Selling the Managed Savings Account for education fees

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Selling the Managed Savings Account for education
fees

• Case study education investment solutions

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Managed Savings Account for education fees

• Bid/offer spread offset by107 allocation/
• special offer
• No capital or initial units
• Automatic premium increases to help meet
  objectives (with 5 bonus allocation)
  
• Loyalty bonus of up to 5
• Extension option at maturity free access to
  capital
  

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(No Transcript)
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MSA education fees

• Free allowance for payment of education fees
  without surrender charges
  
• Fixed Account for payment of education fees with
  potentially no early surrender charges
  
• Extension option at maturity provides for access
  to capital with no surrender charges
  
• Life cover options
• Managed funds suitable for education investment
  solutions
  

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Free allowance

• Free allowance of 1 of fund value a year
• Cumulative
• Builds up an amount that can be withdrawn without
  penalty, ie education fees
  

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Case study advising clients who are saving for
university tuition fees

• You have a client who wants to save for
  university fees for their newborn daughter. You
  have calculated that the total tuition fees for
  university will be around 60,000. Your client
  would also like to achieve a lump sum at maturity
  of at least 500,000. You recommend a 21 year
  Managed Savings Account
• You recommend the client set up an actively
  managed education investment solution using
  Skandia Investment Management funds

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Cost of delaying
Plan due to mature in 2025
Source Royal Skandia. Based on 500 per month
over 20 and 21 years with 10 escalation, Assumes
9 growth, including product charges. Standard
terms apply.
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PFA helps support Education Fees withdrawals
Source Royal Skandia. Based on 500 per month
over 21 years with 10 premium escalation, with
an initial 7,000 lump sum contribution. Assumes
9 growth, excluding all product charges.
Standard terms apply.
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Free allowance

• Free allowance can be used in one or more of the
  following ways
  
• Education fees
• Partial surrenders
• Premium holiday option
• Fund adviser fees

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Fixed Account

• The Fixed Account is an option to access capital
  suitable for paying education fees
  
• No early surrender charges provided plan is held
  until maturity date
  
• Access (normally) 50 of the fund value (min
  7,500)
  
• Plan charges apply to Fixed Account amount
• 7.50 extra monthly charge

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Fixed Account

• You have a client who wants to save for college
  and
  
• university fees, including tuition full board.
  You have
  
• calculated that the total fees for school/college
  and
  
• university will be 325,000. You recommend the
  client
  
• set up a 21 yr Managed Savings Account at 500
  per
  
• month.
• Your client switches 65,000 each year for 5
  years from
  
• year 16 into the Fixed Account.
• The plan is held until the maturity date.

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Fixed Account

• What charges would apply?
• Plan charges apply to the Fixed Account amount
  (annual
  
• management charges and 7.50pm maintenance
  charge)
  
• What extra charges apply/dont apply?
• 7.50 maintenance charges per month (only 450
  over 5 years)
  
• Loyalty bonus does not apply to Fixed Account
• No early encashment charges provided plan held to
  maturity date
  

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Options at maturity

• Option 1
• Withdraw capital from account as a single lump
  sum
  
• Option 2
• Leave capital invested taking partial
  encashments
  
• when needed to support education fees

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Extension option

• Loyalty bonus of up to 5 at the end of the
  savings term
  
• No commitment to pay further premiums
• Free access to capital at any time
• Withdraw education fees as and when required

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Extension option case study
You have a client who wants to save for college
and university fees, including tuition and full
board. You have calculated that the total fees fo
r school/college and university will be 325,000
. You recommend the client set
up a 16 yr Managed Savings Account at 500 per
month. At the end of the savings term the plan
is extended for 10 years. Your client plans to w
ithdraw 325,000 over 5 years (65,000 per year)
and would like a lump sum of at
least 100,000. Your client wants to ensure there
are no penalties or charges for accessing capita
l.
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Extension option case study
5 years
Source Royal Skandia. Based on 500 per month
over 16 years with 9 growth pa, including
product charges and 10 premium escalation
option. Standard terms apply.
Withdrawals of
65,000 a year for 5 years from the end of the
17th year.
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Life cover

• Life cover is important in the event of early
  death
  
• Flexibility to select an amount of life cover to
  pay education fees
  
• 101 of fund value free of charge
• Only pay for sum at risk
• Minimal effect on fund value
• Choice of single or joint life basis

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Life cover

• You have a client who wants to save for college
  and
  
• university fees, including tuition and full
  board. You have
  
• calculated that the total fees for college and
  university will
  
• be 325,000. You recommend the client set up a 16
  yr
  
• Managed Savings Account at 500 per month.
• Your client has asked you about the cost of life
  cover for
  
• 325,000.

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Life cover
Source Royal Skandia. Based on 500 per month
over 16 years with 9 growth pa, including
product charges and 10 premium escalation.
Standard terms apply. Illustration shows fund
value based on life cover of 325,000, male, non
smoker, aged 40 next birthday. Territory A.
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Education planning with Skandia Investment
Management

• Range of nine funds
• Position with client as education investment
  solution

Begin in Aggressive switch to Balanced
and finally to Cautious
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Education investment solutions eg.15 year term
First five Years
Next five Years
Last five Years
Aggressive
Balanced
Cautious
45 Fixed Interest
17 Fixed Interest
7 Fixed Interest
93 Equities
83 Equities
55 Equities
Note These are target equity/fixed interest
splits as at 01/02/2004.
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Education investment solutions - 15 year term

• Another example

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Whats in it for you?

• The benefits for IFAs and clients
• Active fund management
• Investment selection, blending and monitoring by
  dedicated investment experts
  
• Extensive manager coverage and research
• Benefits of constant monitoring portfolios kept
  up to date
  
• Better portfolio information transparency and
  control
  
• Access to both retail and institutional managers
  better potential for best in class
  

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Helping you

• Managed Savings Account guide for investors
• Education planning sales aid
• Managed investment solutions fact sheets
• Quotes improvements coming soon

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• This presentation is not for use in the UK or
  Hong Kong
  
• This presentation is based on Royal Skandias
  interpretation of the
  
• law and Board of Inland Revenue practice at April
  2004.
  
• Investors should be aware that the value of units
  can fall as well as
  
• rise.
• Further details of the Royal Skandia products
  covered can be
  
• obtained from the appropriate Brochure and Policy
  Terms which
  
• are available from any Skandia office.

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• Royal Skandia Life Assurance Limited (an
  incorporated company limited by shares)
  
• Registered number 24916 Registered and Head
  Office Skandia House, King
  
• Edward Road, Onchan, Isle of Man, IM99 1NU,
  British Isles
  
• Phone [phone] Fax [phone]
  715