View more on these topics

MetLife rues lack of level playing field on bonds

Metlife Europe says advisers should not ignore the benefits of unit trusts for income investors and clients seeking to mitigate inheritance tax.

It says despite the introduction of the 18 per cent flat rate for capital gains, investments bonds still retain key advantages over unit trusts.

Head of product marketing Peter Carter says he is disappointed the level playing field on tax between investment bonds and unit trusts has disappeared, but says unit trusts have not been handed the advantage as advisers will have to consider more than tax.

He says: “It is disappointing that there will not be a level playing field for investment bonds against unit trusts because of the CGT changes.

“However the decision to choose an investment bond or a unit trust remains complex and the knee-jerk reaction that the CGT changes give an advantage to unit trusts is wrong. Tax is not the only reason why someone chooses a particular wrapper for their investment.

“It is clear that investment bonds will remain attractive products for basic rate taxpayers, people seeking income and clients seeking to mitigate IHT. There is a strong need for advice and IFAs are well-placed to provide support for clients.”

Some commentators have argued in the wake of the budget that unit trusts are more suitable for all investors and particularly higher rate taxpayers.

But MetLife says a crucial benefit of investment bonds includes the availability of guarantees in contrast with unit trusts which have suffered from stock market volatility.

Recommended

IFDS names Simon Hudson-Lund as new CEO

Simon Hudson-Lund has been appointed chief executive of International Financial Data Services. He succeeds chief executive and executive chairman Charlie Eppinger.The former chief operating officer joined IFDS as managing director in 2003 and has been successfully managing the day to day running since being promoted to chief operating officer.Prior to this he was at Legal […]

Free equity-release advice in joint deal

Retirement Plus is testing a joint-venture equity- release service with Stroud & Berkeley Group, Gloucestershire Primary Care Trust and AWD Chase de Vere Wealth Management. It will offer free, independent equity release advice.

Swift to cut up to 60 jobs

Swift has announced that it is in consultation with 60 staff regarding possible job losses.The staff affected by the consultation will come from the sales, marketing and new business teams. Swift has a total headcount of almost 140 staff. It says it hopes to restrict the number of redundancies to just 25 staff.Chief executive John […]

Pension sales strength underpins Winterthur

Winterthur saw a 22 per cent rise in individual pension new business last year from £1.6bn to £1.9bn.The company says the increase this is predominantly due to the success of its single- premium proposition.Assets under management rose from £10.4bn in quarter four 2006 to £11.4bn at the end of December 2007.Single-premium personal pensions business increased […]

Japan Economic Insight

James Dowey, Chief Economist, and Paul Caruana-Galizia, Economist

The conventional wisdom is that following a roughly 50 per cent rise in the stock market in 2013 in Yen terms, the Japan trade is over and done*. So the story goes, those big gains were due to a one-off boost from quantitative easing (QE) and a depreciation of the Yen — policies that one should think of as a palliative to Japan’s economic weakness, but not a cure. Rather the cure, and by implication the necessary condition for a longer-term investment case, is deep structural reforms — a painstaking re-weaving of Japan’s economic and social fabric, no less. The story continues: this is a much tougher test than launching a blast of QE, and one that prime minister Shinzo Abe, although well intentioned and well supported by the public thus far, is likely to fail. Stick a fork in Japan, it’s done…continue reading

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment