IFAs in UK Look to TEPs for Guarantees And Returns

TEP – 16 March 2009

(IFAs) or  Independent Financial Advisers in UK look to Traded Endowments for guarantees and returns

Leading market maker PolicyPlus has found that IFAs whose clients are frustrated with cash rates and looking for a safe alternative are choosing Traded Endowments (TEPs).

Interest rates are currently so low that holding cash over the medium and long term can significantly erode capital. For example, over 10 years, £15,000 invested with a 5% return would grow by an extra £6,149 compared to an interest rate of even 2%.

The potential returns from TEPs are much higher than cash deposits even though the capital guarantees are almost as good - and in some cases better than cash!

Andrew Briggs, of Oakleaf Independent Financial Services comments,

"I recommend TEPs to clients who are looking to make their money work harder and are able to invest for 5 years or more. The guarantees are excellent, they are tax efficient and they provide the prospect of good rates of return."

Jo Bridger of policyplus added,

"TEPs are very flexible and can be used for retirement savings and children education plans. With many TEPs now providing over 100% capital guarantee and with interest rates so low, it is not surprising that IFAs are turning to TEPs for the low risk element of their clients' portfolios."