BondsNov 20 2017

Sanlam and Seven IM launch open-architecture bond

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Sanlam and Seven IM launch open-architecture bond

National financial adviser Sanlam and Seven Investment Management (7IM) have partnered to launch the Sanlam Onshore bond.

The bond has been created by Sanlam for the 7IM Platform, and Jonathan Polin, group chief executive of Sanlam, said this was in response to adviser demand for a product that would fit a tax-planning niche.

Mr Polin said: "This will support financial advisers and help meet the increasingly complex requirements of their clients.

"In particular, for those advisers looking for onshore options, this solution gives individuals the opportunity to pass on their wealth through the generations, in a tax efficient, onshore trust environment."

Unlike many onshore bond offerings, advisers will not be limited to using insured funds only within the wrapper.

This vehicle will be open architecture. 

This means the bond can invest in authorised and regulated collective schemes, and can support whole-of-market financial advisers in terms of their service proposition.

Verona Smith, head of platform for 7IM, said: “This product wrapper fills a much needed gap in the market. This is the first time we have been able to add an onshore bond to the platform, the challenge historically being that most onshore bond providers only allow access to insured funds.

"We have enjoyed working with Sanlam on this launch.

Charges (in addition to standard 7IM Platform costs and underlying product charges) are 0.25 per cent on the first £100,000, 0.2 per cent between £100,001 and £500,000, 0.15 per cent between £500,001 and £1m and 0.1 per cent on the value in excess of £1m.

The minimum investment required is £5,000, with additional top ups at £1,000.

Fiona Sharp, chartered financial planner for Cambridge-based Verve Financial Planning, said she has used investment bonds, but this tends to be on rare occasions when clients have been a higher-rate tax payer in working life and will end up being a basic-rate tax payer in retirement.

Ms Sharp said: "My clients tend to be inheriting something on divorce, so we tend to focus on pensions first, then Isas and unit trusts, and the investment bonds.

"I tend to use these rarely and only for specific clients, although there will be financial advisers who will want to use this sort of investment bond for trusts and tax planning."

simoney.kyriakou@ft.com