INTERNaTIONal SElECT BONd FOR UK INVESTORS

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1 Key features of your International SELECT Bond FOR UK INVESTORS The Financial Conduct Authority is a financial services regulator. It requires us, Old Mutual International Isle of Man Limited, to give you this important information to help you to decide whether our International Select Bond is right for you. You should read this document carefully so that you understand what you are buying, and then keep it safe for future reference.

2 PLEASE READ THIS DOCUMENT CAREFULLY The purpose of this Key Features Document is to give you a clear and balanced summary of the information you need to help you make a decision about the International Select Bond. Reading financial literature can be daunting, so we try to make our brochures and other documents as clear as possible, with no small print. If technical expressions are unavoidable, we also include an explanation in plain English. We test our literature regularly to make sure that it can be understood by our customers. Please read this Key Features Document in conjunction with your personal illustration. We look forward to welcoming you as an Old Mutual International customer. All references to Old Mutual International, we, us and our in this brochure refer to Old Mutual International Isle of Man Limited, who is the provider of the International Select Bond. The value of investments and the income from them can go down as well as up. You may not get back as much as you invest. This document is based on Old Mutual International s interpretation of the law and HM Revenue and Customs tax practice as at December We believe this interpretation is correct, but cannot guarantee it. Tax relief and the tax treatment of investments may change.! Please note that throughout this brochure, we use the word fund to also refer to the assets that you choose to invest in. 2

3 Key features of YOUR International SELECT Bond Contents at a glance ABOUT Old Mutual INTERNATIONAL 4 AIMS 5 The benefits of investing in the International Select Bond 5 Investing with Old Mutual International 5 YOUR COMMITMENT 7 What you have to do as the investor 7 RISKS 8 Factors that could affect your policy s performance 8 TRUSTS 9 Putting your International Select Bond in a trust 9 QUESTIONS AND ANSWERS 11 Q1. Could the International Select Bond be right for me? 12 Q2. Is my money guaranteed? 12 Q3. What might I get back? 12 Q4. Which funds can I choose from? 13 Q5. Can I appoint a fund adviser and/or discretionary asset manager to 14 manage my investment? Q6. Can I change my choice of funds? 15 Q7. Is there anything else I need to consider if I change my investment range? 15 Q8. What are Key Information Documents (KIDs) and Key Investor Information Documents (KIIDs)? 15 Q9. What currency flexibility does my International Select Bond offer? 16 Q10. How do I pay my adviser? 16 Q11. Where can I find out about the charges made by Old Mutual International 17 for managing my International Select Bond? Q12. What happens if the value of the charge deduction asset is not sufficient to pay a charge? 17 Q13. How will I know how my International Select Bond is doing? 18 Q14. Can I take money out? 18 Q15. How can I make payments to Old Mutual International? 19 Q16. What happens to my International Select Bond if I die? 19 Q17. What about tax? 20 Q18. Can I change my mind? 21 OTHER INFORMATION 22 Contact details 22 Conflict of interest policy 22 Suitability 22 Complaint procedures 22 About the Policy Terms 23 Compensation and investor protection 23 3

4 ABOUT OLD MUTUAL INTERNATIONAL The International Select Bond is provided by Old Mutual International Isle of Man Limited (Old Mutual International). Old Mutual International is part of Quilter, a leading provider of advice, investments and wealth management both in the UK and internationally, managing billion of investments on behalf of over 900,000 customers (as at 31 March 2018). The Quilter group of companies of which Old Mutual International is a part, is a leading provider of advice, investments and wealth management. quilter.com Our vision is to be our customers most trusted partner, and we are passionate about helping people achieve their lifetime financial goals. is the collective name for the companies that provide offshore and cross-border investment solutions within Quilter. oldmutualinternational.com Old Mutual International Ireland dac was formed in 1999 to provide cross-border solutions for European investors, so you can be confident that you are investing with a company that understands your needs. is a leading asset management firm offering a distinctive blend of investment prowess and a deep commitment to customer service and transparency. quilterinvestors.com OLD MUTUAL INTERNATIONAL ISLE OF MAN LIMITED has operated since It manages more than 130,000 policies in tax-efficient investment and savings products, and is a major force in the offshore marketplace. 4

