PRIIP
Solution
Packaged Retail and Insurance-based Investment Products
Why PRIIPs?
Since the 1st January 2018, manufacturers of Packaged Retail and Insurance-based Investment Products (PRIIPs) have been required by the EU to produce a new Key Information Document (KID).
All KIDs require close collaboration with the product manufacturer to reflect their views of market practice, and their expectations on risk, returns and costs. The main goal of the PRIIPs Regulation is to enhance investor protection standards for retail clients and increase transparency in the market, particularly with respect to sales and distribution.
The PRIIPs Regulation requires that a KID is a stand-alone, standardised document prepared for each investment. A KID can be up to a maximum of 3 sides of A4-sized paper and may refer to other documents such as a prospectus if the cross-reference is related to the information required to be included in the KID, or refer to where detailed information can be found. A KID may also provide information about underlying options for one product (such as a life policy) within one document.
Do I need a KID?
| PRIIPs | Non-PRIIPs |
|---|---|
| Investment funds (closed ended or open ended including UCITS) | Basic banking products that contain no element of packaging such as deposit accounts (which are not structured); |
| All structured products | Basic banking products that contain no element of packaging such as deposit accounts (which are not structured); |
| Insurance products whose surrender values are determined indirectly by returns on the insurance company’s own investments or even the profitability of the insurance company itself | Plain shares and bonds (where there is a direct holding of the relevant assets); |
| Derivative investments | Insurance products that only offer insurance benefits, such as pure protection or non-life insurance (where the surrender value is not dependent on fluctuations in the performance of one or more underlying assets or reference values); |
| Structured deposits | Various pension schemes, such as occupational pension schemes and certain other employment based pension schemes which are mandatorily required by national law (e.g. auto enrolled schemes). |
| Products issued by SPV | Pension funds |
| Investment products that may not have a packaged element but describe themselves as ‘guaranteed’ where the investment return may vary, or even where all or a portion of the investment return is guaranteed. |
What do KID calculations look like?
Classed as High Risk. Priced less regular than monthly, possibly a derivative, does not have appropriate benchmark. Can lose more than invested. For example, Shorts, Options, Futures, Swaps, CFDs.
Risk Indicator
| 1 | 2 | 3 | 4 | 5 | 6 | 7 |
The risk indicator assumes you keep the product for 5 years. Be aware of currency risk. The PRIIP holds no capital protection against market risk. The PRIIP holds no capital guarantee against credit risk. The summary risk indicator is a guide to the level of risk of this product compared to other products. It shows how likely it is that the product will lose money because of movements in the market or because we are not able to pay you. We have classified this product as 4 out 7, which is a medium risk class. This rates the potential losses from future performance at a medium level, and poor market conditions could impact our capacity to pay you. This product does not include any protection from future market performance so you could lose some or all of your investment. If we are not able to pay what is owed, you could lose your entire investment.
Performance Scenarios
Investment of £10,000
| Scenarios | 1 Year | 3 Years | 5 Years | |
|---|---|---|---|---|
| Recommended holding period | ||||
| Stress Scenario | What you might get back after costs | £1,791 | £4,626 | £3,623 |
| Average Return each year | -82.09% | -22.66% | -18.38% | |
| Unfavourable Scenario | What you might get back after costs | £8,765 | £8,973 | £9,682 |
| Average Return each year | -12.35% | -3.55% | -0.64% | |
| Moderate Scenario | What you might get back after costs | £11,002 | £13,329 | £16,148 |
| Average Return each year | 10.02% | 10.05% | 10.06% | |
| Favourable Scenario | What you might get back after costs | £13,829 | £19,829 | £26,971 |
| Average Return each year | 38.29% | 25.63% | 21.95% | |
This table shows the money you could get back over the next 5 years, under different scenarios, assuming that you invest in £10,000 from the outset. The scenarios shown illustrate how your investments could perform. You can compare them with the scenarios of other products. The scenarios presented are an estimate of future performance based on evidence from the past on how the value of this investment varies, and are not an exact indicator. What you get back will vary depending on how the market performs and how long you keep the investment. The stress scenario shows what you might get back in extreme market circumstances, and it does not take into account the situation where we are not able to pay you. The figures shown include all the costs of the product itself, but may not include all the costs that you pay to your advisor or distributor. The figures do not take into account your personal tax situation, which may also affect how much you get back.
