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With a little help from Friends

Friends Provident

Friends Provident Isa

Type: Mini or maxi stocks and shares Isa

Aim: Growth by investing in up to 10 investment funds

Minimum investment: Lump sum 4,000

Catmarked: No

Investment choice: F&C fixed interest, index linked, managed, stewardship, UK equity, European, North American and four multi-manager funds
Bonus rates: 0.5% after seven and 10 years if no withdrawals are made
Fund switches: Up to 12 free fund switches a year

Charges: Annual 0.75% a year plus charges on underlying funds

Commission: Subject to negotiation


The Friends Provident Isa is available as a mini or maxi Isa and provides investors with a choice of 11 funds managed by F&C, including four multi-manager portfolios.

Highclere Financial Services partner Alan Lakey thinks Friends Provident is attempting to kickstart the investment market by introducing an Isa with three innovations. It will have no initial charges, it will pay bonuses of 0.5 per cent after seven and 10 years if no withdrawals are made and it has the ability to switch between all eleven funds up to 12 times a year without charge, he says.

He feels the Isa is similar to an investment bond in that there is a discontinuance charges if the bond is cashed in during the first five years. These are at the rate of 6 per cent in year one, 5 per cent in year two, 4 per cent in year three, 2 per cent in year five and 1 per cent in year six.

Looking at the potential disadvantages of the Isa Lakey complains about the investment choice. Apart from the stewardship and multi-manager range the historical investment performance has been average, he says. He also points out that the Isa brochure fails to provide in depth fund details which he regards as unfortunate.

He concludes: Commission is available at bond rates and this allows flexibility of arrangements. The Isa seems to be competing against umbrella funds so it may be that Cofunds, Selestia and Funds Network are the main competitors.


Suitability to market: Good
Investment strategy: Average
Charges: Average
Adviser remuneration: Good

Overall 7/10


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