Established in 1848, today Prudential plc is an international financial services company and household name with a comprehensive range of investment and retirement solutions including personal banking, insurance, pensions and retail investments, institutional fund management and property investments.

In the UK we are a leading life and pensions provider with around seven million customers and 25 million worldwide. Prudential currently manages over £290bn (as at 31 December 2009). In addition Prudential has over 4000 corporate clients and is the largest pension annuity provider in the UK. Prudential currently pays over £2bn per year in retirement income to over 1.4 million people.

Prudential is one of the leading companies in the UK savings market with an established track record and well respected brand. Prudential is a financially strong company, demonstrated by the AA rating from Standard & Poor's, an independent rating company for financial strength. (Source: Standard & Poor's as at March 2010).

The Flexible Retirement Plan

Account Style structure

The Flexible Retirement Plan has a full set of product features including income drawdown, risk rated funds and a deferred SIPP option with SIPP administration provided by Suffolk Life. For an even wider investment choice access there is also access to the Cofunds funds supermarket.

Investment choices

The Flexible Retirement Plan is an open-architecture personal pension plan offering access to an insured fund range of 140 funds including a range of over 100 funds selected by Old Broad Street Research (the 'PruSelect' range) using mainly qualitative criteria. Most of the PruSelect funds are top-selling funds in their respective sectors and a high proportion of the funds are rated AA or AAA by OBSR. The PruSelect range complements the Prudential's wide range of in-house funds including its multi-asset class smoothed PruFund Cautious and PruFund Growth funds. The PruFund Cautious fund is available in a protected version which offers a fifth anniversary guarantee or, alternatively, a retirement guarantee for those within 5-10 years of retirement, at an additional cost of 1.05%pa. The SIPP option provides a wide choice of additional investment choices including commercial property which is available at an extra cost.

The insured funds offered include with profits and protected funds. The fund range was expanded in 2008 by offering access to the PruSelect range of now over 100 funds selected by Old Broad Street Research using a qualitative assessment. The funds comprise many of the leading funds offered in the marketplace and by going down a more focussed route the Prudential has been able to negotiate good discounts from the fund managers. This is clearly demonstrable by analysing best advice systems to ascertain price competitiveness.

Overall, the plan now offers access to 140 insured funds from 29 leading managers and as well as externally sourced funds offers a wide range of funds from its highly regarded investment team at M&G, which are offered at outstanding value. The external fund range provides a wide cross-section of funds by IMA sectors.

A recent addition to the contract is the dynamic portfolio range of funds, managed to a risk tolerance. These provide access to a unique combination of experts:

• Prudential's Portfolio Management Group for asset allocation
• Old Broad Street Research (OBSR) for fund selection

The five portfolios target different levels of risk and potential return and save advisers the time, effort and expense of building their own portfolios. By using these funds there is no need to rebalance asset allocation position or review fund choices under a portfolio. This enables the adviser to simply concentrate on looking after the client and ensuring that the fund selected correctly matches the client's attitude to risk.

Also offered within the plan is the With Profit Fund which comes with an exemplary track record and is ideal for those advisers looking to offer a multi asset fund but with inherent guarantees. These can prove extremely valuable in the run up to retirement or for those in income drawdown. For those drawing income using With Profits negates the affects of 'negative pound cost averaging' which can be extremely damaging to drawdown strategies.

Commission options

A range of adviser remuneration options are available as follows, – fee based, level, initial (funded or unfunded) and fund related. This gives advisers the ability to use an 'adviser charging' method with their clients or alternatively the option of a fee structure enabling payment from the client via an increased annual management charge. Initial commission is also available on the regular premium option.

Support

A comprehensive support package is available for advisers including

Specialist technical support including a helpline to provide legislative and generic product and/or fund information

Pension Transfer Desk: providing administrative support on transfer business for both personal pension and income drawdown business. The service includes a chasing service to ensure prompt payment of funds from previous providers

A Transfer Value Analysis Service offering clear guidance on the implications of transferring your clients' DB benefits, including the critical yield required to support the switch

Comprehensive marketing support, including online tools such as a Cost of Delay, GAD Income and TFC Calculators

Summary

Prudential's Flexible Retirement Plan contract is an 'all in one' solution personal pension solution, encompassing the ability to take regular & single contributions, transfer payments and move into income drawdown.

Consistency of charges, investment choices and reward across the plan

Existing pension pots and savings can be consolidated under the Flexible Retirement Plan (FRP). This includes Protected Rights funds, which can be held within the personal pension and income drawdown

Access to Pru's award winning range of annuities for clients leaving FRP

Clients are rewarded for loyalty and fund size – discounts are applied to the basic AMC for the amount of time invested in the FRP (Loyalty Discount) and based on the fund value as the insured funds grow (Fund Size Discount). Both discounts can apply at the same time and take into account money in both the personal pension and income drawdown

There is a wide range of investment funds including

• With Profits
• Prufund Cautious, Protected Cautious & Growth funds with expected growth rates of 7.5% pa and 7.9% pa respectively
• Guaranteed options via the Prufund Protected Cautious and With Profit Funds
• Other PMG managed funds such as Managed Defensive
• A range of OBSR independently selected funds with the PruSelect range
• 5 Dynamic Portfolio funds managed to a risk tolerance with asset allocation determined by PMG and fund selection by OBSR

The SIPP facility within the contract is only charged for if it is used. Once opened an even wider fund choice can be accessed via Cofunds, and other normal allowable SIPP investments can be made such as Commercial Property.