Is anybody still selling With Profit Bonds?

[Troy]

I know I covered this topic before but today's <!--EZCODE ITALIC START--> Irish Times<!--EZCODE ITALIC END--> prompts me to shout from the rafters that <!--EZCODE BOLD START--> I told you so<!--EZCODE BOLD END--> :eek !

Unfortunately it does not seem to be on their Website but, briefly, <!--EZCODE ITALIC START--> Brenda Dunne<!--EZCODE ITALIC END-->, Canada Life's actuary quoted as follows, <!--EZCODE QUOTE START--><blockquote>Quote:<hr> <!--EZCODE BOLD START--> ...warns that a strong stockmarket rally would be necessary to maintain the present level of bonuses<!--EZCODE BOLD END--><hr></blockquote><!--EZCODE QUOTE END--> And she should know (Canada Life are big WPB providers).

Present level of bonuses? 5% before tax and charges! Hey, if these need a strong stockmarket rally to sustain them there must be an awful lotta ground to make up.

What adviser could possibly put a client into a WPB today? If there is a strong stockmarket rally you would be far better off in a fund which gives you your entitlement and not one which will use your gains to subsidize these heavy legacy losses.:hat

 

[Brendan Burgess]

Hi Troy

Brenda's paper will be published on The Institute of Actuaries website.

I just read an annual bonus statement from Friends First. After 4 years, it showed a policy value of €10,000 with a MVA of €1000 to give a cash-in value of €9000. No MVA will apply if it is held until its 5th anniversary.

There was no mention of the possibility of terminal bonuses, which I thought was surprising. My friend who got the statement had no idea how to interpret it.

Brendan