BARCLAYS UK & EUROPE INCOME PLAN – OCTOBER 2022

A structured product is a fixed-term contract, providing a return based on the performance of an underlying share or stock market index.  Inherently, a structured product is designed to limit investment losses while still creating a return to investors.  Some structured investments offer a degree of capital protection, while others do not.  The growth is usually not guaranteed, and you may receive no return on your investment.  Even where there is capital protection, the deduction of fees and charges could mean you get back less than you put in.

It is important to mention that a structured product is not suitable for people who require access to their money invested during the investment term.  Early redemption can be part of the whole amount invested, but investors may receive less than the original sum invested.

Please ensure you fully understand the key points and risks associated with this structured product.

The capital protection for this plan is dependent on Barclays Bank fulfilling its obligations, along with the investment being held until maturity, unless there is a prior auto‑call.  The initial capital is used to purchase securities in Barclays Bank that have similar characteristics to investing in corporate bonds.  In the unlikely event of default, investors will be creditors of Barclays Bank.

Barclays Bank has been rated ‘A’ by Standard & Poor’s, as of 5 September 2022.  Standard & Poor’s is an independent credit rating agency that uses a scale to denote creditworthiness, ranging from AAA (highest) to D (lowest).  Issuers within the A‑rating band are described by Standard & Poor’s as having strong capacity to meet their financial commitments but are more susceptible to the adverse effects of changes in circumstances and economic conditions than those issuers rated AAA or AA.  Further information about ratings can be obtained via this website: www.spglobal.com/ratings/en/about/understanding-credit-ratings

Initial capital is not 100% secure with this structured product.  If, on the final observation date, 28 October 2027, the worst-performing index is below 65% of its initial level, the initial capital returned will be reduced by any negative performance.  For example, if the FTSE 100 index was 70% below its initial strike level, the initial investment would be reduced by 70%.  Therefore, the return of the original capital invested is not guaranteed.

While the tax rules and rates that are used within any current recommendation to you are up to date, the rules and rates can change at any time.  Mattioli Woods can accept no liability for any such changes and their potential effect on your investment.  The value to you of any tax benefits will depend on your personal tax position at the relevant time.

The value of investments and the returns from them can go down as well as up and you may not get back the amount you invested.  Past performance is not an indication of future returns and investments need to be considered as medium- to long-term holdings.  Inflation will erode the purchasing power of your money.

There is no fixed cost for exiting this plan at maturity.  Please note if you needed to sell this plan prior to maturity, the issuing bank will endeavour to provide quotes under normal market conditions for trading purposes on request, subject to a bid-offer spread of 1%.  Please ensure you read the accompanying fact sheet.  Barclays recommends holding this structured product until 11 November 2027, which corresponds to the product’s maturity.  Please also read the KIID in relation to this statement.

Investing in multiple individual structured products exposed to the same indices increases the risk to an investor, should those indices suffer severe losses.  However, this risk is spread across a wide range of index levels and future dates and will be mitigated by structured products where auto‑call occurs.

We closely monitor this risk for existing structured products and whenever a new structured product is being considered, but should you have any concerns please contact your consultant.

If you change your mind and do not wish to invest, please inform your Mattioli Woods contact by 28 October 2022, the start date for the structured product.  After this date you will only receive the value of the structured product when sold back to the product provider which is likely to be less than your original investment.

The economic outlook looks incredibly challenged with inflation, remaining a persistent problem rather than the transitory one it was hoped it would be.  At the same time the global economy is slowing down significantly.  This leaves central banks in a very difficult position – they can tighten policy to try to control inflation and risk a more protracted recession, or they can look to protect economic growth in the short term and live with the consequences of higher inflation.  Both options are unlikely to be kind to asset markets – investors are hoping that the Federal Reserve in the US can somehow chart a course which achieves a ‘soft landing’, but history suggests this is difficult.  For now, they remain in tightening mode, and this will create headwinds for equities, which are not yet reflecting the prospect of falling earnings from a slower growth environment.