| Based on an investment of £10,000 | If you cash out after 1 Year | If you cash out after 3 Years | If you cash out after 5 Years |
|---|---|---|---|
| Total Costs | £409 | £1,544 | £3,236 |
| Reduction in Yield (RIY) per year | 4.09% | 4.09% | 4.09% |
This table shows the impact on return per year
| *One-off costs | Entry cost | 0.00% | The impact of the costs you pay when entering your investment. (This is the most you could pay and could pay less). The impact of costs already included in the price (this is the most you will pay and you could pay less). |
|---|---|---|---|
| Exit costs | 0.00% | The impact of costs of exiting your investment when it matures. | |
| Ongoing costs | Portfolio transcation costs | 0.94% | The impact of the costs of us buying and selling underlying investments for the product. |
| Other ongoing costs | 2.80% | The impact of the costs that we take each year for managing your investments and the costs presented in Section II. | |
| Incidental costs | Performance fees | 0.00% | The impact of the performance fee. We take these from your investment if the product outperforms its benchmark. |
| **Carried interests | 0.67% | The impact of carried interests. |
* The daily bid-offer spread for Anon Class A GBP has a median of 1.15% over the three year period ending december 2017, this equates to an indirect entry and exit cost of 0.57% per share, for bid-mid and mid-offer spreads.
** The carried interest is based on the the available data from the product over the past 5 years.
Investor has the ability to buy regularly, priced regularly. Value priced by market, Meets minimum data requirements of being priced monthly. For example, Investment Trusts, REITs VCTs, PE, with at least 2 years of daily data or 4 years weekly/monthly, or an appropriate Proxy.
Risk Indicator
| 1 | 2 | 3 | 4 | 5 | 6 | 7 |
The risk indicator assumes you keep the product for 5 years. Be aware of currency risk. The PRIIP holds no capital protection against market risk. The PRIIP holds no capital guarantee against credit risk. The summary risk indicator is a guide to the level of risk of this product compared to other products. It shows how likely it is that the product will lose money because of movements in the market or because we are not able to pay you. We have classified this product as 4 out 7, which is a medium risk class. This rates the potential losses from future performance at a medium level, and poor market conditions could impact our capacity to pay you. This product does not include any protection from future market performance so you could lose some or all of your investment. If we are not able to pay what is owed, you could lose your entire investment.
Performance Scenarios
Investment of £10,000
| Scenarios | 1 Year | 3 Years | 5 Years | |
|---|---|---|---|---|
| Recommended holding period | ||||
| Stress Scenario | What you might get back after costs | £1,791 | £4,626 | £3,623 |
| Average Return each year | -82.09% | -22.66% | -18.38% | |
| Unfavourable Scenario | What you might get back after costs | £8,765 | £8,973 | £9,682 |
| Average Return each year | -12.35% | -3.55% | -0.64% | |
| Moderate Scenario | What you might get back after costs | £11,002 | £13,329 | £16,148 |
| Average Return each year | 10.02% | 10.05% | 10.06% | |
| Favourable Scenario | What you might get back after costs | £13,829 | £19,829 | £26,971 |
| Average Return each year | 38.29% | 25.63% | 21.95% | |
This table shows the money you could get back over the next 5 years, under different scenarios, assuming that you invest in £10,000 from the outset. The scenarios shown illustrate how your investments could perform. You can compare them with the scenarios of other products. The scenarios presented are an estimate of future performance based on evidence from the past on how the value of this investment varies, and are not an exact indicator. What you get back will vary depending on how the market performs and how long you keep the investment. The stress scenario shows what you might get back in extreme market circumstances, and it does not take into account the situation where we are not able to pay you. The figures shown include all the costs of the product itself, but may not include all the costs that you pay to your advisor or distributor. The figures do not take into account your personal tax situation, which may also affect how much you get back.
