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Multiple Onshore Bonds on the same day - Why?

Kat_MockKat_Mock Member
in Technical stuff

Question to the floor!

Previous adviser recommended to set up 5 onshore bonds with the same provider, in the same investment fund on the same day. Each bond has 1000 segments. None of the bonds are in trust and the client is a non-taxpayer.

Am I missing some kind of super whizzy wheeze as to why they might have recommended this? Client has an IHT liability but no real plans to gift and only two kids so I can't see why you would need so many bonds and segments. He only has £30k in GIAs and it's not looking like a diversification play as the bonds are all in the same fund (only one fund).

Any ideas or is it just weird?

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Comments

  • les_cameronles_cameron Member

    I'm voting for weird.

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  • SimplyParaplannerSimplyParaplanner Member

    I recall a tale from an ex Natwest adviser from years ago where Natwest advisers bonus was based on the volume of policies sold not on the value. He told me advisers would regularly write multiple bonds (for add flexibility!!!) to improve the bonus KPIs.

    My guess is weird although it might be a case of something in the adviser head at the time that they never documented.

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  • Kat_MockKat_Mock Member

    Thanks both! Just wanted to check I wasn't missing something :)

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  • richardgoughrichardgough Member

    How much money are we talking about?

    There is an argument for getting as many segments as possible for greater flexibility in the future. However, I probably wouldn't look at such an approach unless you're talking well over £500k.

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  • les_cameronles_cameron Member

    Someone mentioned something to me yesterday - they set up 5 bonds for 5 different beneficiaries - do all the bonds have different life assured?

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