Zurich Vista

dunstonh

They are regulated by the FCA but I am struggling to see why they recommend an offshore product aimed at ex pats to a UK resident. That assumes you were a UK resident at the time. Something you havent clarified.

PanamaDave

dunstonh wrote: »

They are regulated by the FCA but I am struggling to see why they recommend an offshore product aimed at ex pats to a UK resident. That assumes you were a UK resident at the time. Something you havent clarified.

I was in Spain at the time.

PanamaDave

So, I am trying to wok my way through this now and struggling a bit.

"Expense recoupment charge (ERC) The ERC does not apply to single premiums or additional single premiums.
The ERC is a charge of 4% per year of the units purchased by premiums during
any ICP, plus any additional units purchased by bonuses.
The charge is deducted at the start of each month by the cancellation of units and
continues until policy maturity or the 25th anniversary – whichever is earlier.
If you increase your regular premiums, a new ERC will apply to the increase."

So the Initial Contribution Period (ICP) was putting in 1250e/month for 18 months and gained me a 37.5% "bonus"

This means 22,500e was paid in and the account was credited with 30937.50e, a nice bonus of 8437.50e.

We will now be charged 4% per year of the value of all shares purchased with the whole of that 30937.50e.

In addition to that we are paying the standard management fees of 7.50e/month and a 0.75% p.a management fee. Since we are invested into an equity fund through the Zurich Vista I assume we are also liable to paying the management fee on that fund also (Seems to be 1.62% p.a).

I will need to treat this fund as 2 separate parts from now on. The Initial contribution amount and any further premiums paid.

Since any further premiums paid are going to be subject to a 0.75% additional charge when compared with buying the same equity fund through a platform such as Hargreaves Lansdown (probably could even get a 0.25% discount through HL so we are talking 1% p.a) I clearly cannot justify putting anymore money than necessary into this fund. Since I currently have a penalty free surrender value of more than 2 years worth of premiums it seems I can cash that all out and just recycle the money through so as not to commit any fresh funds into the account.

Regarding the funds from the Initial Contribution Period.

I basically got a 37.5% bonus up front and am paying 5% per annum to be invested into a equity fund with a 1.6% charge so 6.6% p.a charge.


Here is my maths based on different market returns investing into the same fund with 1.6% annual charge for the duration of a 25 year policy:


6.6% growth a year
Vista: 30937.50 (30937.5 x 1^25)
HL: 76193 (22500 x 1.05^25)


8% growth a year
Vista: 43796 (30937.5 x 1.014^25)
HL: 106102 (2500 x 1.064^25)


3% growth a year
Vista: 12371 (30937.5 x 0964^25)
HL: 31852 (22500 x 1.014^25)


Is this right?

PanamaDave

Does make the 9% surrender penalty after 10 years look very attractive!

PanamaDave

Incase anyone else in future finds this thread and has this product, this was also a useful link:

http://andrewhallam.com/2011/11/zurich-international-and-friends-provident-should-you-invest-with-them