Legal & General International (Ireland) Ltd (LGII) has released details of how it will treat adviser payments on its International Portfolio Bond (product) in the run up to and post implementation of the retail distribution review (RDR) in 2013.
Pre-RDR commission based products:
Payments on offshore bonds with start dates pre-RDR will be treated as follows:
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Trail commission on existing products will remain. The client can reduce this but any increase would end trail commission and trigger adviser charging.
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For advised top-ups taking place post RDR on pre-RDR products an initial adviser charge can be facilitated.
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For an adviser change - trail commission can be redirected to the new adviser under instruction from the client.
Post-RDR products:
Adviser Charging can be facilitated in one of two ways:
1) Premium Plus: This is deducting the charge from the client payment prior to investment in the bond.
2) Partial Withdrawal: This is deducting the charge from the assets in the bond (Note: - this will be treated as a partial withdrawal for tax purposes).
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Under instruction from the client ongoing adviser charges can be altered at any time. CEO of Legal & General International (Ireland) Ltd, David Fagan said: "We are confident that our offshore bond will be RDR ready well in advance of year end and we will offer a high level of flexibility on both adviser charge payment and trail commission. Provided we have explicit instructions from clients, we can facilitate payment of an adviser charge for both pre and post RDR business. As we are accountable to HMRC for money being paid into and out of a bond, we will closely monitor payments taken from the bond assets, as these will count towards the 5% annual tax deferred withdrawal allowance."
David Fagan, CEO of Legal & General International (Ireland) Ltd
Advisers who require more information about our International Portfolio Bond RDR charging structure should contact the Legal & General International (Ireland) Ltd Distribution Support Team on 0845 6740 803.
Lines are open from 9 am to 5.30 pm Monday to Friday. We may record and monitor calls. Call charges will vary.
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