Prudential is launching a £1.5m marketing campaign to convince consumers to switch to its smoothed investment plan rather than keeping their money in cash.
The firm says its PruFund investment plan – first revealed in Money Marketing earlier this month – will target the £107bn which Prudential bel-ieves consumers have tucked away in deposit accounts.
The plan, which is broadly an investment in a retail life fund under a bond wrapper, will offer smoothed returns from a diversified asset mix which will include property, equities and corporate bonds.
Pru's illustrations show that a £30,000 investment growing to £33,800 assuming annual 4 per cent growth after five years, £37,200 assuming 6 per cent and £40,800 assuming 8 per cent. After 10 years, it would reach £38,600, £46,700 and £56,400 at the same rates of growth.
Pru says its research rev-eals that consumers do not want complicated charging structures and terminology so its new product will not allow any market value reductions or bonuses and will publish expected growth rates every three months.
The product launches on September 14 and will be sold through IFAs and promoted in the trade and national press. Ads will be targeted at consumers and advisers.
Minimum initial investment is £5,000 with minimum top-ups of £1,000 and a maximum investment of £500,000 per person.
Investment and savings director Hugh McKee says the fund will probably attract the over-60s looking to invest for between seven and 10 years and people who would previously have opted for traditional with-profits investments.
McKee says: “Unlike some other life funds whose investment is constrained by asset mix, this will be invested in a strong fund with £60bn under management.”