Presentation on theme: "Flexible Guarantee Bond Reassurance in tricky times For UK financial advisers only. Not to be used with customers."— Presentation transcript:
Flexible Guarantee Bond Reassurance in tricky times For UK financial advisers only. Not to be used with customers.
Contents An investment solution from LV= The basics Optional guarantee Investment choices About Threadneedle Investments Averaging approach Flexibility Allocation rates Transparent charging Mutual bonus Adviser support & commission LV= strong & stable For UK financial advisers only Option to buy a capital guarantee over a range of terms Choice of three fund options Switching capability From the UK’s largest friendly society Guaranteed minimum death benefit
An investment solution from LV= Flexible Guarantee Bond The name says it all… Option to buy a capital guarantee at outset or any time after. Protect initial investment & lock in gains. Stay invested as long as your client wants (ideally for more than five years). Averaging to smooth returns. Choice of three fund options. Guaranteed minimum death and terminal illness benefit. Option for ad-hoc & regular withdrawals. Competitive & transparent charging. For UK financial advisers only
The basics Single premium, non-qualifying unitised with-profits, whole of life investment bond. Open to UK residents aged 17 or over (lives assured from 3 months to 89 years) Single, joint and life of another basis. Invest between £5,000 and £500,000. No fixed term (recommended minimum five years). Option to buy a capital guarantee over a range of terms at outset or any time after. Choice of three fund options. Averaging approach, for a smoother more consistent return. Guaranteed minimum death and terminal illness benefit. Ad-hoc & regular monthly, quarterly, six-monthly and yearly withdrawal facilities. Options for commission give up and trail. Potential for an additional mutual bonus to be added. For UK financial advisers only
Optional guarantee Key benefits of the optional guarantee: Ability to protect original capital. Range of terms available. Clients can lock in any gains made. Can be bought at outset, at any time after, or replace an existing one at any time. There’s no need to cash in at end of the guarantee term. We automatically add units to make up any shortfall. Any units we add continue to participate in bond performance (but value isn’t guaranteed, unless your client buys another guarantee). Option to purchase a new guarantee from the range of terms available when the current guarantee expires. We commit to always offering at least a ten year guarantee term on all three fund options for the lifetime of the bond. We promise that the bond will be worth at least the same at the end of the selected guarantee term as it was when the guarantee was purchased, less any money taken out. For UK financial advisers only
Optional guarantee cont’d We promise that the bond will be worth at least the same at the end of the selected guarantee term as it was when the guarantee was purchased, less any money taken out. For UK financial advisers only
Investment choices Choose one of three fund options. Mix of equities, commercial property, fixed interest and cash. Money is invested in the LV= with-profits fund. Latest asset mixes available on our website. Unlimited fund switches (first three per bond year are free). Actively managed by Threadneedle Investments. For UK financial advisers only Asset mixes can change regularly. Please refer to our website for the latest splits.
About Threadneedle Investments Threadneedle is a leading international investment manager with a strong track record of outperformance across asset classes. They actively manage £73bn of assets (as at 31 Dec 2011) investing on behalf of individuals, pension funds, insurers and corporations. A top 10 fund manager by assets under management. * The third largest UK retail fund manager. * Established in 1994 in London, Threadneedle operates in 16 countries across Europe, the Middle East, Asia Pacific and North America. For UK financial advisers only *UK IMA rankings, June 2012.
