Friends Provident International has revamped its investment bond by adding another charging structure and portfolio fund to its original design.
This unit-linked bond now offers investors the reward option and a loyalty option. The reward option has an initial charge of 6 per cent, an annual management charge of between 1 per cent and 1.25 per cent and exit penalties for the first five years of between 5 per cent and 1 per cent.
The loyalty option is a new feature. It has no initial charge and the same annual management charge as the reward option. However, it has higher exit penalties at between 9 per cent and 2 per cent during the first five years.
Friends Provident International has also created the secure growth portfolio for the bond. It combines the protector fund and a with-profits fund. The with-profits fund differs from the previous with-profits fund in that investors are eligible for final bonuses from day one, instead of three years. As an alternative to the four portfolio funds, investors can choose from a range of 14 unit-linked funds managed by Friends Ivory & Sime.
Friends Provident International has increased investment choice but products such as Royal Skandias collective investment bond and Selestias offshore collective investment bond offer a wide range of external fund links. Friends Provident International provides access to external funds only through its open managed portfolio fund and does not allow investors to choose external funds themselves.
However, Friends Provident Internationals limitations in this respect could be explained by its £5,000 minimum investment. Selestias minimum investment is £10,000 and Royal Skandias is even higher at £25,000.