Investors Trust

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Investors TrustInvestors Trust
Investors Trust Assurance SPC (“ITA”) is an international insurance company licensed and regulated by the Cayman Islands Monetary Authority, specializing in the provision of investment–linked insurance. The Cayman Islands are located in the northwest of the Caribbean Sea, about 400 miles (650 km) south of Miami, 180 miles (300 km) south of Cuba, and 195 miles (315 km) northwest of Jamaica.

With service offices established to support plan participants around the world but not in the UK, USA or EU, ITA seeks to provide opportunities to its plan participants through access to the global financial markets. ITA is constantly innovating, and investing in technology to allow clients online access to manage their investment-linked products.

Investors Trust Assurance SPC (“ITA”) are not a large company by international standards and based out of Cayman with its lack of regulatory enforcement and protection could cause problems if the company suffers any financial set-backs.

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Investors Trust Summary

Investors Trust – Review

You need to be careful what you are getting as these are 6 plans with different names. Other than Platinum Plus and Access Portfolio Plus the other variants are commission based and just offer the same commission driven products that are widely available.
This is not a widely regulated product. Let’s focus on the EU as an example but this may apply in other geographical areas.

Depending on the exact risks in question, it is not obvious whether an EU adviser’s permission, particularly a Passported permission, is sufficient to advise on this kind of policy. With an EU-based insurance company, that would be much easier to verify, so why take the risk as to whether you are dealing with an unregulated adviser or an unregulated product? We asked the company itself to clarify where their licence was applicable, and they told us that it was usually used in non-EU countries and outside the USA.

In summary, it is certainly not regulated or licenced in the EU (including the United Kingdom) or the USA, and this is our major concern. Based in a low enforcement regulatory regime, and as a small cell based company (very unusual), what would happen if the company got into financial difficulties?


For


  • Platinum Plus and Access Portfolio Plus plans offer Open Architecture
  • The clean structure of two makes this a product worth considering outside of the UK, EU and USA

Against


  • It is not regulated in much of the world – Other insurance bonds in EEA, why use a Cayman Island product
  • Limited protection, makes it risky to consider
  • This product should not be used or sold in the EU or the USA or the UK
  • With commission this is an extremely expensive option, and even part withdrawals can increase real costs



Policy Currency: The Platinum and Access Plan may be denominated in only US Dollars, Euros and UK Sterling.
Why choose the Investors Trust Investment Bond: There are 6 variations of the insurance bond broken down into three Platinum versions ;Platinum, Platinum Select and Platinum Plus, and three Access Portfolio versions; Access Portfolio 5000, Access Portfolio 8000 and Access Portfolio Plus. Open architecture investments with links to 14 fund houses. The Cayman Islands Government has constructed a regulatory regime that is highly favourable to offshore operations with no taxation in the Cayman Islands other than stamp duty and import duties.

Expat Money Expert Verdict on Investors Trust Investment Bond 

Investors Trust promotion: What does Investors Trust write about their own Platinum and Access plans? ITA works with some of the world’s top asset managers under its convenient open architecture platform. It provides clients with greater investment .
Specializing in medium to long term investment-linked products tailored to meet the needs of investors around the world, ITA offers a range of flexible, tax-efficient products, designed to suit various income levels and financial planning needs.
Eligibility: ITA is of course regulated and licenced by the Cayman’s Islands Monetary Authority. It is also licensed in Labuan and the DIFC for our business in those areas.

As above, plans are usually used by advisers with non-EU clients. It is not licenced in the EU and we cannot see why this should be used in the UK or USA, when other products are more transparently regulated and are addressed specifically at these markets, and have enforceable protection which is unlikely from the Caymans.

Access and Platinum are single premium, life assurance wrappers with 3 currency options, not available to US residents and countries where such distribution would be contrary to law or local regulation. Age from 18 to 85.

Minimums: 
Platinum 10,000 USD/EUR/GBP ( top ups 2,500 USD/EUR/GBP)
Select: 50,000 USD/EUR/GBP ( top ups 10.000 USD/EUR/GBP)
Plus : 100,000 USD/EUR/GBP
Access 5000 : USD 75,000 / EUR 75,000 / GBP 50,000
Access 8000 : USD 75,000 / EUR 75,000 / GBP 50,000
Access Portfolio Plus 5000 : USD 75,000 / EUR 75,000 / GBP 50,000
Charges: This will depend on the type of plan you take out from Old Mutual International as they offer different charging structures largely linked to the amount of commission or earnings being taken by the third party salesman or adviser.

