international portfolio bond knowledge · a one-off withdrawal. adviser provides a copy of the...

INTERNATIONAL PORTFOLIO BOND

This is not a consumer advertisement. It is intended for professional financial advisers and should not be relied upon by private customers or any other persons.

KNOWLEDGEWe understand the importance of supporting your clients. Helping you to understand how to get the most out of our International Portfolio Bond allows you to make informed decisions that are right for your clients.

CONTENTS

10

7

4

9

6

4

3

8

5

3

10

12

HOW TO GET AN ILLUSTRATION FOR THE IPBYou can request an IPB illustration by submitting your request to Canada Life International Assurance (Ireland) DAC by email to:

[email protected]

Or alternatively by calling us on:

+44 (0)1624 820200

We may record and monitor calls.

Your client’s illustration can either be emailed to you with links to the appropriate literature or we can post a quote pack to you.

Illustrations should be read together with the relevant supporting documents.

11. HOW TO GET ONLINE VALUATIONS

8. HOW TO MANAGE SWITCHING

5. HOW TO UNDERSTAND OUR ASSET RULES

10. HOW TO TRANSFER ASSETS

7. HOW TO MAKE WITHDRAWALS FROM THE IPB

4. HOW TO MANAGE SEGMENTS

1. WHAT IS THE APPLICATION PROCESS?

9. HOW TO MANAGE BOND LIQUIDITY

6. HOW TO MAKE PAYMENTS INTO THE IPB

3. HOW TO PLACE THE IPB IN TRUST

12. HOW TO DECIDE WHICH FORMS TO COMPLETE

HOW TO CONTACT US

2. WHY DO WE PROVIDE A PRE-APPLICATION CHECKING SERVICE? 3

2 INTERNATIONAL PORTFOLIO BOND – ADVISER GUIDE

3INTERNATIONAL PORTFOLIO BOND – ADVISER GUIDE

1. WHAT IS THE APPLICATION PROCESS? • You can download the application form from the literature section of our website at www.canadalifeinternational.ie

• We have also produced a straightforward Anti Money Laundering documentation checklist and Application checklist to help ensure you have included all the necessary information with the application.

• Once you have completed the paperwork you have the option of sending your client’s application form and client identification documents to us for pre-application checking either by fax on +44 (0) 1624 820 201, or as a scanned attachment via email to [email protected]. When we receive the application, pre-application checking will be done within 24 hours where possible.

• Once pre-application checking is complete you can then send us the original application and certified client identification information. Please send all the paperwork to our Isle of Man address (Canada Life International Assurance (Ireland) DAC, Canada Life House, Isle of Man Business Park, Douglas, Isle of Man IM2 2QJ).

• When we receive the application and client identification documents we will check everything thoroughly. If we need any more information we’ll get in touch, but this isn’t likely if you’ve gone through the pre-application checking process.

• To place your client’s IPB in trust, the trust should be set up before the trustees apply for the bond.

• Once we have received all the required documents, the investment premium is processed, the policy is issued and the selected assets are purchased.

2. WHY DO WE PROVIDE A PRE-APPLICATION CHECKING SERVICE?• To provide you with feedback before you send original documents or your client’s money to us.

• To avoid omissions and mistakes.

• To ensure the actual application process is processed swiftly and efficiently.

3. HOW TO PLACE THE IPB IN TRUSTThe following trust schemes are available through our IPB:

• Loan Scheme

• Gift Scheme

• Discounted Gift Scheme

• Will Trust

• Probate Scheme

• Excluded Property Trust

Our simple Trust Decision Tree can assist you in determining which type of trust is most suitable for your client.A dedicated team of experts are also available to help you in this area. [email protected]

To find out more about how each trust works and how to place your client’s IPB in trust please go to www.canadalifeinternational.ie


4. HOW TO MANAGE SEGMENTS• We set up your client’s IPB as a set of identical policies (sometimes referred to as ‘segments’ or ‘clusters’).

When your client applies for a bond they can select one policy or a maximum of 99,999 policies.

• If your customer doesn’t specify within the application form how many policies they require we will use a default number of 1,000 policies.

