Download - For financial adviser use only
For financial adviser use only
Flexible Guarantee BondIt’s not your average investment bond
Great features for your clientsOur Flexible Guarantee Bond offers the following:
2An investment solution from LV=
Capital guarantee, buy
anytime
Ability to lock in gains
Guaranteed minimum death and terminal
illness benefit
Guarantee available on three fund
options
Can buy a new guarantee when one expires, for life
Potential for mutual bonuses to be added, on top of normal
returns
£ Benefits
Averaging approach, for a smoother return
Competitive AMC
Available for ages 17 or over (lives assured from 3 months to 89 years)
Invest between £5,000 and £500,000
Option to buy a guarantee over a range of terms at any time to protect capital or lock in growth
Guarantee options available for the lifetime of the bond
Open-ended (recommend investing for at least five years)
Freedom to switch between three fund options to help meet changing investment needs
Choice of ad-hoc and regular withdrawals monthly, quarterly, half-yearly or yearly first 5% of amount invested, or rolled up 5% allowance, withdrawn each bond year
= no income tax payable at that time
Range of adviser charging options
Flexibility 3
No nasty surprises100% allocation across all agesAnnual management charge Based on the bond value (including any mutual bonus) at the time the
charge is taken and deducted monthly:
No initial, establishment or exit chargesFund switches the first three each bond year are free of charge £25 charge for each additional switch
Transparent charging 4
Key benefitsCan buy at the start, at any time after, or replace an
existing one any timeProtects the value of the bondRange of terms available (5-10 years)
Lock in gains by buying a new guaranteeThere’s no need to cash in at end of the guarantee term We automatically add units to make up any shortfall Any units we add continue to participate in bond performance (but the value isn’t
guaranteed, unless your client buys another guarantee)When the guarantee ends, a new one can be bought We’ll always offer at least a ten year guarantee on all three fund options for the lifetime
of the bond If your client cashes in the bond before the guarantee date, they’ll get the value of the
bond at the date of withdrawal
Future advice and added value opportunities
Capital guarantee option 5
Wide range of terms and competitive charges
Our guarantee charges and available terms can change over time
However, once bought, the charge remains the same throughout the guarantee term
We commit to always offer at least a 10 year guarantee option on all three funds
Current guarantee charges and terms* 6
FUND OPTION
5 YEARS 6 YEARS 7 YEARS 8 YEARS 9 YEARS 10 YEARS
Cautious Series 2
1.70% 0.90% 0.70% 0.50% 0.40% 0.25%
Balanced Series 2
n/a 2.20% 1.70% 1.30% 1.00% 0.80%
Managed Growth
n/a n/a 2.50% 2.00% 1.70% 1.50%
*As at 28/02/2014. Quoted charges are annual figures.
Let’s take a look at some ways to use our bond:Investment protection Fit with capacity for loss requirements. Provide potential for countering inflation impacts
with the certainty provided by capital guarantee options and potential for mutual bonuses
Life stage adaptability Fit with life stage e.g. requiring lower risk in retirement or if reserving funds for planned
expenses, such as school/university fees
Growth lock-in Instigate a growth lock-in strategy with periodic reviews to assess opportunity to secure
growth achieved (apart from the guarantee charge, there is no charge for buying a new guarantee once a bond year. A charge of £25 thereafter is applied)
IHT planning Provides additional certainty to investors and trustees, whilst the bond structure eases the
administration for trustees (for those up to age 79 at outset, a minimum death benefit guarantee applies for no extra charge, irrespective of whether a capital guarantee has been bought)
Tax planning Bond structure allows tax planning opportunities, particularly for Higher Rate Taxpayers
Typical uses 7
LV= a compelling choiceThe UK’s largest friendly societyProudly ‘mutual’, with no shareholders eating into profits£11.4bn assets under management³
Rated B+ (very strong) overall rating for financial strength1
Our main with-profits fund is rated 10/10 for financial strength, investment freedom, flexibility and bonus-paying ability2
Over 5 million members & customers³Looking after members since 1843
Who backs the guarantee?Our guarantees are backed wholly by the strength of Liverpool Victoria Friendly Society (LVFS)The reserves to cover the guarantees are held in our main With-Profits fund, outside of the individual fund options
Financially strong and stableMain with-profits fund rated
