With Profit Bonds are a type of insurance-based investment in which money is invested, usually paid as a single premium or lump sum. It is then pooled together with other investor’s money and invested across a range of products.
These can include investments in stocks and shares, property and other bonds.
The idea is to spread the risk through diversifying the types of investment asset classes.
The investor gets a share of profits in the form of annual bonuses added to their policy. They might also get a terminal bonus when their policy ends.
As with all investment the amount of returns you receive depends on the performance.
Fund managers can help their clients ride the highs and lows by “smoothing”. This in effect means holding back some returns in a good year to cover losses in a bad year.
However, it does not guarantee that you will be better off at the end of the investment term.
Many people who were advised to invest in a With Profits Bond were not made aware of the charges and penalties for withdrawing their money early.
Such as – if you surrender early you may be subject to a Market Value Reduction to your policy. This might claw back a large part – or even all – of any bonuses that have previously been added.
If you weren’t made fully aware of the risks or how the product works, including any fees or charges then you may have been mis-sold.
You are not required to use our services to pursue your claim. You can also seek further advice or shop around subject to any time limits within which a claim must be made.
It is possible for you to present the claim for free, either to the firm or person against whom you wish to complain or to the statutory ombudsman (Financial Ombudsman Service or Pension Ombudsman Service) or the Financial Services Compensation Scheme, whichever is applicable to your claim.
We will not make or pursue a claim, or advise you to, if we know or have reasonable grounds to suspect that the claim does not have a good arguable basis, and or is fraudulent or frivolous.