Royal Skandia Collective Investment Bond

What do you think of the Royal Skandia Collective Investment Bond - see link attached.
http://www.royalskandia.com/Investments/cib.asp

I have a Finance Advisor ([broken link removed]) who is proposing this as a solution to me for a Lump Sum investment in region of 50K spread across a number of different funds to lower risk and maximise.
Also I am an Irish Expat on the continent - it sounds like a good option.
Any Advice!

You have to ask yourself:
1. What are the charges?
(Nothing about them in the offer documents - I consider this a bad sign)
2. What are the funds?
(Nothing about them in the offer document)
3. How long will you be off-shore and what happens if you become tax resident in another country?

To my mind, these offerings are only really suitable for people who are going to be off-shore for a very long time, either moving countries a lot or living in non-resident countries, e.g. the gulf, Africa, some parts of Asia.

The funds identified for the portfolio are:

[FONT='Arial','sans-serif']AXA Global Inflation Bond. [/FONT]
[FONT='Arial','sans-serif']F&C EM Bond.[/FONT]
[FONT='Arial','sans-serif']Schroder Alt Agriculture.[/FONT]
[FONT='Arial','sans-serif']Merrill Lynch Gold & General.[/FONT]

[FONT='Arial','sans-serif']The first 2 are considered the lower risk and 70% of the investment will be in these 2.[/FONT]
[FONT='Arial','sans-serif']20% of investment will be in Schroder and 10% in Merrill Lynch which is considered the highest risk.[/FONT]
[FONT='Arial','sans-serif'][FONT='Arial','sans-serif']All above funds will have initial charges reduced to zero when held through the CIB.[/FONT][/FONT]
[FONT='Arial','sans-serif'][FONT='Arial','sans-serif']The annual management fee is 1% per year[/FONT][/FONT]
[FONT='Arial','sans-serif'][FONT='Arial','sans-serif']You can withdraw up to 75% of your capital from day one penalty free, with full penalty free access available after 8 years.
Annual Management 1% pa
Admin charge 96GBP per qrtr
Dealing charge 15GBP per sale / purchase of funds


What do you think??
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You should check if the policy includes a life insurance element. The Royal Scandia document says: “The Collective Investment Bond is a flexible lump sum whole-life investment”, and in the Glossary: “Whole Life Policy - Life assurance that a customer pays throughout the whole of their life and that pays out whenever they die.” If it is this type of a product you are probably paying a life insurance premium that you don’t need and that will increase the older you get. The life insurance element eats into profits.

I was offered something similar to this in my ex-pat days and passed up on it for that reason.

The Death Benefit offered is 101% of SV at no extra cost - the amount of additional life cover offered is 1% of the SV and most offshore policies provide this free of charge.

Therefore, there is no life cover costs eating into the profits at any stage during the product term.

What you have to look out for here is the double layer of charges - Royal Skandia will have their policy charges and the underlying fund manager will have it's own set of charges.

Edit: Just had a quick look at the charges here - they are not competitive versus other players in the market. Have a look around. Is your adviser giving you the best impartial advice?