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Financial advisers expect growth in onshore bond business

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Nearly three in ten (29 per cent) of financial advisers specialising in investments believe their firm will increase sales of onshore investment bonds over the next year as clients focus on longer-term solutions, according to new research by HSBC Life.

Nearly three in ten (29 per cent) of financial advisers specialising in investments believe their firm will increase sales of onshore investment bonds over the next year as clients focus on longer-term solutions, according to new research by HSBC Life.The company’s Adviser Study shows that onshore investment bonds are becoming increasingly popular in the adviser market with the vast majority, 90 per cent, saying they recommend onshore investment bonds to clients – with almost one in five (19 per cent) recommending onshore investment bonds regularly to meet customer investment needs.
 
HSBC Life’s Bonds Pulse Survey of advisers up and down the country, specialising in wealth management, confirms that demand for onshore investment bonds is being driven by growing interest from clients in longer term investments. More than two out of five (43 per cent) advisers say they believe the ongoing pandemic is driving client demand for longer-term investment solutions.
 
The Bonds Pulse research underlines the importance onshore investment bonds play in advisers’ range of investment solutions. Around two in five (40 per cent) advisers rate onshore investment bonds as an important part of their range of solutions – nearly three times as many as the 14 per cent who say bonds are not central to their solutions range.
 
HSBC Life’s study shows onshore investment bonds are already well-established in client portfolios – on average one in seven clients holds an onshore investment bond and around one in five (19 per cent) of advisers say bonds are held by more than a fifth of their clients.

Mark Lambert, Head of Onshore Bond Distribution at HSBC Life (UK) Limited, says: “Onshore bond demand is driven mainly by the three I’s of investment, income and inheritance which are core considerations for advisers and their clients in the financial planning process. Our study has shown that many advisers would agree with this.
 
“Demand for medium to long-term investments is a major issue for advisers and their clients currently and ultra-low long-term interest rates are clearly a contributing factor. Advisers have moved quickly to adapt to the investment challenges of the coronavirus and see the clear client benefits in longer term investment solutions.
 
“Our priority is to offer advisers and their clients investment choice, transparency and value supported by the highest levels of service.  It is extremely encouraging that advisers appear so optimistic about the future of the onshore bond market and we share their views about future growth.”

The HSBC Onshore Investment Bond has a minimum investment of GBP5,000 and is a medium to long-term lump sum investment providing the potential for capital growth while still allowing clients to make withdrawals from their investment. 

The HSBC Onshore Investment Bond combines investment choice, tax-efficiency, and minimal administration costs. It allows the policyholder to hold collective investments for flexibility and tax planning purposes and maintain a consistent strategy across their overall investment portfolio.

HSBC Life (UK) Limited does not replicate funds offered by external fund managers. It invests in the funds directly and as a result is able to offer a competitively priced proposition.

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