• There is no minimum value for each segment when the bond is set up, but each policy must be of equal value when the bond is set up.

• Additional investments can be made into the IPB and will be divided equally across all the policies that make up the bond.

• The greater the number of policies the greater the flexibility when assigning policies and the better you can control tax planning.

5. HOW TO UNDERSTAND OUR ASSET RULES• Through the IPB, your client can invest in one or more of the assets permitted by us.

• The selection criteria we use to approve assets reflect the current Permitted Links legislation and regulation.

• We reserve the right to amend the assets that we make available through the IPB.

• The chosen assets must fall into these categories:

– Unit Trusts – Units in an authorised unit trust, as defined in section 243 of the Financial Services and Markets Act 2000 (FSMA).

– Open-ended investment companies (OEICs) – Shares held in an open-ended investment company, as defined in section 236 of FSMA.

– Investment trusts – Shares held in an approved investment trust company, as defined in section 842 of the Income and Corporation Taxes Act 1988 (ICTA88).

– Other collective investment schemes – Interests in other collective investment schemes resident outside the UK, as defined in section 40 of the Finance Act 2008.

– Cash – Not for the purposes of realising a currency gain.

• All specific assets requested are subject to our prior approval. Our primary reference is to the Portfolio Bond Regulations set by HMRC and the Central Bank of Ireland. However, we also reference other criteria such as jurisdiction, regulatory status, liquidity and gearing when assessing the admissibility of assets.

• As a result, we may reject certain assets if they do not meet with our requirements, even though they may qualify under the Permitted Links regulations. We may also restrict access to funds or ask for them to be sold if they fall outside our guidelines after your client has made their investment.

• Your client can have the assets within the IPB managed by Discretionary Fund Managers or by you, and you can manage the assets via any of the Platform Managers with which we have a relationship. You can be appointed as an Investment Adviser which will allow us to take the instruction from you. We simply require that your client and you complete and sign our Investment Adviser Appointment Form.

• We have relationships with over 20 Discretionary Fund Managers and we are building relationships with a number of different Platform Managers.

• We have pre-approved over 4,000 funds, so the chances are that we already have a relationship with your preferred fund managers and the funds you want. You will need to check that your client’s fund choice is admissible before they invest, but we can let you know that when we create the quote pack.

• However, we must have established an active relationship with the fund manager before we can make the investment, so please give us plenty of notice.

Your client should complete the Asset Selection section of the application form which can be downloaded from the literature page of our website. This section explains what information is needed and how it should be supplied. Once the application is processed the selected assets will be purchased. It is important to understand that all risks related to any assets selected by you and/or your client are borne by the policyholder.

Initial Investment

Client

Decides to invest in an IPB.

Adviser

Provides a copy of the IPB application form to the client.

Client

Completes and signs the IPB application form (including the investment amount and method of payment).

CLIAI

When we receive all the required documents and investment premium, the policy is issued and the selected assets are purchased.

• A policy schedule will be produced for your client(s). This will show the charging structure that applies to the investment and an adviser charge schedule, where your client has asked us to facilitate payments to you from the bond.

• Payments must be made from an account in the name of the policyholder(s).

• Cheque payments will not be banked until we receive a fully completed Application Form and satisfactory AML documents.

• Cheque payments of up to £750,000 are subject to a four-day clearance period. Cheque payments of £750,000 and above are subject to a seven-day clearance period.

• Cheques should be made payable to Canada Life International Assurance (Ireland) DAC.

• Alternatively, payment can be made by SWIFT/telegraphic transfer.

Additional Payments/Top-ups

Client

Expresses wish to make either an additional single or regular investment into their IPB.

Adviser

Provides a copy of the Additional Investment Application Form or the Regular Single Premium Investment Form to the client.

Client

Completes and signs the Additional Investment Application Formor the Regular Single Premium Investment Form.

CLIAI

When we receive all the required documents and investment premium, an additional policy schedule is issued.

• An additional policy schedule will be produced for your client(s). This will show the charging structure based on the original investment and an adviser charge schedule, where your client has asked us to facilitate payments to you from the top-up to their bond.

• Cheques should be made payable to Canada Life International Assurance (Ireland) DAC.

