Investors Trust:
Investors Trust is an international insurance company licensed and regulated by the Cayman Islands Monetary Authority.
Investors Trust specialises in the provision of medium to long-term investment-linked products tailored to meet the needs of investors around the world, and delivers a range of flexible, tax-efficient products including regular and single premium annuities, designed to suit various income levels and financial planning needs.
With service offices established to support plan participants around the world - but not in the UK, USA or EU Investors Trust seeks to provide opportunities to its plan participants through access to the global financial markets.
Investors Trust are not a large company by international standards, and given that they are based out of Cayman, with its lack of regulatory enforcement and protection, this is a red flag for us - what if the company were to suffer any financial set-backs?
Investors Trust Access Portfolio Bond:
The Investors Trust Access Portfolio Bond is an offshore lump sum investment policy, issued under Investors Trust’s Cayman Islands insurance license.
The Access Portfolio Bond allows investors to manage a portfolio of stocks, funds, exchange traded funds (ETFs), bonds or structured products via one platform, rather than having the administrative burden of dealing with each of these holdings separately.
Investors Trust sets up the investments and manages the ongoing administration on behalf of the client.
It’s easy to switch between investments with different managers, different currencies, different asset classes, all through a central online platform.
There is an insurance element to the plan, which can have tax planning advantages for some investors.
The Access Portfolio Bond is issued in the form of a single policy.
There are 3 different charging structures available, based on policy terms of 5 years, 8 years or open-ended.
The charging term and structure is fixed at the outset of the policy, and this cannot be varied or waived once it is in force, see the FAQ for full details.
As an investor you need to be aware that there are early encashment penalties if the 5 or 8 year options are chosen and you stop the whole plan before the end of your fixed term.
There is no surrender penalty with the open-ended structure.
Investors Trust say they have a segregated portfolio structure in the Cayman Islands, which gives investors “100% security via an independent third party custodians’ nominee trust account.”
You can apply for and manage your Access Portfolio Bond online and in multiple languages.
Investors Trust Access Portfolio Bond Key Features:
Open Architecture – The plan delivers an open architecture platform which provides significant investment freedom by allowing plan holders to spread and vary their investments across a wide spectrum of asset classes, giving them the power to purchase an almost unlimited array of investments, including Stocks, Bonds, ETFs, Mutual Funds and Structured notes.
Plan holders have the option to invest by transferring existing investment holdings into their portfolio at no cost, invest with cash or build a portfolio using a combination of both. There is no restriction on the number of investments that can be added to the portfolio.
Discretionary Investment Advisor - a discretionary investment advisor can be appointed to run the portfolio bond. A discretionary investment advisor, when appointed, is responsible for the management of your portfolio including the buying and selling of investments.
Currency Options - the policy can be denominated in one of the following currencies: USD ($), EUR (€) or GBP (£).
Minimums:
The minimum lump sum contribution is USD 75,000 / EUR 75,000 / GBP 50,000. Additional lump- sum payments into your policy at any time. The minimum additional investment is USD 7,500 / EUR 7,500 / GBP 5,000.
In addition:
Investors Trust is regulated and licensed by the Cayman’s Islands Monetary Authority.
Advisers with non-EU clients’ predominately use Access Plans.
Investors Trust is not licensed in the EU and it would be unlikely to see this product used in the UK or USA, when better, more transparent alternatives are available and investors are protected by more robust regulation.
Pensions (QROPS and SIPP)
There is no need to use the Access Portfolio Bond within a QROPS or SIPP, other than to generate more fees and commission for the salesman or adviser. The product is not regulated in the EU, so should it should not even be contemplated.
The Access Portfolios Bonds are similar to many such products on the marketplace and can be an expensive option in the wrong hands. We believe that they are outdated products aimed at the commission sales market.
Another key concern is that this is not a widely regulated product.
Investors Trust is based in a low enforcement regulatory regime, and as a small cell based company, which is unusual, we question would happen if the company got into financial difficulties.
Charges will depend on the type of plan you opt for, as they offer different charging structures largely linked to the amount of commission or earnings being taken by the third party salesman or adviser.
Under the access umbrella, there are three plan types; Access Portfolio 5000 Series, Access Portfolio 8000 Series, Access Portfolio Plus.
Access Portfolio 5000 Series charges:
Annual Administration Charges =
0.45% quarterly (1.8% per annum) during the first 5 years. This charge will be calculated based on the higher of the premium paid or the account value.
Policy Fee =
USD 180 /EUR 180 / GBP 112.5 Quarterly
Surrender Charge =
Initial surrender charge is 9% declining daily to zero at the end of year 5. This charge will be calculated based on the higher of the premium paid or the account value.
End of year 1 - 7.2% End of year 2 - 5.4% End of year 3 - 3.6% End of year 4 - 1.8% End of year 5 - 0%
Access Portfolio 8000 Series charges:
Annual Administration Charges =
0.30% quarterly (1.2% per annum) during the first 8 years. This charge will be calculated based on the higher of the premium paid or the account value.
Policy Fee =
USD 180 /EUR 180 / GBP 112.5 Quarterly
Surrender Charge =
Initial surrender charge is 9.6% declining daily to zero at the end of year 8. This charge will be calculated based on the higher of the premium paid or the account value.
End of year 1 - 8.4% End of year 2 - 7.2% End of year 3 - 6.0% End of year 4 - 4.8% End of year 5 - 3.6% End of year 6 - 2.4% End of year 7 - 1.2% End of year 8 - 0%
Access Portfolio Plus charges:
Annual Administration Charges =
0.25% quarterly (1.00% per annum) for the duration of the Policy, based on the account value.
Policy Fee =
USD 90 / EUR 90 / GBP 55 Quarterly
Surrender Charge =
Plan is free of surrender charges.
Establishment Charge
NIL
Currency Exchange Charge
NIL
Asset Transfer Charge
NIL
As an expat you need to prepare for the unexpected. I signed up for an 8 year term and lost my job and therefore my visa after 3. I decided to head home and my IFA told me the Access wasn't suitable if I did - so I cashed in and lost out because of financial penalties. I'm not saying don't plan for the long-term - but if you DO, you HAVE to make sure whatever you do it's flexible and you won't be financially hurt if you have to alter your plans.
Be careful of the costs involved when full commissions are charged; it may be better to ask for a fee-based option, this can often save substantial costs.
Our advice is to only consider incepting such a plan after receiving advice from a fully regulated chartered financial adviser, who is qualified to advise on an investment portfolio, and to opt for a cleanly priced option with lower or no establishment charges or lock-in periods, and no exit penalties.
Used in the right circumstances, offshore bonds can give deliver substantial tax benefits. However, in many instances, they can be mis-used by commission based salespeople to extract high levels of commission.
If you already have an Investors Trust Access Portfolio Bond 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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