FundsNetwork will target existing with-profits bonds as a source of business for its unit-linked offering to be launched this year.
The group believes the asset allocation in with-profits funds has changed so dramatically that there may be a case for intermediaries to re-examine holdings with clients even where a change would give rise to a chargeable event.
Rob Fisher, FundsNetwork marketing director, said: "There are good with-profits products, but there are many substantially invested in fixed income in order to meet solvency requirements, and not just the closed funds. It is difficult to justify them staying there unless that is exactly what the client wants and intended."
Unlike mutual funds and Isas, investment bonds are not easily transferable as they represent a contract between client and insurance company and a transfer requires the contract to be broken.
This would prompt a chargeable event, leading to possible tax liability, and would also involve paying a further initial charge to enter another product.
The issue is not relevant to pensions, with forthcoming offerings from Cofunds and FundsNetwork both open for transfer business.
FundsNetwork is targeting personal pension and Sipp money and will not be seeking occupational business.
Trevor Cheal, savings and development director at L&G, said even though an investment bond wrapper is being developed by L&G for Cofunds, it is an entirely new product - meaning existing L&G bond customers cannot transfer bond assets.
In September, FundsNetwork is introducing a range of tools to help advisers address investment goals and examine whether products such as with-profits suit their needs.
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