5 Key features of YOUR International SELECT Bond AIMS The benefits of investing in THE International Select Bond The International Select Bond aims to provide a flexible method of investing your money over the medium to long-term. It is designed to allow your capital to grow and to offer you the option to take regular, tax-efficient withdrawals. With the International Select Bond, you can enjoy significant investment freedom by spreading and varying your investments across a defined range of funds according to your financial goals and your attitude to risk. INVESTING WITH OLD MUTUAL INTERNATIONAL The International Select Bond provides access to a wide selection of funds, together with a range of tax-efficient ways to hold them, within a single consolidated portfolio. You and your financial adviser can choose funds from two distinct fund ranges, these are called WealthSelect and SelfSelect. You can choose to invest in funds in either range but you cannot mix and match funds from the two ranges. You can move from the WealthSelect range to the SelfSelect range, or vice versa, at anytime without cost. Please see question 4 on page 13 for more information about the WealthSelect and SelfSelect fund ranges. Because the International Select Bond can be established as either a life assurance or capital redemption policy and is structured as a cluster of individual policies, it can help provide you with the most appropriate tax planning benefits to suit your needs. The two International Select Bond options are: The International Select Bond Life set up on a life assurance basis The International Select Bond Life is a life assurance contract. It has a choice of having one or more lives assured, to ensure the continuity of your policy. Where there is more than one life assured, we will pay a death benefit of 101% of the surrender value on the death of the last life assured (the Relevant Life Assured). The International Select Bond Redemption set up on a capital redemption basis The International Select Bond Redemption does not have any lives assured. It is a capital redemption policy, which has a 99 year fixed term. Your investment will continue to the end of the term (the maturity date), unless you fully cash it in before the maturity date. Each policy within the cluster of policies still in force at the maturity date has a guaranteed maturity value of twice the initial premium paid less a percentage. This percentage is worked out based on the proportion of withdrawals taken in comparison to the premium paid. Whether you choose the International Select Bond Life or the International Select Bond Redemption, both may offer the opportunity to take advantage of several tax benefits, including arrangements that can help to reduce your UK inheritance tax (IHT) liability. Please discuss any questions you may have regarding tax with your financial adviser. 5

6 AIMS (CONTINUED) With the International Select Bond, you can: take advantage of investment opportunities from many of the world s leading investment fund providers; access your capital, including an option to take regular, tax-efficient withdrawals. See page 18, question 14 for further information; change assets to link to your portfolio fund if your circumstances change; periodically manage your portfolio of funds if your adviser has chosen to use automatic rebalancing. If they do, they will provide you with details; choose to spread the timing of your investment of your premium into your chosen selection of funds over a period of time, this is known as phasing in ; access a wide range of trusts, or use a professional trustee service such as our sister company, Old Mutual International Trust Company (OMITC); appoint a fund adviser and benefit from their guidance and expertise; agree how you want to pay for the advice provided by your financial adviser and/or fund adviser; and select a discretionary asset manager (subject to our acceptance) to provide investment services, in respect of the assets linked to your policy, on a discretionary or advisory basis. See page 14, question 5 for further information. The discretionary asset manager may make a charge for this service. The portfolio fund will include a transaction account, which is set up as soon as the bond is set-up. This account is used to manage the buying and selling of funds. DEFINITIONS Policy your International Select Bond will consist of a number of policies known as a cluster of policies and your premium will be spread equally across the number of policies you choose. The benefit of having more than one policy is to enhance the flexibility from a UK tax point of view when you cash in or withdraw money from your policy. We will automatically issue 100 policies if the box for the number of policies in the application form is blank. Portfolio Fund this is the fund we maintain in relation to your policy. It holds the notional units and unit price representing the value of your policy at any time. For example, when you pay us a premium, we add units to the portfolio fund, and when we pay benefits and some portfolio fund charges from the policy we will cancel units in the portfolio fund. When the value of the assets linked to the portfolio fund increases then the price of the units in the portfolio fund is increased to reflect the change in the value of the assets. Portfolio Fund Charges these are the various charges for managing the portfolio fund and your policy as explained in Term 19 of the Policy Terms. Surrender value this is the amount of money you receive when you choose to cash in your policy, after any outstanding charges have been deducted. 6

7 Key features of YOUR International SELECT Bond YOUR COMMITMENT WHAT YOU HAVE TO DO AS THE INVESTOR You should make sure that you understand the features and risks of this product so you can decide whether it is likely to meet your needs and expectations in terms of flexibility, capital growth and taxation planning. You must invest an initial premium of at least 20,000, US$30,000 or 30,000. Choosing and reviewing funds You need to choose the fund or funds, available in the selected range, in which to invest your money. To ensure that the International Select Bond and your chosen funds continue to meet your needs, you should monitor their performance regularly, consider new funds that become available and make whatever changes you feel are necessary. Your financial adviser will be able to help you with this. Alternatively you may appoint a fund adviser, or ask Old Mutual International to appoint a discretionary asset manager, to make the initial and ongoing fund choices for you. MEETING THE COST OF CHARGES The charge deduction asset is an asset that will be used to pay portfolio fund charges and any ongoing advice fees. Where you have chosen assets from the WealthSelect investment range, all of the assets within the portfolio fund except the transaction account will be regarded as the charge deduction asset. If there is a credit balance in the transaction account held with us then we will normally use that value towards payment of your portfolio fund charges. If a debit balance occurs in the transaction account, then: If you choose to invest in the WealthSelect range, charges will be cleared by the proportional sale of all funds. If you choose to invest in the SelfSelect range, you must choose from one of the following three options: a) sale of a specific fund b) sale of the fund with the highest value c) sale of all funds proportionately. Please refer to your Policy Terms to see how charges are cleared in the event that the charge deduction asset can t be used. FUNDING REGULAR WITHDRAWALS Where you request regular withdrawals, you must also select one or more funds to fund your regular withdrawals. This fund is known as your nominated asset. You need to select a nominated asset when you request regular withdrawals. If you are investing in the WealthSelect investment range, the regular withdrawals will be funded by the proportionate sale across all assets. If you are investing in the SelfSelect investment range, the regular withdrawals can be funded by the proportionate sale of all funds or the sale of a specific fund or funds. You can change your choice at anytime. See question 14 on page 18 or the Policy Terms for further information on meeting the cost of charges and funding regular withdrawals and regular withdrawals for ongoing fees. Your financial adviser will be able to provide you with a copy of the Policy Terms. Because the International Select Bond is designed to be a medium to long-term investment, you should aim to hold it for at least 5-10 years. You will also need to keep us informed of any future change to your address or contact details so we can continue to keep in touch with you. Our contact details are on page 22. 7

