RL360 is based in the Isle of Man, conducting business in Asia, Africa, the Middle East and the UK. RL360 is part of the RL360 Group, which has 60,000 policyholders, in 170 countries in excess of $10 billion in assets under management and 300 staff.
It is no longer part of Royal London (the UK group), having separated from it several years ago.
RL360 provides offshore savings, protection and investment products for expats and local nationals around the world.
RL360 Oracle Offshore Bond
The RL360 Oracle plan is a lump-sum investment plan.
It is provided by RL360 Insurance Company Limited in the Isle of Man.
Policyholders are protected by the Isle of Man Compensation of Policyholders protection scheme. However, this does not necessarily protect individual investors from poorly suited products and bad financial advice!
RL360 provide offshore investment bonds that are not subject to any on-going tax in the Isle of Man.
The RL360 Oracle plan has a minimum investment of $32,000 (equivalent in up to 7 currencies) with the full amount (on large premiums a little more than 100%) invested.
A selection of 170 funds is available with no cash holding. Fund units are cancelled as charges accumulate and if the policy value falls below the minimum, RL360 may surrender the policy and reclaim everything owed.
Fund switch charges are not levied and withdrawals are possible as long as they do not reduce the policy below the surrender value minimum.
This does not make the policy particularly flexible, however, as the surrender value is still ‘locked in’ – the policy holder is still liable to the outstanding establishment charge.
This is 7.5% of the initial premium. The establishment charge is applied over 5 years and pays the adviser commission among other sales costs.
Although plan holders do not need to invest in mirror funds. RL360 still charges 1.2% extra to ‘manage’ your funds. The cost of the underlying fund still stands (normally 1.5-3.5%).
As an example, assuming actively managed funds don’t underperform (which is highly unlikely) anyone seeking to recoup their investment at end of year 3 could incur 6.4% in charges in that year alone!
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 entering a policy.
RL360 Oracle Offshore Bond Key Features
Life assurance or capital redemption - Oracle can be issued as either a life assurance or capital redemption policy. Your adviser can explain when it may be appropriate to use one over the other, but in general, the capital redemption basis is more likely to suit trustee and corporate investors. This is because the policy does not come to an end on the death of a named individual (the “life assured”), as there are no lives assured and the policy simply continues until its maturity in 99 years’ time.
Limited Range of Funds – In our opinion Oracle provides access to a limited range of funds, although the big named fund managers are included in the list.
Multi-Currency - Oracle is available in the following currencies:
Charges -
Charges cover the set-up and on-going administration of the policy, any commission paid to your adviser and RL360’s profit! There are two main components of the Oracle charging structure as listed below:
Establishment fee:
The standard establishment fee is 7.50% of the premium paid. The fee is collected at a rate of 0.375% quarterly in arrears over the first 5 years.
Each additional premium will be subject to its own establishment fee. The fee will be collected in the same format as described above.
Administration Fee
There is a standard on-going percentage administration fee of 1.20% per year, taken as 0.30% of the current policy value or the premium paid, if higher, deducted quarterly in arrears. Each additional premium is subject to its own percentage administration fee.
The percentage administration fee is payable for the lifetime of the policy.
Advice fee
If you choose to appoint an investment adviser there may be an advice fee deducted from your policy. The amount of the fee, and when it should commence, should be agreed between you and your investment adviser. The amount deducted, if any, will be paid directly to your investment adviser.
Additional fees
The funds that are held within your policy will be subject to an annual management charge. The charge will vary per fund chosen and seem to range between 0.5% and 2%.
Early Encashment
If you wish to fully surrender your policy you can do so at any time, simply by returning your Policy Schedule, including any endorsements, to RL360’s head office head office along with a completed Surrender Form.
A policy surrendered in full within the first 5 years will be subject to a surrender fee. The fee will be equal to the outstanding establishment fee.
A surrender fee equal to the outstanding establishment fee will also apply to any additional premium if it has been less than 5 years since the additional premium has been paid.
We would recommend that you discuss any withdrawals or surrenders with a financial adviser so that you can decide on the most effective method.
Anyone aged 18 or over can apply for an Oracle policy provided they are not subject to any legislation which prohibits this type of investment. Available to individuals on a single or joint ownership basis as well as companies and trustees, Oracle can be issued as either a life assurance policy or as a capital redemption policy.
Oracle can be issued on a life assurance or capital redemption basis.
1. Life assurance Oracle
On a life assurance basis, Oracle 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.
The youngest life assured cannot be older than 65 years of age when the policy is issued.
2. Capital redemption Oracle
On a capital redemption basis, Oracle has no lives assured linked to it.
