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Review summary

Old Mutual International Executive Redemption Bond (ERB)

Old Mutual International

Old Mutual International (formally known as Royal Skandia) is the international arm of Old Mutual Wealth, one of the leading retail investment business.

Old Mutual Wealth oversees £123.5 billion in customer investments (as at 31 December 2016).

Old Mutual Wealth is part of Old Mutual plc, a FTSE 100 group that provides life assurance, asset management, banking and general insurance.

Old Mutual is trusted by more than 19.4 million customers across the world and has a total of £394.9 billion assets under management (as at 31 December 2016).                           

The Old Mutual International Executive Redemption Bond (ERB)

The Old Mutual International Executive Redemption Bond is an offshore, whole of life assurance policy providing benefits on death of the relevant life assured (or ‘bond’) that accepts single premiums.

Customer Reviews
Expert Verdict

Many international investors find managing a portfolio of funds an administrative burden.

With the International Executive Redemption Bond, Old Mutual International takes care of this by establishing a portfolio of Old Mutual International funds within the account and managing any paperwork on your behalf.

Normally if a particular investment is underperforming, then changing strategy or fund manager may mean you suffer not only exit penalties and new initial charges on a new investment, but also a possible tax liability as well.

By choosing an Executive Redemption Bond, you potentially avoid this problem.

The ERB bond is issued in the form of a single policy or a number of separate polices known as a “cluster of polices”.

The initial charging term is fixed (based upon the commission and charging structure agreed) at the time of the policy activation and this cannot be varied or waived; therefore, early encashment of the policy results in a “surrender charge” or “early withdrawal charge”.

Learn more from our deep dive into Old Mutual International's Executive Redemption Bond...

The Old Mutual Executive Redemption Bond (ERB) Key Features

The Executive Redemption Bond is a capital redemption contract with a 99-year fixed term.

It continues until the end of the term unless cashed in earlier.

At the end of the term the bond has a guaranteed value of at least twice the premium amount you have paid (less any withdrawals or surrenders).

Open Architecture

The Executive Redemption Bond provides flexibility and freedom of choice, through access to a wide range of investment asset types.

This wide investment choice is known as open architecture. It enables you to invest in mutual funds, stocks and shares, fixed-interest securities, multi- currency deposits, hedge funds, structured notes, exchange-traded funds and other alternative investment, which means you can customise your portfolio precisely to your individual needs and preferences, without having to compromise in order to fit in with pre-set rules and parameters.


Lump sum minimum of £50,000.

You can make additional lump-sum payments into your policy at any time with a minimum of £2,500. However your will pay any initial fund charges on all contributions.


The Old Mutual International Executive Redemption Bond can be set up a policy in 1 of 3 currencies including Pound sterling (GBP), Euro (EUR), United States dollar (USD).


The Old Mutual International Executive Redemption Bond is a regular premium, whole of life, life assurance contract issued by Old Mutual International (OMI).

It is available to most international investors outside of the main regulated territories such as the UK, the USA and Australia.

Learn more from our deep dive into Old Mutual International's Executive Redemption Bond...

Choose an external custodian:

The structure of a bond means that you need a custodian to hold, on Old Mutual international’s behalf, the assets that you decide to link to your bond.

You can choose your own custodian, which is likely to be the financial institution you currently have a relationship and who are advising you.

If you don’t have your own custodian, then Old Mutual international will use its own appointed custodian to play this important role for you.

Charges - will depend on the type of plan you take out from Old Mutual International as they offer different charging structures largely linked to the amount of commission or earnings being taken by the third party salesman or adviser. They should, but may not always be the case provide you with a charges schedule, which will detail:

  • The costs Old Mutual international levy for setting up and managing your bond
  • The administrative costs of the fund managers
  • Fees charged by your financial adviser.

Early Surrender:

A full encashment will result in exit penalties being applied in the early years through surrender charges linked to the term of the policy. The amount of this charge reflects the cost of Old Mutual Internationals set up fee, including any payments (such as commission) made by Old Mutual International to your financial adviser.