8 RISKS FACTORS THAT COULD AFFECT YOUR POLICY S PERFORMANCE All types of investment involve some risk. The International Select Bond gives you access to a wide variety of funds, the value of which may fall as well as rise. You accept this investment risk by taking out this policy. This means that we cannot guarantee the amount you get back when you cash in your policy. It may be less than forecast in your personal illustration, or less than you invested, for the following reasons: CHOICE OF FUNDS The funds available all have specific objectives and associated risks. These differ according to the assets held within them. For example, if you choose emerging market funds that are invested in parts of the world with less well established economies, their value could be subject to considerable price changes (known as volatility ). Similarly, some funds, such as those investing in property, can be difficult to sell and you might not be able to sell such funds as quickly as you want. If you or your fund adviser or discretionary asset manager do not review the choice of funds within your policy regularly and monitor their performance, they may fail to meet your expectations. If the funds in your policy do not match your attitude to risk (willingness to accept potential losses), they may not perform as you anticipate. Where a fund holds investments in a currency different to the one in which it is denominated and in which your policy is held, there may be additional risks because of exchange rate fluctuations. CHARGES AND WITHDRAWALS The effect of charges may be higher than illustrated. For example, you might decide to change to funds with higher charges than those shown in your personal illustration, or investment management costs may increase in the future. If you take greater regular withdrawals than originally planned, the value of your International Select Bond may be less than shown in your personal illustration. TAX CHANGES Tax rules could change in the future. CANCELLATION RISK If you decide to cancel your policy within the first 30 days, its value could fall over this time. If so, you will get back less than you invested. If, at your request, we have facilitated the initial fee for advice given to you by your financial adviser and you decide to cancel your policy, we cannot reclaim or refund the fee. The fee agreement is between you and your financial adviser, not Old Mutual International, and it is up to you to reclaim the fee from your financial adviser. The section Your commitment on page 7 will help you understand how you can reduce some of these risks. Please see page 23 for information on Compensation and investor protection in the unlikely event that Old Mutual International Isle of Man Limited becomes insolvent. You can find out more about the risks in the International Select Bond - Redemption Key Information Document or International Select Bond - Life Key Information Document. Your financial adviser will provide you with these documents. 8

9 Key features of YOUR International SELECT Bond TRUSTS PUTTING YOUR INTERNATIONAL SELECT BOND IN A TRUST Your financial adviser may suggest that you help to safeguard your investment by placing your International Select Bond in trust. This can help to ensure that your wealth is used as you intended during your lifetime and after you die, and may offer some advantages in the future if you are self-employed, get divorced or are means tested (for long-term care provision, for example). A trust can also benefit your family or beneficiaries after your death, by helping to avoid complicated probate issues. You can also reduce, or even eliminate, UK inheritance tax when transferring your wealth. Assets which are not held in trust, and which are above the nil-rate band (the threshold above which inheritance tax applies, currently 325,000), could be liable to 40% inheritance tax*. There are a wide range of trusts available and customers also have the option of using our own independent trustee service provided by our sister company, Old Mutual International Trust Company (OMITC). Using the Trust Company can help to give you peace of mind that your assets will be dealt with in a professional and unbiased manner, in accordance with your wishes. For further information about our trusts, please contact us or your financial adviser for the brochure, A guide to trusts by Old Mutual International Trust Company (UK domiciles only). * This is based on our current interpretation of UK tax for the current tax year, the nil-rate band is frozen until tax year 2020/

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11 Key features of YOUR International Select Bond QUESTIONS AND ANSWERS 11

12 Q1. COULD THE INTERNATIONAL SELECT BOND BE RIGHT FOR ME? This could be the right investment for your needs if you are looking for investment growth and/or the facility of taking withdrawals, and you can afford to commit a minimum investment of 20,000, US$30,000 or 30,000 for at least 5-10 years. It involves more risk than bank or building society savings accounts, but the potential for growth is greater. It could also be suitable for you if you are happy to invest in a defined list of funds, and want the option to have them regularly monitored on your behalf. Whether you choose the International Select Bond Life or the International Select Bond Redemption, your bond can be set up to continue after your death, possibly to help with UK inheritance tax planning. As your attitude to risk and your financial objectives change, you can switch your fund choices accordingly. If you have any questions about the suitability of this policy, its features and the funds you are intending to invest in, we recommend you speak to your financial adviser. Q2. IS MY MONEY GUARANTEED? No, the value of your investment in the International Select Bond can go down as well as up and you may not get back the amount invested. Q3. WHAT MIGHT I GET BACK? Your personal illustration gives examples of what you might get back. The projections shown are based on a range of assumptions about investment performance, none of which are guaranteed. The amount you get back will depend on: how much you have invested, how long your premiums have been invested, the investment performance of your chosen funds, how much you have previously withdrawn, the charges that we have taken, any tax due when you cash in the policy, and how much you have asked us to withdraw to facilitate payment of fees to your financial adviser and/or fund adviser. 12

