Adviser re-evaluating onshore bonds in financial planning solutions

15 March 2022

High net worth clients have become a core demographic for the onshore bonds market, as advisers have re-evaluating the investment and financial planning solutions they are using, new research from HSBC Life has found.

According to the latest HSBC Bonds Pulse Survey, more than two in five (44%) advisers believe high net worth clients are the most important segment driving demand for bonds, ahead of clients close to retirement or those looking for income and inheritance tax solutions.

However, those client segments still remain important, with 36% of advisers believing that onshore bonds are most suitable for clients who are five years from retirement, while over a quarter (26%) say they are most suitable for clients looking for income or seeking to reduce inheritance tax.

Advisers using onshore bonds for clients said financial strength was a key consideration when choosing a provider followed by trust. Breadth of fund choice, adviser support, availability on platforms, brand name and ESG fund choice were also cited as key factors to consider.

Looking ahead, advisers said their biggest concern regarding returns from all asset classes is the threat of global recession, with nearly half (48%) worried about the risk over the next five years. Two fifths (39%) are concerned about the risk of inflation, while a third (34%) cited possible market corrections and concerns about equities being over-valued.

Mark Lambert, head of onshore distribution at HSBC Life Limited, said: “Onshore bonds are increasingly viewed as being suitable for a wider range of clients. Traditionally, demand for bonds is driven by the three I’s of investment, income and inheritance.

“Our growth in recent years has been helped by Wealth Advisers re-evaluating the investment and financial planning solutions provided by Onshore Bonds for their high net worth clients. We see this continuing and especially whilst the current caps are in place on investment limits for pensions and ISAs.

“HSBC Life has aspirations for further significant growth in the onshore bond market, and we are dedicated to offering advisers and their clients the highest levels of service, underpinned by a wide investment choice, transparency and value for money.”

Professional Paraplanner