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IFAs choose structured products for cautious investors, says Virgin Money

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IFAs believe structured products are the best bet for income-seeking investors in the current stock market climate, research by Virgin Money suggests.

IFAs believe structured products are the best bet for income-seeking investors in the current stock market climate, research by Virgin Money suggests.

The survey of 100 advisers, carried out before the collapse of structured investment provider and administrator KeyData Investment Services, found 27 per cent chose structured products as the best option for cautious investors looking for income from a lump sum over five years.

Corporate bonds were chosen by 23 per cent of advisers while another 15 per cent selected bank and building society accounts despite the current low interest rates on offer and the tax implications.

Traditional UK income funds were chosen by just nine per cent of advisers with investment bonds slightly more popular as the choice of 11 per cent of the advisers surveyed.

The Virgin Money Investors Intentions’ Index also found that advisers are starting to feel more confident about investment generally with a sea change in optimism over the past three months.

It found 79 per cent of advisers are now recommending UK shares to clients over the next three months compared with just 57 per cent in February. Eight out of the ten sectors monitored by Virgin Money showed increases over the previous quarter with just cash and bonds seeing a drop.

Virgin Money spokesman Grant Bather says: ‘IFA confidence is on the rise and our index suggests that investors should now start to move away from the poor returns, but relative security, of cash in favour of better returns in other sectors.

‘Structured products are seen as the best bet for income despite the Lehmans disaster last year and concerns over investors’ cash. The KeyData collapse will be a major test for the market and advisers’ confidence.’

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