Review - SEB Spanish bond

SEB Life International are a Dublin based company owned by SEB bank of Scandinavia - one of the strongest in the world. In 2011 the group bought Irish Life International and re branded to SEB Life International. They are well known in Spain for being a Spanish compliant portfolio bond provider. However as of October lst 2018 they closed their door to any new business from Spain and the rest of Europe unless from Sweden or Finland. There are of course many existing SEB policy holders still holding this investment structure.
This is a Spanish compliant portfolio bond so benefits from some excellent streamlined reporting, tax mitigation and compound growth on gains. However, being a unit linked life assurance policy means it is the investments it holds that ultimately determine whether it makes money or not. Sadly it has been abused by some unregulated and unqualified self-titled 'advisers' to the point where it has gained something of a bad name. Which is a shame because, if used correctly, it can be one of the most cost effective 'tax wrapper' investment platforms available for Spanish residents.

Verdict

Pros:

1) Backed by one of the world's strongest banks - SEB.
2) Benefits from tax deferral, compound growth, proportional tax relief and IHT mitigation.
3) The ability to construct portfolios for the cautious through to adventurous investor.
4) High levels of investor protection owing to local laws in Ireland.
5) Has the ability to greatly reduce administration fees by investing in SEB's Select list of internal funds.
6) The ability to convert to a Spanish annuity if required.
7) No need to report on the Modelo 720 in Spain
8) Open architecture platform meaning a wide range of investments available.

Cons:

1) Charging structures somewhat inflexible.
2) Firms have one log in for all clients but individual advisers do not - which can cause a delay with valuation requests.
3) After the initial charging period (5 or 8 years) there is still a 0.5% annual management fee from SEB.
4) No longer available for new applications

Conclusion:

The SEB Spanish compliant bond is an excellent vehicle for collectively holding compliant investments. Using their 'Select List' can reduce quarterly admin fees considerably. Due to it's 'open architecture' some unfortunate people have historically had rogue advisers put terrible investments in the bond resulting in suspension or substantial losses. Thankfully regulation has largely cleared them out from the market in Spain but a lot of damage has been left in their wake.

Do you hold an existing SEB Spanish portfolio bond? If your investments are performing badly or you have had bad advice please get in touch for a free, no obligation review of your portfolio. Hopefully we can make the necessary adjustments to put it back on track. Please contact us for further information by filling out the form below or calling me direct on +34 951 390 201

Patrick Macdonald ASCI
International Financial Adviser