Friends Provident International Premier Advance Savings Plan

An independent review by our team of experts.

Review summary

Friends Provident International Premier Advance Savings Plan

The Friends Provident International Premier Advance savings plan has been widely marketed to expatriates over many years. 

Premier Advance is a unit-linked regular payment savings plan designed to be held as a medium to long-term investment. 

This is a savings plan which contracts you to save an agreed amount on a regular basis for a pre-agreed number of years.  A Friends Provident Premier should never be taken out unless you fully intend to contribute for the entire term agreed. Here is why.

Overview

Friends Provident International (FPI) has over 35 years of international experience and is part of the Aviva group which has a heritage that dates back over 300 years.

FPI provide savings, investment and protection products to customers in Asia and the UAE. With offices in Dubai, Hong Kong, Singapore and the Isle of Man, FPI have more than 500 staff worldwide, looking after more than 160,000 customers.

Friends Provident International Premier Advance Savings Plan

The first 18 months of your regular contributions plus the first 18 months of any increase are used to purchase initial units. These have a penalty (up to 100%) if you withdraw them before the end, or do not complete your plan.  All regular payments to the Friends Provident International savings plan after the first 18 months are used to purchase accumulation units. 

Initial units have a charge of 1.5% per quarter and there is a plan fee of $6 per month. There is no entry cost (bid-offer spread) for regular payments; they buy units at the bid (exit) price.  However lump sums will be subject to a bid-offer spread of 7%, that is they are deposited at the offer price and immediately drop down to the bid price.

All withdrawals and switches between funds are done at the bid price.

There are other hidden charges, taken out before the funds are priced and so are not seen: Friends Provident savings plan take 1.2% pa out by reduction of the fund prices each day. The performance of the mirror funds are therefore 1.2% pa less than the underlying funds being mirrored.

Although this product is one of the better within this type of product, this entire family of product type (known as Maximum Investment Plans) has now been superseded by other more attractive options.

Friends Provident International Premier Advance Savings Plan Features

Premier Advance is a unit-linked regular payment savings plan designed to be held as a medium to long-term investment. 

Investment Choice – The 100 risk-rated funds covering all the major world markets and investment classes. The funds section contains performance statistics which are updated monthly, fund prices which are updated daily and Fund Fact Sheets on each fund.

Multi-Currency - The FPI Premier Advance may be denominated in US dollar, GB pound, Hong Kong dollar, Japanese yen, Swedish krona (SEK) or Euro. Benefits will be paid in the plan currency.

Minimums - £300 per month. You can pay additional amounts via a number of different methods including credit card. Payment by credit card into the FPI Premier Advance will result in a charge of between 1% and 1.95% of each payment additional cost.

The pros

  • Established brand name
  • Size and administrative capability
  • Superficially highly attractive
  • Potential for better than bank rate return if all contributions are made throughout the term

The cons

  • Inflexible
  • Opaque and complex charging structure
  • Expensive way to invest
  • Easily mis-represented at the point of sale
FAQs
What are the charges for the Friends Provident International Premier Advance Savings Plan

An initial charge of 1.5% is taken each quarter from the initial unit holding over the term of the plan.

A monthly plan charge of £4 (or equivalent currency).

Annual policy charge structure - an annual fund administration charge of 1.2% of the plan value.

Other charges = annual management charges and other fund expenses are imposed by the underlying fund manager and the amount depends on which fund is chosen.

Is there an early encashment penalty?

The plan will not have a cash-in value until you have paid at least 12 months’ worth of payments.

We understand that there are also heavy encashment penalties after 12 months depending on the original term of the policy and when you want to access it.

These penalties pay for the commissions earned up front by your salesman.

The Friends Provident International Premier Advance is expensive compared to the alternatives and far less flexible.

The supposed tax benefits can also be outweighed by charges and lost through these early encashment penalties.

The penalties in the first 12 months are extremely high and will effectively wipe out any money saved in that time.

What is the investment choice?

There are 100 risk-rated funds covering all the major world markets and investment classes.

The funds section of FPI’s website contains performance statistics which are updated monthly, fund prices which are updated daily and fund fact sheets on each fund.

Customer reviews
Try communicating with FPI and you get nowhere

I signed up to a 25 year term, thinking I could get out earlier if I wanted to.

The reality is far from that - and when I couldn't get hold of my adviser I contact Friends Provident direct for information about why my charges were much higher than I was told and they totally fobbed me off, telling me basically to go back to the adviser. 

So expensive

The fees have just eaten up everything I've invested.

I was lucky I figured this out early on and quit while I was ahead - I recommend not recommending the premier advance account by not even reviewing it - why give Friends Provident the time of day.

Expert verdict
Expert Assessment of Friends Provident International Premier Advance Savings Plan

Although this product is one of the better within this type of product, this entire family of product type (known as Maximum Investment Plans) has now been superseded by other more attractive options.

A little like Blackberries being replaced by Apple iPhones, the outdated construction of this plan makes it unattractive for international investors who wish to maximise their return.

More cost effective, more flexible and less complex options are now available for discerning investors.

If you already have a Premier Advance savings plan from Friends Provident International and it is worth £50,000 or more, we recommend you have a free, no obligation X-Ray Review™ conducted to give you the information you need to make a decision on the best way forward.

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