| Based on an investment of £10,000 | If you cash out after 1 Year | If you cash out after 3 Years | If you cash out after 5 Years |
|---|---|---|---|
| Total Costs | £409 | £1,544 | £3,236 |
| Reduction in Yield (RIY) per year | 4.09% | 4.09% | 4.09% |
This table shows the impact on return per year
| *One-off costs | Entry cost | 0.00% | The impact of the costs you pay when entering your investment. (This is the most you could pay and could pay less). The impact of costs already included in the price (this is the most you will pay and you could pay less). |
|---|---|---|---|
| Exit costs | 0.00% | The impact of costs of exiting your investment when it matures. | |
| Ongoing costs | Portfolio transcation costs | 0.94% | The impact of the costs of us buying and selling underlying investments for the product. |
| Other ongoing costs | 2.80% | The impact of the costs that we take each year for managing your investments and the costs presented in Section II. | |
| Incidental costs | Performance fees | 0.00% | The impact of the performance fee. We take these from your investment if the product outperforms its benchmark. |
| **Carried interests | 0.67% | The impact of carried interests. |
* The daily bid-offer spread for Anon Class A GBP has a median of 1.15% over the three year period ending december 2017, this equates to an indirect entry and exit cost of 0.57% per share, for bid-mid and mid-offer spreads.
** The carried interest is based on the the available data from the product over the past 5 years.
The return is not a constant multiple of the value. Non standard calculations. For example, the value reflects underlying investments but not as a constant multiple. Seen in non-linear payoff curves. An example maybe, ZDPs.
Risk Indicator
| 1 | 2 | 3 | 4 | 5 | 6 | 7 |
The risk indicator assumes you keep the product for 5 years. Be aware of currency risk. The PRIIP holds no capital protection against market risk. The PRIIP holds no capital guarantee against credit risk. The summary risk indicator is a guide to the level of risk of this product compared to other products. It shows how likely it is that the product will lose money because of movements in the market or because we are not able to pay you. We have classified this product as 4 out 7, which is a medium risk class. This rates the potential losses from future performance at a medium level, and poor market conditions could impact our capacity to pay you. This product does not include any protection from future market performance so you could lose some or all of your investment. If we are not able to pay what is owed, you could lose your entire investment.
Performance Scenarios
Investment of £10,000
| Scenarios | 1 Year | 3 Years | 5 Years | |
|---|---|---|---|---|
| Recommended holding period | ||||
| Stress Scenario | What you might get back after costs | £1,791 | £4,626 | £3,623 |
| Average Return each year | -82.09% | -22.66% | -18.38% | |
| Unfavourable Scenario | What you might get back after costs | £8,765 | £8,973 | £9,682 |
| Average Return each year | -12.35% | -3.55% | -0.64% | |
| Moderate Scenario | What you might get back after costs | £11,002 | £13,329 | £16,148 |
| Average Return each year | 10.02% | 10.05% | 10.06% | |
| Favourable Scenario | What you might get back after costs | £13,829 | £19,829 | £26,971 |
| Average Return each year | 38.29% | 25.63% | 21.95% | |
This table shows the money you could get back over the next 5 years, under different scenarios, assuming that you invest in £10,000 from the outset. The scenarios shown illustrate how your investments could perform. You can compare them with the scenarios of other products. The scenarios presented are an estimate of future performance based on evidence from the past on how the value of this investment varies, and are not an exact indicator. What you get back will vary depending on how the market performs and how long you keep the investment. The stress scenario shows what you might get back in extreme market circumstances, and it does not take into account the situation where we are not able to pay you. The figures shown include all the costs of the product itself, but may not include all the costs that you pay to your advisor or distributor. The figures do not take into account your personal tax situation, which may also affect how much you get back.
| Based on an investment of £10,000 | If you cash out after 1 Year | If you cash out after 3 Years | If you cash out after 5 Years |
|---|---|---|---|
| Total Costs | £409 | £1,544 | £3,236 |
| Reduction in Yield (RIY) per year | 4.09% | 4.09% | 4.09% |
This table shows the impact on return per year
| *One-off costs | Entry cost | 0.00% | The impact of the costs you pay when entering your investment. (This is the most you could pay and could pay less). The impact of costs already included in the price (this is the most you will pay and you could pay less). |
|---|---|---|---|
| Exit costs | 0.00% | The impact of costs of exiting your investment when it matures. | |
| Ongoing costs | Portfolio transcation costs | 0.94% | The impact of the costs of us buying and selling underlying investments for the product. |
| Other ongoing costs | 2.80% | The impact of the costs that we take each year for managing your investments and the costs presented in Section II. | |
| Incidental costs | Performance fees | 0.00% | The impact of the performance fee. We take these from your investment if the product outperforms its benchmark. |
| **Carried interests | 0.67% | The impact of carried interests. |
* The daily bid-offer spread for Anon Class A GBP has a median of 1.15% over the three year period ending december 2017, this equates to an indirect entry and exit cost of 0.57% per share, for bid-mid and mid-offer spreads.
