This is Allianz new assurance vie product which is replacing Allianz AMEV. Basically, because the Fond euro (the secure fund of this saving account) is getting worse in terms of interest and might even be negative if you consider the inflation, Allianz has decided to try to boost the return from the secure part in exchange for a 5 years fidelity contract. It is an Assurance vie so it has all the same advantages regarding French inheritance law, death duties and income tax.
- Who can invest in it: Anybody who is a French resident (and Monaco) and below 85 years old.
- How much can you invest in it: The minimum is 30 000€, no maximum.
- How is it invested: It has to be at least 30% on shares/funds. The secure part is called Fond Euro and the interest of this secured part which was given on the 31st of December each year (and was well below 1%) is now transferred to a fund called Strategy 15. The capital is still guaranteed and if you have not made any withdrawals within 5 years of investing it, Allianz will boost the number of shares you have with Strategy 15 by 10% minimum (to thank you for staying longer with us).
The Shares/Funds part of your investment can go up or down!! You can decide how much you want on shares so it could be all of it if you wish so (but minimum 30%).
- What is Strategy 15: It is a unit fund (Isin number LU1462192250 if you want to check it online). It is not too risky, level 3 out of 7 (7 being very risky). Maximum 35% are on shares, the rest is on bond or monetary funds.
- How does the 5 years fidelity guarantee work: Well, let us take an example. You invest 100K, 50% is invested in fond euro and 50% in shares. Out of the 50K invested in fond euro, you probably would have got 0.80% of interest (well, more like 0.50% in the future but let us be positive) so 400 euro per year in the next 5 years. Those 400 euro will be reinvested in Strategy 15. So, 400 euro would buy you 4 units (value of one unit is 103.66 as per 07/10/20). So, after 5 years you would have around 20 units (if their value is the same and also if the interest of the fond euro stays the same). Then Allianz will increase by 10% your number of units, so you would have 22 units (instead of 20 so 200 euro more if the value has stayed the same)which are then added to your capital on the 6th Obviously the aim is for the Units of Strategy 15 to earn more than would have in the Fond euro so hypothetically, you should not only have 10% more in units but the value of the units should have also increased!! Past performances show that units grow an average of 3.70% per year (over 9 years). But performances of the past are no guaranties for the future.
- What happens if you make a withdrawal before 5 years: You get your capital back minus the management fees, no interest for the part invested on the secure fond euro. For the capital invested on shares, the amount you get back will depend on how it has been performing.
- Exceptional circumstances for withdrawals within 5 years: Your death of course. You or your family will not be penalised if you die. But also, if you or your child or spouse become invalided or death of your partner (pacs or married).
- Accidental death extra: This contract includes an insurance so that if you die in an accident before you are 85 years old, Allianz gives to your beneficiaries half the amount of the value of your contract on top of the value of your contract (maximum 1 million euro). This is automatically included in the contract and it is free. E.g.: You have 100 000€ on your account, then die of an accident, then Allianz will give 150 000€ to the beneficiaries named on your contract.
- Options available:
- Securisation des performances: This is a very good option that means that when your shares/funds go up by 5% (you can choose between 5 and 15%), the 5% gain is automatically transferred to the secure part of your Assurance vie. The gain has to be at least 100€ (5% gain on a share might represent less if your share is only worth 500€!!). This is very good and some of my customers have appreciated this option when the market has crashed back in March 2020 (Covid). Indeed, the gain they made the previous year had been transferred to the secure part of the Assurance vie so the loss was less.
This option is free, so no fees.
- Dynamisation progressive du capital: Some of you might be not too keen to invest all your eggs at once in case you are investing it all just before a crash (so at its highest) so Allianz has come up with an option in which your capital is invested over a period of your choice :6, 12 or 24 Months. So that you are investing at different stages of the stock market value. This option is also available when you make another deposit, not just when you open the investment.
