View more on these topics

Timely launch from Keydata

Keydata Investments

Keydata Secure Income Bond 3

Type: Income bond

Aim: Income or growth by investing in cash and insurance contracts

Minimum-maximum investment: 4,000-no maximum, Isa 7,000

Term; Five years

Return: 7.5% income a year, 1.875% income a quarter or 43.5% growth over five years

Guarantee: Original capital returned in full unless insurance companies default or the maturity rates of the insurance contract change

Closing date: December 23, 2005, December 9, 2005 for Pep/Isa transfers
Commission: Initial 3%, renewal 0.5%


Tel: 020 7710 6906

Keydatas secure income bond 3 is an income bond which provides income or growth by investing in cash and insurance contracts.

Looking at the market suitability of the product Aptitude Financial Management principal Roy Rutter says: With a view that interest rate movement next time could be down rather than up the timing is good. This product falls really between the stockmarket-linked structured products, of which I am not an enthusiast, and the security of a deposit-type fixed-interest account.

Useful features Rutter highlights include a choice of quarterly or annual income, availability to Pep transfers and the fact that it can be placed in a Sipp which he views as very timely.

Casting an eye over the product literature Rutter says: It is clear, compact and well presented with the boring bits at the back. Adviser remuneration is as expected – its nice to see the 0.5 per cent renewal commission is still on offer.

Moving onto the negative features of the product Rutter believes the concept of maturing insurance contracts needs explaining to clients, lest the dreaded word endowment comes into their thinking. He says: Overall the bond passes most of the right buttons. But the withdrawal penalties and early exit penalties are fairly severe, although to be expected perhaps.

He also has a minor complaint about the closing date. Lets hope IFAs get applications in early and the Royal Mail delkicvers ot the closing date is in the thick of the Christmas post.

Rutter feels there are no direct competitors to this product. I see this as falling between fixed interest bonds from providers such as Heritable Bank and Birmingham Midshires, and structured products.

Summing up Rutter says: This bond has come into the market at the right time and the Keydata name is becoming better known to IFAs, if not to clients. However, with very recent memories of Equitable LIfe and closed funds, there may be reservations in some quarters about an insurance contract linked bond.

BROKER RATINGS

Suitability to market: Good
Investment strategy: Good
Adviser remuneration: Good

Overall 8/10

Recommended

FSA rejects calls to raise maximum redress limits

The FSA has resisted calls to increase the maximum compensation that the FOS and FSCS can award customers. In its latest regular review of the compensation and eligibility limits for both schemes, the FSA rejected calls from consumer groups to increase the maximum limit for ombudsman awards from 100,000 to 200,000. Some in the industry […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    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

    Email: customerservices@moneymarketing.com