It 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 USD160 (or currency equivalent).
You cannot change the basis of your policy after it has been issued.
Regular withdrawals:
You can take regular withdrawals from your policy at any time.
Regular withdrawals may be taken as a percentage of the premium, or as a fixed amount.
Regular withdrawals will be paid in the policy currency and can be paid: • monthly • quarterly • termly (i.e. on a 4 monthly basis) • half-yearly • yearly
Regular withdrawals can be set up when you apply for your policy or can be requested at a later date.
One-off withdrawals:
There is no maximum limit for a one-off withdrawal subject to the following:
• If you have only paid one premium into your policy, any withdrawals taken cannot be greater than the current surrender value or result in the policy value being less than USD20,000 (or currency equivalent), whichever is higher.
• If you have paid more than one premium into your policy, any withdrawals taken cannot be greater than the surrender value or result in the policy value being less than 10% of the total in-force premiums paid, or USD20,000 (or currency equivalent), whichever is higher.
Withdrawal minimums:
Both regular and one-off withdrawals are subject to minimums depending on currency.
Sub-policy surrenders:
In addition to withdrawals, you may also surrender whole sub-policies.
Any sub-policy surrendered within the first 5 years will be subject to a surrender fee.
The surrender fee will be equal to the outstanding establishment fee and will be applied proportionally across all surrendered sub-policies.
Policy surrenders:
If you wish to fully surrender your policy you can do so at any time, simply by returning your Policy Schedule, including any endorsements, to RL360's head office address along with a completed Surrender Form.
A policy surrendered in full within the first 5 years will be subject to a surrender fee.
The fee will be equal to the outstanding establishment fee. A surrender fee equal to the outstanding establishment fee will also apply to any additional premium if it has been less than 5 years since the additional premium has been paid.
Any extra allocation based on premium size will also be subject to a surrender fee if the policy is surrendered in full within the first 5 years from date of issue.
The fee will be equal to 100% of the extra allocation rate reducing at each policy anniversary by 20%.
For life assurance policies (where the last life assured has died):
When the last life assured dies, your policy will end. RL360 will then require written notifification of death along with satisfactory documentation (legal entitlement - “probate”) to be sent to their head office address, before they can pay out.
The death benefit payable will be equal to 101% of the policy value.
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.
For capital redemption policies:
Capital redemption policies will not automatically come to an end on the death of the policyholder(s).
Ownership can be determined by the personal representatives of your estate.
Ok...
RL360's charges cover the set-up and ongoing administration of your policy, any commission paid to your adviser and - of course - RL360's profit.
There are 2 main components of the Oracle charging structure as listed below:
Establishment fee
The standard establishment fee is 7.50% of the premium paid.
The fee is collected at a rate of 0.375% quarterly in arrears over the first 5 years.
Each additional premium will be subject to its own establishment fee.
The fee will be collected in the same format as described above.
Percentage administration fee
There is a standard ongoing percentage administration fee of 1.20% per year, taken as 0.30% of the current policy value or the premium paid, if higher, deducted quarterly in arrears.
Each additional premium is subject to its own percentage administration fee.
The fee will be collected in the same format as described above.
The percentage administration fee is payable for the lifetime of the policy.
Advice fee (optional)
If you choose to appoint an investment adviser there may be an advice fee deducted from your policy.
The amount of the fee, and when it should commence, should be agreed between you and your investment adviser.
The amount deducted, if any, will be paid directly to your investment adviser.
Additional fees
The funds that are held within your policy will be subject to an annual management charge.
The charge will vary per fund chosen.
The annual management charge set by the fund manager is reflected in the fund price, and is in addition to the Oracle product charges.
There may be charges associated with the payment of premiums or withdrawals by telegraphic transfer and other means.
If you require more than the standard annual valuation statement, a charge may be made for each additional valuation.
A loyalty bonus of 0.50% of the policy value will be applied on the sixth policy anniversary and yearly thereafter.
Furthermore, each additional premium will attract its own loyalty bonus.
The loyalty bonus will be calculated as 0.50% of the additional premium’s current value on its sixth premium anniversary.
The loyalty bonus will be applied on each premium anniversary thereafter.
I was told this was THE most flexible solution for me. Put yer money in, watch it grow, take an income, get a bonus...and also wrap it up tight so my family can have it when I die.
What I wasn't told was what the actual charges do to your money - and what they doubly do if you actually try and access your money.
Wish this review had been up before I got (miss)sold!
Our view is that this product is expensive, inflexible and offers an unattractive range of investment funds. A little like encyclopaedias – this type of baby bond is out of date.
If you already have the Oracle from RL360 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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