Warning over switching investments

Mon, 12 May 2008

Those with investments in insurance bonds should not sell them simply because of changes to the tax system, one expert has warned.

Anthony Coyte, head of investment steering group at AWD Chase de Vere, explains that people who do so might not get value for money .

He said: "It could take up to nine years for a basic rate taxpayer using a bond to provide income to recoup the additional charges incurred by switching to a slightly more tax efficient collective with the same underlying asset allocation."

Some people might be being encouraged to switch investments simply to create additional commission for brokers .

While there are good reasons to change investments from time-to-time, anyone being told to do so simply because of the budget tax changes "should smell a rat", he concluded.

Last week investment firm Edward Jones advised people to take a long-term attitude towards making money on the stock exchange .
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