Platinum
Admin Charge 0.13% monthly (1.6% per annum), years 1 – 5
Policy Fee USD/EUR 7.00 (GBP 4.5) Monthly
Asset Management Fee 0.125% monthly (1.5% per annum)

Platinum Select
Admin Charge 0.4% quarterly (1.6% per annum), years 1 – 5
Policy Fee NIL
Asset Management Fee 0.3% quarterly (1.2% per annum)

Platinum Plus
Admin Charge Nil
Policy Fee Nil
Asset Management Fee 0.125% monthly (1.5% per annum)

Access Portfolio 5000
Admin Charge: 0.45% quarterly (1.8% per annum) during the first 5 years. This charge will be calculated based on the higher of the premium paid or the account value.
Policy Fee USD 180 / EUR 180 / GBP 112.5 Quarterly
Establishment fee :Nil

Access Portfolio 8000
Admin Charge 0.30% quarterly (1.2% per annum) during the first 8 years. This charge will be calculated based on the higher of the premium paid or the account value.
Policy Fee USD 180 / EUR 180 / GBP 112.5 Quarterly
Establishment fee :Nil

Access Portfolio Plus

Admin Charge 0.25% quarterly (1.00% per annum) for the duration of the Policy, based on the account value.
Policy Fee USD 90 / EUR 90 / GBP 55 Quarterly
Establishment fee :Nil

Other Charges:
There are also fund management charges, usually 1% to 2.5% pa each year- depending on the funds chosen.

There is a dealing charge made for each sale and purchase that is made within the Access products of 20GBP so if you sell one fund and buy another, The Platinum products have the first 15 dealing transactions on the policy free of charge.

Additionally there may be an adviser charge to manage the portfolio, this typically can be between 1 to 1.5% per annum depending on the chosen advisers charging structure and service provided.

Pensions (QROPS and SIPP) – If the Platinum and Access Bonds are used within a QROPS or SIPP then there can (and most probably will) be additional set up and ongoing fees for the life of the policy. This is arguably unnecessary cost given that, where the adviser has an investment intermediary’s licence, it is possible to invest direct in funds without the Investors Trust policy. Second, with the product not being regulated in the EU, we are unsure why anyone would be using them within EU based QROPS, ROPS or SIPP investing, when (even if you want to use an insurance wrapper within your pension) there are other wrappers that are more transparent for the EU market? We do not recommend this product for any form of pension investing.

Are charges explicit: By explicit, it means that it is clear to see not only the charges for taking out the plan but also the cost of funds annually, any upfront fund costs, penalties on access, etc. Yes, in the main the Platinum Plan and Access Plan charges are clearly shown and any professional should be able to interpret them.

Documents

Investors Trust Portfolio Bond Brochure
Investors Trust Platinum Brochure
Investors Trust Term Sheet
Expat Money Expert Verdict on Charges – commission taken:

Expat Money Expert Verdict on Charges – no commission taken:

Surrender of the Investors Trust Investment Bond:

Platinum and Select

End of year 1 – 6.4%
End of year 2 – 4.8%
End of year 3 – 3.2%
End of year 4 – 1.6%
End of year 5 – 0%

Platinum Plus

None but there is a 1.5% Asset Management cancellation fee within the first 12 months.

Access 5000 and 8000
Equal to outstanding administration charges at the time of the surrender, based on the higher of the premium paid or the account value.

Access Plus
None but there is a 1.0% Administration cancellation fee within the first 12 months.

Expat Money Expert Verdict on Accessibility – commission taken:

Expat Money Expert Verdict on Accessibility – no commission taken:



Expat Money Expert Assessment of the Investors Trust Investment Bond

The Platinum, Select, Access 5000 and Access 800 are similar to many such products on the marketplace and can be an expensive option in the wrong hands. The annual fees, together with any adviser fees make them very expensive although the Platinum Bond early surrender penalties are lower than many competitors and penalty free after 5 years, suggesting less up-front commission to the salesmen.

