The Unbiased Utmost Assurance Vie Review
LEARNING OBJECTIVES
We’re passionate about providing free, high quality and up-to-date information to Expats around the world.
IN THIS ARTICLE, YOU WILL LEARN THE FOLLOWING:
Who are Utmost
How does their Assurance Vie work
How much does it cost
The tax treatment in France
The strengths & weaknesses of the Utmost Assurance Vie
Utmost International is a prominent provider of insurance-based wealth solutions with a global presence. The company operates in various regions, including the UK, Europe, Latin America, Asia, and the Middle East. Utmost International has gained recognition for its expertise in offering financial solutions. It has further expanded its reach by acquiring established products from companies like Quilter and Generali.
As a result, Utmost now has over £52.4 bn under administration. The insurer holds an 'A' Insurer Financial Strength Rating with a Positive Outlook according to Fitch Ratings.
Tax Efficient Investments France
An "Assurance Vie" is a French investment account that combines life insurance coverage with the potential for investment returns. Assurance Vie, a French investment account, offers substantial tax benefits, primarily realized after an 8-year holding period. This makes it an ideal long-term retirement planning option.
Apex France | What You Need to Know
Apex France is the name of Utmost International’s Assurance Vie offering.
It is an international life insurance policy, designed as a single premium unit-linked plan. It requires a minimum initial premium of EUR 100,000
The Apex (France) policy is structured as a life insurance policy. It remains in force until the death of the Relevant Life Assured, which could be the sole, first, or last Life Assured. However, Utmost PanEurope has the authority to close the policy if its value drops below EUR15,000
If the relevant Life Assured dies, the policy provides a payout structured as follows:
100% of the Policy Value
An additional 1% of the Policy Value, capped at €10,000 or the equivalent in your chosen currency.
Regulation
Utmost Pan Europe is under the regulatory authority of the Central Bank of Ireland. Utmost AV (Assurance Vie) is authorised for conducting life insurance business in France under a freedom to provide services basis. It is appropriately registered for this purpose with the French Prudential Control and Resolution Authority.
Fees
Fees are charged by both the provider (Utmost) and the Adviser that you work with. Utmost's fees do not change, and will always apply.
The fees paid to an adviser will vary.
We have broken these down into the 2 components below:
Product Fees (Charged by Utmost)
No initial setup fee.
Annual Management Charge varies from 0.4% to 0.55%.
Administration charge: €600 per annum.
Early discontinuance charge: 1% in year 1, 0.5% in year 2, zero from year 3 onwards.
Withdrawal charges apply after the first 4 withdrawals in a policy year and amount to €250.
Dealing charge: £27 or currency equivalent.
Expat Financial Adviser Fees (Charged by the Adviser)
Fee-based advisers typically charge between 5% and 1% depending on the initial investment value, with an annual fee of 1%.
Commission-based advisers can receive up to 8% of the initial investment value. This fee is integrated into the ongoing policy costs, leading to very high running fees.
Encashing the policy may incur substantial exit penalties to compensate for amounts paid out by Utmost to the adviser.
How does The Wealth Genesis Charge?
A flat setup fee of £3,000, regardless of the initial investment value.
An industry low ongoing management fee of 0.85%
Apex France Fund Range
Within the Apex France you have access to an extensive range of investments. Far greater in fact than most investment platforms. These include: ETFS, Mutual funds, Investment trusts, OEICs and listed shares. Utmost AV also has terms with a large array of DFM’s including LGT Vestra, Brook Macdonald and Rothschilds.
Account Minimums
The initial minimum investment for the Apex France policy is €100,000, £90,000, or $110,000. Additionally, there are other minimum requirements for subsequent contributions, withdrawals, and maintaining a certain balance.
Product Exit penalties
As above, 1% in year one, 0.5% in year 2 and zero thereafter.
Adviser Exit Penalties
When the Apex France LA policy is set up on a commission basis, any money initially paid to the adviser by Utmost needs to be recovered from you upon closing the product.
These recovery charges are then reduced on a sliding scale over a set period, typically 8 years. In simple terms, a £500,000 investment will incur £30,000 initial charge excluding Utmost.
If you exit early, this amount will be held back.
If you come across exit penalties in any documentation unrelated to the discontinuation charge, it should be considered a red flag.
Tax Benefits
The primary motivation for utilising this product is its favourable tax treatment, which includes:
Gross roll-up: No taxation on any growth, whether it's capital gains, dividends, or fixed income generation. Tax is only applicable when you withdraw money
Legacy: Named beneficiaries can receive up to €152,500 free of French Inheritance Tax (IHT) in the event of death.
Tax-free withdrawals: After the eighth year, a tax-free annual allowance of €4,600 or €9,200 per married couple becomes available.
Flexibility: You can elect to have income taxed at your marginal rate. A preferential rate applies if one half of a couple has low income levels.
How Are Assurance Vies Taxed?
If held for less than 8 years:
12.8% Income Tax + 17.20% Social Charges = 30%
If held for 8+ years
7.5% Income Tax + 17.20% Social Charges = 24.7%
Key Strengths
Highly regulated by the Central Bank of Ireland.
Utmost hold a Fitch Rating A, ensuring high protection
Offers an extensive range of investment options.
Competitive pricing for both the product and administration charges.
Provides flexibility in investment choices and access
Key Weaknesses
The ability to be set up on a commission or high fee basis can lead to higher costs.
Exit penalties in the first two years
The Importance of Financial Advice in France
France is a notoriously complicated and tax-heavy jurisdiction for Expats that move to the country. As such, we strongly recommend taking unbiased, regulated and independent advice.
Falling foul of French taxation and regulation is easily done. Working with a professional can provide peace of mind, knowing that your finances are structured as efficiently as possible.
Our Verdict
The Utmost Apex France offers a compelling combination of affordability, flexibility, and investment options.
Unlike traditional French banks that limit your investments to their offerings, this product provides access to a diverse range of investment opportunities.
Additionally, it's worth noting that the bond can be converted into a UK Offshore Bond if you plan to return to the UK in the future, enhancing its versatility and long-term value.
The Wealth Genesis is the first Expat Adviser to charge the same flat-fee to all clients, regardless of background, wealth or circumstances.
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8/10
‘Great, and currently the best Assurance Vie for British Expats in France’
+ Wide investment choice
+ Independent from French Banks
+ Contract in English
+ Tax-efficient in France
+ Great value
+ Highly regulated
+ Portable if you move back to the UK
- 2 year exit penalty levied by Utmost
- Possibility of lock-ins and large adviser commissions
- Minimum investment of £90,000
