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IFAs say future looks grim for with-profits

IFAs cannot see a future for with-profits products.

Sixty-one per cent of IFAs in The One Account/Money Marketing State of the IFA Nation poll say they are not optimistic about the continuing presence of with-profits pensions in the marketplace and 52 per cent say they are doubtful about the future of with-profits bonds.

Of the IFAs who do not see a future in with-profits bonds, 58 per cent would advise clients to look at property funds as an investment alternative, with 49 per cent opting for funds of funds.

Guaranteed funds and manager of managers are joint third for 38 per cent.

Smooth managed funds are on 37 per cent, mutual funds get 30 per cent and structured funds 25 per cent. Distribution funds are the least likely alternative, with only 5 per cent.

Datamonitor analyst Ann-abel Gorringe says with-profits bonds will become more favourable as long as there is transparency for clients.

She says consumers need to be educated on what investment products are available.

Bloomsbury Financial Planning managing director Jason Butler says: “There is no future for with-profits. We have no time for oily-rag profit prod-ucts sold by lazy people who like to call themselves financial advisers. Clients des-erve a lot better.”

Chelsea Financial Services bond manager Matthew Woodbridge says: “The future of with-profits lies with providers which are financially strong. Realistically, for the smaller guys, it is never going to pay up positive bonuses. Pseudo with-profits funds have not managed to capture the IFA imagination as intended. Transparency is what will bring a massive boost to the market.”

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