Legal & General kicks off the New Year with a new Early Bonus Plan offering a choice two investment options.
02 January 2013
Legal & General's latest product in its series of “kick out” capital at risk investment plans, Early Bonus Plan 11, offers investors a choice of potential bonus payments based on the level of the FTSE 100 Index on the applicable anniversaries.
Early Bonus Plan 11 is available for investment over an eight week period from Wednesday 2 January until Friday 22 February 2013.
Clients can choose one of the following:
Maximum bonus at the end of the six year term = 50.4% provided an early bonus has not already been paid and the level of the FTSE 100 Index at maturity is equal to, or better than, the initial FTSE 100 Index level taken on the start date (also known as the strike date).
Maximum bonus at the end of the six year term = 37.2% provided an early bonus has not already been paid and the level of the FTSE 100 Index at maturity is 90% or better, when compared to the initial FTSE 100 Index level taken on the start date.
Kick out feature:
In addition, both options in the plan 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.
The kick out feature pays investors their capital, plus a bonus payment, prior to the end of the term. If the early bonus payment feature activates the Plan will close and pay a set bonus - see early bonus payment table below.
"David Beard, Business Development Manager said, “Our Early Bonus Plan series is proving to be very popular with advisers and their clients.
As a result of market demand we have now introduced a choice of index levels on our autocall product to accommodate clients seeking a more defensive option.
Firstly, we offer a 16.8% bonus on the second anniversary, which is based on the FTSE 100 Index on 13 March 2015 being equal to or better than the start level.
Alongside this the defensive option would mature early even if the FTSE 100 Index had fallen by up to 10% when compared to its strike level on the second anniversary paying a 12.4% bonus.
Both options require investors to accept some risk to their capital and it is important to make sure they fully understand the risks they are being asked to agree to. This includes the risk of counterparty default.
In both options investors will get back their original investment provided the FTSE 100 Index has not fallen at the maturity date by 50% or more of the starting Index level on the strike date (13 March 2013). If the FTSE 100 Index has fallen by more than 50% at maturity they will lose some or all of their original capital."
Early bonus payment:
The Plan offers repayment of capital plus a bonus as long as matches the terms of the option chosen (Option A = FTSE 100 Index is equal to, or better than, the initial FTSE 100 Index level taken on the start date, Option B = FTSE 100 Index is 90%, or better compared to the initial FTSE 100 Index level taken on the start date, also known as 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:
Kick out feature activation.
|End of year||1||2||3||4||5||6|
(fixed end date)
|Bonus Option A - FTSE 100 level or better||N/A||16.8%||25.2%||33.6%||42.0%||50.4%|
|Bonus Option B - FTSE 100 90% or better||N/A||12.4%||18.6%||24.8%||31.0%||37.2%|
Notes to editors
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 it’s starting level, investors will receive 60% less than they invested.
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. There is no maximum for ISA transfers.
The last date for ISA transfers is 8 February 2013 to allow time for the completion of the transfer before the offer close date. The closing date for all other applications is 22 February 2013.
This is a nil commission investment plan. It does not offer Facilitated Adviser Charging.
Full details for this product are available on the Legal & General dedicated adviser website
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 firstname.lastname@example.org
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 13 March 2013 and the end of the fixed term is 13 March 2019.
2. This plan is not suitable for customers who may need to access their money before the end of the six year term or who may be seeking a definite return, and are not prepared to accept the risk that they may lose some or all of their investment.
3. The growth of the FTSE 100 Index will be measured using the initia