How Tees Mutual’s With Profits Fund Works – A Brief Guide
The premiums members pay each week or month are invested into Tees Mutual’s With Profits Fund, which is managed by the society’s investment advisors, London-based LGT Vestra.
LGT Vestra employ a range of experts in specific areas of investment such as fixed interest securities and equities.
The aim of the With Profits Fund is to club together all our members’ money and enable them to invest in a wide range of financial investments that they wouldn’t be able to do on an individual level.
In addition by doing this, the society is able to “buy” expert advice from LGT Vestra at a lower cost level than individuals investing directly with them.
Tees Mutual’s dedicated management committee works closely with our actuary and investment managers to constantly monitor investment conditions on our members’ behalf.
The actuary also advises LGT Vestra on what particular investments to make. At the time of writing (winter 2018), because of the uncertainty about Brexit and issues overseas, the society is holding 80% of our members’ money in government gilts and corporate bonds.
The aim of the society is to deliver consistent profits for our members in the form of an annual bonus that can be added to your policy. Once they have been awarded they cannot be taken away. In addition, a final “terminal bonus” may also be added when the policy matures.
With Profits funds use a process known as “smoothing”, which means retaining a proportion of the profits made during prosperous years and using them to boost bonuses during the poorer years.
At Tees Mutual, our members always come first. Because we don’t have shareholders to pay, our members benefit from 100 per cent of the profits after the cost of investing is deducted.
All our members are invited to attend our annual general meeting, which includes a presentation on how our investments have performed over the previous year.
In 2016 the society achieved an overall investment return of 13.5%, while in 2017, when fixed interest returns declined slightly, the return was 3.7%.
With Profits funds have fallen out of fashion in some quarters, but many are people are now returning to them as they become aware of the advantages they can offer.
At Tees Mutual, our members always come first. Because we don’t have shareholders to pay, our members benefit from 100 per cent of the profits after the cost of investing is deducted.
No form of investing is ever completely risk-free, but products such as Tees Mutual’s With Profits funeral and savings plans have stood the test of time.
Call us on 01642 855199 or email info@teesmutual.co.uk to find out more about our funeral and savings plans.
