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REVIEW SUMMARY

Friends Provident International Summit Bond

Friends Provident International has over 40 years of experience in the international life assurance market. They provide savings, investment and protection solutions to customers in Asia and the UAE and have offices in Dubai, Hong Kong, UK, Singapore and the Isle of Man.

Friends Provident International Limited (FPIL) is now owned by International Financial Group Limited (IFGL).

IFGL provides investment, savings and protection solutions to international investors around the world and the group comprises RL360, RL360 Services, Ardan International and Friends Provident International.

The group employs 650 staff and administers assets of US$24 billion for 210,000 customers.

Our Verdict
A Closer Look
FAQs
Customer Reviews

Summit is an international lump sum investment bond - with a loyalty bonus. It is a unit-linked international investment bond that claims to reward you with a loyalty bonus on the 3rd anniversary of your investment and every subsequent anniversary. The bonus rate then rises on the 6th and 11th anniversary.

FPI's Summit claims to offer a loyalty bonus and the option to withdraw up to 90% of your investment, penalty-free from the start of your plan.

Summit is available to those who are aged 18 and over (at least one life assured must be 79 or under at the plan commencement) and are willing and able to accept the risks.

Features of Friends Provident International's Summit Bond:

  • Requires a minimum investment amount of at least USD 37,500 (or currency equivalent).
  • You can set up the plan on your own life, on another person's life, or jointly on up to four lives.
  • You can choose the currency in which you would like your plan to be denominated. Currencies include:
    US dollars,
    UK pound sterling,
    Euros,
    Dirhams and
    Hong Kong dollars.
  • An establishment charge of 0.4% of your payments will be taken quarterly for the first five years after you take out your plan or after each additional payment.
  • An administration charge of 1.2% of the bid value of each fund a year is charged.
  • One-off or regular withdrawals can be taken from your plan, depending on your needs.
  • 90% in total of your payment can be taken out, penalty-free during the first five years (from day one) and after that there is no limit, subject to the minimum plan value.
  • If any additional investment is made, then you can take 90% of that investment for the first five years after it is paid, with no limit after that, subject to the minimum plan value.
  • If the plan is set up on your life, it will end when you die. They will pay an extra 1% on top of the cash-in value of your plan. Any outstanding establishment charges will be taken before they pay the death benefit.
  • You can invest in up to ten funds at any one time. They divide each fund into units and your payments buy units in the funds you choose.

Plan contributions:

FPI's Summit Bond requires initial contributions. These can be summarised below:

Minimum initial payment
Currency Payment
USD 37,500
GBP 25,000
EUR 37,500
AED 137,500
HKD 375,000

 

If you wish to add to your plan, the minimum additional payment is as follows:

Minimum additional payment
Currency Payment
USD 15,000
GBP 10,000
EUR 15,000
AED 55,000
HKD 150,000


Loyalty bonus:

As per the Friends Provident International's Summit, on the third anniversary date of the plan and on every subsequent anniversary, you will be entitled to a loyalty bonus. The bonus will be applied as additional units into your plan.

Any additional payments you make will also receive their own loyalty bonus from the third anniversary of each contribution. The loyalty bonus structure is as follows:

Number of complete years since commencement date or the additional premium payment date as appropriate Loyalty bonus % of bid value
3 to 5 0.50
6 to 10 0.75
11+ 1.00

 

NOTE:

  • Friends Provident International states that what you get back in the future entirely depends on how well the investments have performed and the value of the plan can go up or down (you can get back less than you've paid in).
  • Some of the funds available for investment carry a high level of risk and can erode your capital.
  • Changes in currency rate and inflation can also affect the value of your plan.
  • We would recommend reading the expert verdict section of this review before making a decision about Friends Provident International's Summit Bond.

Additionally, here's a free guide that can help you achieve better results. In this guide, you'll learn:

  • Academic evidence only shared with a select few firms across the world
  • A real-life example of why you should never try to outguess the market
  • Why a fund's past performance is not enough to predict future returns
  • Why you need to focus on what you can control and why this leads to a better investment experience
  • Why you should accept the markets for what they are
  • What can impact behaviour and make people seek instant gratification

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The Pros

> Popular investment plan
> Strong brand of parent company

The Cons

> Risk of hidden commission
> Potentially inflexible
> Commonly mis-used
> Expensive
What is the Summit Bond?

Summit is a unit-linked plan suitable for customers with a lump sum to invest for a medium to long period (a minimum of five years).

Summit offers a loyalty bonus and the option to withdraw up to 90% of your investment, penalty-free from the start of your plan.

 
What are the main risks with the Summit Bond?

Apart from the costs and the fact that your adviser might mis-use it when structuring your portfolio...FPI say these are the main risks: 

What you get back in the future depends on how well the investments perform.

The value of the plan can go up and down. You could get back less than you’ve paid in.

When you cash-in your plan, you may get back less than your illustration shows. This could happen for several reasons, for example if:

  • investment returns are lower than shown;

  • charges are higher than shown;

  • you take out more money than shown.

Some funds carry a higher level of risk than others, and may be subject to sudden and large falls in value. This could erode some or all of your capital.

If you invest in a fund denominated in a currency different to the plan currency, the value can go up and down simply because of changes in the currency exchange rate.

Inflation will reduce the spending power of any money you get back in the future.

How do I apply for FPI's Summit Bond?

You can apply to the Summit Bond through these simple steps:

  • Complete the application form and submit it to your financial adviser.
  • Include any other relevant supplementary forms as well as documentary proof of identity and address.
  • Your plan documents will be sent to you by FPI soon as your plan has been set up.
  • They will then send you a statement each year, on your plan anniversary, to show how your plan is performing.
What will I get back if I invest in this plan?

You will get back the cash-in value of your policy at the time you decide to cash it in.

The cash-in value will depend on several things. For example, how long you invest for, how well the investments perform, the charges taken and any withdrawals you take.

Would not recommend it to anyone

I was crow-barred into investing in the Summit - I even topped up when I got a bonus.

I was forced to focus on a charge of 0.4% that didn't sound like much. My IFA went on and on about it...

Turns out it's 0.4% 4 times a year for 5 years and that's only ONE of the charges that attacks your investment. 

Expert assessment of Friends Provident International's Summit Bond

In our opinion, this product is now superseded by other options.

The shortcoming of Friends Provident International's Summit is that the explicit and implicit charges of this type of product are very high.

While a commission-based salesperson may well direct you to this type of investment plan, there are now substantially more cost effective, more flexible and arguably better performing products available to the discerning international investor.

If you already have a Friends Provident International Summit Bond, and it is worth £250,000 or more, we strongly recommend you seek a Second Opinion to ensure you are on track to get and keep the life you want.

It will detail fees, performance, risk and asset allocation - and clearly highlight if you need to make any changes to the way you're invested.

Learn more from our deep dive into Friends Provident International's Summit Bond.

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