Bond Vs Collective

I Have a new client and in discussions with the advisor with the best route for the funds to be invested. Let me set the scene.

  • Client in Care home, slight dementia, son's have LPA.
  • Client has just sold their home and looking to invest the funds for income to pay for the care needed.

The advisor immediately went to a bond and taking 4.5% from the onshore bond as income to pay for the shortfall for care.

I raised the question and just asked if she has considered a GIA and ISA for the income. Not advising the advisor, just raising the question. The income would be taken for the ISA as Tax free income and Bed & ISA each year using her CGT allowance.

Her argument was that the bond is 'simpler'. I believe they are pretty much the same lets be honest.

Where I am going with this is, how do you guys compare products for these situations. I used the Prudential comparison tool and still no luck with the advisor. I am not saying the GIA is the solution only how can we prove that there are alternatives that also have reason to look into ?

Comments

  • Anna03Anna03 Member

    What about the bond investment potentially being seen as a deliberate deprivation of assets? I don't know exactly how it all works but if the client is already in care, would this still apply? I guess it would depend where her other assets/sources of income are derived from.

  • NathNath Member

    This sort of work I believe needs a suitably qualified adviser in the Long-Term-Care arena (CF8 exam). Is the adviser qualified in this area? They need to also look at an Immediate Care Needs Annuity, as well as your other options to ensure all options are considered in my opinion.

  • AsturgessAsturgess Member
    edited April 19

    Thank you for your views on this. I appreciate it. In the report do you talk about how you have discounted each option and then summarised why you have chosen X option. Or do you just say you have chosen this x option for y reasons and only slightly mention each other option and not go into huge detail and have your research in the background ?

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