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Quilter International (formerly known as Old Mutual International) is one of the leading providers of advice, investments and wealth management both in the UK and internationally.
Quilter International is a part of Quilter plc and manages around £107.4 billion of investments (as at 30th June 2020). Quilter plc is listed on the London and Johannesburg stock exchanges.
Quilter International's Collective Investment Bond (CIB)
The Collective Investment Bond is a whole of life offshore bond. This means it is a life assurance bond where, in the event of the death of the relevant life assured, the death benefit is 101% of the surrender value (which is the value of the Portfolio Fund, less any outstanding charges, including the early withdrawal charge).
The Collective Investment Bond is a typical offshore investment bond, and does not permit the holding of highly personalised assets, which is good for both UK residents and returning UK residents.
This is largely because when a UK expatriate returns to the UK, it is essential to “endorse” the offshore bond so that they can continue to benefit from tax deferred gains.
If you fail to endorse the offshore bond you could find yourself paying income tax on annual deemed gains of 15% of the original sum invested, regardless of whether the investment bond produced any gains.
By instructing the offshore investment bond provider to endorse the policy if you return to the UK, you restrict the invested assets to those which are permissible down to those within a product such as the Collective Investment Bond.
The CIB 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”.
The Quilter International Collective Investment Bond (CIB) Key Features:
Extensive choice of Quilter International and external collective investment funds and unit trusts, Eurobonds and currency deposits.
Minimums - Lump sum minimum of £25,000. You can make additional lump-sum payments into your policy at any time with a minimum of £2,500. However you will pay any initial fund charges on all contributions.
Currency - Quilter International's Collective Investment Bond payments can be made in a choice of 13 currencies, including Pound sterling (GBP), Euro (EUR), United States dollar (USD).
Eligibility - Quilter International Collective Investment Bond is a regular premium, whole of life, life assurance contract issued by Quilter International (formerly known as Old Mutual International). It is available to most international investors outside of the main regulated territories such as the UK, the USA and Australia. Anyone aged between 18 and 89 (inclusive) can invest into the Collective Investment Bond.
Choice of external custodian - You may request Quilter International to consider the appointment of one or more Authorised Custodians and Dealing Desks, instead of, or as well as, their Default Custodian and Dealing Desk subject to their minimum published investment limit for transfers to Authorised Custodians.
Charges - This would depend on the type of plan you take out from Quilter 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 this may not always be the case) provide you with a charges schedule, which will detail:
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 Quilter International's set up fee, including any payments (such as commission) made by Quilter International to your financial adviser. This charge may also apply if you cash in part of your bond and the amount remaining is less than either 25% of your total investment, or £10,000/US$15,000/€15,000 (or another currency equivalent).
Quilter International (formerly known as 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.
Your financial adviser may suggest that you place your collective bond in trust. This can ensure your wealth is used as you intend during your lifetime and after you die, and may offer some advantages in the future, for example if you are self-employed or get divorced, or if you have an estranged family.
It can also benefit your family or beneficiaries after your death by helping them to avoid probate issues.
Seek personalised advice from a fiduciary.
In the UK, a collective bond is regarded as a portfolio bond.
If you are planning to move to the UK you will become a UK tax resident and taxation of the collective bond will be subject to possible ‘chargeable events’.
These events include: full surrender of the policy, assignments for consideration, and regular withdrawals in excess of the 5% tax deferred allowance.
We strongly recommend you discuss your options with a fiduciary before becoming a UK tax resident.
The charges for setting up and maintaining your Collective Investment Bond will depend on the kind of funds you choose, your agreement with your financial adviser, and other variables.
Your financial adviser should provide details and explanations, and the charges should also be listed for you in a charges schedule.
The costs Quilter International incurs in setting up and managing your bond
The administrative costs of the fund managers.
Fees charged by your financial adviser.
You may need to pay an early withdrawal charge if you cash in your bond fully.
The amount of this charge reflects the cost to Quilter International of setting up the bond, including any payments (such as commission) made by Quilter International
to your financial adviser.
This charge may also apply if you cash in part of your bond and the amount remaining is less than either 25% of your total investment, or £10,000/US$15,000/€15,000 (or another currency equivalent).
If you decide to move any of the investments into a different fund or asset, you will usually have to pay a dealing charge. this is currently £15 for each transaction.
Most switches involve two transactions: out of the current fund and into the new one – so the charge would be £30.
You may also need to pay other third-party charges such as bank charges, which will be included in the net amount being switched.
There may also be other charges to pay, such as telegraphic transfer charges.
The Collective Investment Bond and some of the investments which may be held within it have fees which exist partly to meet the advice, promotion and distribution expenses.
These may include initial and on-going payments (such as commission) made by Quilter International to your financial adviser.
These payments could be in addition to any commission payable by the investment provider to your financial adviser in respect of the investment held.
If you want to know how much you're paying, have paid and how much your financial adviser received and continues to receive - just ask for an X-Ray Review™.
Quilter International say:
The collective bond could be right for you if you want to:
• take maximum advantage of offshore tax benefits
• invest in a wide range of funds
• be able to deal investment funds, quickly and simply
• consolidate any existing investments you hold in collective funds or unit trusts
• have flexible access to your investment
• use your investment to generate a regular income
• invest at least £25,000/uS$37,500/€37,500 (or currency equivalent)
• save for growth over the medium to long-term
• create a trust or nomination for your children or grandchildren’s future.
Get an expert opinion from a fiduciary!
I think I've made the right choice with OMI's (now known as Quilter International) Collective Investment Bond. I took careful advice, read all the literature and even reviews like this one...and for my circumstances and requirements, it seemed like the perfect fit.
The Quilter International Collective Investment Bond is (when used correctly) a good investment product which stands up well against the competition. It is, however, also easily mis-used and normally available at a much lower cost.
Our advice is to incept such a plan only after receiving advice from a fully regulated financial planner 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 a Collective Investment Bond from Quilter International we recommend you get a Second Opinion to ensure you are on track to get and keep the life you want.