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Product Matters

It is 10 years since Tessas were launched

and this year sees a huge opportunity for IFAs with £16bn of Tessa money maturing in the first six months.

In general, Tessas have been excellent investments although conventional variable-rate Tessas have returned less, as one would expect, than equity-linked equivalents.

Bristol & West and HSBC have been excellent exponents of the equity-linked advantage over the last five years. IFAs having used the HSBC Tessa Plus plans maturing this year will be able to demonstrate a 55 per cent total return so £9,000 will be producing £13,950.

Tessa holders have six months from maturity to consider their options, the case for investing original capital into a Tessa-only Isa, with its tax-free benefits is compelling while retaining the ability also to take out a conventional Isa.

Investors will consider the vast range of variable-rate Toisas in the marketplace. If accessibility to capital is not a factor, then fixed-rate alternatives would be preferable, with Julian Hodge, for example, offering 6.4 per cent annually on a five-year fixed basis.

If investors can accept a degree of risk to capital, then the new HSBC Performance Plus Isa, designed for Tessa rollovers, offers excellent opportunities. It has the potential for returns of up to 60 per cent linked to the performance of the FTSE 100 Index.

The worst-case scenario if the stockmarket falls over five years is that capital is returned intact. By linking to the most visible index and being based over five years, HSBC has dramatically lowered the risks to investors.


Optimism prevails for the year of stakeholder

It will be no mean feat being an adviser in 2001. There is a brand new pension,a new system of disclosure, ambitious plans for training and competence including possible retesting and, very likely, the abolition of polarisation. This will be followed by mortgage regulation in 2002, although it will have an impact long before then […]

Lenders vie for release key as trackers replace SVRs

On the product front, I know that a number of lenders are working hard on the two big issues. The first is a real solution to equity release. Bank of Scotland and, latterly, Barclays and Northern Rock showed there is fantastic potential demand for the release of equ ity for our ageing population. It wouldn&#39t […]

Education key aim of MCCB roadshows

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Premier Portfolio Managers – PII Global Select Fund

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Life begins at…

By Fiona Holmes, proposition communications manager Having reached a certain age (it’s the new 40 by the way), I’m having to come to terms with the fact that my peers and I aren’t as immune from illness or death as we’d like to think. That’s the problem with 30 being the new 20 and 40 […]


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