An overwhelming 84 per cent of IFAs believe with-profits bonds have
outperformed inv-estor expectations over the past 10 years, according to
research from Prudential.
IFAs say with-profits bonds are not outdated and irrelevant, as they are
often portrayed by consumer groups, but are becoming an important
investment option in times of stockmarket volatility and falling interest
The survey of 250 IFAs, carried out by independent research company PTM,
found that half of the advisers questioned had recommen-ded a with-profits
bond in the past fortnight and 30 per cent had done so within the past
More than two-thirds of advisers questioned – or 69 per cent – believe
criticism of with-profits bonds over the past six months has not been
justified but they suggest that more transparent contracts would improve
their popularity in the future.
The majority of those questioned, 82 per cent, said with-profits bonds
remain relevant today and 76 per cent of advisers said the bonds should be
part of most balanced investment portfolios.
Forty-one per cent of IFAs believe with-profits bonds have become more
relevant over the past decade, largely as a result of declining returns on
cash-based savings acc-ounts and greater stockmarket volatility.
Eighty-eight per cent of advisers believe that with-profits bonds are an
appropriate investment vehicle for long-term nest egg savings and 78 per
cent said they are effective when planning for retirement.
A third of those questioned would consider recommending with-profits bonds
as a way to save for university fees.
Prudential strategy marketing manager Campbell Boyd says: “From the
results of the survey, it is clear that with-profits bonds remain an
important part of the investment landscape in the 21st Century, helping to
ach-ieve a proper balance of risk and reward in most individual portfolios.”