- Arbitrage: This is the French word for switching from one fund to another. With Allianz you are entitled to one free per year but can do as many as you want. So, if you are not happy with a fund, you can switch at any time you want.
- Gestion profile: If you are not willing to trust me or yourself to choose your funds, you can let Allianz manage it for you. You can choose between 7 types of investment between very low risk to high risk. 2 of those investments are fully ISR (investment socially responsible). Allianz readjust the investments 4 times per year following their own expert advisers, so you have nothing to do.
- Securisation du capital: You can choose to make sure that your beneficiaries will get at least the amount you have invested to start with so 100% or 120% of what you have invested. So, if the market crashes, you are sure that your heir will get at least what you wanted them to have or more! You invested 100K but lost 10K, you die, then your beneficiaries still get 100K and not 90K.
- Invalidity insurance option: You can opt for an insurance that gives you the same amount of the value of your investment in case you are disabled following an accident before the age of 62 years old. You must be at least 66% disabled.
- Entry fees: The entry fee is normally 4.5% of the amount invested but I am very nice, so I negotiate. Between 30 and 50K, the entry fee is 0.50%, between 50K and 100K it is 0.25% and above 100K, I do not take any entry fees, so it is 0%. There is however a 12€ administration fee (whatever the amount invested).
- Management fees:425% of the investment per year if you have up to 150 000€.
1.31% of the investment per year if you have between 150 000€ and 300 000€.
1.203% of the investment per year if you have above 300 000€.
This contract is a “clean share” assurance vie contract which means that they are no commissions given on distributors of shares (sort of management fees for units). Those commissions are hidden in other assurance vie contracts (was also on Ex-Allianz contracts as well). So, you might think these are steep fees, but they were higher before (around 0.5% more)!! You just did not see it! The new law obliges insurance companies to be transparent, so Allianz has created a “clean share” contract to meet the law requirement.
- Option fees:
-0.25% per year for the Gestion profile option (0.25% of the amount invested on gestion profilé)
-0% fee for switching from Fond euro to shares or shares to another shares. 1.50% of the amount for switching from shares/funds to Fond euro(maximum 5000€.
-Between 0.071% (age 41) and 3.406% (age 85) quarterly maximum for the option of the capital guarantie in case of death. The percentage is taken on the amount of the loss and depends on the age of the subscriber. This fee is only taken if the capital is at loss
-Disability option: 0.018% quarterly of the value of your investment.
- Adding money to it: You can add money to it at any time but a minimum of 450€.
- Regular withdrawal: You can set up Monthly, quarterly, twice a year or once a year automatic withdrawal which go directly to your bank account. This is free.
- Regular deposit: You can choose to do regular deposits (Monthly, quarterly, twice a year or once a year) so the amount you choose to add to your assurance vie is taken automatically from your bank account.
- Availability: The present amount on your assurance vie is always available and you can even make the withdrawal yourself from your Allianz customer account. So, the money is never blocked. There are no penalties for taking your money out, but tax may apply if you have made a capital gain.
Conclusion: The advantages of the Assurance vie savings account are well known and it is no secret that it is the preferred investment for French people not only because of its advantages but also for its flexibility. But even if Assurance vie investments offer the same envelop with every company (same advantages in regard to French inheritance law and tax and income tax), it is important to notice the little differences and therefore shop around before making a decision. They can be different from one company to another and not just the entry or management fees!
Also, Allianz has a solvability ratio that is one of the best on the market at 174% for Allianz France and 200% for Allianz Group so do not hesitate to contact me for any further information regarding our very large range of investments.
And remember to check out our web site www.bh-assurances.fr/eng for all my previous articles (“practical information”) and register to receive our monthly Newsletter. You can also follow us on Facebook: “Allianz Jacques Boulesteix et Romain Lesterpt”
And don’t hesitate to contact me for any other information or quote on subject such as Funeral cover, inheritance law, investments, car, house, professional and top up health insurance, etc…
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