View more on these topics

Growing pains for Woolwich


Capital Growth Plan 8

Type: Guaranteed equity bond

Aim: Growth linked to the performance of the FTSE 100 index

Minimum-maximum investment: 4,000-500,000, Isa 7,000

Term: Five years

Return: 120% of the rise in the index at the end of the term or 20% of original investment after two years and six months if index rises by at least 20 per cent

Guarantee: Original capital returned in full regardless of the performance of the index

Closing date: June 27, 2005, June 13, 2005 for Pep/Isa transfers

Commission: Initial 3%

Tel:0800 0857929

Hargreaves Lansdown senior analyst Meera Patel generally finds there are more cons than pros to structured products and suggests IFAs should look under the bonnet of each product before recommending them to investors.

Patel says: “On the first impressions, the literature seems clear and highlights the risks of the product.” She feels the early maturity option offers flexibility but this only applies if the necessary conditions are met. The 100 per cent capital protection is regarded by Patel as an advantage as it does not matter if the index rises or falls.

However, she feels investors having to tie their money up for five years to get the protection is a potential drawback. She also complains that it is not made clear that capital is not guaranteed and some investors could see the term protection as a guarantee. “Capital is still at risk if one of the financial institutions used by Woolwich fail to honour their commitments. It is also not clear what type of investments are purchased from these institutions. Growth on these could be higher than the performance of the FTSE 100 at maturity, so investors can potentially lose out,” she says.

Companies such as Premier, Abbey and Britannia are cited by Patel as possible competitors. She concludes: “Structured products need to be treated with caution as many are not as transparent as they are made out to be. So many structured products have failed to live up to their promises so I would tread carefully with any product of this type, even where there is a protection or guarantee.”

Suitability to market: Poor
Investment strategy: Poor
Adviser remuneration: Poor

Overall 3/10


Purls of PR wisdom

Polhill has chosen to grace MM‘s Diary page with a refined coming-out. Heidi Robinson says the “chicks with sticks” club has been picking up speed at the agency, with six members taking a lead from Vogue’s fashionistas and casting off and on in their free time. The current project is cushion covers although Heidi has […]

Rights of access

There has been a lot of talk about the positive impact on the self-invested personal pension market of the simplification proposals, particularly the opportunities arising from the new investment freedoms. However, far less has been said about the increasingly restrictive impact of the governing rules on protected rights.

Life cover for life

When someone mentions whole of life plans, most people will think of a niche product that serves as an inheritance tax planning tool for high-net-worth clients. And it’s really not surprising they’ve been pigeonholed in that waybecause before the arrival of RDR in 2013, that’s more or less exactly what they were. For advisers thinking […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm