The Providence Capital Simplicity Personal Pension Plan, which is Guernsey-domiciled, has a minimum investment of £20,000 and invests directly into a protected investment called the Providence Simplicity Bond.
The Simplicity Bond is a structured note with a six-year term which, in a sterling denomination, offers 170% participation in the performance of the FTSE 100 Index. The client’s capital will be 100% secure, as long as the value of the FTSE 100 is 40% above the “strike” level (the point at which the capital is invested) at the end of the six-year term.
Providence Life will charge an annual management fee of 1.25% (subject to a minimum of £450), plus a 4% subscription fee for the structured note and a one-off fee of £500 when the bond is established.
The company also said it is developing a pan-European product for pension transfers from non-UK, EU territories, but was unable to confirm further details.
Austin Blair, director of Providence Life, said that the Simplicity QROPS plan had been created in response to demand from distributors of Providence Life’s products in the offshore market, who, he said, “were being asked for a low [entry] value QROPS product, which offered the opportunity for growth, combined with a high degree of capital preservation”.
As International Adviser reported in February, Providence Life was launched with some help from the deVere Group, and was conceived as a source of new investment products for it and other advisory groups.
At the time deVere did not reveal the size of its investment in Providence Life, or say whether it had taken a stake in the business. Providence said in a statement that it would be run “as an independent organisation”, with the majority of its management board being Mauritian residents.
Providence Life Ltd PCC was licensed by the Mauritius Financial Services Commission in the last quarter of 2010, and is headed by Blair.
