I asked him whether the “adviser” had asked him about attitude to risk, timescales for investment, access or whether they had already done stocks & shares Isas for the current tax year (which they have). “No, he just said we could get a better return with a stocks & shares Isa” was his reply.2: Times are tough for investment clients and our reviews include reassurance as well as reminders about asset allocation, etc, as we discuss their losses over the past 12 months and sober prospects for the forthcoming year.
However, one product that has continued to experience growth throughout all the recent downturn is the with-profits bond. I am not stupid enough to think they are the answer for everyone but as long as clients understand how bonuses and MVRs work, there is a place for a well managed WPB.
However, what was the headline the public was fed in the Mail on Sunday recently? “Time to cash in obsolete bonds”.
The article leads with: “Investment bonds should be cashed in by most investors because taxation changes mean they are obsolete.” What rubbish.
What would they say to a client. “Yes, Mr Client, I know all your unit trusts have fallen by 30 per cent over the past year and your with-profits bond is up by 5 per cent but it is obsolete and it has got to go. Don’t worry about the MVR or the 7 per cent surrender penalty. How about a nice safe property fund?”
Neptune Financial Management, Bristol