13 Key features of YOUR International SELECT Bond Q4. WHICH FUNDS CAN I CHOOSE FROM? The International Select Bond offers you a choice of two investment ranges, the WealthSelect range and the SelfSelect range. All funds within WealthSelect and SelfSelect are PRIIPs* compliant. Your financial adviser will help you to choose which is most appropriate for your needs. This will depend on a number of factors, including your financial objectives, the level of investment risk you are comfortable with and the breadth of fund choice you require. The funds available for you to hold in your International Select Bond cover a wide range of UK and overseas investments, including shares, government stocks, fixed interest securities and commercial property. WEALTHSELECT A hand-picked competitively priced range of around 60 funds consisting of our Researched Range and a selection of Multi-Asset Solutions. All picked from 12 high quality and well-known fund managers. FUNDS selfselect Access to funds across all the major asset classes. Your portfolio can be constructed by your adviser using handpicked funds from our Researched Range. Alternatively you and your adviser can use one of our ready-made Multi-Asset Solutions. portfolios Access to a wide range of funds so your adviser can create a bespoke portfolio which is appropriate for your needs, with plenty of choice in every sector. We do not provide advice on selecting investments. Your financial adviser can help you choose the most suitable funds for your circumstances and needs. You can change your choice of funds as your needs change. REBALANCING AND PHASING IN INVESTMENTS Whichever investment range you choose, your financial adviser or fund adviser may make use of automatic rebalancing, to keep the proportions allocated to individual funds in line with your original choice. If you wish to avoid the risk of investing a premium all at once you can choose to spread the timing of your investment of your premium into your chosen selection of funds over a period of time. This is known as phasing in. What is Rebalancing? Rebalancing is the process of realigning the weightings of your portfolio of funds. It involves buying or selling funds in your portfolio over a set period of time, in order to maintain the agreed level of asset allocation. Your adviser may use rebalancing to manage your investment; please ask them for further details. For example, say an original target asset allocation was 50% in an equity fund and 50% in a bond fund. If the equity markets performed well during the period, it could have increased the equity weighting of the portfolio to 70%. The investor may then decide to sell some of the equity fund holdings and buy more bond fund holdings to get the portfolio back to the original target allocation of 50/50. What is phasing in? Our phasing in option allows the gradual movement of your premium, over time, into a different set of individual funds. This can help timing risk, the risk associated with placing all your investment in a fund at the top of the market (i.e. at its highest price). However, it may also reduce the possibility of placing all your investment in the fund near the bottom of the market, when prices would allow more units to be purchased. These options cannot be used at the same time. You can start the rebalancing option at anytime, but the phasing option can only be started with the initial investment or a later top-up. Both options can be stopped at anytime. The period for the phasing in option is 3, 6, 12, 18 or 24 months. Phasing in will stop if the feeder fund (the fund specifically designated by you as the fund you are moving money out of) becomes valueless or if it closes or merges with another fund or is unable to trade due to the fund becoming suspended. * PRIIPs refers to Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs). 13