The Access 5000 and 8000 bonds have higher commission payments and the 8000 bond has a lock in for 8 years, not 5. The Access 5000 and 8000 are outdated products aimed at the commission sales market and as a result of this, we have reduced the star rating.
However, the key point is this is not a widely regulated product and this is a major concern. To quote the company, „It (Investors Trust) does not fall under IMD, so plans are usually used by advisers with non-EU clients. It is not licenced in the EU“ at all and should not be used in the EU, including the UK, or USA.
Investors Trust has the disadvantage of being based in a low enforcement regulatory regime, and as a small cell based company (very unusual), what would happen if the company got into financial difficulties?

You may not get back all of your savings with an Platinum, Select and Access Plans and there are no guarantees that the portfolio will give you the returns you are expecting, but any attempt to take proceeds early in the plans life, if the charging structure is based on maximum commission earnings for your adviser will result in penalties. In fact the commission taken will have a negative impact for years as the charges are applied annually in arrears thus leading to reduced fund performance.

The Platinum Plus and Access Plus Bonds are considerably better priced and have no surrender costs after 12 months. These is still expensive compared to other platforms on the market.

Pensions (QROPS and SIPP) – with the product not being regulated in the EU, we are unsure why anyone would be using them within EU based QROPS, ROPS or SIPP investing. EME does not recommend this product for QROPS or SIPP investing.

WARNING: Costs and information is correct as of November 2016. Please refer to a brochure from the company for current up to date information and any changes on costs or information. You should not buy based purely on information contained within this article and EME do not accept liability for purchases. If you have any doubts then please speak with your financial adviser or a representative of the company for further advice.

If the provider improves or amends its terms then EME would like to hear from them to amend the review page accordingly, and providers are encouraged to comment on errors or omissions to ensure that readers have the latest and correct information




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  • Charges criteria

    Charges are assessed inclusive of fund fees, capital units, bid/offer spread criteria and third party management fees which are often ignored but are, in effect, compulsory additional costs that essentially must be considered by clients.


    Star ratings

    The star ratings apply at inception of the products and in at least the first 2 -8 years. Some products reduce charges or become more accessible with time held, but the length varies for each product; from our reviews it is typically overall between 5-10 years.

    These ratings are awarded based on information obtained from the companies at a certain date. It is worth considering obtaining the latest updated information yourself before making a decision.


    Star ratings

    ChargesOverall charges greater than 5% per annum.
    FundsLimited selected range of collectives or mirror funds with upfront additional charges (Bid/Offer spread) or initial “capital” units.
    AccessibilityTo avoid access penalties, only accessible after establishment period of 8 years or longer.
    Overall AssessmentA commission-based adviser’s product. Not recommended under any circumstances.

    ChargesOverall charges greater than 4% per annum.
    FundsIn-house range of collectives or mirror funds with upfront additional charges (Bid/Offer spread).
    AccessibilityPenalties resulting in loss of fund value may exist for 5 years – 8 years.
    Overall AssessmentA predominantly commission-based adviser’s product with limited use or appeal.

    ChargesOverall charges between 2.5% and 4% per annum.
    FundsIn-house or limited range of collectives or mirror funds with no Bid/Offer spread.
    AccessibilityTo avoid access penalties, only typically accessible after establishment period of 12-24 months or longer, but with no penalties thereafter.
    Overall AssessmentFor those seeking lock-in target dates (perhaps with guarantees) over 5 years.

    ChargesOverall charges less than 2.5% per annum.
    FundsFull range of collectives with no Bid/Offer spread and rebates on charges reducing annual costs.
    AccessibilityImmediate within 60 days without any penalties on any item.
    Overall AssessmentRecommended for some situations and some people due to lower charges and flexibility.

    ChargesOverall charges less than 1.5% per annum.
    FundsIncludes ETPs (passive) and Individualised accessible collectives with no Bid/Offer spread and clean share classes for lowest annual costs.
    AccessibilityImmediate within 30 days without any penalties on any item.
    Overall AssessmentRecommended for most situations and most people, with full transparency and low charges.