The six year growth plan 16 offers an uncapped return. Unlike the shorter term plan, which is a zero per cent commission option, the six year growth plan 16 pays a 3 per cent adviser commission, which can be partially or fully rebated to the client.
Cater Allen added that the three and three quarter year plan has monthly averaging over the final six months, and the six year term over the final twelve months, to ease against any market volatility.
The Cater Allen annual locked-in return plan 7 offers investors a return of their original investment at maturity, plus up to six annual locked-in returns, each equivalent to 6 per cent gross of the original investment for each year that the FTSE 100 index is at or above the initial index level.
This could potentially be up to 36 per cent of the original investment over the full term, equivalent to 5.26 per cent AER variable.
Cater Allen said that the lock in feature of this plan means that any cumulative returns will be paid out at maturity which avoids any potential gains being wiped out by a drop at the end of the plan term.
The deadline for investment in all three plans is 8 March 2013 (or earlier if sold out), and all product’s commence on 4 April 2013.
REACTIONS:
PROVIDER VIEW
Jonathan Banks, structured products manager at Cater Allen Bank, said: “Structured deposits can offer a real benefit within a wealth management portfolio. They offer 100 per cent capital protection, providing investors with the safety inherent in cash and the same protection as any other cash deposit account under the Financial Services Compensation Scheme, plus potential rewards linked to market growth. We are offering three different products to take into account individual market expectations. Whether a client envisages steady market growth over the short-medium term, or fluctuations over that period, they can select either a growth or an annual locked-in return product.”
ADVISER VIEW
Alan Lakey, partner of Hertfordshire-based Highclere Financial Services, said: “I am a fan of structured deposit plans, pretty much I have used Investec over the last five years, but this actually looks very good compared to the latest offering from Investec. The six year growth plan 16 has no upper limit on the gain in the FTSE over that period which is very attractive, although six years is a very long time for some people. Often these plans are marketed as a slightly sexy alternative to a fixed rate bond with a building society, but you don’t get many six year fixed rate bonds, people tend to go for one, two or three years, so it doesn’t make it so easy to market as an alternative to a deposit plan. The only drawback is because Cater Allen is part of Santander, it has historically been burdened with the reputation of having bad admin, as long as that has been overcome then this would be attrractive.”
CHARGES
Each plan requires a minimum deposit of £5,640 and is suitable for 2012/13 Cash Isas and Isa transfers to benefit from an individual’s Cash Isa tax-free allowance. The products can also be used within an offshore bond wrapper, Sipp or Ssas for additional tax efficient benefits. Early bird interest is included in each plan at a fixed rate of 0.50 per cent AER.
VERDICT
There is not long for investment, if someone wanted to do a transfer they have only got a few weeks, so that needs to be taken into consideration.