14 Q5. Can I appoint a fund adviser and/or discretionary asset manager to manage MY INVESTMENT? A fund adviser or discretionary asset manager can be appointed to provide investment services in respect of the selection of funds linked to the portfolio fund for your policy. Fund adviser a fund adviser is an individual or firm that you appoint to manage some or all of the assets in the portfolio fund linked to your policy. There are two types of fund adviser: ADVISORY BASIS An advisory fund adviser can guide you through the process of choosing funds and then manage the relevant assets in the portfolio fund linked to your policy for you. However, all decisions will ultimately be made by you. DISCRETIONARY BASIS You can also go one step further and allow your fund adviser to make decisions on your behalf in line with pre-agreed boundaries. This role is sometimes known as a discretionary manager. If you wish to appoint a fund adviser you must complete the relevant Old Mutual International form to appoint a fund adviser. Terms of business will normally need to be agreed between you and the fund adviser and any fees for such a service are personal to you and will not be deemed a portfolio fund charge. If you request that we facilitate payment of a fee to your fund adviser, this will be a part surrender or regular withdrawal for ongoing fees and form part of your 5% tax deferred allowance. Please refer to the Policy Terms for further information on appointing a fund adviser to provide investment services in respect of the assets. Your financial adviser will be able to provide you with a copy of the Policy Terms. Discretionary asset manager a discretionary asset manager is an individual or firm that is appointed by Old Mutual International to manage all of the assets in the portfolio fund linked to your policy. A discretionary asset manager can be appointed on a discretionary or an advisory basis. The difference between the activities performed by a discretionary asset manager on a discretionary and advisory basis are explained below: Discretionary basis means the adviser holds regulatory authority to carry out discretionary investment management activities based on an agreed investment mandate and does not need to agree any changes to the fund selection before they submit the dealing instructions. Advisory basis means the adviser holds the regulatory authority to advise on investments. The discretionary asset manager must obtain the policyholder s agreement to the investment recommendation they are providing to Old Mutual International before they submit any instruction to the Dealing Desk. Where the discretionary asset manager is to act on a advisory basis, then we will appoint you to make investment decisions in respect of the funds which are linked to the relevant portfolio fund for your policy. Your investment decisions will be based on investment advice given to you directly by the discretionary asset manager as a requirement of the discretionary asset manager s appointment. If you wish to request that we use a discretionary asset manager in respect of your policy, you must complete the relevant Old Mutual International request form to appoint a discretionary asset manager. The request form and your Policy Terms confirm the restrictions placed on the funds linked to the portfolio fund for your policy. The discretionary asset manager must have your written approval of any investment recommendations before they submit dealing instructions. Once we are satisfied that the discretionary asset manager has the appropriate terms of business set up with Old Mutual International, is regulated by an appropriate regulatory authority and has qualifications required by law or regulation to carry out discretionary asset management services, we will confirm their appointment to you through your Online Service Account or by post where you have chosen that option. Please note that the discretionary asset manager fee does not form part of your 5% tax deferred allowance. Please refer to the Policy Terms for further information on appointing a discretionary asset manager to provide investment services in respect of the funds. Your financial adviser will be able to provide you with a copy of the Policy Terms. 14

15 Key features of YOUR International SELECT Bond Q6. Can I change my choice of funds? You can change the funds you have selected at anytime within the same investment range (ie, within the WealthSelect or the SelfSelect investment range) but you cannot hold funds from both ranges at the same time. If you wish to change to a fund that is not available in your current investment range, you will need to swap all your holdings to funds in the other investment range and you may request this at anytime. How do I CHANGE funds? You should submit instructions to change funds directly to us using our secure online service, Wealth Interactive. If you have appointed a fund adviser they will also be able to trade online for you unless you cancel their authority by writing to us and letting us know. When a trade instruction is given, it will be dealt at the next dealing point for that fund. Information on funds can be found in the Funds Information document, which is available from your financial adviser. If you instruct us to buy or sell a cash value, the instruction will normally be submitted to the fund manager on the same day. For all other instructions, the purchase will usually be made at the next dealing point after all of the sales in your instruction have taken place and the fund manager has confirmed the sale proceeds. For some funds, buying or selling units/shares can take up to two working days. This means that if you are instructing us to change one fund to another, the whole process will typically take no more than five working days from receipt of your instruction. You, or your financial adviser, can choose a different fund to invest in if you make an additional investment. Your financial adviser, using Wealth Interactive, can also request to swap the investment range for your International Select Bond, subject to your approval. We reserve the right to reject or defer an instruction on a fund or individual transaction if, under regulatory guidelines and best market practice, we reasonably consider any activity to constitute market timing. Market timing is the practice of speculative investment with the aim of gaining short-term advantage. It typically involves a high volume of fund transactions and short holding periods. Such activities are to the detriment of the long-term investors for whom our products are designed. Q7. IS THERE ANYTHING ELSE I NEED TO CONSIDER IF I CHANGE MY INVESTMENT RANGE? If you decide to swap from one investment range to the other, you can do this at anytime but you will also need to consider: that any phased investment instruction already underway will automatically be stopped whether to review the asset(s) used to fund any regular encashments (your nominated asset), and whether to change the asset(s) you use to pay for fees and charges (your charge deduction asset). You should speak to your financial adviser before making any decision on switching investment range. Q8. WHAT ARE KEY INFORMATION DOCUMENTS (KIDs) AND KEY INVESTOR INFORMATION DOCUMENTS (KIIDs)? Key Information Documents and Key Investor Information Documents are issued by the fund manager, to give more comprehensive information about the way each fund works and its investment risks. Key Information Documents (KIDs), are being introduced gradually from January If no KID is available for a particular fund, the fund manager concerned will provide a Key Investor Information Document (KIID). Both documents present similar information but are based on two separate pieces of European legislation. To avoid confusion, KIDs will eventually replace all KIIDs by January The provision of a KID or KIID is a regulatory requirement if you are thinking of investing in a fund within an International Select Bond. 15