** The carried interest is based on the the available data from the product over the past 5 years.
Anything which doesn’t meet categories 1-3, including a mixture of any of 1-3 categories. This maybe, insurance based PRIIPs, or the value is not observed in the market place, or combination of Categories 1-3.
Risk Indicator
| 1 | 2 | 3 | 4 | 5 | 6 | 7 |
The risk indicator assumes you keep the product for 5 years. Be aware of currency risk. The PRIIP holds no capital protection against market risk. The PRIIP holds no capital guarantee against credit risk. The summary risk indicator is a guide to the level of risk of this product compared to other products. It shows how likely it is that the product will lose money because of movements in the market or because we are not able to pay you. We have classified this product as 4 out 7, which is a medium risk class. This rates the potential losses from future performance at a medium level, and poor market conditions could impact our capacity to pay you. This product does not include any protection from future market performance so you could lose some or all of your investment. If we are not able to pay what is owed, you could lose your entire investment.
Performance Scenarios
Investment of £10,000
| Scenarios | 1 Year | 3 Years | 5 Years | |
|---|---|---|---|---|
| Recommended holding period | ||||
| Stress Scenario | What you might get back after costs | £1,791 | £4,626 | £3,623 |
| Average Return each year | -82.09% | -22.66% | -18.38% | |
| Unfavourable Scenario | What you might get back after costs | £8,765 | £8,973 | £9,682 |
| Average Return each year | -12.35% | -3.55% | -0.64% | |
| Moderate Scenario | What you might get back after costs | £11,002 | £13,329 | £16,148 |
| Average Return each year | 10.02% | 10.05% | 10.06% | |
| Favourable Scenario | What you might get back after costs | £13,829 | £19,829 | £26,971 |
| Average Return each year | 38.29% | 25.63% | 21.95% | |
This table shows the money you could get back over the next 5 years, under different scenarios, assuming that you invest in £10,000 from the outset. The scenarios shown illustrate how your investments could perform. You can compare them with the scenarios of other products. The scenarios presented are an estimate of future performance based on evidence from the past on how the value of this investment varies, and are not an exact indicator. What you get back will vary depending on how the market performs and how long you keep the investment. The stress scenario shows what you might get back in extreme market circumstances, and it does not take into account the situation where we are not able to pay you. The figures shown include all the costs of the product itself, but may not include all the costs that you pay to your advisor or distributor. The figures do not take into account your personal tax situation, which may also affect how much you get back.
| Based on an investment of £10,000 | If you cash out after 1 Year | If you cash out after 3 Years | If you cash out after 5 Years |
|---|---|---|---|
| Total Costs | £409 | £1,544 | £3,236 |
| Reduction in Yield (RIY) per year | 4.09% | 4.09% | 4.09% |
This table shows the impact on return per year
| *One-off costs | Entry cost | 0.00% | The impact of the costs you pay when entering your investment. (This is the most you could pay and could pay less). The impact of costs already included in the price (this is the most you will pay and you could pay less). |
|---|---|---|---|
| Exit costs | 0.00% | The impact of costs of exiting your investment when it matures. | |
| Ongoing costs | Portfolio transcation costs | 0.94% | The impact of the costs of us buying and selling underlying investments for the product. |
| Other ongoing costs | 2.80% | The impact of the costs that we take each year for managing your investments and the costs presented in Section II. | |
| Incidental costs | Performance fees | 0.00% | The impact of the performance fee. We take these from your investment if the product outperforms its benchmark. |
| **Carried interests | 0.67% | The impact of carried interests. |
* The daily bid-offer spread for Anon Class A GBP has a median of 1.15% over the three year period ending december 2017, this equates to an indirect entry and exit cost of 0.57% per share, for bid-mid and mid-offer spreads.
** The carried interest is based on the the available data from the product over the past 5 years.
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St Peter Port, GY1 1BZ