• Additional single or regular investments can be made by telegraphic transfer or cheque.

• Cheque payments of up to £750,000 are subject to a four-day clearance period. Cheque payments of £750,000 and above are subject to a seven-day clearance period.


6. HOW TO MAKE PAYMENTS INTO THE IPB

In-specie Payments

Client

Expresses wish to set up an IPB using an in-specie transfer of assets already owned.

Adviser

Please see ‘How to transfer assets’ on page 9.

• You may wish to advise your client to include a cash element into the Transaction Account. This is where all available policy cash is held to cover any immediate payments for product charges, adviser charges and/or withdrawals. We will not sell anything from the transferred portfolio until we have to.

Regular Withdrawals

Client

Expresses wish to make a regular withdrawal.

Adviser

Provides a copy of the Regular Withdrawal Form to the client.

Client

All policyholders need to complete, sign and date the form before it is returned.

CLIAI

On receipt we will process the instructions.

• Regular withdrawals can be made monthly, quarterly, half-yearly or yearly on any date in the month.

• Policyholders can take withdrawals as a fixed amount, as a percentage of the premium or as a percentage of the whole bond value.

• Changes can be made to the amount, frequency and account details of the regular withdrawals at any time as long as we receive written permission at least 10 working days before the payment is due from all policyholders including signature(s) and date. However, if written under a Discounted Gift Trust, the regular withdrawal amount cannot be varied throughout the lifetime of the policy.

• Taking regular withdrawals from a bond that is already paying an on-going adviser charge will impact your tax deferred withdrawal allowance.

7. HOW TO MAKE WITHDRAWALS FROM THE IPB


One-off Withdrawals (Surrender)

Client

Expresses wish to make a one-off withdrawal.

Adviser

Provides a copy of the Surrender Request Form to the client.

Client

Decides whether to take the one-off withdrawal by cancelling individual policies or by taking the withdrawal by partially cashing in the whole bond. Completes, signs, dates and returns the Surrender Request Form.

CLIAI

On receipt we will process the instructions.*

* Note: If we receive the instruction by 1pm, the surrender value will be calculated that day. If sufficient funds are available in the Transaction Account the surrender will be processed the following day. If the instruction is received after 1pm the surrender value will be calculated the following day and processed the day after that. If there is insufficient cash in the Transaction Account we will begin the process of selling the relevant assets in the bond. This process will vary depending on the trading terms of the assets and may take several weeks.

• If withdrawals result in a gain which exceeds half the UK basic tax rate upper limit in any year, we will issue a Chargeable Event Certificate to all policyholders and HMRC. If a gain is less than this limit we will only issue a Chargeable Event Certificate to all policyholders.

• Policyholders can take partial surrenders by partially cashing in the whole bond or by fully cashing whole policies within the bond. There are differing tax benefits for both methods.

• Policyholders who have invested through a Platform will need to ensure that there is sufficient cash in the Platform trading account to cover the withdrawal amount. Advisers will need to access the Platform and place the sale trade(s). The Platform provider will not transfer the cash to CLIAI until there is sufficient cash available and this may delay payment to the policyholder.


Switch Request

Client

Expresses wish to purchase or sell some assets.

Adviser

Provides a copy of the Investment Variation Form to the client.

Client

All policyholders need to complete, sign and date the form before it is returned.

CLIAI

On the day that we receive the instructions (cut off 1pm) we will process the request to purchase or sell assets as requested.*

* Trades will be placed with the individual Fund Mangers the following day. This process will vary depending on the trading term/tradability of the assets and may take several weeks. We will then write to the policyholder as each instruction is completed.

You can be appointed as an Investment Adviser which will allow us to take the instruction from you. We simply require that your client and you complete and sign our Investment Adviser Appointment Form. If you agree an ongoing investment adviser charge with your client, we can facilitate such payments through the bond provided that you have agreed terms with CLIAI.

8. HOW TO MANAGE SWITCHING

Transaction account in bond currency

Balance in the transaction account comprises:• Any monies not invested in other assets (both at start of

the bond and during its lifetime).

