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Open Architecture Investment Bonds

Traditionally investment bonds have been issued by assurance companies such as Standard Life, L&G and Prudential. They usually offer their with-profits funds and occasionally a managed unit-linked investment. As the financial services industries evolved, these companies added more fund options, initially their own investment known as 'In House' funds and then later external investment funds from investment houses like Invesco, Schroders and Threadneedle.

Although some of today's modern portfolio bonds can boast access to several hundred funds; open architecture investment bonds are revolutionising the way investment advisers are able to build a balanced portfolio for their clients using a variety of tax efficient vehicles.

The charging structure of investment bonds has often been criticised for lack of clarity. Most investment bond products offer enhanced terms for larger investments together with penalties for early withdrawal. The 'In House' funds rarely attract additional management charges, whereas externally selected funds from some of the leading fund houses will attract additional charges.

At Raymond James we have access to a wide range of onshore and offshore Portfolio Bond providers who provide the insurance structure that shields your capital from tax. Once the bond has been created the investment adviser is able to manage your capital in the same way as he would an ISA, SIPP or general investment account. The charging structures for investment bonds are provided at the outset; valuations are available daily via Raymond James Investor Access clearly showing all purchases, sales, dividends and charges; and there are no early redemption penalties.

 

Open Ended Investment Companies (OEICs) are on the whole more suitable for open architecture bonds. Gross income paying and institutional funds can be used where appropriate and using individual equities and corporate bonds is only possible in an onshore bond.

By structuring your investments across your ISA, general investment account and offshore portfolio bond, your adviser is able to place the most suitable investments in each account to help reduce your potential tax liability.

Open architecture investment bonds are particularly useful for clients looking for a trust portfolio. Your adviser is able to continuously monitor the trust portfolio and make any adjustments through their trading systems at Raymond James, subject to the service level agreement that you have agreed to.

A list of fund providers can be found on our strategic partner list

www.rjis.co.uk


 
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