Lowes Structured Investment Centre (LSIC), the new structured investment hub developed by Lowes Financial Management, is marketing its first 10-year kickout/autocall plan, which has the potential to mature annually from the third anniversary onwards.
The 10:10 Twin Option FTSE Kick-Out Plan offers investors two options, with either 10% potential annual returns if the FTSE 100 index is at or above its start level at any anniversary (Option 1) or 12.5% potential annual returns if the index is at or above 110% of its start level (Option 2) with the first maturity opportunity from year three.
The first investment product, the 10:10 Twin Option FTSE Kick-Out Plan, immediately highlights LSIC's aims – it is the first proposition of its kind in the sector and clearly breaks new ground in its strategy, said Chris Taylor, head of strategic development of Lowes Structured Investment Centre (LSIC).
''It's hard to argue with the assertion that equity markets are expected to rise over time and that short-term equity market risk can be mitigated through lengthening the investment time horizons – this is a fundamental principle and belief in investing," said Taylor. "For advisers and investors who believe longer-term investment horizons mitigate short-term risk, the 10:10 plan should prove worthy of consideration, with the combination of short term kickout potential, from year three, and an extended maximum investment 10-year term."
If the index is below the start level (Option 1) or 110% (Option 2) after three years, the plan continues year on year, with the same kickout conditions assessed at each anniversary, and with the annual coupons rolled up through the term to create maximum potential returns of either 100% or 125%, plus original capital at the full-term maturity.
If the FTSE is below the required kickout trigger levels at each anniversary and at the end of the investment term, the original capital is returned in full, unless the index is 30% or more down, when capital is lost in line with the fall in the index.
The plan is also dependent on the continued solvency of the counterparty issuer Société Générale, which has a credit rating of A from Standard & Poor's.
''It doesn't take many people long to really appreciate what this investment is offering but it helps to consider it in the context of what other investments might produce, in contrast, in various market scenarios," said Ian Lowes (pictured), managing director of Lowes Financial Management. "I genuinely believe this is one structured product that will gain favourable recognition from advisers across the UK, even including open-minded former critics."
The centre, said Lowes, will be involved in launching plans which are designed to help extend the structured investment sector's product and service offering to closely match the requirements and needs of investors and their professional advisers, and other investment professionals, across the UK.
Charges are accounted for in the terms of the plan – and are not expected to exceed 3.5% over the 10 year investment term. The share of fees due to Lowes from Mariana on any investment transacted by any of Lowes' clients (advised or non-advised) will be redirected to charity.
This product will be available shortly in the UK database.