10/10 by Cazalet Consulting
8
Sources: 1. AKG Consultation Company Profile & Financial Strength report, July 20132. Cazalet Consulting With Profits ratings, July 20143. As at 31 December 2013
A range of options to suit you and your clients:
Adviser charging options 9
Initial adviser charge £ amount, % of cheque amount Paid before the remainder is invested in the bond
Ongoing adviser charge £ amount, % of initial premium, % of fund (excluding
mutual bonus) Monthly, quarterly, half-yearly, yearly Treated as withdrawals
Ad-hoc adviser charge £ amount, % of fund value (excluding mutual bonus) Treated as withdrawals
• Choose one of three funds
• Mix of equities, commercial property, fixed interest, cash
• Money is invested in the LV= with-profits fund
• Latest asset mixes available online
• Unlimited fund switches
• Actively managed by Threadneedle Investments
Investment information
Investment choices 10
Cautious Series 2
Balanced Series 2
Managed Growth
*benchmark asset split
What does it do?Designed to provide a smoother, more consistent return
Can reduce the extent of underlying falls in value, however, unsmoothed funds will reflect increases in the market more quickly than smoothed funds
Average value (‘Averaged Price’) of bond assets over the preceding 26 weeks
Real value of underlying assets (‘Underlying Price’) used for the first 26 weeks
No Market Value Reductions
Fund protection only if Underlying Price falls below 80% of the Averaged Price
Averaging in actionThe graph below illustrates how the effect of averaging can work in practice, showing both the underlying and averaged prices over a period of time. The prices and timeframes are used purely to display the effect of averaging. They are not based on real past performance nor are they a guide to future performance.
Averaging approach 11
It’s great being a mutualHere’s some information about our mutual bonus:
Rewards qualifying members for their ownership of LV=
Launched in 2011, we’d like to be able to add a 1% bonus each year
Increases the amount we pay when your clients decide to fully cash in their bond, if they die or become terminally ill
It’s a pure addition, on top of the normal returns applied to the bond
Invested in the same fund option as the main bond
It doesn’t get taken into account when we assess how much we uplift the bond by if it’s lower in value at the end of the guarantee term (if chosen)
Please note that the mutual bonus may be reduced or taken away. However, we’d only do this in exceptional circumstances.
Mutual bonus 12
Member discountsAll of our members qualify for discounts on a range of LV=‘s general insurance products including:
Car insurance Save up to 10% on regular non-member
ratesHome insurance Save up to 10% on regular non-member
rates
Member supportOur Member Care Line offers free access to confidential advice and support from qualified professionals 24 hours a day, 7 days a week, including:
Health, medical and lifestyle questions Provided by a team of qualified nurses who
offer advice and guidance
Counselling The Member Care Line has trained and
experienced counsellors on hand to take calls anytime, day or night
Legal questions and disputes Members can seek advice from a team of
experienced solicitors and legal executives
Member benefits 13
We’re here to make life easier for youPersonalised quotes Either from our quotes hotline Or contact your dedicated account manager
Dedicated website Order customer packs View, download and order a range of web-friendly
customer guides and adviser sales aids Loan Trusts, Gift Trusts and guides Suitability report paragraphs
Personal support Team of dedicated account managers Sales support for quotes and information
Support for you 14
Contact Us
Phone: 0800 0234 173 Email: [email protected]
Visit: www.LV.com/adviser/fgb
Important notes
This is for financial advisers only
Not to be used after 31 March 2015
This presentation is based on our understanding of current legislation as at August 2013 applicable in England and Wales and HM Revenue & Customs practice which may change in the future. We cannot accept responsibility for any action arising as a result of the information contained in this presentation.
Liverpool Victoria Friendly Society Limited, Keynes House Tilehouse Street, Hitchin, Herts, SG5 2DX.
LV= is a registered trademark of Liverpool Victoria Friendly Society Limited (LVFS) and is a trading style of the Liverpool Victoria group of companies. LVFS is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, register number 110035. Registered address: County Gates, Bournemouth BH1 2NF. Tel: 01202 292333.
21444101 09/14
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