Advisers consider using offshore bonds

In a recent survey six out of ten advisers (59.5%) said that they had either recommended offshore bonds over the past year, or would consider doing so in coming months.

The research from Legal & General International (Ireland) Limited is a clear indication that the offshore bond sector is becoming a more mainstream consideration for IFAs who are advising clients on tax and investment planning.

When asked what factors had resulted in the relatively strong performance of offshore bonds when compared to onshore bonds almost half (46% of those recommending offshore bonds) identified ‘greater investment flexibility' as the reason the sector had held up well in 2008. One third also indicated that price was a factor with 33% indicating offshore bonds were no longer seen as more expensive than onshore investments.

CEO of Legal & General International (Ireland) Ltd, David Fagan said: "The offshore bond market delivered a strong performance in 2008 compared to the onshore market despite capital gains tax changes and investment market turbulence. Our research shows that advisers are becoming increasingly comfortable with offshore bonds as a real option for investment and tax planning and are increasingly likely to recommend offshore investment to clients.

In 2009 we are extending our geographical coverage to include residents from the Isle of Man and the Channel Islands and anticipate rolling out our open architecture products to distributors in these markets from the second quarter."