Fee-based adviser offered Premium Bonds millionaire contract
National Savings and Investments (NS&I) has awarded an initial three-year contract to Nelson Money Managers to provide optional independent financial advice to the monthly £1 million Premium Bond prize winner, effective from February 2005.
Each month, NS&I gives away more than one million prizes in its Premium Bond draw, including one top prize of £1 million. The lucky jackpot winner is given the opportunity to take advantage of independent financial advice, a service which NS&I has provided since the £1 million jackpot was introduced in April 1994.
Nelson Money Managers, a fee-based adviser with UK-wide coverage, will be available to provide the winner with an initial consultation and further sessions according to the winner’s needs, if they wish.
Founded in 1970, and part of Close Brothers Group plc since 2003, Nelson Money Managers works with large employers and provides tax, investment and retirement planning advice to employees. It also offers these services directly to individuals.
The appointment process
During 2004, NS&I invited responses for the contract from the intermediary market and received an impressively high number of quality responses, including well-known financial services providers and niche and national IFAs.
John Prout, NS&I sales director, said,
“Premium Bond jackpot winners have a diverse range of profiles and requirements and we needed an adviser who could reflect that.
“We felt that Nelson’s technical offering, straightforward and transparent fee-based structure, ability to arrange tailored banking services at short notice and, critically, their ‘fit’ for our customers would be ideal for the Premium Bond millionaires of the future.”
Nelson was also selected on the basis that it provides a fee-based service.
Prout added:
“NS&I is a strong supporter of truly independent advice. We also believe that a fee-based approach can often better reflect the value of this advice, and Nelson has a particularly well established way of working in this area of the market.”
Peter Cooley, director of business development at Nelson, said:
“Premium Bond millionaires are a unique breed of people, from the reasonably wealthy to those who have struggled to make ends meet, and so the big win really can turn peoples’ lives upside down.
“Because of this wide variety of winners, this contract is an exciting and unique opportunity for us and we are thoroughly looking forward to working with some of the UK’s luckiest people and with such a well-known and respected financial provider.”
Premium Bonds facts and figures
Launched in 1956, Premium Bonds are a serious yet fun investment, offering prizes instead of regular interest, in which 23 million people have invested £26 billion.
All prizes are tax-free and the prize fund rate is currently 3.2%, equivalent to 5.33% p.a. gross for a higher rate taxpayer and 4.00% p.a. gross for a basic rate taxpayer. Odds of any single Bond winning a prize are 24,000 to 1.
The winning numbers are generated each month by ERNIE (Electronic Random Number Indicator Equipment). In the April draw, NS&I gave away more than 1 million prizes worth more than £69 million including the jackpot prize of £1 million, which was introduced in April 1994. Since then, NS&I has created 133 millionaires.
Premium Bonds can be bought online at www.nsandi.com, by telephone, standing order, by post and over the counter at the Post Office. NS&I launched its Premium Bond online sales facility at the end of January this year and web sales have averaged £50 million a month. It is expected that sales will increase month by month.
About NS&I
National Savings and Investments offers a range of unique savings and investments, including Index-linked Savings Certificates (inflation proof and tax-free), Fixed Interest Savings Certificates (tax-free), Guaranteed Equity Bonds and the Easy Access Savings Account. Deposits total £67.8 billion and NS&I has some 26 million customers.
As a government department and an executive agency of the Chancellor of the Exchequer, it exists to provide cost-effective financing to HM Treasury.
Established in 1861 as the Post Office Savings Bank, National Savings – as it was known then – became a separate organisation in 1969. It maintains a partnership with the Post Office, through which many of its products are sold. However, NS&I now attracts substantial business through its telephony and internet channels.