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Onshore bond market growing driven by three I’s

14 December 2020

Nearly a third of advisers (29%) expect the onshore investment bond market to grow over the next year as clients focus on longer-term solutions, new research by HSBC Life has revealed.

According to HSBC Life’s Bond Pulse Survey, onshore investment  bonds are becoming increasingly popular, with 90% of advisers recommending those to clients and almost one in five (19%) doing so regularly.

Demand is primarily being driven by growing interest from clients in longer-term investments, with over two fifths (43%) of advisers believing the pandemic has spurred this trend, the findings showed.

The research also found that 40% of advisers rate onshore investment bonds as an important part of their range of solutions – nearly three times as many as the 14% who say bonds are not central to their solutions range. On average, one in seven clients holds an onshore investment bond, while one in five (19%) advisers say bonds are held by more than a fifth of their clients.

Mark Lambert, head of onshore bond distribution, HSBC Life, said: “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.

“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.”

Lambert added: “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.”

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