Barclays and Legal & General have teamed up to launch a structured investments product into the IFA market – the first in a series of collaborative investment products to be released by the two firms.
Defined Return Plan 1, the first product, is set to launch on 8 April, 2013, with a range of other structured investments to follow.
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The Defined Return Plan 1 will offer repayment of capital along with a defined return as long as the level of the FTSE 100 Index on the second anniversary, or subsequent anniversaries, is equal to or above the starting level.
The product will entail a six year investment term, with a kick out should the defined payment feature get activated on any anniversary between the second and the fifth.
The potential defined return payment will increase on each anniversary from the second onwards, to a maximum 42% on the date of close.
Capital will be at risk, and investors could lose the initial commitment if the level of the FTSE 100 falls more than 50% from the starting level at the end of the six year term. Percentage capital losses will mirror percentage index falls.
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By GlobalDataBarclays director of investment solutions, Richard Henry, said Barclays veiws the tie-up as "complementary" with its own strategy, as the lender announced a revamp of its distribution strategy in December 2012 – closing the Woolwich Plan Managers and finalising plans to offer all its structured investments for IFAs unbundled through third party platforms and stockbrokers.
"This in a bundled format fits in well as a client-centric offering," Henry added.
L&G head of structured solutions, James Harrington, said: "L&G have brought IFA structures to the market since 1995 and taking advantage of Barclays change in strategy and L&G’s strategy with regards to delivering bundled product made this an ideal opportunity to come together."
