Watch Out for 'Income' Promises ; Insurance Investment Bonds Are Being 'Sold' by the Bucketful, Especially by Banks and Building Societies. As a Result of the High Commission Paid This Is a Very Lucrative Sale. This Kind of Investment 'Wrapper' has Its Place in Financial Planning, but Invariably Is Not Being Used for the Right Reason. Often There Is No Planning and No Proper Advice.

Western Morning News, The › April 05, 2009

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Summary

Insurance Investment Bonds are being 'sold' by the bucketful, especially by banks and building societies. As a result of the high commission paid this is a very lucrative sale. This kind of investment 'wrapper' has its place in financial planning, but invariably is not being used for the right reason. Often there is no planning and no proper advice.

I am becoming increasingly alarmed where Bonds have been sold as 'income' products. Apart from one or two funds that do generate an actual income, which can be distributed without affecting the original capital purchase, most of the Bonds I see are either With Profits or portfolio type bonds which are invested across a range of different funds, many of which do not distribute any income.

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Extract

Watch Out for 'Income' Promises ; Insurance Investment Bonds Are Being 'Sold' by the Bucketful, Especially by Banks and Building Societies. As a Result of the High Commission Paid This Is a Very Lucrative Sale. This Kind of Investment 'Wrapper' has Its Place in Financial Planning, but Invariably Is Not Being Used for the Right Reason. Often There Is No Planning and No Proper Advice.

Often Investment Bonds are sold or advised because of the supposed tax free withdrawal facility. All too frequently I have seen it suggested that up to 5 per ce...

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