The consequences of Russia’s invasion of Ukraine have affected the entire globe, but Europe is most exposed to the energy crisis, given its reliance on natural gas.  The economic backdrop and rising rates in the US have made the dollar the only ‘game in town’ and the euro has been hit hard.  It is not alone in this, with sterling also weak.  This exposes both Europe and the UK to higher inflationary forces and these domestic economies look precariously positioned.  However, the weaker currencies and the often high quality of the listed companies in both Europe and the UK means that larger cap, multinational names in these areas should prove to be relatively protective and certainly fare better than most.

Tightening liquidity conditions and elevated geopolitical tensions create a strained outlook, and seeking alternative approaches to obtaining returns seems advisable in this environment.

A company called IDAD is employed on behalf of Mattioli Woods to conduct an auction with competing structured product providers.   IDAD also settles the trade with our custodian and provides all the supporting documentation required by the Financial Conduct Authority (FCA).  To complete these tasks, IDAD charges a fee.  For the Barclays UK & Europe Income Plan IDAD’s fee is not expected to exceed 1%, with Barclays’ estimated fee of up to 1.2184%.  The combined total of these fees cannot exceed 2.2184% and, as noted, they are built into the return of the plan so do not reduce the amount invested.  For example, based on a monetary investment figure of £10,000 the fee would equate to £221.84.  This charge has been accounted for in arriving at the stated potential return of 2% per quarter and will not be deducted from that figure when the income is paid.

This product offers no FSCS protection.

For over 30 years Mattioli Woods has been at the forefront of providing advice, pension administration/trusteeship, and investment products and services for clients across the country.  Its key aim is to put clients first to help them reach the objectives they set.  This is done with integrity and professionalism while maintaining a bespoke approach, and it continues with this ethos as part of its culture.

The Mattioli Woods website (www.mattioliwoods.com) provides a further history of the company and the products offered to achieve clients’ various requirements.

In terms of financial legislation, firms can be ‘independent’, or ‘restricted’, or both.

We offer our own discretionary portfolio management (DPM), self-invested personal pension (SIPP), personal pension (MW PP) and small self‑administered scheme (SSAS) services as our investment managers and consultants/client relationship managers are specialists in these areas of advice and management.  For this reason, we are classed as a ‘restricted’ advice business and, only where it is suitable and in line with your objectives, we will recommend these solutions to you.  Should your circumstances not be best served by our own propositions, we will look to the wider market to source the most appropriate solution for you.

In addition, as part of our centralised investment proposition, we offer the Custodian REIT plc, which is a real estate investment trust managed by Custodian Capital Limited, part of the Mattioli Woods Group.

Our solutions are designed to meet your needs and where appropriate we can also offer advice on pensions, investments, and non-investment insurances (protection policies) from the whole market.

Mattioli Woods is committed to ensuring the principles of ‘treating customers fairly’ set by the Financial Conduct Authority are applied with integrity throughout all aspects of our business.

Any tax-based calculations completed by Mattioli Woods are for illustrative purposes only, and we recommend you check these with your accountant or tax adviser.

ISAs are a tax-efficient wrapper with the option to save via cash and/or stocks and shares, making them ideal for investors as there is nothing to include on tax returns. Full details are included in the investment guidance booklet on our website.

As mentioned, you are able to draw funds from your ISA and replace the amount within the same tax year without losing the tax benefits or using up any further allowance in that tax year.

Specifically:

• flexi-ISAs enable investors to withdraw cash from their ISA and subsequently replace this within the same tax year without it counting towards their annual subscription allowance
• the replacement of cash must happen within the same tax year the cash is withdrawn
• any withdrawn cash not replaced before 5 April cannot be replaced and will be a new subscription counting towards the investor’s annual allowance
• payments into the flexi-ISA will be counted first as repayments of any outstanding flexible withdrawals made in the current tax year, and second as a subscription against the current year’s annual allowance
• there is no carry-over of either unused annual allowances or withdrawals between tax years
• repayments of withdrawn funds may only be made to the account from which the associated withdrawal was originally made
• the full value of the ISA may be withdrawn, but withdrawals must not exceed the total value of the ISA (overdrafts are prohibited), even when the amount available for withdrawal is less than the total of current year contributions

Pershing Securities Limited is the administration platform we have selected to operate the service.  For further information please refer to the enclosed Pershing terms of business document.