Advisers anticipate a strong market for offshore investments

Results from the ‘Offshore Research’ Report undertaken among Legal & General’s UK adviser base show that investment advisers remain confident that offshore business will hold up despite the threat of a global economic downturn.

Indeed more than three quarters of those advisers questioned (78%) think that the volume of international business they transact will stay the same or increase in the near future.

The survey backs up a recent market report from Defaqto which points to exponential growth in demand for international investment products. In its latest review of the offshore bond market for UK investors, Defaqto said the market grew by almost 50% to £7.4bn in 2006, following a 60% rise in 2005. It cited continued outward migration, international portability and tax advantages as contributing to sales growth within the sector.

Legal & General’s ‘Offshore Research’ Report claims that almost 9 out of 10 (88%) advisers are drawn to international investments because of the powerful tax planning benefits they provide. But it also indicates that almost half (47%) of advisers see a growing understanding of international investment products as driving market demand.

CEO of Legal & General International (Ireland) Ltd, David Fagan said the research shows that offshore investment is becoming increasingly relevant to the broader adviser market: “Even in the current volatile economic climate, it’s encouraging to see that advisers and their clients recognise the value of investing with cross border life companies, particularly those which are subsidiaries of well established financial groups. The UK market for offshore bonds has grown strongly in recent years driven largely by their compelling tax mitigation potential; but the growth in the market is also due at least in part to the fact that international life companies are offering an increasing number of ‘open architecture’ international portfolio products which, in turn, is making the market accessible to the broader adviser community.”