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MetLife warns IFAs need to take 'holistic view'
05 August 2010
IFAs should take a "holistic view of financial planning" warns MetLife-UK after new analysis has found that sales of offshore bonds account for nearly half of all investment bond sales Peter Carter, head of product marketing for MetLife UK, issued the advice after noting the dramatic shift between onshore and offshore sales. This comes after data released from MetLife indicates that the increase in capital gains tax to 28 per cent for higher-rate taxpayers will boost the total market for investment bonds, with the availability of guarantees further enhancing their attraction. He said: "The shift in the sales balance between offshore and onshore bonds is striking and has been driven partly by the tax-planning advantages of offshore bonds which enable investors to defer tax while they are higher-rate taxpayers. "That will remain the case despite the CGT changes which are more likely to have an impact when making decisions on future income requirements. The 10 per cent rise in CGT rates for higher-rate taxpayers will make a difference. "However, tax is only one aspect and advisers will be well aware that it is more important then ever to take a holistic view of financial planning. Guarantees should be a crucial part of the decision-making process." The research showed that total single premium UK-distributed offshore bond sales in the first quarter of 2010 were £1.396bn – 47 per cent of total investment bond sales of £2.925bn in the three months. In 2009, offshore sales made up 39 per cent of total investment bond sales of £10.661bn while in 2008, when lower CGT rates of 18 per cent were introduced, offshore sales made up 32 per cent of total sales. Published by FT Adviser
