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IFAs turn to with-profits bonds

IFAs are increasingly recommending with-profits bonds to satisfy nervous investors worried about stockmarket volatility, according to Prudential.

In the survey of 250 IFAs, 41 per cent say they have been recommending with-profits bonds more than usual in response to demand for investments which provide a buffer against stockmarket volatility.

More than half say they currently endorse with-profits bonds to clients up to five times a week, with almost 80 per cent suggesting this type of investment should feature on most portfolios.

The majority of respondents said the clamour for with-profits has been apparent principally over the past 12 months, with only 14 per cent of IFAs citing the September 11 terrorist attacks as the spark for the boom in demand.

Almost three-quarters say the number of enquiries about safer investment opportunities began to rise in the months before September when the stockmarket had failed to recover.

Strategy marketing manager Campbell Boyd says: “The research serves to reinforce the relevance of with-profits bonds in today&#39s turbulent investment environment and emphasises their role in achieving a proper balance of risk and reward.”

Simpsons of Brighton IFA partner Andrew Merricks says: “The trouble is that minimising the volatility risk through with-profits bonds is extremely expensive. I believe IFAs and customers should be looking to be more, not less, aggressive in times of trouble.”

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