Credits into the transaction account• Proceeds from the sale of assets in the bond currency.• Any interest payable (quarterly) on monies held in

the transaction account.• Any income received from assets held in the bond currency

(for example, dividends not automatically reinvested).

Deductions from the transaction account

• Cost of purchasing assets (including dealing charges and other expenses).

• Policy charges (for example, initial, establishment, ongoing administration and asset administration charges).

• Any interest charge on an overdrawn balance in the transaction account.

• Payments to additional transaction accounts to purchase assets in the other bond currencies.

• Foreign exchange costs on purchasing non bond currencies.

Payments out of the bond

• Payment of any regular withdrawals.

• Payment of any partial or full surrenders of policies.

• Payment of any facilitated adviser charges.

9. HOW TO MANAGE BOND LIQUIDITY

Unit trusts OEICsInvestment trusts

Deposit accounts

Note: All cash transactions for the bond are operated through the transaction account.

• Our Investor’s Guide to the Transaction Account explains how the transaction account works and how to manage the cash balance within the account.

• Your client should ensure that sufficient funds are held in the transaction account to cover any withdrawals, product charges and adviser charges.

• When completing the application form, your client can nominate an order in which they wish to encash assets to maintain the balance of the transaction account. If we do not receive an order of nomination, we will encash assets in line with our liquidity policy, which is described in our Investor’s Guide to the Transaction Account. This occurs when an overdrawn balance reaches 2% of the bond value. However, in the interim, interest is charged on the overdrawn balance.

• For details of our product charges refer to the Personal Illustration, the Product Charges Guide and the Product Guide.

• If any income is received in a currency other than the bond currency (for example, dividends or credits), we will automatically set up an additional transaction account in the new currency, which can be British Pound, Euro and/or US Dollar. On your client’s instructions, we will transfer balances to other currencies at prevailing exchange rates.

• When making investments in a foreign currency your client will need to ensure that sufficient cash is available in the relevant additional transaction account. If not, they can switch between currencies at prevailing exchange rates so that the additional transaction account has sufficient funds available for the proposed purchase.

• You can learn more about our approach to adviser charges in our Facilitated Adviser Charges Guide.

Payments into the bond


10. HOW TO TRANSFER ASSETS• Some of your clients may wish to pay their premium by way of transferring an existing portfolio of suitable assets into the bond.

We can facilitate this in two different ways, direct transfer or a DFM or Platform transfer.

• In each case it is possible to place the assets into an IPB by transferring the assets into the beneficial ownership of CLIAI in lieu of paying a cash premium. The value of the assets at the date of the last transfer is the premium amount.

• If you are setting up the bond with a transfer of assets, you will need to agree with your client how they are going to pay for your services.

• We can facilitate the payment of an initial adviser charge prior to investment in the bond by reducing the amount invested or through the bond after the premium is invested.

• If they pay you directly, the tax efficiency of the bond need not be affected.

STEP ONEAdviser contacts us and submits a list of assets which their client would like to transfer. This must include identification details (ISIN/SEDOL Codes).

STEP ONEAdviser contacts us and submits details of the assets to be transferred.

STEP TWOWe inform the advsier of any inadmissible assets.

STEP TWOWe inform the adviser of any inadmissible assets.

STEP THREEThe client submits the policy application to us together with a completed DFM Appointment Request Form/Platform and Financial Adviser Appointment Form.

STEP THREEThe applicant completes a stock transfer form* for each asset to be transferred and sends this to us.

STEP FOURWe countersign the stock transfer form and send it to the relevant fund manager.

STEP FOURThe client instructs the DFM/Platform to transfer the assets into an account in the name of CLIAI.

STEP FIVEThe fund manager completes the transfer and notifies us that the assets are now held in our name.

STEP FIVEThe DFM/Platform sends a valuation to us confirming the latest value and that the assets are held in the name of CLIAI.

STEP SIXOnce we receive confirmation that all assets are held in our name the policy is issued.

STEP SIXWe issue the policy with the premium being based on the value as provided by the DFM/Platform.

DFM/PLATFORM TRANSFERThis is where a client already holds a portfolio of admissible assets with a Discretionary Fund Manager (DFM) which are admissible into a CLIAI bond.