Old Mutual International has a great reputation but, in the pursuit of offering flexibility of charging structure to all types of advisers they have created a product that has the same name but completely different costs.

Those costs are dictated by the adviser and we have seen evidence to suggest that some advisers and adviser companies take the maximum commissions.

Learn more from our deep dive into Old Mutual International's Executive Redemption Bond...


The Pros

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

The Cons

> High risk of hidden commission
> Potentially very inflexible
> Commonly mis-used
What are the payment and withdrawal terms on OMI's Executive Redemption Bond?

Payments in:

• Make one initial investment of at least £50,000/US$75,000/75,000, or the equivalent in another currency.

• Add in extra amounts of at least £2,500/US$3,750/3,750 (or currency equivalent)*.

• No fixed term.

These minimum amounts may increase in the future, so please check the latest gures with your nancial adviser.

Payments out:

One-off or regular withdrawals, which will be free of charge as long as you leave in a surrender value of £10,000/US$15,000/15,000 (or another currency equivalent), or at least 25% of your total investment, whichever is higher.

What happens on the death of a policyholder?

The treatment of your policy when a death occurs depends on whether there are surviving policyholders.

If a policyholder has died and at least one policyholder is still alive, the bond will continue and will automatically transfer to the surviving policyholder(s).

If the last policyholder has died, the bond will continue until the end of the 99-year term. Ownership of the bond will pass to one of the following parties:

• If there is a nominated beneficiary, ownership will be transferred to them.

• If the bond is subject to a trust, then the bond is still owned by the trust and a trustee must be appointed as a policyholder.

• In all other cases, ownership will be transferred to the legal personal representatives of the deceased policyholder’s estate. They can then choose whether to:

– keep the bond and appoint a beneficiary to become the policyholder by executing a 
deed of assignment,


– encash the bond to pay the proceeds to your estate’s beneficiaries.

Close shave as I avoided paying the commission.

Reading this review - and the expert verdict - I clearly had a close shave. Being as I am from the UK I made sure I used a fee only adviser - clearly that's made this bond an effective and cost effective solution for me.

I had a close shave though as I was cold called by an IFA who was very pushy to meet - when I found he wasn't fee only though I binned off the idea of a meet.

It sounds nice that an adviser doesn't charge like they do back home for some - but come on don't be a sap - how do you think they drive flash cars? They take money off you blind...hidden commission like it says here.

Anyway, I'm happy - and I know I wasn't badly advised - and my ERB is the right product for me.

My advice is tread carefully though...it's not necessarily the product that's at fault it's how its sold.

Expert Assessment of Old Mutual International's Executive Redemption Bond (ERB)

The Old Mutual International Executive Redemption Bond is an excellent investment product which stands up very well against the competition, but it is also easily mis-used and is normally available at a much lower cost than you may have been made aware at the point of sale. 

When we have compared the charges that fee-based clients would pay, for making use of an Old Mutual International Executive Redemption Bond / ERB, against commission based advisers – it is clear to see that recipients of commission based advice may pay anywhere from 100-500% more in charges.

These hidden costs also cause a lock-in period of up to 8 years which substantially reduced the flexibility which clients would otherwise benefit from.

When used correctly the OMI Executive Redemption Bond is a market leading product.

Our advice is to incept such a plan only after receiving advice from a fully regulated financial adviser and to opt for a cleanly priced option without any form of establishment charge or lock-in period (zero-exit penalties).

If you already have an offshore investment bond from Old Mutual International 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.

Learn more from our deep dive into Old Mutual International's Executive Redemption Bond...

Old Mutual International Executive Bond Brochure

Old Mutual International Executive Redemption Bond Fact Sheet At A Glance

Old Mutual International Executive Redemption Bond Terms & Conditions

Old Mutual Executive Redemption Bond Instruction Form And Guidance Isle Of Man

Old Mutual Executive Redemption Bond Change To Fund-Based Commission Form

Old Mutual Executive Redemption Bond Application Form For Individual Investors

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