Give us guarantees consumers tell Friends Provident

Friends Provident, the FTSE 100 life and pensions company, has launched a new guaranteed bond reflecting consumer demand for secure long-term investment products.

Research commissioned by Friends Provident revealed that nearly two thirds (62%) of people surveyed would be more inclined to opt for an investment product that provides guarantees.

The FRIENDS® Guaranteed Bond is aimed at investors with a lump sum of £10,000 or more who want to invest in stock markets, but are also looking for a guaranteed element to their investment.

From the date they invest, customers (or their beneficiaries) are guaranteed to get back at least the amount they have paid in – either on death, or after a five year period. If the markets have performed well they could get back considerably more than this. And after five years, customers can keep these guarantees as long as they remain invested in the bond.

Christine Foyster, head of wealth management at Friends Provident, said: “People are increasingly looking for a secure investment for the future. The guarantee is especially reassuring for those who want to earmark the money for a future inheritance. With a traditional bond there is the risk of the downside of a stock market drop, which means that if the customer died during a stock market fall, the money passed to family or beneficiaries could be less than the original amount invested.”

An additional feature of the FRIENDS® Guaranteed Bond is that the guaranteed amount (after five years) has the ability to increase and any increases are locked in for the lifetime of the bond.

Customers who invest in the FRIENDS® Guaranteed Bond will be given access to an online facility to view the value of the bond at anytime.

The product features are:

A guaranteed minimum payment if the bond is cashed in at any time after five years, or on death
The ability for the guaranteed minimum payment to grow and lock in that growth after five years
Single or joint life cover
Tax-efficient features
Bond valuation available online
Flexible options after five year period
The bond will invest in the Capital Assured Fund, which is made up of:
A special fixed interest investment (to provide the guaranteed minimum payment), and
The Barclays Dynamic Tracker Fund (to provide the extra growth potential). It invests in various market indices including UK and overseas shares, commodities, fixed interest and property-related securities.

Investors do have access to their money at any time in the first five years but the guaranteed minimum payment will not apply and a discontinuance deduction charge will be made – so they could get back less than they paid in. The value of the bond can go up and down depending on investment performance and currency exchange rates.