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REVIEW SUMMARY

Prudential International Portfolio Bond

Prudential International was founded in 1848 as a loans and life assurance company. Today, they are a part of M&G plc, a family of brands aligned to manage customers' savings and investments.

Prudential plc is an international financial services group with significant operations in Asia, the US and the United Kingdom. They also have operations in 13 markets, serving the emerging middle class families of the region’s outperforming economies.

The Group is structured around four main business units: Prudential Corporation Asia, Jackson National Life Insurance Company, Prudential UK and M&G.

Prudential is listed on stock exchanges in London, Hong Kong, Singapore and New York.

Our Verdict
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Customer Reviews

This product is provided by Prudential International who are based in Dublin. They claim to offer flexibility along with a wide range of investment choice. Prudential claims that investments with them grow largely free from tax which could result in a potentially higher return than investments in UK-based funds.

Please note that this isn’t guaranteed and there is the potential that you might not get back the amount you put in.

Prudential International's Portfolio Bond has two types:

  1. The International Portfolio Bond - Lives assured version:
    It is a single premium, whole of life investment bond which offers the potential for growth and provides a small benefit on death.
  2. The International Portfolio Bond - Capital redemption version:
    Which is a single premium investment bond, which offers the potential for growth and provides a benefit at the end of 99 years if it is not cashed in before then.

Let's have a look at what each of these entail.

1. The International Portfolio Bond - Lives assured version:

  • This product is a non-qualifying, single premium, whole of life assurance investment that aims to increase the value of your investment over the medium to long-term, a 5 to 10 year period, by investing in a choice of funds, including Prudential International PruFund funds and collective investments.
  • Prudential claims that it provides you with the ability to take a regular withdrawal in a tax efficient manner and access to your product's value at any time.
  • The minimum initial investment for this product is £20,000.
  • This product is intended for investors looking to invest a single lump sum over the medium to long-term although the investment profile and the type of investor it is suitable for varies depending on the chosen underlying investment option. 
  • A death benefit will be payable, of 100.1% of the cash-in value of the bond, on the death of the relevant life assured, as chosen at outset. With external assets, the relevant amount will be the value on the day that they can sell them and this may differ between assets.
  • This product does not have a maturity date.
  • It will terminate immediately on the death of the life or lives assured.
  • There is a 10 year recommended holding period for this product.

2. The International Portfolio Bond - Capital redemption version:

  • This product is a non-qualifying, single premium, 99 year fixed term investment that aims to increase the value of your investment over the medium to long-term, a 5 to 10 year period, by investing in your choice from a wide range of funds throughout the life of your product.
  • Prudential claims that similar to it's life version, it also provides the ability to take a regular withdrawal in a tax efficient manner and access to your product's value at any time.
  • There is no death benefit payable on the International Portfolio Bond - Capital redemption version.
  • This product does not have a maturity date but each plan will mature 99 years from the date it starts.
  • This product does not include any protection from future market performance so you could lose some or all of your investments (If Prudential International Assurance plc is not able to pay you what is owed, you could lose your entire investment).
  • The minimum initial investment for this product is £20,000.
  • You can exit this product at any time.

Costs and charging of the Portfolio Bond can be summarised below:

This table shows the impact on return per year (%)

One-off costs Entry costs 0.00% - 0.53%
Exit costs 0.00% - 0.00%
Ongoing costs Portfolio transaction costs 0.00% - 0.77%
Other ongoing costs 0.05% - 5.51%
Incidental costs Performance fees 0.00% - 0.77%
Carried interests 0.00% - 0.00%

 

NOTE:

  • The actual costs charged may differ from those illustrated above. Additional costs may be payable if product options are chosen throughout the lifetime of your investment.
  • The fund costs are based on the range of funds that are expected to be available during the assumed lifetime of your investment, including some funds that may not be available at the time you first invest.
  • If you cash-in your policy during an initial charge period, an early cash-in charge will apply, essentially a five year surrender penalty on a reducing scale. The amount of this charge will be equal to the outstanding initial charges. This charge does not apply if the upfront initial charge period is chosen.
  • We would highly recommend reading the 'expert verdict' section of this review to make an informed decision.

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

> Offers some tax protection in certain jurisdictions
> Strong brand of parent company

The Cons

> No flexibility of full withdrawal
> With commission this is an extremely expensive option
> Part withdrawals can increase costs more
> Charging structures are fixed by the financial advisers
What are the main risks with the Prudential International Portfolio Bond?
  • The value of your bond can go down as well as up and may even fall below the amount you invested – what you get back is not guaranteed.
  • Prudential's funds invest in stocks, shares and other assets which can rise and fall in value.
  • Each of the investment choices available for the Prudential International Portfolio Bond has its own specific risks that will affect the value of your bond.
  • In exceptional circumstances, a transaction (such as a full or partial cash-in) may be delayed which may mean you will face a delay in gaining access to your money.
  • If more money is taken out of your bond, including charges, than the amount of growth, this will reduce the value of your investment.
  • Fluctuations in exchange rates could affect the value of your investment or withdrawals.
What happens if Prudential International Assurance plc is unable to pay out?

Prudential International exceeds its capital requirements and is financially strong.

However, in the unlikely event that Prudential
International, the fund manager, Prudential in the UK or the custodian of fund assets should fail to meet their financial obligations, you may face financial loss.

Prudential International products will not be covered by a government-backed financial guarantee scheme, including the FSCS in the UK.

Who is the International Portfolio Bond Life Assurance version best suited to?

This product is intended for investors looking to invest a single lump sum over the medium to long-term although the investment profile and the type of investor it is suitable for varies depending on the chosen underlying investment option.

More expensive than I thought

My adviser managed to roll his charges up in such a way that I was oblivious to how much I was really paying.

If I had not paid out so much at inception I think this would not have turned out the way it did...regret not doing more research beforehand.

Expert assessment of Prudential International Portfolio Bond

If you already have the Portfolio Bond from Prudential International, 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.

This product is commonly mis-sold, mis-used and expensive.

GET A SECOND OPINION

Prudential International - International Portfolio Bond Fund Guide

Prudential International - International Portfolio Bond Life Assured Version Brochure

Prudential International - International Portfolio Bond Capital Redemption Version Brochure

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