iDAD The Callable Defensive Supertracker Plan – June 2019
50% of the Initial Index Level. If the Finish Level of the Underlying Index is less than 50% of the Start Level (representing a decline of more than 50% from the Initial Index Level), your Initial Capital will be lost at a rate of 1% for every 1% the Finish Level of the Underlying Index is below the Initial Index Level.
- Market / index link: FTSE 100 Index
- Counterparty: Goldman Sachs International
- Investment term: 6 years 1 week
- Kick-out / Early maturity: No
- Barrier type: End of Term
- Barrier level: 50%
The closing date for ISA transfer applications is 15 May 2019.
Product Literature & Forms
You should always read the relevant plan brochure and any other plan documentation, for full details of the plan’s features, including any risks, and the terms and conditions. In addition to the plan brochure and terms and conditions there are other important documents, including a Key Information Document ('KID'), that you should consider, before deciding to invest in the plan.
If you do not fully understand the risks or are unsure as to the suitability of the investment, please contact us
How to Invest?
Applications for the Plan must be submitted via Best Price Financial Services and received by 5pm on 30 May 2019 for bank transfer applications.
The closing date for applications by cheque is 22 May 2019
The closing date for ISA transfer applications is 15 May 2019.
This will enable us to process your application and forward it on to the structured product provider.
1 Firstly, print off and complete our Appropriate Assessment Questionnaire. All applications require two proofs of identity - see the questionnaire for more information.
2 Next download, print and complete the application form available. Note that product applications will have multiple documents, so please choose the one relevant to you.
3 Place all completed documents - questionnaire, proofs of identity, application form and cheques for payment - in an envelope and post to:
Best Price Financial Services,The Tythe Barn, 5 Eglwys Nunnydd,
Margam, Neath Port Talbot
SA13 2PS
Further Information
This is a 6-year 1-week Plan based on the performance of the FTSE™ 100 Index. The Plan is constructed to offer a potential return of 10.00% per annum to the redemption date if the Issuer calls the investment early (please refer to the ‘Callable Feature’ on page 3 of the Brochure), or 3.0% for every 1.00% growth of the FTSE™ 100 Index at maturity from a defensive Strike Level. We refer to defensive, in that the Strike Level used to calculate the basis of any return if the product is not called early, is set at a level 5% below the Initial Index Level.
If the Plan is not called early, at maturity a payment will be made if the Final Level of the Index is above 95% of its Initial Index Level. In this event, the amount of the payment made will be 3.00% of your investment for each percentage point that the Final Level of the Underlying Index exceeds 95%. For example, at maturity, if the FTSE™ 100 Index had risen 10% from the Strike Level, the investor will receive 100% of their investment back plus a 30% growth payment (10% X 3.00).
Investor’s capital is protected in full unless the FTSE™ 100 Index falls more than 50%. If on the Final Observation Date, the Closing Price of the Underlying Index is less than 50% of the Initial Index Level. (representing a decline of more than 50% from the Start Level), your Initial Capital will be lost at a rate of 1% for every 1% the Closing Price of the Underlying Index is below the Initial Index Level. The investment is linked to one of the best-known indices in the world (see page 5 for full details) and investors will benefit from geared growth in the Index unless, the Issuer, Goldman Sachs International (GSI) “calls” the Plan early, in which case investors will be paid a very competitive fixed rate of return. The enhanced participation is designed to more than make up for the loss of dividends a direct investor into the Index would benefit from, and although the returns are effectively capped, because the Plan is very unlikely to deliver more than the 10.00% per annum coupon rate, the cap is at an attractive level relative to current interest rates.
Don’t forget the risks
All investments carry risk. It is identifying those risks, understanding how they may affect an investment and assessing whether an investment is suitable for your circumstances that is important.
The potential returns of most structured products and repaying the money invested are usually linked to the level of a stock market index and also depend on the financial stability of the issuer and counterparty bank. You should only consider investing if you understand and accept the risk of losing some or all of any money invested.
You should always read the relevant plan brochure and any other plan documentation, for full details of a plan’s features, including any risks, and the terms and conditions. In addition to the plan brochure and terms and conditions there are other important documents, including a Key Information Document (‘KID’), that you should consider, before deciding to invest in a plan.
Structured products should only be considered as part of a diversified and balanced portfolio.
Below is a summary of some of the main risks usually associated with an investment in structured products plans:
Market risk to potential returns
Whether or not a plan generates the potential returns for investors usually depends on the closing level of the relevant index on the relevant dates for the plan, i.e. the kick-out anniversary dates for kick-out products; the early maturity dates and end dates for growth products; the annual income dates for income products.
If the index closes below the level needed, for the plan or plan options chosen, on all of the relevant dates, the plan or plan options will not generate a return.
Market risk to repayment of money invested in 'Capital-at-Risk' plans
If the closing level of the relevant index is below the level needed on all of the kick-out anniversary dates or early maturity dates, if relevant for the plan or plan options chosen, and on the end date, repaying the money invested at maturity will usually depend on the closing level of the index on the end date..
Different structured products use different types of protection barriers. Some products use barriers that are observed every day that can therefore be breached on any day during the investment term, while some products use barriers that are only observed at the end of the investment term and that cannot therefore be breached during the investment term.
Market risk to the repayment of money invested on the end date will depend on the type of barrier and its level.
For example, for a product with an end of term barrier, set at 60% of the start level, if the index for the plan closes at or above 60% of the start level, on the end date, money invested will be repaid in full (less any agreed adviser fees and withdrawals). However, if on the end date the index closes below 60% of the start level, the amount of money repaid (less any agreed adviser fees and withdrawals) will be reduced by the amount that the index has fallen. For example, if the index has fallen by 45%, the repayment of money invested will be reduced by 45% (meaning that investors will get 55% of their investment back).
'Protected' types of structured products
Some structured product plans are designed so that they are 100% protected from stock market risk at the end date.
It is important to understand that even if a structured product plan is designed with 100% protection from stock market risk, at the end date, it will still usually have issuer and counterparty bank risk. In other words, both the potential returns of the plan and repaying the money invested at the end date will depend on the financial stability of the issuer and counterparty bank. If the issuer and counterparty bank become insolvent, or similar, or fail to be able to meet their obligations, it is likely that investors will receive back less than they invested.
Issuer and counterparty bank risk
Both the potential returns and repaying the money invested of most structured products depend on the financial stability of the issuer and counterparty bank. If the issuer and counterparty bank become insolvent, or similar, or fail to be able to meet their obligations, it is likely that investors will receive back less than they invested.
Financial Services Compensation Scheme ('FSCS') protection
It is important to understand that it is not usually possible to claim under the Financial Services Compensation Scheme if the issuer and counterparty bank fail to meet their obligations or if the stock market index that a plan links to falls.
Structured deposits
Structured deposit plans are deposit-based and will usually be fully protected from stock market risk at the end date and also benefit from the protection of the Financial Services Compensation Scheme, if the bank or building society is a licensed UK deposit taker.