16 Q9. WHAT CURRENCY FLEXIBILITY DOES MY INTERNATIONAL SELECT BOND OFFER? With the International Select Bond, you can choose which currency you want for policy valuations and premium payments from those available. You can also hold assets in different currencies: Policy currency your International Select Bond investment can be held in British Pound Sterling ( ), US Dollar ($) or Euro ( ). You can choose the currency in which you want your International Select Bond valuations to be displayed. This is known as the policy currency. This is also the currency in which the deduction of portfolio fund charges will be made. Premium currency if you have chosen a policy currency which is different to the currency in which your premium is paid, you should be aware that we will not convert your premium. Instead, a notional currency conversion to your policy currency will be required which is purely for your valuation purpose. You could be exposed to exchange rate fluctuations at a later date when your premium is converted to another currency, for example if you decide to take money out of your Policy. All notional conversions will be at the mid-market rate on the working day before the working day that we become aware that the premium was credited to our bank account. Q10. HOW DO I PAY MY ADVISER? Advice fees You can pay your adviser s fee in a number of ways. You can pay it directly to your adviser, for example by cheque, keeping it completely separate from your policy. Alternatively, you can ask us to pay a withdrawal from the policy that s equivalent to the fee, which will then be paid to your adviser. We will also confirm to you any fees for which you ask us to arrange payment to either your financial adviser or fund adviser. If you decide on this route, there are a number of options which can be used on their own or in combination with each other, as detailed below: Financial adviser advice fees 1. Initial fee from your payment before it is invested as a premium in the policy: you can ask us to pay a fixed monetary amount or a percentage of the initial investment we receive from you to your financial adviser. 2. Initial fee taken as a withdrawal from your policy once we have accepted your application for the policy: you can ask us to make a one-off withdrawal from your policy to pay a fee to your financial adviser, expressed either as a fixed monetary amount or as a percentage of the premium invested in the policy. These initial fees can also apply to advice for additional premium payments (top ups) where the fee can be paid either before or after the top up is accepted by us. If you ask us to pay a fee after the policy or top up is accepted, we will treat this as a withdrawal. 3. Ongoing service fee: you can also ask us to make a regular withdrawal for ongoing fees, expressed as either a fixed monetary amount or an annual percentage of the value of the portfolio fund linked to your policy. This type of regular fee is agreed by you, with your financial adviser, in respect of ongoing advice. This regular withdrawal for ongoing fees is payable quarterly in arrears. 4. Ad hoc fee: you can also ask us to pay a one-off withdrawal to your financial adviser to pay an ad hoc fee. This must be a monetary amount. 16

17 Key features of YOUR International SELECT Bond Fund adviser fees If you appoint a fund adviser (which could be your financial adviser or a third party), there are a number of fee payment options which can be used on their own or in combination with each other: 1. Fund adviser fee: you can ask us to make a regular withdrawal for ongoing fees for a fixed monetary amount or an annual percentage of the assets held in the portfolio fund. This regular withdrawal for ongoing fees is payable quarterly in arrears. 2. Ad hoc fee: you can ask us to pay a one-off withdrawal to your fund adviser to pay an ad hoc fee. This must be expressed as a monetary amount. 3. Dealing advice fee: you can ask us to pay a dealing advice fee that will be a fixed percentage of the value of the assets on the purchase date of a qualifying transaction. These are payable quarterly in arrears to your fund adviser for ongoing investment services provided. Discretionary Asset Manager CHARGE If we accept your request to appoint a discretionary asset manager, there may be a charge for the services that the manager provides. This charge is an annual percentage of the value of the portfolio fund to be taken quarterly or a monetary amount to be deducted from the value of your portfolio fund to be paid quarterly. Please refer to your Policy Terms for further information on discretionary asset manager fees. Please note that advice fees and fund adviser fees, with the exception of the initial fee before you invest, are treated as withdrawals from your policy and count against your 5% tax deferred allowance. For further information please see question 14 on page 18. Q11. WHERE CAN I FIND OUT ABOUT THE CHARGES MADE BY OLD MUTUAL INTERNATIONAL FOR MANAGING MY INTERNATIONAL SELECT BOND? Your personal illustration provides details of the charges we make for managing your International Select Bond and the investments within it, how the charges are taken, and the effect they could have on the value of your International Select Bond. Full details about the charges that may apply to your International Select Bond will be confirmed in the Charges Schedule which will be sent to you, together with your policy documents, after your policy has started. Old Mutual International Portfolio fund charges The charges we deduct from your policy cover the management of your policy and the portfolio fund. Any funds that you invest in may also charge an annual management charge. The cost of this varies from fund to fund. You can find a description of all the charges in the Policy Terms. Your financial adviser will be able to provide you with a copy of the Policy Terms. Q12. What happens if the VALUE OF THE CHARGE DEDUCTION ASSET is not sufficient to pay a charge? WEALTHSelect If one or more of the funds cannot be sold, we will proportionately sell the remainder of the funds. SELFSelect If it is no longer possible to sell from a charge deduction asset or the value of the charge deduction asset isn t sufficient to pay a portfolio fund charge, you, your fund adviser or the discretionary asset manager have 30 days from the date of the quarterly valuation to provide us with new investment instructions in order to clear the debit balance at the next deduction date. If any of the debit balance remains outstanding after the 30 day notice period and if the amount is above our maximum overdraft limit we have the right to sell from the highest value asset on that date, unless the asset has restricted dealing or early redemption penalties. Under these circumstances, we will sell from the asset with the next highest value but no restricted dealing or early redemption penalties. If all assets have early redemption penalties, we will sell from the asset with the highest value and you will incur the redemption costs. If we cannot sell from any asset, we will defer the sale of assets. 17

