View more on these topics

Online bank in Cahoots with bond

Cahoot, the online banking arm of Abbey National, has introduced a guaranteed equity bond that is linked to the FTSE 100 index during a three-year term.

The 3-year FTSE guaranteed return bond is available to investors with between £500 and £250,000. If they invest before the investment term starts interest is paid at 6 per cent gross until December 3, 2001. The starting level of the FTSE 100 index is also recorded on this date and the closing level is taken as an average between June 2, 2004 and December 2, 2004.

Investors are offered the return of their original capital and a return of 12 per cent if the final level of the index is the same as the starting level or lower. However, if the index rises during the term investors get their original capital back plus 50 per cent growth.

There is a demand from investors for this type of product as interest rates are low and investing in stocks and shares without the cushion of a capital guarantee may be too risky for cautious investors. This bond occupies the lower end of the risk scale as it guarantees a minimum return on top of the original capital, but there is a downside.

The final return is based on a six-month average at the end of the term, which benefits investors if performance dips, but it also means investors cannot take full advantage of any sharps peaks that occur. In addition, growth is limited to 50 per cent, which may not be high enough for some investors.

According to FTSE, the FTSE 100 fell from 5093.525 points on September 28, 1998 to 4903.390 points on September 28, 2001.


Commission is millstone round IFAs&#39 reputation

A curious paradox within the life and pension industry emerges in the latest Swiss Re Insurance Report.Based on a survey of 1,000 consumers, the report shows a strong preference for face-to-face advice and a growing recognition of the benefits of independent advice. But this does not translate into general esteem for IFAs.One of the questions […]

Schroders calls for product comparison

Schroders has suggested that IFAs should be required to provide clients with a minimum number of comparable products when recommending investments. It supports a strong independent advice market but advocates a greater degree of regulation.

Life offices could close or merge as the markets slump and liabilities leap

Life offices are facing a financial crisis because of plummeting stockmarkets and soaring liabilities, meaning some could be in danger of closing to new business. The FSA says the financial situation of the life industry is of concern and that it is keeping a “very close eye” on the sector. A report from Cazalet Financial […]

Leeds & Holbeck takes up with platinum bond

Leeds & Holbeck has designed the platinum access bond for investors who want to divide their investment between a high interest account and a unit-linked bond. Up to 30 per cent of the investment goes into the high interest account from Leeds and Holbeck. This part of the product offers a fixed rate of interest […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm