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RISK FACTORS |
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Is
this product right for me?
This Plan is designed for those customers who want
to benefit from the potential long-term growth of the Index and are
prepared to accept a degree of risk to their capital in return for
the prospect of enhanced returns. Before investing, however, it is
important that you are comfortable with the Plan and the risks that
exist in return for the potential rewards.
You should also be aware that if you do not hold this Plan for the
full term, you may not get back the amount you invested. In
addition, please note that as this investment is linked to a
stockmarket, it is different from depositing money in a Building
Society or Bank account, and access to your capital during the
investment term is restricted.
To help you decide if this Plan is right for you, below is a brief
list of pros and cons which you should consider before investing.
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Yes, I wish to invest because:
•
I am willing to invest
for a set period of time, known as the investment term; (see
page 5 of the brochure)
• I am not likely to need access to my money
during the investment term; (see page 6)
•
Although the Plan might
pay out early I
understand this is a six-year
investment; (see page 4)
• I want the potential to benefit from any
rise in
the Indices but do not want to invest directly in
the FTSE 100; (see page 5)
•
I know that the value of
the Indices can fall as well as rise; (see page 5)
•
I understand that
although the assets will be
provided by a major Investment Bank
with a current credit rating from Standard & Poor’s of at
least ‘A+’, there is a chance that they may default on the
payments due and this means that I may lose some, or all, of
my investment, known as the counterparty risk; (see page 3 & 9)
• I am prepared and can afford to accept the
investment risks; (see page 5 & 9) |
No, I don’t think I should invest because:
•
I am not prepared to accept any risk
of loss to my capital; (see page 5 of the brochure)
•
I may need access to my money before
the end of the investment term; (see page 6)
• I want an income from my investment;
•
I don’t want to lose the dividend
income that I may get if I invest in shares or other similar
investments;
•
I don’t want an investment where the
returns are linked to the stockmarkets; (see page 5)
•
I don’t fully understand how the Plan
works; (see page 3)
• I don’t have any other savings or
investments; (see page 6). |
What are the risks involved with investing?
• The investment
return you receive will depend on the performance of the FTSE100 and
it is possible that you might not receive any investment return at
all. Please see the ‘How are my returns calculated?’ section and
table on page 4 of the brochure.
• If the early maturity conditions are achieved you will receive 13%
for each year the Plan has been in force. If the Index has grown by
more than this you will not receive the benefit of any growth over
the predetermined level stated.
• The payment and timing of the maturity proceeds will depend on the
closing levels of the Index on the measurement dates, as set out in
the ‘How are my returns calculated’ section on page 4. The Plan may
therefore be affected by short-term market fluctuations.
• The capital return at maturity will also depend on the performance
of the Index and it is possible that you could lose some, or all, of
the amount you invest. The capital return will only be affected if
the Index has fallen by more than 50% from its Opening Level at any
close of business during the investment term and then not recovered
by the end of the period. Please see the ‘How is the capital return
calculated?’ Section on page 5.
• If your circumstances change and you need to withdraw your
investment early we will have to
sell your Securities back to the Issuer and the value will depend on
the price they are prepared to pay. You will also have to pay an
administration charge. You should note that while the asset provider
intends to make a secondary market a material change in market or
corporate conditions could affect this.
• The Securities you purchase will be issued by a major financial
institution, which has a current credit rating from Standard and
Poor’s or a similar rating agency, of at least ‘A+’, which denotes
high financial strength. It is unlikely that such an institution
would not be able to meet its obligations but you must be aware that
if it were unable to do so, you could lose some or all of your
investment.
• If you tell us that you want to cancel your investment after we
have bought the Securities you will only get back the value of the
bonds when we sell them, which is likely to be less than your
original investment.
• The values of any tax reliefs will depend on your individual
circumstances. You should note that the levels and bases of taxation
could change in the future.
What are the risks of transferring my ISA?
• Your existing ISA must be transferred in cash, which means that
your existing Plan Manager will sell your investment holdings.
• Your existing Plan Manager may charge you an exit or transfer fee.
There is the potential for loss of income or growth if markets
should rise while your transfer remains pending.
• Please note that to ensure your funds are received from your
existing Plan Manager in a timely manner, we will not normally
accept ISA transfer applications after 4th June 2008.
Please refer to the Brochure and the Terms & Conditions for full
details.
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