Friends Provident International Ultra Advance Savings Plan

An independent review by our team of experts

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.

They have offices in Dubai, Hong Kong, Singapore and the Isle of Man.

Friends Provident International is part of 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 (figures as at 31/12/2020).

Please note, the Friends Provident International Ultra Advance is closed to new business.

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

The Ultra Advance savings plan's terms are between 5 and 25 years.

The key features of Friends Provident International's Ultra Advance savings plan includes:

Loyalty bonus: A loyalty bonus of 0.5% is payable after year 10.
Multi currency: The FPI Ultra Advance may be denominated in US dollar, GB pound, Hong Kong dollar, Euro and UAE dirhams. Benefits will be paid in the plan currency.
Minimum amounts: £1,000 per month or currency equivalent. You can pay additional amounts via a number of different methods including credit card. Payment by credit card into the FPI Ultra Advance will result in a charge of 1% additional cost.
Investment choices: A range of funds selected by Friends Provident International risk-rated funds covering all the major world markets and investment classes. The funds section contains performance statistics that are updated monthly, fund prices that are updated daily and a Fund Fact Sheet about each fund.

The plan risks stated on the brochure include:

charges (which could go up),
investment performance (investments could see the value of your plan go down) and
any requirement for you to withdraw money during the term.

The costs of Friends Provident International's Ultra Advance savings plan includes a significant surrender charge which applies for the initial period.

This period depends on the total duration of your plan - but canceling before the end will always incur penalties.

Other plan charges include:

Surrender charges: These are deliberately complex, but, for example, if you decided to leave a 25 year plan after 5 years, you would lose 81% of the initial value from this deduction alone.
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) is also applicable.
There is an annual fund administration charge of 1.2% of the plan value.
Additional lump-sum payments are charged at 7% (somewhat disguised as an ‘allocation rate’).
Charges of 1.5% per quarter (6% per annum) must be paid on the initial unit holdings. This applies throughout the term of the plan.
Ongoing charges of $6 per month (or currency equivalent) are also applicable.

Other Charges like an annual management charge and other fund expenses are imposed by the underlying fund manager and the amount depends on which fund is chosen.

Plan holders must invest in mirror funds.

These are Friends Provident International branded copies of other funds.

The mirrored funds are built and managed by dedicated companies, Friends Provident International charges extra to copy them. This costs 1.2% added to the underlying fund costs of up to 3 or 3.5%.

NOTE:

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 Ultra Advance is expensive compared to the alternatives and far less flexible.
The supposed tax benefits can also be outweighed by charges and lost through early encashment penalties.
The penalties in the first 12 months are extremely high and will effectively wipe out any money saved in that time.
We would highly recommend reading the 'expert verdict' section of this review in order 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

The Pros

> Established brand name

> Size and administrative capability

> Potential for better than bank rate return if all contributions are made throughout the term

The Cons

> Inflexible

> Potentially opaque and complex charging structure

> Expensive way to invest

> Easily mis-represented at the point of sale

Can I get out of my FPI Ultra Advance savings plan early?

Yes, you can get out of your FPI Ultra Advance savings plan early.

However, you will incur a financial penalty, and depending on how long you have left to save and the performance of your plan to date, it may - or may not - make financial sense for you to do so.

In the majority of cases we see, it is financially beneficial to exit. But we can only give you personalised advice after reviewing your policy.

Will my IFA have received commission when he sold me this?

Yes - and the commission received will effectively wipe out your early years' payments.

We would highly recommend reading the expert verdict to learn more.

Are there better options available for regular saving?

Yes, there are many better options available for regular savings.

The FPI Ultra Advance has been superseded by much more flexible, cheaper and effective alternatives.

Depending on things like how much you want to save, your tolerance for risk and your investment timeline, there maybe many better options open to you.

Expert assessment of Friends Provident International Ultra Advance savings plan

The good news is that the Friends Provident International Ultra Advance is closed to new business.

But for anyone already invested, the high costs erode your returns and the available fund range is unsatisfactory.

It is easy for these products to be badly misrepresented at the point of sale and more flexible, more open architecture and simpler plans are now available.

If you already hold a Friends Provident International Ultra Advance plan and it is worth approximately £500,000 or more, we strongly recommend you seek a Second Opinion to ensure you are on track to get and keep the life you want.

Friends Provident International Ultra Advance Brochure

Friends Provident International Ultra Advance Product Description

Friends Provident International Mirror Fund Costs

Friends Provident International Ultra Advance Past Isle of Man Fund Performance

Friends Provident International Ultra Advance Wealth Capital Redemption Contract Conditions

Friends Provident International Ultra Advance Wealth Capital Redemption Application Form

Friends Provident International Ultra Advance Application Form

The information in this material is intended for the recipient’s background information and use only. It is provided in good faith and without any warranty or, representation as to accuracy or completeness. Information and opinions presented in this material have been obtained or derived from sources believed by AES to be reliable and AES has reasonable grounds to believe that all factual information herein is true as at the date of issue. It does not constitute investment advice, recommendation, or an offer of any services or products for sale and is not intended to provide a sufficient basis on which to make an investment decision. It is the responsibility of any persons wishing to make a purchase to inform themselves of and observe all applicable laws and regulations. Unauthorised reproduction or transmitting of this material is strictly prohibited. AES accepts no responsibility for loss arising from the use of the information contained herein.

‘AES’ refers to the AES Group’s separate but affiliated entities generally, rather than to one particular entity. These entities are AES Middle East Insurance Broker LLC registered with the UAE Ministry of Economy, United Arab Emirates, Licence no. 571368, and Commercial Registration no. 75162 and regulated by the UAE Central Bank license no. 189; AES Financial Services Limited, incorporated and registered in England and Wales with company number 06063185, authorised and regulated by the UK Financial Conduct Authority FRN: 464494; AES Financial Services (DIFC) Ltd, registered in the Dubai Financial Centre (DIFC) as a foreign company, license no.2128, and regulated by the Dubai Financial Services Authority (DFSA) Reference No F003476; AES International Limited, a private company incorporated and registered in the British Virgin Islands with company number 1839872; AES International Global Limited, a private company incorporated and registered in the British Virgin Islands with company number 1887885. Please visit our authorisations page for further information on regulation, redress and accessibility.

If you are outside the UK and we advise you or carry out other business, nearly all the rules, regulations and arrangements made under the UK regulatory regime (including the rules made by the FCA and the dispute resolution process provided by the UK Financial Ombudsman Service) will not apply to most aspects of the service you receive, such advice or business being provided from outside the UK. You should therefore clearly understand such rights and protection as are afforded in the jurisdiction where you receive advice. Local law, regulation and redress processes will apply in almost all cases, and will be different from that of the UK.

RISKS

Investments involve risks. The investment return and principal value of an investment may fluctuate so that an investment, when redeemed, may be worth more or less than the capital invested. Past performance is not a guarantee of future results. There is no guarantee strategies will be successful. For further information, please click here.

Friends Provident International Ultra Advance Savings Plan

An independent review by our team of experts

REVIEW SUMMARY