchange (FX) transaction, this will be done at a rate determined by RL360, based on those commercially available in the market.

THE END...

Confused? Yes, we would be too - have an X-Ray Review™ on us and it will list - in plain English - and in numerical form - how much you're being charged and have been charged.  Turning opacity into transparency!

Can I withdraw from or surrender my PIMS?

Withdrawals

One-off or regular withdrawals can be taken from PIMS at any time.

There are minimum acceptable one-off withdrawals, regular withdrawals and minimum PIMS policy values after a withdrawal.

(For example - in GBP one off min is - £500, regular is = £250 - minimum policy value = £25,000 - note the minimum policy value must not drop below the figure shown or 15% of the premiums paid to date, whichever is the higher)

One-off withdrawals can be paid in an easily exchanged currency.

Regular withdrawals will be paid in the PIMS policy currency and can be taken monthly, quarterly, halfyearly or yearly.

Regular withdrawals can be set up when you apply for a PIMS policy or be requested at a later date.

Surrenders

In addition to withdrawals, whole sub-policies may also be surrendered.

This could have potential tax benefits.

A PIMS policy can be fully surrendered at any time, simply by returning the Policy Schedule, including any endorsements, to RL360's head office along with a completed Surrender Form.

On receiving notification at their head office of a request to surrender a PIMS policy, RL360 will:

• stop all regular withdrawals and any other actions due to take place

• sell all of your linked investments and add the sale amounts to the cash account

• calculate the final surrender value of the policy.

Depending on the combination of charging elements used the policy may be subject to early surrender fees if you surrender before the end of the early surrender period.

For example

A policy with establishment fees that is surrendered after the fourth year of a 5 year early surrender period would be charged 1 year's worth of fees on surrender.

Similarly if the policy was surrendered 7 years into a 10 year early surrender period then 3 years worth of fees would be taken on surrender.

The fee would be taken as a percentage of your premium paid.

A policy with a percentage administration fee that is surrendered after 6 years of an 8 year early surrender period would result in 2 x the percentage administration fee being taken.

Similarly, if the policy was surrendered 5 years into a 10 year early surrender period this would result in 5 x the percentage administration fee being taken.

The percentage would be taken as the higher of your premium paid or its current policy value.

Are there any death benefits associated with RL360's PIMS?

Benefit on death

The amount paid out on death of the last life assured under a life assurance policy will be 100% of the surrender value of the policy and referred to as the death benefit.

For life assurance policies (where the last life assured has died) On receiving written notification at their head office of the death of the last life assured on a PIMS policy, RL360 will:

• stop all regular withdrawals and any other actions due to take place

• sell all of your linked investments and add the sale amounts to the cash account

• calculate the final death benefit of the policy.

RL360 will only pay out the death benefit when they have received proof of:

• the death of the last life assured

• that you, your estate or someone else has the legal right (“probate”) to the policy benefits.

RL360 will not pay out the death benefit until they have sold all linked investments and the sale amounts have been added to the cash account.

They must also receive the Policy Schedule and any additional endorsements at their head office, before they will pay out the death benefit.

For life assurance policies (where the policyholder has died, but lives assured remain)

Where the policy is held in the names of joint policyholders, sole ownership will pass to the surviving policyholder.

Where the policy is held by you only, ownership of the policy passes to the personal representatives of your estate.

Effectively the policy remains in-force, but it can be surrendered if required. 

For capital redemption policies

Where the policy is held in the names of more than one policyholder, ownership will pass to the surviving policyholder(s).

Where the policy is held by you only, ownership of the policy passes to the personal representatives of your estate.

Maturity value

A maturity value applies to the capital redemption basis only.

Capital redemption policies remain in-force for a total of 99 years, at which point it will mature and RL360 will pay out the surrender value plus a guaranteed amount of GBP100 (or currency equivalent). 

Customer reviews
Unless you have a maths masters, steer clear

My O level maths wasn't sufficient for me to figure out the fees and charges.  My A level English WAS enough for me to figure the sales brochure was baffling. End result = went elsewhere!

Crippling charges

Crippling charges have eroded my investment.

Expert verdict
Expert Assessment of RL 360 Insurance Company Personal Investment Management Service

This is an inflexible, expensive, outdated product.

Opt for a better option!

If you already have a PIMS from RL360 we recommend you have a free, no obligation X-Ray Review™ so you can figure out how much you've paid, are paying, will continue to pay - and how best toproceed.

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Kristian Petersson

“With this sort of service you also expect to be paying very high fees, but it’s just not the case. I would definitely recommend AES.”

Jake van den Dries

“In the short time that I’ve been using AES I’ve made nearly ten thousand pounds and couldn’t be happier!”

Jackie Pym

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