Averaging approach Reduces the impact of stock market volatility. Providing a smoother, more consistent return. Average value (‘Averaged Price’) of assets within the bond over the preceding 26 weeks. Real value of underlying assets (‘Underlying Price’) used for the first 26 weeks of the bond. No Market Value Reductions. Fund Protection for rare events. More information about prices, averaging approach and Fund Protection in ‘Your Guide to how we manage our with-profits fund’ (and PPFM). For UK financial advisers only The graph below illustrates how the effect of averaging can work in practice, showing both the underlying and averaged prices over a period of time. The prices and timeframes are used purely to display the effect of averaging. They’re not based on real past performance nor are they a guide to future performance. Averaging in action
Flexible by name… Open-ended, but we recommend investing for at least five years. Freedom to take ad-hoc and regular withdrawals. - monthly, quarterly, half-yearly or yearly. First 5% of amount invested, or rolled up 5% allowance, withdrawn per bond year: - No income tax on amount at that time. - No exit charge up to this limit. Freedom to switch between three fund options to help meet evolving investment needs. Option to buy a guarantee over a range of terms at any time to protect capital or lock in growth. For UK financial advisers only
Allocation rates Standard allocation rates based on; Age of life assured at outset. Amount invested. Any ‘commission give up’ is added to the premium paid by the investor, not as extra allocation. For UK financial advisers only
Transparent charging No initial set up charges. Annual management charge. - Based on amount invested and deducted monthly. - 1.5 % pa for investments < £10,000. - 1.3 % pa for investments £10,000 & over. Exit charge. - Applied to partial or full withdrawals within first five years. - No exit charge applied to the first 5% of amount invested, or rolled up 5 % allowance, in any bond year. For UK financial advisers only Year123456 onwards Exit Charge8.5%6%4%2%1%0%
Mutual bonus Rewards qualifying members for their ownership of LV=. Increases the amount we pay when your clients decide to fully cash in their bond, if they die or become terminally ill. Is a pure addition, on top of normal returns applied to the bond. For bonds with a guarantee, it doesn’t get taken into account when we assess how much we uplift the bond by if it’s lower in value at the end of the guarantee term. Can be reduced or taken away, however we’d only do this in exceptional circumstances. A Mutual Bonus was added to all Flexible Guarantee Bonds that were in existence on 31 August 2011, which increased bond values by 0.5%. A further bonus of 0.5% has been added to all bonds in existence as of 29 February 2012. Looking ahead, we’d like to be able to add a 1% bonus each year. We intend to declare future mutual bonuses yearly. For UK financial advisers only
Commission options Initial commission only. Initial + trail. - Part of initial commission can be converted to trail. - 0.5 % trail for 2.2 % reduction in initial. - 0.25 % trail for 1.1 % reduction in initial. - Trail commission paid on six-monthly basis from month 13 & for first 10 years. Commission ‘give up’ - On a 1 for 1 basis. - Any commission given up is added to the amount invested before the allocation rate is applied. For UK financial advisers only
Support for you Personalised Flexible Guarantee Bond quotes. Exclusively - Exclusively from our quotes hotline. Dedicated website area. - Order customer packs (with essential documents). - View, download & order a range of web-friendly customer sales aids & adviser guides. - Suitability report wordings. Personal support. - Team of dedicated account managers. - Sales support for quotes & information. For UK financial advisers only
Financially strong and stable LV= A compelling choice… The UK’s largest friendly society Proudly ‘mutual’, with no shareholders eating into profits Looking after members since 1843 Rated B+ (very strong) overall rating for financial strength 1 Our main with-profits fund is rated 10/10 for financial strength, investment freedom, flexibility and bonus-paying ability 2 5 Million members & customers³ For UK financial advisers only Sources: 1. AKG Consulting Company Profile & Financial Strength report, September 2011. 2. Cazalet Consulting With Profits ratings October 2011 3. As at 31 st December 2011
Liverpool Victoria Friendly Society Limited: County Gates, Bournemouth BH1 2NF LV= and Liverpool Victoria are registered trade marks of Liverpool Victoria Friendly Society Limited (LVFS) and LV= and LV= Liverpool Victoria are trading styles of the Liverpool Victoria group of companies. LVFS is authorised and regulated by the Financial Services Authority, register number 110035. LVFS is a member of the ABI, AFM and ILAG. Registered address: County Gates, Bournemouth BH1 2NF. Tel: 01202 292333. 21228744 09/12 For UK financial advisers only It’s important that you and your client read the Flexible Guarantee Bond Key Features so that you both fully understand the risks and features of this investment before they apply. Any references we make to tax are based on our understanding of current legislation and HM Revenue & Customs practice, which can change. The amount of tax your client pays depends on their personal circumstances.