The platform says both savings vehicles have their merits and advisers should not be swayed by the headlines.
Business development director for trusts and tax planning Paul Kennedy says the onus is on advisers to gain a thorough knowledge because the tax wrapper chosen can affect the return by up to 67 per cent.
He says: “This is the domain of IFAs. If they can gain an understanding of how investment classes are taxed differently from wrapper to wrapper, they can add a considerable amount to clients’ returns and another dimension to the advice they give.”
FundsNetwork’s research has found that growth-orientated assets tend to perform better in mutual funds while interest-based assets usually suit investment bonds.
Kennedy says advisers must start with a blank sheet of paper, determining what assets the investor wants to invest in and whether they are a higher or basic-rate taxpayer.
The white paper is available at fundsnetwork.co.uk.