18 Q13. HOW WILL I KNOW HOW MY INTERNATIONAL SELECT BOND IS DOING? The majority of funds you can invest in are priced daily. The value of your International Select Bond is based on the total number of units you have in each fund. If the fund unit prices rise or fall, so will the value of your International Select Bond. When you become a policyholder, you will be set up with an Online Service Account, via our online wealth management service, on Wealth Interactive. Wealth Interactive lets you see everything you need to know about your International Select Bond, including: a summary view of your Old Mutual International policies in one place; up to date valuations 24 hours, 7 days a week; the buying and selling of funds; how your chosen funds have performed since the bond started; access to factsheets for the funds you hold; a history of your transactions; and a library of correspondence you ve received from us. Alternatively you can contact our client service centre using the contact details on page 22. Q14. CAN I TAKE MONEY OUT? The International Select Bond gives you the flexibility to access your capital; this is subject to a minimum regular withdrawal amount of 100/US$150/ 150, or 1,000/US$1,500/ 1,500 for a one-off payment and provided that the amount in your policy can sustain both the withdrawals and the charges involved. Any withdrawals made to pay for advice fees are exempt from this monetary limit. Please see Questions 10 and 11 for further information on fees and charges. You can withdraw up to 5% of your total investment each year without any immediate UK tax liability. This allowance will be reduced by the amount of any withdrawals made to pay fees to your financial adviser or fund adviser. If you don t use this allowance in a specific policy year, it can be carried over to the next year, so you could withdraw 10% tax deferred in that year, and so on. If the value of your policy falls below the minimum value for maintaining a policy (currently 10,000/US$15,000/ 15,000), we can decide to surrender it unless you agree to make a further payment to top up your investment. regular withdrawals You can use your policy to create a regular income stream; this can be yearly, half-yearly, termly (every 4 months), quarterly, bi-monthly or monthly. These withdrawals will be funded from a nominated asset which you must choose. The choice of nominated asset depends upon the investment range you are in. Please note that if we cannot sell a nominated asset on the regular withdrawal due date, then the regular withdrawal will not be paid. Regular withdrawals will be reflected by selling units in the portfolio fund linked to your policy. This is a partial surrender across all of the policies within the cluster of policies and so the value of each policy will be reduced proportionately. This will be reflected in your quarterly valuations. Please refer to the Policy Terms for further information on taking money out of your policy. Your financial adviser will be able to provide you with a copy of the Policy Terms. 18 continued

19 Key features of YOUR International SELECT Bond one-off withdrawals (part surrenders) As long as you leave the minimum amount in your policy, you can, subject to a minimum of 1,000/US$1,500/ 1,500, normally withdraw any amount you want at any stage by making a request to us and providing a dealing instruction. However, please remember that the International Select Bond is designed for medium to long-term investment, so taking money out of your policy in the early years can dramatically reduce its potential for growth. You should ask your financial adviser about the tax and financial planning implications before you commit to withdrawals or surrendering individual policies. SURRENDERING INDIVIDUAL POLICIES As an alternative to making one-off withdrawals across all of the individual policies, you could request to fully cash in one or more individual policies and receive the surrender proceeds. If you fully cash in individual policies, we will pay you the surrender value which reflects the deduction after any outstanding charges for those individual policies. These withdrawals are not subject to the 5% tax deferred allowance, but if there is a gain (total amounts paid out is more than the total investment made to the policy and any tax paid on withdrawals above the 5% tax deferred allowance), you may be liable to income tax on the gain. Q15. HOW CAN I MAKE PAYMENTS TO Old Mutual INTERNATIONAL? You can make your payment by electronic bank transfer or cheque. If you wish to make an electronic bank transfer you can find full information on the banking details when you apply online using Wealth Interactive or in the International Select Bond application form, which your financial adviser can give to you. You can add to your investment whenever you like (subject to our acceptance) by making further payments of at least 500/ US$750/ 750. To add additional payments to your International Select Bond you will need to complete the relevant top-up form, but the quickest and easiest way to top-up your policy is online using our wealth management service - Wealth Interactive. Q16. WHAT HAPPENS TO MY INTERNATIONAL SELECT BOND IF I DIE? If you choose the International Select Bond Life, you can set it up to cover your own life ( single-life basis), yourself and one other person ( joint-life basis), or yourself and others ( multiple-life basis). When the Relevant Life Assured dies, we will pay out 101% of the surrender value of your policy. For example, if the surrender value (taking into account any applicable charges) of your policy on notification to us of death is 200,000, the total amount paid out will be 202,000. If you have put your policy under trust, we will pay the benefit to the trustees to distribute, or your policy will continue after your death if you are not the last life assured on the policy. If you choose the International Select Bond Redemption then your policy will continue until its maturity date, unless it is fully cashed in by you before your death, or by your executors following your death, or by the trustees if it is held under trust. 19

