Skandia International is launching a new generation of portfolio bonds that
are designed to fit the new UK
regulatory landscape taking shape in 2013, the firm said.

The company, which is the offshore business of London- and
Johannesburg-listed Old Mutual Wealth Management, is to roll out the products
for UK
customers on 31 December.

The new bonds, which will be in line with the Retail Distribution Review
requirements, are powered by Wealth Interactive, the new wealth management
service launched earlier this year by Skandia International.  Wealth Interactive provides advisors access
to tools and services, enabling them to manage client investments online.

The RDR reform programme stamps out the use of trail commissions on
financial products paid to advisors, part of an attempt by policymakers to make
advice more independent. A number of other wealth managers have launched
RDR-compliant products ahead of 2013.

Skandia International’s new wealth management service will consist of the
European Portfolio Bond, offered by the Dublin-based Skandia Ireland, and
the International Portfolio Bond, available in either life assurance or capital
redemption options, offered by the Isle of Man-based Royal Skandia. 

“Whilst making our proposition ready for R-Day in the UK, we have
also been working hard to deliver additional benefits to advisors and customers
alongside the new regulatory requirements,” said Michelle Andrews, marketing director
at Skandia.

 “Our new Portfolio Bond
proposition in the UK will not only facilitate a range of advisor charging
options and pass rebates back into customer’s bonds, it will also provide many
additional features and value-add services to benefit both advisors and customers.  These include the ability to manage
investments online, straight through processing, access to sophisticated
investment tools and detailed fund information,” said Andrews.

Offering a range of charging options, which can be adapted to fit the
clients’ needs, as well as the advisor’s business model, the new products, will
ensure that any fund rebate arrangements already in place, are to be refunded
in full to the customer’s bond, the firm said in a statement.

In the interim

Until 30 December, advisors can continue to submit applications for new
business, as well as top-up requests for existing portfolio bonds. Furthermore,
on provision of evidence that advice has taken place before 31st December, new
business and top up instructions received up until 5th April 2013 will be
treated as pre-RDR business and continue to facilitate the payment of
commission, the firm said.

Move of existing
products to RDR

After 30th December 2012, all current portfolio bond products sold by
Skandia International in the UK
will close to new business, although the option to make top-ups will remain
available, and any trail commission payments due on investments made pre-RDR
will continue.

However, if a top-up is received after 30 December, any existing trail
commission will cease and initial commission will not be payable. Fund switches
within the existing portfolio bonds will not trigger advisor charging, even if
these occur in 2013.

The firm said there will be no obligation for advisors with existing customers
to submit the current bonds and replace them with the new products in order to
comply with the RDR requirements. During 2013, all Skandia International
portfolio bond policies taken out by UK customers in the pre-RDR regime
will be upgraded to adopt the Wealth Interactive functionality and existing
customers will benefit from the enhanced services at no extra cost, the firm said.