- Quilter does this to allow the uncrystallised fund to grow free of product and adviser charges, and to therefore provide a larger uncrystallised fund and provide a larger tax-free cash amount for the client.
- The result is that for mixed accounts, the uncrystallised pot gets larger, and hence the charges from it get larger, at the same time as the crystallised fund is getting smaller. In the critical yield calculation, the crystallised fund then requires a larger growth rate to overcome these combined charges than it would have done, had a standalone calculation just considering the drawdown fund been performed.
- An illustration produced using a standalone calculation that is only looking at the drawdown account will therefore produce a much lower critical yield.