Mariana 3 Stock Defensive Kick-Out Plan - November 2020
This is a 3-year, 1-week plan linked to the performance of AbbVie Inc., Cisco Systems Inc. and General Mills, Inc. with the potential of a 10% return on capital for each six month period the Plan runs (20% p.a.) (paid gross).
- Market / index link: AbbVie Inc. (ABBV)
- Counterparty: Goldman Sachs International
- Investment term: 3 years 1-week
- Kick-out / Early maturity: Yes
- Barrier type: End of Term
- Barrier level: 50%
The closing date for ISA transfer applications is 8 October 2020.
Product Literature & Forms
You should always read the relevant plan brochure and any other plan documentation, for full details of the plan’s features, including any risks, and the terms and conditions. In addition to the plan brochure and terms and conditions there are other important documents, including a Key Information Document ('KID'), that you should consider, before deciding to invest in the plan.
If you do not fully understand the risks or are unsure as to the suitability of the investment, please contact us
How to Invest?
Applications for the Plan must be submitted via Best Price Financial Services and received by 5pm on 26 October 2020 for bank transfer applications.
The closing date for applications by cheque is 19 October 2020
The closing date for ISA transfer applications is 8 October 2020.
This will enable us to process your application and forward it on to the structured product provider.
1 Firstly, print off and complete our Appropriate Assessment Questionnaire. All applications require two proofs of identity - see the questionnaire for more information.
2 Next download, print and complete the application form available. Note that product applications will have multiple documents, so please choose the one relevant to you.
3 Place all completed documents - questionnaire, proofs of identity, application form and cheques for payment - in an envelope and post to:
Best Price Financial Services,The Tythe Barn, 5 Eglwys Nunnydd,
Margam, Neath Port Talbot
SA13 2PS
Further Information
This is a three year, one week Plan based on the performance of AbbVie Inc., Cisco Systems, Inc. and General Mills, Inc. stock, the Underlying Assets. The Plan is constructed to offer a Potential Return of 10% for each six month period the Plan runs with the possibility of early maturity and the full repayment of Initial Capital from the end of the first year and semi-annually thereafter. The Potential Return is only payable if the Plan kicks out.
Should the Closing Price of all the Underlying Assets on an Observation Date be at or above the Kick Out Trigger Level, the Plan will mature early, repaying your Initial Capital plus the Potential Return multiplied by the number of six-month periods the Plan has run.
The Kick Out observations begin at the end of the first year and continue on an annual basis until the Plan’s Maturity Date (from 04 November 2021 to 06 November 2023)
If the Plan has not already kicked out, Initial Capital will be repaid in full at the end of the Plan’s term if on the Maturity Date (06 November 2023) the Closing Price of the worst performing Underlying Asset is not more than 50% below the Start Level.
If on the Maturity Date the Closing Price of the worst performing Underlying Asset is less than 50% of the Start Level (representing a decline of more than 50% from the Start Level), your Initial Capital will be lost at a rate of 1% for every 1% the Closing Price of the worst performing Underlying Asset is below the Start Level.
What happens if the Plan kicks out?
The repayment of your Initial Capital and the Potential Return offered by this Plan depend on the performance of the Underlying Assets on the relevant Observation Dates.
The Plan has the opportunity to kick out on an Observation Date providing the Closing Price of all the Underlying Assets is at or above the relevant Kick Out Trigger Level (see page 6). As an example, if the Plan kicks out at the end of year 2 with a Potential Return of 10% per six-month period, you will receive the return of 40% gross (4 x the semiannual return) plus your Initial Capital.
Should the required conditions not be met on any of the pre-defined Observation Dates, you will not receive the Potential Return and your Initial Capital could be at risk.
Don’t forget the risks
All investments carry risk. It is identifying those risks, understanding how they may affect an investment and assessing whether an investment is suitable for your circumstances that is important.
The potential returns of most structured products and repaying the money invested are usually linked to the level of a stock market index and also depend on the financial stability of the issuer and counterparty bank. You should only consider investing if you understand and accept the risk of losing some or all of any money invested.
You should always read the relevant plan brochure and any other plan documentation, for full details of a plan’s features, including any risks, and the terms and conditions. In addition to the plan brochure and terms and conditions there are other important documents, including a Key Information Document (‘KID’), that you should consider, before deciding to invest in a plan.
Structured products should only be considered as part of a diversified and balanced portfolio.
Below is a summary of some of the main risks usually associated with an investment in structured products plans:
Market risk to potential returns
Whether or not a plan generates the potential returns for investors usually depends on the closing level of the relevant index on the relevant dates for the plan, i.e. the kick-out anniversary dates for kick-out products; the early maturity dates and end dates for growth products; the annual income dates for income products.
If the index closes below the level needed, for the plan or plan options chosen, on all of the relevant dates, the plan or plan options will not generate a return.
Market risk to repayment of money invested in 'Capital-at-Risk' plans
If the closing level of the relevant index is below the level needed on all of the kick-out anniversary dates or early maturity dates, if relevant for the plan or plan options chosen, and on the end date, repaying the money invested at maturity will usually depend on the closing level of the index on the end date..
Different structured products use different types of protection barriers. Some products use barriers that are observed every day that can therefore be breached on any day during the investment term, while some products use barriers that are only observed at the end of the investment term and that cannot therefore be breached during the investment term.
Market risk to the repayment of money invested on the end date will depend on the type of barrier and its level.
For example, for a product with an end of term barrier, set at 60% of the start level, if the index for the plan closes at or above 60% of the start level, on the end date, money invested will be repaid in full (less any agreed adviser fees and withdrawals). However, if on the end date the index closes below 60% of the start level, the amount of money repaid (less any agreed adviser fees and withdrawals) will be reduced by the amount that the index has fallen. For example, if the index has fallen by 45%, the repayment of money invested will be reduced by 45% (meaning that investors will get 55% of their investment back).
'Protected' types of structured products
Some structured product plans are designed so that they are 100% protected from stock market risk at the end date.
It is important to understand that even if a structured product plan is designed with 100% protection from stock market risk, at the end date, it will still usually have issuer and counterparty bank risk. In other words, both the potential returns of the plan and repaying the money invested at the end date will depend on the financial stability of the issuer and counterparty bank. If the issuer and counterparty bank become insolvent, or similar, or fail to be able to meet their obligations, it is likely that investors will receive back less than they invested.
Issuer and counterparty bank risk
Both the potential returns and repaying the money invested of most structured products depend on the financial stability of the issuer and counterparty bank. If the issuer and counterparty bank become insolvent, or similar, or fail to be able to meet their obligations, it is likely that investors will receive back less than they invested.
Financial Services Compensation Scheme ('FSCS') protection
It is important to understand that it is not usually possible to claim under the Financial Services Compensation Scheme if the issuer and counterparty bank fail to meet their obligations or if the stock market index that a plan links to falls.
Structured deposits
Structured deposit plans are deposit-based and will usually be fully protected from stock market risk at the end date and also benefit from the protection of the Financial Services Compensation Scheme, if the bank or building society is a licensed UK deposit taker.