Barclays kick-out plan

BARCLAYS

Type: Kick-out plan

Description: Barclays has launched the Defined Returns plan (Annual Kick-out 90), June 2012 edition, which is available through Woolwich plan managers alongside three additional investments: FTSE Defensive Autocall E1, E2 and E3. The investments are offered through platforms, stockbrokers and Sipps, with potential returns varying from 7.7 per cent to 9.5 per cent per annum depending on the option chosen.

Conditions: The four products are subject to the counterparty risk of Barclays, with the possibility of early maturity from the third anniversary should the FTSE be at or above 90 per cent of the initial index level on an anniversary date. Capital is completely at risk if the early maturity condition is not met, and the final index level is more than 50 per cent below the initial index level.

Verdict: Ian Lowes, managing director at Lowes Financial Management, said: “This is an acknowledgment that wraps are going to take a bigger place in the structured product market.”

Mr Lowes, who said the plan is yet to reach the final phase of its evolution, added: “It is recognition that platform holding structured products which are packaged as plans represent a double element of administration which isn’t necessary. If you can cut one element out, then ultimately there is a cost saving somewhere along the line and what Barclays have done is ultimately transferred that cost saving to the client.”

Rating: three stars out of five