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L&G offers high income Isa

Wingar says: "The Isa offers no, or very little, capital growth over the medium to long term."

Buswell adds: "The major disadvantage is, I suppose, the fact that the maximum investment allowed at the moment is £7,000 per person in this tax year – and an income of 8.5 per cent from £7,000 is only £595 a year."

Turning to the investment strategy and investment options of the product, Buswell says: "As a corporate bond, the investment strategy is naturally cautious, with the strategy based around ‘old-style’ companies which will stand the test of time."

Wingar is approving. He says: "The investment strategy is old, well tried and tested. Corporate bonds in Peps and Isas have a good following and are popular."

Jackson says: "The product offers a good spread of investments, both here in the UK and abroad. Corporate bonds did take a dive over the past few years, but now seem to be making a recovery."

Moving on to the reputation of Legal & General, Jackson says: "Personally I like Legal & General. Its administration has improved, although for a large company its investment returns could be better."

Wingar says: "Legal & General’s financial strength will become more important to its standing in the marketplace."

Buswell says: "Legal & General’s reputation is sound, well known and well respected. Following its recent tie-up with Barclays I can see this investment going down very nicely with those people who have an account at Barclays."

Turning to the company’s past performance record, Jackson says: "Some of Legal & General’s funds have been bad, such as the Legal & General European fund, while some of its funds have produced excellent returns, such as the property fund. The high income Isa is not going to be number one in my mind but will still be useful in composing a clients portfolio."

However Buswell feels that Legal & General’s investment past performance record is generally very good.

Evaluating which Isas will provide the main competition to the Legal & General product, Wingar feels that competition will come from any Isas offering a high level of income, while Buswell points to all the other corporate bond Isas in the market.

Jackson says: "Competing Isas include several from HSBC, the Virgin income Isa, the Norwich Union corporate bond Isa, Save & Prospers high income Isa, the Tesco corporate bond Isa and the Murray gilts Isa."

Moving to the charges, Wingar says: "There are no initial or exit charges for this product, and with a one per cent annual management charge this is a very competitive product."

Jackson agrees. He says: "The charges are very fair. There is no initial charge or exit penalty and the one per cent annual management charge is in line with cat standard charges."

Buswell is more ambivalent. He says: "The charges for the Legal & General product are standard for the market."

Commenting on the commission, Jackson is lukewarm. He says: "The commission is a bit on the low side. However so are the charges, so I suppose you can’t have everything."

Casting an eye over the product literature, Jackson says: "The key features documents are clear and precise and are easy to follow. Another advantage to the literature is that it does not contain a lot of jargon, which can be confusing."

Wingar feels that the literature is clear and concise, while Buswell feels that: "The literature is clear, telling you what they do, where the main investments are placed and also what the costs are."


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