23 Jan, 2008
IFAs say CGT changes will bring bond
market to a standstill
66 per cent of advisers say that capital gains tax changes
announced in the pre-Budget report will lead to a sharp fall in new
investment bond business or could even halt sales completely.
A survey by CWC Research found that 66 per cent of advisers said
they would very rarely recommend investment bonds if the proposed
changes to capital gains tax go through.
The research, conducted in association with BNP Paribas Securities
Services, found that only a third of advisers questioned could see
a future for bonds.
CWC Research senior partner Clive Waller says: "Bonds have
been the staple adviser investment product for many years now.
However, the move to open architecture, full transparency and
fee-based remuneration has resulted in more advisers recommending
"TCF and RDR proposals look to accelerate the process. A
change in CGT, putting bonds at a clear disadvantage to unit trusts
and OEICs, could result in bonds becoming niche products.
"These results show how polarised the market is regarding
investment bonds. If the CGT changes do become law, the industry
will need to present a unified argument to advisers and customers,
indicating exactly when bonds are appropriate advice."