Prudential has topped advisers’ list of preferred investment bond providers, with 46% of advisers recommending its onshore bonds to clients, according to Defaqto.
Prudential’s figure has increased from 39% in the previous year.
According to Defaqto’s newly released annual Investment Bond Service Review 2024, Quilter was the second most recommended onshore bond provider over the past 12 months, with Canada Life and Aviva also receiving the support of nearly 20% of advisers.
Amongst offshore bond providers, Canada Life International remains the most recommended, albeit with less support than in previous years. In 2022, 19% of advisers said they recommended the firm, but this dropped to 16% in 2023. Meanwhile, Utmost and Prudential came in second and third place.
Ben Heffer, wealth and protection insight consultant at Defaqto, said: “In reality, Canada Life still dominates the international bonds market alongside Utmost, who’ve risen to become the second most popular provider in the category. With little prospect of any new challengers anytime soon, this probably leaves advisers with little choice for their clients should service levels drop.”
Administration dissatisfaction
The survey revealed that adviser satisfaction scores across all categories are significantly lower than those recorded last time by an average of eight percentage points. The administration categories that are ranked most important to advisers saw the biggest drop in satisfaction.
Heffer said: “Existing business administration and administration staff took the biggest hit with drops of 15 and 12 percentage points respectively. These results indicate a general dissatisfaction among advisers with their chosen bond providers, with administration appearing to be the main cause of disapproval.
“The highest performing category was provider strength and brand with a satisfaction index of 79% but even that is down by six percentage points compared to last year.”
Fewer bond types selected
The review also revealed that advisers are selecting fewer different types of investment bonds year-on-year. Last year’s review showed that in 2022, advisers recommended on average 2.76 different types but the latest review shows that in 2023, this number had fallen to 1.48.
Open architecture products remain the first choice over bonds with a limited fund selection, while onshore bonds were found to be more popular than international bonds, Defaqto said. Almost 60% of advisers are now writing open architecture onshore bonds and over 40% are writing open architecture international bonds, down from 66% in 2022 and only just ahead of restricted architecture onshore bonds.
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