20 Q17. WHAT ABOUT TAX? Please note: This information is based on our current understanding of UK tax which may change in the future. PERSONAL TAX The following applies if you are a UK taxpayer. If you are not a UK taxpayer then you need to take advice about tax from your financial adviser. You will not normally have to pay capital gains tax in connection with your policy. You may withdraw up to 5% of your original premium (plus any additional premiums) each year for at least 20 years without any immediate liability to income tax. If you withdraw more than 5% a year, or withdraw over the years more than you invested, you may be liable to income tax* on the excess (known as an excess gain). If you request that we facilitate payment of a fee to your fund adviser, this will be a part surrender or regular withdrawal for ongoing fees and will form part of your 5% tax deferred allowance. If you request that we facilitate a payment of a fee to your discretionary asset manager, the fee will not form part of your 5% tax deferred allowance. When you finally cash in your policy, you may have to pay income tax on any gain you have made. Any gain made could also affect your right to age-related personal reliefs and any entitlement to children s tax credit*. If you have chosen the life assurance option, your policy is treated for tax purposes as though you had fully cashed it in just before the relevant death. If you have set up your policy under trust it will be treated accordingly for tax purposes. * The tax position of your policy may change in the future. You may be subject to additional taxes or costs which are not accounted for within the contract. Please refer to your financial adviser for advice about tax liabilities. TAX ON POLICIES UNDER TRUST If you have been advised to set up your policy under trust, any liability to income tax will depend on several factors, including the type of trust and when the policy is cashed in. If your trustees are thinking of cashing in a policy set up under trust, they should speak to their financial adviser as there may be a potential income tax liability. We strongly recommend that you speak to your financial adviser before making any decisions regarding trusts. TAX ON FUNDS The funds in which you invest are not currently liable to taxes in the Isle of Man, where Old Mutual International is based. However, investment income building up in any fund may be subject to a tax deduction in the country where the income was produced. 20

21 Key features of YOUR International SELECT Bond Q18. CAN I CHANGE MY MIND? Yes. When we notify you that your application for the International Select Bond Life or International Select Bond Redemption has been accepted and send you the appropriate documentation, we will remind you that you have 30 days to change your mind and cancel your contract. You can do this by writing to the customer service centre at the address shown in contact details on page 22 or online via your Online Service Account. If you decide to cancel, we will give you your money back. However, if the value of your investment has fallen in the meantime, you may not get back the full amount you paid in. You should be aware that this reduction could be substantial if your chosen funds have a medium or high level of volatility or risk, or non-refundable charges. The description of the funds you have chosen will give details if this applies. In cases where the fund you have selected is not redeemable for a period, we may not be able to return that part of your premium until the end of that period. Please note that some funds are priced on a weekly or less frequent basis, and certain funds also have cut off times for dealing purposes, so you may not be able to disinvest as quickly as you would like during periods of market volatility. Therefore this could potentially cause delays in you receiving your money back. Please discuss this with your financial adviser if this is an area of concern for you. Any Old Mutual International charges will be refunded in full. If, at your request, we have facilitated the initial fee for advice given to you by your financial adviser and you decide to cancel your contract we cannot reclaim or refund the fee. The fee agreement is between you and your financial adviser, not Old Mutual International and it is up to you to reclaim the fee from your financial adviser. 21

22 OTHER INFORMATION CONTACT DETAILS If you need any further information about this product, please contact your financial adviser in the first instance. If you wish to contact us directly, you can do so in the following ways: Phone: Fax: By writing to: Old Mutual International Isle of Man Limited King Edward Bay House King Edward Road Onchan Isle of Man IM99 1NU British Isles CONFLICT OF INTEREST POLICY Staff and directors are expected to act in the best interests of Old Mutual International, whilst still observing their duties to our customers. No director or employee may engage in activity that gives rise to a personal financial interest, has the potential to damage Old Mutual International s reputation, or is likely to lead to a material conflict with the duty owed to our customers. SUITABILITY Old Mutual International does not give investment advice, nor do we make any judgements on your behalf about the merits or suitability of the transactions we arrange. The fact that an investment fund is available in the Fund Information document does not imply that it is suitable for you. The Isle of Man Financial Services Ombudsman Scheme (FSOS) will therefore not be able to consider any complaints against Old Mutual International relating to the suitability of any investment for your particular circumstances or needs. COMPLAINT PROCEDURES Customer satisfaction is very important to us at Old Mutual International, but if you do have cause to complain about the service you receive, we have procedures to make sure your complaint is dealt with fairly. How can you complain? It s simple to make a complaint to us in writing or over the phone. If you write to us, please mark it clearly as a complaint and provide as much information as possible, including what you want us to do to put things right. Including as much detail as you can about what happened will enable us to understand your complaint and investigate it thoroughly. If you are happy for us to call you, please also provide a contact telephone number and we will acknowledge receipt of your complaint and endeavour to contact you within five working days of receiving the complaint. What happens if you complain? Our administration team and manager will be responsible initially for resolving your complaint. If they are unable to do so, it can be escalated to the complaints team who will carry out a review and if they are unable to resolve your complaint, they will send you a final response. Contact Details You can write to the complaints team using the below address: Old Mutual International King Edward Bay House King Edward Road Onchan Isle of Man IM99 1NU British Isles OMIfmcomplaints@ominternational.com Fax: + 44 (0) You can telephone us on + 44 (0) continued 22