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Calling all investors: our experienced investor section

Calling all investors: our experienced investor section

28 May 2013 / by Oliver Roylance-Smith

Whether it’s the potential for a steady flow of competitive income, or perhaps the opportunity to enhance your capital in line with the stock market over the medium term, finding and selecting an investment is an important task. With so much choice available, having access to a wider range of opportunities should be a top priority, which is exactly where our experienced investor section can help.

No time like the present

The investment landscape never fails to disappoint by continually raising more questions than answers and the last 12 months have been no exception. Strong stockmarket growth has been seen in the UK and further afield but this is negated in some part by inflation which continues to erode our capital and has not been under the 2% target since June 2009.

Many UK investors have a bias towards the FTSE within their overall holdings but with the Index having risen around 24% over the last 12 months and last week closing at its highest level since the start of this century, taking a medium term view of what might happen can create a difficult investment decision.

Wide range of investment options

Against this backdrop it is helpful to be armed with a wide range of options and Fair Investment is constantly looking at ways to improve our site and the service we offer to new and existing customers alike.

Many of our customers decide that a plan with a fixed term is the right way forward. These investments are structured to offer a defined return for a defined level of risk, thereby allowing the investor to be able to evaluate the balance of risk versus reward for each opportunity prior to investing.

We always want to help our customers by offering plans that are not only relatively easy to understand in terms of how the investment operates, but are also competitive when compared to similar offerings within the market. As such the investments listed in our investment section are potentially appropriate for both new and experienced investors.

A rising trend

The return on offer is usually dependent on the performance of the stock market and many of these investments are designed to reflect the current market, for example when the FTSE is at historically high levels the potential return on offer may be payable even in a slightly falling market. The benefit of knowing at outset exactly what has to happen to achieve the stated returns and a return of their initial capital is appealing to a rising number of investors.

However, with fixed term plans rising in popularity as investors increasingly see the benefit of having a risk versus reward which is clearly defined before committing their capital, we are seeing a rising number of new opportunities and additional investment plans becoming available.

Experienced investor section

Designed to complement our broader range of savings and investment ideas, our experienced investor section is aimed at making it easier for you to find and compare the latest income and growth investment opportunities whilst also giving you plenty of investment ideas and product selections to help you identify whether they meet your needs.

This is where the experienced investor section offers additional investment opportunities, available to both new and existing customers. Listed here is our selection of plans whose performance will depend on a wider range of underlying investments, be this the FTSE 100 Index or indices from the US or Europe, a blend of more than one index or perhaps a specific number of stocks targeted at a benchmark or sector.

As such the knowledge and experience required to review them as a potential investment opportunity is considered higher than for our other investment plans. Therefore these might not be appropriate for someone new to this type of product or new to investing but rather are designed for customers who have already invested in a similar product or who fully understand and have experience of putting their capital at risk.

Who is an experienced investor?

An experienced investor is someone who has sufficient investment knowledge and experience to be able to weigh up the risk and merits of the investment opportunities listed in order to establish that they are appropriate for them.

Since Fair Investment does not give advice, we feel there are certain investments which should only be considered if this knowledge and experience can be established and although there are no formal set criteria, the following are examples:

1.    An existing customer who has invested in a capital at risk product
2.    A new customer who has, in the last 5 years, held a capital at risk investment
3.    A new customer who has, in the last 5 years, held a structured product

Since an assessment of appropriateness forms part of our application process, all investors into any of the plans listed in this section will need to show that they have the necessary knowledge and experience by confirming they fit into one of the above or similar and we may need to obtain further details from you in order to confirm this.

Existing customers

This section is also aimed at those who have taken out investments with us over the years which have either recently matured, look likely to mature early or who are simply looking for a wider selection of ideas for further investment.

Making sure you are kept well informed of any potential maturity as well as offering the widest range of options at that time is an important part of our service to all customers and the experienced investor section is well placed to help.

Investment matures early

Investments which include the opportunity to mature early, often referred to as ‘kick-outs’, have been extremely popular with our customers and with the rise of the FTSE over the last 12 months, many investors have benefitted from this feature and have seen a full return of their capital along with the stated annual return, some of which have been double digits.

With increased experience of the stock market often comes the need for some customers to consider a wider range of investment opportunities and considering what to do with an investment that matures early is one example of when our experienced investor section could help.

Income and growth selections

Currently all of the plans listed are investments with the opportunity to kick out early, and include options for both income and growth.

Gilliat’s Income Kick Out is a five year plan with Morgan Stanley as the counterparty and offers the potential for up to 8.2% income each year based on the performance of three FTSE 100 shares – Barclays, BP and Vodafone. Your return of capital is also dependent on the performance of the same three shares and your investment can mature early each year from year 3 onwards.

Gilliat also provide two growth investments based on the performance of the FTSE 100 and the S&P 500. The Multi-bank Annual Kick Out has the potential to return 8.85% each year (not compounded) if both indices are at or above their starting levels. This investment can mature from year one onwards and your capital is returned unless one or both indices falls by more than 50% during the term of the plan.

For those with a more defensive view the Multi-bank Defensive Kick Out is also based on the FTSE 100 and the S&P 500 but the potential return is 7% as this plan will mature early if both indices are at or above 90% of their starting values. This investment can mature from year 2 onwards.

These investments put your capital at risk and should only be considered if you are prepared to lose some or all of your money. All of the plans listed are eligible for new ISA investments, ISA transfers and non-ISA investments.

Conditional capital protection

Remember that all of the investments in this section also contain conditional capital protection. Unlike investment funds, this means that your capital is not exposed to daily fluctuations in value but rather your entire initial investment will be returned in full conditional on the future performance of the underlying investment.

This condition is normally a fall of your underlying investment by 50% or more, measured either throughout the investment or at the end of the investment only. If this occurs, your initial capital is reduced by the same amount as the fall in the investment. Although there is no way of predicting whether or not this event will occur, you do have the certainty at outset of knowing the defined terms of the investment. This allows the potential upside to be considered more fully in the balance between risk and reward.

New plans to be added

With the ever changing investment landscape and a financial services sector that never stands still for long, there are a growing number of investment opportunities coming to the market. In addition to the current selections, we also work hard to expand the depth and range of opportunities that are listed. We do this by independently reviewing investment plans as they become available in the market as well as approaching investment providers directly with new ideas and opportunities on behalf of our customers.

There are a number of new investments to be added in the coming weeks so keep visiting. We are regularly making changes to this section as well as the rest of our website which is constantly being updated with new and exciting selections. Along with our savings and investment ideas, articles and market commentary, all of which combine to give you more information and clearer guidance in helping you find the right solution.

We hope you find the experienced investor section helpful and easy to use - please do let us know what you think or if you have any questions by emailing us at or calling us on 0845 308 2525.

Visit the Experienced Investor section to find out more about our current selections »

No news, feature article or comment should be seen as a personal recommendation to invest. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment. If you are at all unsure of the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.

The plans detailed in this article are structured investment plans that are not capital protected and are not covered by the Financial Services Compensation Scheme (FSCS) for default alone. There is a risk of losing some or all of your initial investment. There is a risk that the company backing the plan or any company associated with the plan may be unable to repay your initial investment and any returns stated. In addition, you may not get back the full amount of your initial investment if the plan is not held for the full term. The past performance of individual shares, the FTSE 100 Index and the S&P 500 Index is not a guide to their future performance.

© Fair Investment Company Limited