New market study, "UK Investment Bonds 2010", has been published

New Financial Services market report from Datamonitor: "UK Investment Bonds 2010"
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Aug. 19, 2010 - PRLog -- Changes to the Capital Gains Tax regime have queried viability of the investment bond against a backdrop of financial markets emerging out of a recession. Providers are presented with a scenario for success if investors are made aware of clear circumstances where a bond is an advantageous investment.


* Examines the current shape of the investment bond industry and explore factors that are currently limiting new business.
* Analyzes the use of wrap platforms in the distribution of bonds with focus on how technological developments can enable better business.
* Reviews tax and regulatory changes that are challenging the investment bond market.
* Identifies key competitors and examines their differing strategies in the UK investment bond market.


Despite changes to CGT, the investment bond is still a viable part of an investment portfolio. The smoothing factor of with-profits bonds offers the nervous investor the opportunity to even out the volatility of returns from the stock market and other underlying investments.

Economic uncertainty is a key challenge faced by the investment bond market, although a changing regulatory and tax environment continues to bring new challenges to providers, IFAs and retail clients alike.

Reasons to Purchase

* Gain unique insight into the tax and regulatory changes that are driving the investment bond market.
* Understand the investment bond market, the distribution trends and the key technological developments driving new business.
* Access Datamonitor's forecasts for the market and valuable knowledge of how the sector is set to develop to 2014.

For more information or to purchase this report, go to:

Partial Table of Contents:

Overview 1
Catalyst 1
Summary 1
Executive Summary 2
The UK investment bond market declined at a CAGR of 15% over the past five years 2
Providers should make investors aware of clear circumstances in which a bond is an advantageous investment 2
Wrap platforms will shape the distribution of investment bonds 2
Table of Contents 3
Table of figures 4
Table of tables 5
Market Context 6
Introduction to investment bonds 6
Unit-linked bonds offer investors policies with a value that is directly linked to investment performance 7
Clients appreciate the flexibility and transparency of unit-linked bonds 8
With-profits bonds offer a smoothing mechanism, a unique attribute of the product 8
A distribution bond is recognized as a simple product that provides investors with a steady stream of income 9
Guaranteed bonds encompass the guaranteed income, guaranteed growth and guaranteed equity bonds 10
Guaranteed income and guaranteed growth bonds 10
Guaranteed equity bonds 10
Money market bonds are a new category of bonds introduced by the ABI in 2008 11
Sales of investment bonds in 2009 suffered at the hands of fallen stock markets 11
Unit-linked bonds immediately felt the positive effect of stock market rallies in 2009 12
The smoothing factor of with-profits bonds are attracting and calming the nervous investor, to generate healthy sales in 2009 14
With-profits bonds became unpopular after the stock market bubble burst in 2001 14
Guaranteed bonds were popular in 2008 but new business in 2009 declined heavily 15
Distribution bond sales continued to falter in 2009 16
Money market bonds lost favor in 2009, a year after being introduced as a new bond category 16
Investment bonds still remain a viable investment product but discerning the suitability of a bond for any individual will be more complex 17
Investors will still question the role of unit-linked bonds in the future as they lack elements of protection against market volatility 18
A with-profits revival will be seen over the next five years, at the expense of distribution bonds 18
Guaranteed bonds will continue to suffer a decline in sales in 2010 19
Money market bonds will lose their popularity among investors going forward 19
The best investment product depends on individual circumstances but there are three key facts which keep a bond broadly attractive as an investment 20
Only 5% of the population pays CGT 20
The majority of bond holders are basic rate taxpayers at the time of encashment and the changes to CGT make bonds even more attractive for these investors 21
An investment bond is a flexible product that can be adapted as an individual's circumstances change 21
There are clear circumstances in which a bond is an advantageous investment 21
However, investment bonds are not favorable to all scenarios 22
Market Issues 23
Consumers' low risk tolerance is affecting the investment bond market 23
Consumers are risk-averse and prefer safer or guaranteed returns 23
Investment bonds need to attract the less affluent consumer who is unwilling to take any risks with their cash 23
Prevailing economic conditions continue to pose a key challenge to investment bonds 24
Recent changes to taxation will impact the investment bond market 25
Changes to CGT announced in the June 2010 emergency budget may prove beneficial to the investment bond market 25
Under the old regime the tax structure gave a clearer advantage to investment bonds 26
A flat rate of 18% CGT was the prior arrangement that impacted the investment bond market 26
The changes to CGT in April 2008 were more far-reaching than their intended target 27
The tax treatment of investment bonds has not changed 27
Investment bonds are taxed within the income tax regime rather than as capital gains 27
An investment bond carries a 5% tax deferred withdrawal allowance 28
A tax charge can arise whenever a ""chargeable event"" occurred 28
Technological innovation centering on wraps is helping overcome the challenges of investment bonds 29
There are eight key areas where a wrap platform will help overcome challenges 30
The tax complexity of bonds and income-drawing options will drive growth in distributing investment bonds via wraps 30

Full Table of Contents is available at:

About Datamonitor

The Datamonitor Group is a world-leading provider of premium global business information, delivering independent data, analysis and opinion across the Automotive, Consumer Markets, Energy & Utilities, Financial Services, Logistics & Express, Pharmaceutical & Healthcare, Retail, Technology and Telecoms industries. Datamonitor's market intelligence products and services ensure that you will achieve your desired commercial goals by giving you the insight you need to best respond to your competitive environment.  View more research from Datamonitor at

About Fast Market Research

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.

For more information about these or related research reports, please visit our website at or call us at 1.800.844.8156.

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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
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Tags:Bond, Investment, Tax, Wrap, Investor, Guaranteed, Ifa, Unit-linked, With-profits, Ape
Industry:Finance, Research, Banking
Location:Massachusetts - United States
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