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IFAs clash on bond rates

Two leading investment IFAs are embroiled in a spat over guaranteed income bonds, each claiming it distributes bond with the best rates.

The dispute arose after a client of Baronworth Investment Services received marketing literature promoting Chase de Vere&#39s product as market leader. The client invested a lump sum with Chase, only to find Baronworth&#39s product pays a higher rate for the sum invested. Both IFAs are offering three-year and five-year guaranteed income bonds, all provided by AIG.

Chase pays 4.6 per cent over three years and 4.8 per cent over five years on minimum investments of £10,000.

The Baronworth product offers 4.65 per cent over three years, but only on investments of £40,000, and 4.9 per cent over five years on £50,000.

Baronworth&#39s director Colin Jackson concedes Chase has better rates for smaller sums but is annoyed because its literature does not qualify its “best rates in the UK” claim.

However, Chase de Vere savings and investment manager Anna Bowes claims the Baronworth product is only available on reinvestments and the commission has been slashed to enhance the rate.

Jackson denies this, saying his product is available to all and that Chase also cut commission. He says: “My gripe is the fact my client believed the literature and invested.”

Bowes says: “Our literature is not misleading, it is the best rate on the open market.”

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