New Early Bonus Plan from Legal & General.
08 March 2013
Legal & General’s twelfth product in its series of ‘kick out’ investments, Legal & General Early Bonus Plan 12, offers investors two potential bonus options, a dual tax year investment opportunity plus Facilitated Adviser Charging.
Clients can choose from the following:
A bonus will be paid if the level of the FTSE 100 Index on any of the applicable anniversary dates is higher than or the same as the initial level of the FTSE 100 Index taken on the start date (also known as the strike date). The first early bonus, payable on the second anniversary is 15% - see table below. The maximum bonus at the end of the six year term = 45%.
A bonus will be paid if the level of the FTSE 100 Index on any of the applicable anniversary dates is the same as, higher than, or has not fallen by more than 10% from its starting level. The first early bonus, payable on the second anniversary is 11% - see table below. The maximum bonus at the end of the six year term = 33%.
Legal & General Early Bonus Plan 12 is a capital at risk product and is available for investment over an eight week period from Monday 11 March until Friday 3 May 2013.
Kick out feature:
Both options incorporate an early exit feature (also called a ‘kick out’ feature), which pays a fixed payout dependent on the level of the FTSE 100 Index on any given anniversary from the second year anniversary onwards. Once a ‘kick out’ has occurred, the contract will close paying back the stated returns.
If the early bonus payment feature activates, investors receive their capital plus a bonus payment, and the Plan will close prior to the end of the term - see early bonus payment table below.
James Harrington, Head of Structured Solutions said, “Early Bonus Plan 12 is a dual tax year autocall product and following on from EB11 once again offers cautious clients a choice of a more defensive option, that has the opportunity for the early potential maturity to occur should markets even have fallen on one of its applicable anniversaries.
The higher bonus option offers a 15% bonus on the second anniversary if the FTSE 100 Index on 22 May 2015 is equal to or better than the start level.
Alongside this, the defensive option pays an 11% bonus should the FTSE 100 Index have fallen by no more than 10% from its starting level on the second anniversary.
Whichever option is chosen, investors do accept some risk to their capital*, including the risk of counterparty default, and it is important to make sure they fully understand these risks.
It must also be made clear to investors they will lose some or all of their original capital if the FTSE 100 Index has fallen by more than 50% at maturity."
Early bonus payment
The Plan offers repayment of capital plus a bonus as long as the level of the FTSE 100 Index on the second anniversary, or subsequent anniversaries, matches the terms of the option chosen (Option A = FTSE 100 Index is higher than or the same as the initial level of the FTSE 100 Index taken on the start date, Option B = FTSE 100 Index has not fallen by more than 10% from its starting level on the strike date).
If the early bonus payment feature activates, the Plan will close and there is no option for the investment to continue. If early payment is not activated, the Plan continues until the next anniversary/maturity:
|End of year||1||2||3||4||5||6 (fixed end date)|
| Bonus Option A|
FTSE 100 level or better
| Bonus Option B|
FTSE 100 has not fallen by more than 10%
Note*: Capital is not protected with this Plan. Between 50% and 100% of the original investment will be lost if the FTSE 100 Index has fallen by 50% or more (that is 50% - 100%) of its starting level at the end of the six year term. The original capital invested will be reduced by 1% for each 1% that the final level of the FTSE 100 Index is below its starting level. So, if the FTSE 100 Index is 60% less than its starting level, investors will receive 60% less than they invest.
The minimum investment is £3,000.
Investors can invest up to £11,280 in a stocks and shares ISA for the 2012/2013 tax year and may also invest a further £11,520 for the following tax year 2013/2014.
There is no maximum for ISA transfers. The last date for ISA transfers is 19 April to allow time for the completion of the transfer before the offer close date. The closing date for all other applications is 3 May 2013.
This plan offers Facilitated Adviser Charging (FAC).
Full details of FAC arrangements and product key features are available on the Legal & General dedicated adviser website www.landgstructuredproducts.com.
Advisers can also contact Solutions First on 0370 050 0614 (Lines are open from 9am to 5pm Monday to Friday. We may record and monitor calls. Call charges will vary). Or email email@example.com
Notes to editors
The information contained in this press release is intended solely for journalists and should not be relied upon by private investors or any other persons to make financial decisions.
1. The contract start date is 22 May 2013 and the end of the fixed term is 22 May 2019.
2. This plan is not suitable for customers who may n