Clients could save up to 20 basis points which would otherwise go towards paying VAT on discretionary fund manager fees with the launch of a new offshore bond wrapper by Axa Wealth International.
Distributed from Dublin, Axa’s new Delegation investment service aims to give investors access to a broader range of asset types including collective investment schemes, equities, government and corporate debt and derivatives.
Due to Delegation’s offshore nature the costs associated with DFM fees are not subject to VAT.
According to AWI, discretionary fund management in the UK offshore bond market has become more popular in recent years as advisers and clients outsource investment strategy and management.
Delegation allows DFMs to invest in line with their standard portfolio management practices and maintain consistent mandates across all wrappers, including Sipps and offshore portfolio bonds.
Simon Willoughby, head of proposition at AWI, said: “The way in which advisers and their clients are investing is continually changing and as a provider we need to adapt to meet these needs.
“The launch of Delegation represents one of the most significant new product developments in the UK offshore market for several years and we believe it signposts the next phase in the evolution of the offshore portfolio bond.”
The new bond is a single premium, life assurance investment bond that provides advisers and clients to access to flexible adviser remuneration.
Although Delegation allows advisers to set objectives based on client risk profile and available on a managed or discretionary basis, in order to keep its UK tax-compliant wrapper status the policyholder must not be able to select or influence the choice of assets held in the bond.