Transfer Options? Friends Provident Offshore Bond (Pershing Unit Trust) "managed" by AFH WealthMgmt

[Deleted User]

Im placing to one side the question of the suitability of this product sold to my 82 year old father in 2015 by AFH to pose the following question first:

1.  Is it possible to transfer the management of a Friends Provident Offshore Bond that was set up via AFH Wealth Management but is held as a Pershing Unit Trust.
      (My father receives 1/4ly statements from AFH and for the 1% annual fee they charge to manage the account the performance lags well behind those of comparable risk profile (3) portfolios.  
     So it is possible to transfer the management of the unit trust to, for example, a platform such as II (& keep the Bond status) but self select the investments (we are thinking of a managed fund with appropriate risk profile?
     My father does not make withdrawals and is not likely to.  Current Value £255k

Ok, now suitability of Offshore Bond?  

 2.  My father is 88 years now, a basic tax payer:  his pension income covers all his current needs and has c£500 surplus income every month, homeowner, no debts.  Assets £255k Offshorfe Bond, £50k Premium bonds (rainy day fund),, £20k share ISA (plan to move this to II if the Offshire Bond can be moved to), £5k current accounts,
His objective with all his assets is leaving an inheritance which is rather lovely & sweet.  Dad is currently £150k under his IHT allowance (his plus residue of my late mother's IHT allowance)  
Offshore Bond Pros:  Currently not included in Financial assessment for care fees, can be be transferred/assigned to a Beneficiary 
Offshore Bond Cons:  No Tax protection ie not an ISA, hard to understand product re tax & withdrawal implications

Help - Would appreciate anyone sharing their thoughts on the above as we are really struggling.

Thank you

dunstonh

1.  Is it possible to transfer the management of a Friends Provident Offshore Bond that was set up via AFH Wealth Management but is held as a Pershing Unit Trust.

Yes.  A new IFA can be appointed as an agent by the policy owner or trustees (if in trust)

(My father receives 1/4ly statements from AFH and for the 1% annual fee they charge to manage the account the performance lags well behind those of comparable risk profile (3) portfolios.  

It is worth noting that risk scales vary and that risk 3 on one scale will differ to risk 3 on another scale.  So, make sure the context is right.    For example, a 1-5 scale could have 3 at medium risk but a 1-10 scale could have 3 as defensive.  

So it is possible to transfer the management of the unit trust to, for example, a platform such as II (& keep the Bond status) but self select the investments (we are thinking of a managed fund with appropriate risk profile?

II don't offer management services.  They are a DIY platform where the management is done by the owner.
Also, I don't believe II can handle offshore investment bonds (Most DIY offerings cant)

Offshore Bond Cons:  No Tax protection ie not an ISA, hard to understand product re tax & withdrawal implications

Offshore bonds and ISAs can have similar protections on the internal assets you utilise.  It varies at the wrapper level but that is typically the least important.

Keep_pedalling

I wonder what grounds they thought this was suitable for him? Protecting it from care assessment seems pointless when he has plenty of other assets to pay for that, and even if he hadn’t it is hardly in his best interest to have to rely on LA funding.

dunstonh

Keep_pedalling said:

I wonder what grounds they thought this was suitable for him? Protecting it from care assessment seems pointless when he has plenty of other assets to pay for that, and even if he hadn’t it is hardly in his best interest to have to rely on LA funding.

Typically an offshore bond in trust is about estate planning to reduce IHT.  There are other reasons but that seems the most likely in this case.     

Keep_pedalling

dunstonh said:

Keep_pedalling said:

I wonder what grounds they thought this was suitable for him? Protecting it from care assessment seems pointless when he has plenty of other assets to pay for that, and even if he hadn’t it is hardly in his best interest to have to rely on LA funding.

Typically an offshore bond in trust is about estate planning to reduce IHT.  There are other reasons but that seems the most likely in this case.     

Ah yes, this was done a couple of years before the introduction of the RNRB.