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IFAs Look To Structured Products, Virgin Money Research Shows

Date: Wednesday, June 24, 2009
Author: PR-Canada.net

Independent financial advisers believe structured products are the best bet for income-seeking investors in the current stock market climate, research by Virgin Money shows.

The nationwide survey* of advisers, carried out before the collapse of structured investment provider and administrator KeyData Investment Services, found 27% chose structured products making them the top choice for advisers when selecting the best option for cautious investors looking for income from a lump sum over five years.

Corporate bonds were chosen by 23% of advisers while another 15% selected bank and building society accounts despite the current low interest rates on offer and the tax implications.

Traditional UK income funds were chosen by just 9% of advisers with investment bonds slightly more popular as the choice of 11% of the advisers surveyed. The poll asked IFAs to name the investment vehicle that would be first on their list for a cautious investor keen to develop a lump sum within a five year period.

Surprisingly 5% of advisers said they didn't know what they would advise, the Virgin Money Investor Intentions' Index showed.

However the Virgin Money Investors Intentions' Index shows that advisers are starting to feel more confident about investment generally with a sea change in optimism over the past three months.

It found 79% of advisers are now recommending UK shares to clients over the next three months compared with just 57% in February - eight out of the 10 sectors monitored by Virgin Money showed increases over the previous quarter with just cash and bonds seeing a drop.

The Virgin Money Investor Intentions' Index tracks the confidence of IFAs across the country in 10 different investment sectors on a quarterly basis as well as where they advised their clients to invest their money over the preceding quarter. It also includes a barometer on how optimistic IFAs feel about those sectors delivering the best returns.

Virgin Money spokesman Grant Bather said: "IFA confidence is on the rise and our index suggests that investors should now start to move away from the poor returns, but relative security, of cash in favour of better returns in other sectors.

"Structured products are seen as the best bet for income despite the Lehmans disaster last year and concerns over investors' cash. The KeyData collapse will be a major test for the market and advisers' confidence."

The Virgin Money Investor Intentions' Index tracks 10 sectors in total. These are: UK shares, European shares, green investments, cash, commodities, property, bonds, Far East, emerging markets and gold. The Index details advice over the last three months and investment intentions for the next quarter.

Notes to Editors

* IFA interviews were conducted by George Street Research in May 2009. A total of 100 interviews were completed amongst a cross-section of advisers throughout Great Britain with a weighting towards those whose business is primarily with investment clients. Quotas were imposed on the total sample in respect of size of IFA firms, region and areas of specialisation.

For further information:
Grant Bather at the Virgin Money Press Office +442071111012
Kevan Reilly/Billy Partridge, Citigate Dewe Rogerson +442076389571

About Virgin Money

Virgin Money is Virgin's financial services arm and was established in 1995.

Virgin Money has over two million customers and offers a wide range of financial products across lending (e.g. credit cards and personal loans), savings (e.g. deposits, investments and pensions) and protection (e.g. life insurance, home insurance and car insurance) to the UK market.

Virgin Money Personal Financial Service Ltd is authorised and regulated by the Financial Services Authority (FSA). Registered Office: Discovery House, Whiting Road, Norwich NR4 6EJ. Registered in England no. 3072766. Entered on the Financial Services Register (www.fsa.gov.uk/register), Register Number: 179271