The Global 4 was launched as a third collateral option to the FTSE 100 Enhanced Kick-out Plan 44 to offer clients an additional choice of counterparty.
Gary Dale, head of intermediary sales, said: “Our UK5 option has proved extremely popular since its launch in 2011 and it makes sense for us to continue to develop this further by adding alternative counterparties for those customers who may already be exposed to the current range.
“Research we recently carried out indicated that customers viewed counterparty risk in a very similar way to market risk, so, with slightly higher pay-off profiles available from our Global 4, it will be interesting to see where customers choose to invest.”
| Key features |
The Global 4 option offers the potential for maturity at the end of years two, three, four, five or six. The four banks are: Banco Santander SA, Commerzbank AG, Standard Chartered Bank and The Royal Bank of Scotland. It offers payment of 8 per cent a year (not compounded) if the FTSE 100 is higher than the starting level. It offers two other collateral options: Investec (9.75 per cent a year) and UK 5 (7.5 per cent a year). |
Adviser verdict
Nick Burt, chartered financial planner at London-based Addidi Wealth, said: “We do not use structured products primarily because of their complexity and lack of transparnecy. They are quite difficult for an adviser to understand in terms of the underlying investments.
“It’s probably not a sensible strategy for clients to take on risk they don’t understand. The costs are not as transparent as some other assets either, and they can be illiquid.”
