Advisers are increasingly using onshore investment bonds as part of financial planning strategies, amid growing client interest.
Research from Chesnara Life (UK) found more than a quarter (26%) of advisers significantly increased their use of onshore investment bonds in the previous tax year.
Advisers’ growing use of onshore bonds is partly driven by client enquiries; almost nine out of 10 (88%) expect more enquiries from clients about onshore bonds this year, including 28% who expect a significant increase.
Chesnara Life said rising interest is caused by a number of factors including the role of onshore investment bonds in estate planning as well as the changing tax treatment of other investments.
On average, advisers wrote £2 million of onshore investment bond business in the last tax year with a minimum case of about £100,000 and an average cash size of £265,000. Around one in six (16%) surveyed wrote more than £5 million of onshore bonds business.
Advisers are positive in their outlook for the current tax year, expecting to write on average £2.24 million of business, with more than a fifth (21%) expecting to write more than £5 million.
They are similarly optimistic about average case sizes which are expected to rise to £394,000. Around 17% expect an average case size of more than £750,000.
Mark Lambert, head of onshore bond distribution at Chesnara Life (UK) said: “Advisers are increasingly using onshore investment bonds as part of everyday financial planning conversations and momentum across the market will be further boosted in the current tax year.
“We are seeing growing interest in onshore investment bonds and trusts with estate planning a key influence on demand. Providers need to respond to that with more support for advisers and their clients.”
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