Bonds remain firm fixture in portfolios moving into 2019

  • Nearly three quarters of advisers are either looking to write more bond business in the next year 
  • The majority of financial advisers (55%) believe onshore bonds play an important role in the advice they give to clients
  • Financial advisers are recognising the benefits of writing bonds, with three in five (61%) stating they are more useful than most advisers believe

Nearly three quarters (73%) of financial advisers said they were either considering or planning to increase the amount of bonds they write for clients in the next year, with exactly a quarter (25%) stating they would definitely increase the amount they write, according to new research from Canada Life.

 

Richard Priestley, Executive Director of Canada Life UK, commented: “Despite the complex, rapidly evolving landscape, the popularity of bonds with advisers shows no signs of slowing. Bonds continue to remain a firm fixture in portfolios, with many advisers recognising the importance and usefulness they hold as a defensive investment option for their clients.

 

“It is unsurprising that more financial advisers are recognising the benefits of bonds, such as top slicing relief, compared to a year ago. However, with 2019 on the horizon, advisers who have yet to consider writing more bond business for their clients in the next twelve months would be wise to consider this option.”

 

The majority of financial advisers (55%) believe onshore bonds play an important role in the advice they give to clients. While three fifths (61%) say bonds are more useful than most advisers believe, a slight increase from 2017 (60%). The number of advisers recommending international bonds to their clients has also risen slightly year-on-year, up from 17% in 2017 to 18% in 2018.

 

Financial advisers are also increasingly recognising the benefits and value of bonds, compared to twelve months ago.

 

Over two thirds (67%) of financial advisers cite tax deferral options as an advantage of using bonds, up significantly from just under half (49%) last year. Meanwhile, over three in five advisers (62%) say top slicing relief is one of the main advantages of writing bonds, a substantial increase from 48% in 2017.

 

Of those planning to write more bonds in the next twelve months, two in five (40%) advisers plan to write a mixture of both onshore and offshore, while over two fifths (42%) intend to only write more onshore bonds.

 

Posted by Patrick Doherty