• 78% of IFAs would not recommend clients to invest in ‘with-profit’ based investments
• Only 2% of IFAs have a very positive ‘view’ on with-profits
• 1.33 million people plan to stop investing in with-profits

13 August 2009 - New research (1) from Managing Partners Limited (MPL), the boutique fund manager, reveals that only 2% of IFAs have a very positive view on with-profits based investments. More than two out of five (40%) IFAs have a negative view, with 17% being very negative. 

Just over one in two (55%) of IFAs surveyed say they are trying to find an alternative investment product that has many of the characteristics of ‘with-profit’ based investments. 

Jeremy Leach, Managing Director of MPL, said: “With-profits investments have steadily failed to deliver returns over the last number of years, much to the despair of many investors.  A high number of IFAs (78%) would not proactively recommend clients to invest in ‘with-profit’ based investments, which shows how far with-profits have fallen from grace.”

Consumer research (2) also carried out by MPL earlier this year revealed that seven out of 10 holders of with-profits policies are unhappy with their performance, including 32% who are very unhappy. As a result, 15% - some 1.33 million people in the U.K – intend to stop investing in them.

Jeremy Leach, continues: “Investors unaware of an alternative investment to with-profits have increasingly become dissatisfied and resigned over their policy performance. Added to this, exit penalties of up to 20% are being applied to policyholders on encashment of their plans, adding further distress to investors.”

One such alternative to with-profits is Traded Life Policies, which offer Investors steady, predictable returns. TLPs are US-issued whole of life policies sold before their maturity date to allow the original owners to enjoy some of the benefits during their own lifetimes. By building diversified portfolios of them and carrying out the right actuarial analysis, fund managers can use them to deliver steady, incremental returns that are uncorrelated to other financial asset classes.

MPL’s ‘Traded Policies Fund’ was an outstanding performer in 2008. The GBP Growth share class in the fund, which is available to retail investors, returned 10.47% net of all charges in the 12 months to 1 January 2009. Over the 12 months to 1 August 2009, the GBP Growth share class delivered 9.33%.

The minimum direct investment in the fund is £35,000 but the fund can also be accessed via insurance bonds or SIPPs for £2,500.
 
For further information on Managing Partners Limited range of funds, call 0203 397 0525 or visit (www.managing-partners.com).

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