Friends Provident International Ultra Advance Savings Plan

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.