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Openwork lines up with-profits deal with Pru

Openwork is lining up a single-tie agreement with Prudential to sell its with-profits bonds, Money Marketing understands.

The two companies are thought to be in advanced discussions and an announcement is expected later this month following a “rigorous” tender process.

The deal will represent Openwork’s first venture into with-profits bonds since it was formed last year. The network already has an annuity tie-up with Pru.

Despite the negative publicity surrounding with-profits , Prudential has consist-ently outperformed the mar- ket, delivering a 45 per cent cumulative return over the six calender years since 2000 compared with 5 per cent clocked up by the FTSE Allshare index.

Pru believes with-profits are increasingly returning onto both advisers and investors’ radars after seeing a 29 per cent rise in with-profits bonds sales in the first nine months of the year compared with last year.

A Pru spokesman says: “If someone of Openwork’s reach in the distribution market agrees on a with-profits deal, this would signal a resurgence in with-profits as an investment type.”

McCroddan Partnership managing director Michael McCroddan says: “Despite the bad publicity with-profits has received, Pru has the best track record in the market and has not been affected by MVRs in the same way as firms such as Standard Life. Not many IFAs are recommending with-profits now but I know many people who have been making money on them hand over fist for the last 20 years.”

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