DIRECT TRANSFERThis is where a client holds assets directly, which are admissible into a CLIAI bond.

* 1. The current Registered Owner of the asset should be named on the form. 2. The Client should also instruct the Fund Manager that CLIAI is the receiving party and his/her wish to transfer ownership of the assets. 3. Copies of any correspondence issued to the Fund Manager requesting the transfer of the assets to CLIAI should be provided.We must have an established relationship with the Discretionary Fund Manager or Platform Manager before any transfer can take place.Please also note that if clients transfer collectives this may create liability to Capital Gains tax.


11. HOW TO GET ONLINE VALUATIONSMyAccount will let you view, print or save online valuations of your client’s policies. If you would like to register for MyAccount please contact us by email at:

[email protected]

Or alternatively call us on:

+44 (0)1624 820200

Call charges will vary. We may record and monitor calls.

12. HOW TO DECIDE WHICH FORMS TO COMPLETE

Standard Personal, Trustee or Corporate Application Forms

Client/policyholder AND adviser complete and sign this form

Investment Adviser Appointment Form(if your client wants you to manage the investments in the bond on their behalf)


Client/policyholder AND adviser complete and sign this form (and where necessary, the Platform Manager needs to complete this as well)

Platform and Financial Adviser Appointment Form(if your client wants to have part of their investment managed by you on an Investment Platform)

Discretionary Fund Manager Appointment Form(if your client wants to have part of their investment managed by a Discretionary Fund Manager)

Client/policyholder completes and signs this form

Experienced Investor Form(if your client selects bond assets we class as Experienced Investor funds)

Bank Deposit Additional Details Form(if your client wants to invest in a Deposit Account that does not meet our risk rating requirements)

Trust deeds (if your client wants to set up a new trust) Trustees/policyholders complete and sign this form (must be dated earlier than the application form or on the same date)

WHO COMPLETES?WHAT POINT OF SALE FORMS?

Structured Deposit Additional Details Form(if your client wants Structured Products as bond assets)


Additional Investment Application Form or Regular Single Premium Investment Form (to add single/regular premiums to their IPB)

Client/policyholder completes and sign this form

Swift Telegraphic Transfer Bank Instruction Authority (if your client wants to top-up their bond electronically)


Client/policyholder AND adviser complete and sign this form (and where necessary, the Platform Manager needs to complete this as well)

Investment Adviser Appointment Form (if your client wants you to manage the investments in the bond on their behalf)

Bank Deposit Additional Details Form(if your client wants to invest in a Deposit Account that does not meet our risk rating requirements)

Platform and Financial Adviser Appointment Form(if your client wants to have part of their investment managed by you on an Investment Platform)

Trust deeds (if your client wants to place an existing bond in trust)

Client/policyholder completes and signs this formDiscretionary Fund Manager Appointment Form(if your client wants to have part of their investment managed by a Discretionary Fund Manager)

Investment Variation Form(to switch into or out of assets within the bond)

Experienced Investor Form(if your client selects bond assets we class as Experienced Investor funds)

Regular Withdrawal Form (to start regular withdrawals from the bond or change existing regular withdrawals)

Structured Deposit Additional Details Form(if your client wants Structured Products as bond assets)

Surrender Request Form(to request a partial surrender or full surrender of the bond)

Trustees/policyholders complete and sign this form

Client/policyholder completes and signs this form

WHO COMPLETES?WHAT POST SALE FORMS?

Requests for change of address and change of servicing agent will need to be submitted in writing and signed by all legal owners of the bond.


Canada Life International Assurance (Ireland) DAC, registered in Ireland no. 440141. Registered office: Irish Life Centre, Lower Abbey Street, Dublin 1, IrelandTelephone: +44 (0) 1624 820200 Fax: +44 (0) 1624 820 201 www.canadalifeinternational.ie Member of the Association of International Life Offices.

Canada Life International Assurance (Ireland) DAC is authorised and regulated by the Central Bank of Ireland.

ID6895 – 1216R

For further information about Canada Life International Assurance (Ireland) DAC, please visit www.canadalifeinternational.ie or call us on +44 (0) 1624 820200.

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