A Warehouse for your Investments

Many wealthy people have a jewel box, or a safe deposit box in a bank, where they hold their trinkets, cash, share certificates, stocks and securities. Safe deposit boxes have been the subject of a few decent Hollywood movies.
There are myriad reasons why people have them but whatever they are the can not compare with the advantages of holding all your assets in an offshore Executive Investment Bond. (EIB) sometimes called a Portfolio Bonds (PB)
An EIB is like a big warehouse which can hold all your investments, wherever you purchased them. It can hold or purchase on your behalf fixed interest securities, stocks and shares on a regulated stock exchange, bonds gilts and currency deposits, unit trusts, mutual funds and cash deposits.
Your name is not painted all over this warehouse. You see all of your assets are transferred and legally owned by the EIB Provider and held on their behalf by a custodian trustee. Many wealthy investors especially American expats use the EIB as a tax shelter.
But it has much more to offer than just that.
The ability to structure an investment portfolio requires careful planning, prudent stock selection and a knowledge of the world's investment markets. Your EIB provider can appoint a professional fund advisor to do all this for you. Normal stock broker's fees for this service are 1.5% of your portfolio. The EIB can offer a discount of 1.2% so actual cost is 0.3%
Initial discounts from fund management groups are a big feature also. For example if you requested the warehouse manager to purchase say an offshore HSBC fund he would have to pay 0.25%. If you were to purchase it directly it would cost 5% a saving of 4.75%
Similarly he could purchase a Fidelity fund at 0.0% charge where you would pay 5%
This gives you the flexibility to change your investment portfolio at any time: especially convenient if the market crashes, when you can liquidate with little cost.
So how can your EIB provider offer these discounts?
There are many EIB providers like Zurich, Friends Provident, Generali and a few private client providers but I prefer Royal Skandia (More later) because of their huge buying power. They are for instance the largest corporate client of Fidelity and that's why they can pass on huge discounts to their EIB holders.
In addition to almost total investment freedom you can transfer in any existing quoted shareholding you possess.
You can then forget about distribution of dividends spending hours calculating your net worth and never being sure and wondering about currency calculations. Each quarter you will receive an in depth valuation statement. It will provide full information on asset movement, income accrual, cash withdrawal and charges. It will also state the total valuation in the currency of your choice.
So the EIB in summary offers administrative simplicity, worldwide dealing, no CGT or income tax, corporate discounts, bank account facility, bank loan/leverage and denomination in any major world currency All you need is Stg50,000 or currency equivalent to open the door to investment freedom.
So why choose Royal Skandia?. Here are a few reasons. They are not owned by a bank:
They were the pioneers in portfolio bonds 20 years ago:. They have more EIB's than any other provider and they have the largest offshore EIB dept with over 100 staff. There are many more reasons but space prevents me from listing them.
Just a cautionary note. PB's cannot hold everything. Exclusions may include works of art, coins, precious metals, property and derivatives. So keep your Safety deposit box: you might need to deposit the precious jewelry that nice tuk tuk driver helped you purchase in Bangkok.