Our products benefit from our unique Tempo pledge: ‘Stated terms or better’

At the end of 2019, we introduced an innovative and unique feature – and an important industry first – to all our plans: the Tempo pledge: ‘Stated terms or better’.

We introduced our pledge as part of our aim to ‘do the right things – and do simple well’, to redefine structured products for Professional Advisers and their clients.

It is designed to allow us to improve the terms of our plans above the terms stated in plan brochures, if the stock market and other factors during an offer period mean that we can do so.

For example, if a plan brochure detailed a particular option as offering a potential return of 10% p.a., if stock market movement and other factors meant that we could increase this during the offer period, the actual terms could become, say, 10.25% p.a., which would be confirmed following the start date.

The pledge gives us the opportunity to pass the benefit of stock market movement which could result in improved terms for investors during an offer period on to investors in our plans. The terms of our plans will always be at least those stated in our plan brochures – the pledge can only ever increase and improve the terms of a plan above the stated terms.

Example of the Tempo pledge: ‘Stated terms or better’ in action include:

• The Long Kick-Out Plan, April 2020 (Option 3): The potential fixed return of this plan, which accumulates for each year that the plan runs, and is paid if the FTSE 100 EWFD closes at or above 100% of the start level on one of the kick-out anniversary dates or on the end date, was increased from the 13.1%p.a. stated in the plan brochure, to 20.4%p.a.
• the Long Growth Accelerator Plan, April 2020 (Option 2): The potential return generated on the 5th anniversary of this plan, if the FTSE 100 EWFD closes at or above 110% of the start level, was increased from the 107.5% stated in the plan brochure, to 175%. In addition, if the FTSE 100 EWFD does not close at or above 110% of the start level on the 5th anniversary, the return generated on the end date was also increased from 6 times the amount by which the FTSE 100 EWFD closes above 90% of the start level, as stated in the plan brochure, to 10 times the amount by which the FTSE 100 EWFD closes above 90% of the start level. And the maximum potential return for investors on the end date, if the FTSE 100 EWFD closes at or above 120% of the start level, therefore increased from the 180% stated in the plan brochure, to 300%.
• A bespoke version of the Long Kick-Out Plan, December 2019: The professional adviser and clients involved with the plan expected the plan to offer 10.7% p.a., but stock market movement and other factors allowed us to improve this during the offer period, to 10.9% p.a., which was confirmed following the start date.
  

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