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Reforms raise thorny issue of suitability

IFAs face a headache when advising on insurance bonds after the Chancellor proposed a flat rate of capital gains tax.

Hargreaves Lansdown says it is checking the suitability of all its advised investment bond sales in light of the pre-Budget report proposals.

Head of financial practitioners Danny Cox says where the investment is not completed or the client is still in the cooling-off period, they will be given the opportunity to cancel if the investment is not suitable.

Technical Connection director John Woolley says some clients, particularly short-term investors, will benefit from the new flat rate but many may be better off in an Oeic or unit trust.

Woolley says: “Advisers will have to be a lot more careful in understanding a client’s circumstances, particularly if the client is investing for income.”

He says the issue is further clouded by the fact that investors holding income-generating funds in a life insurance bond will continue to benefit from being able to build up dividend income without a further tax charge. Unit trust investors face a tax hit on their income, depending on their earnings.

Heartwood Wealth Management investment director Alan Sippetts says clients whose CGT plans relied on taper relief for long-term investments will face the costly and time-consuming process of reworking their plans. He says: “Many clients’ tax planning will go out the window.”


Turn back time

Given the recent increase in market volatility, the difficulties in debt markets and the approach of 19 October, there is a temptation to draw comparisons with events 20 years ago, when world stock markets collapsed, ending the strong bull run and foreshadowing the property crisis and recession of the early 1990s. But how similar to […]

Anand has followed CBK records process for two years

Anand Associates says it has successfully followed the underwriting procedure advoc-ated by CBK principal Peter Chadborn in last week’s Money Marketing, whereby a clients’ medical records are submitted with their protection application, for the past two years.Financial architect James Brooke says if a client cannot confidently answer questions about their medical history, he includes a […]

Thinc Group acquires Bristol IFA Crest

Thinc Group has acquired Bristol-based adviser firm Crest Financial Group and its associated mortgage and IFA arms.Based in Bristol, Crest has nine advisers split across its tied, mortgage and IFA arms. Thinc chief executive John Simmonds says: “Crest Financial Group is a valuable addition to the Thinc group. This acquisition is in line with our […]

Judge’s payback ruling on endowment redress

A Judge has ruled that an IFA’s client must pay back the endowment misselling redress ordered by the financial Ombudsman Service if their policy matures above the expected level, leaving no shortfall.In what is thought to be the first case of its kind, a County Court in Wales ordered the client to pay back the […]

To be and not to be – Multi asset investing with conviction

At Pictet Asset Management we believe active management of asset allocation is the most important generator of returns. What is not to be in our portfolio is just as important as what is to be because good performance is determined as much by the assets you avoid as by those you hold. The FP Pictet Multi Asset Portfolio managers are not wedded to any particular […]


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