Sales of offshore products in the UK are set to rise over the next year, according to research by Skandia.
A survey of more than 500 advisers shows that 37% expect the proportion of offshore business they advise on to increase over the next 12 months while 61% say it will stay the same. Only 2% expect it to decrease.
Almost 80% say offshore sales account for between 1% and 10% of their business while 15% say they account for between 11% and 20% of their overall sales.
Skandia believes the figures will rise over the next year as offshore products become increasingly accepted into the mainstream.
Figures from the Association of International Life Offices show the market for offshore bonds has more than trebled over the past decade, with the most significant growth occurring over the past three years. The offshore bond market reached £8.7bn in 2006, compared to £4.4bn in 2003. A total of £6bn of the value generated in 2006 came from the UK.
An average of 57% of advisers in the Far East, Middle East, Europe and South America say offshore sales account for more than half of their business. More than 60% expect this to grow over the next 12 months.
Advisers worldwide count fund range and service standards as the most important factors when choosing an offshore product provider. Almost 80% of UK advisers count fund range as important compared to 60% citing service standards. Just 30% count product jurisdiction as a consideration.
Adrian Smith, international product marketing manager at Skandia International, says: “Generally offshore investing has become a more acceptable and familiar option in financial planning over the past few years.
“This is largely due to the fact that offshore investments are better understood today and are no longer seen as tax efficient schemes only appropriate to the very wealthy. In addition to this more companies are launching offshore products, which expands choice and raises awareness as the amount of promotional activity is increased.
"Finally, despite recent short term volatility, global stock markets have generally been buoyant over the past few years and economic growth has been strong. Allied with increasing levels of personal wealth this feeds through to more people able and willing to invest.”
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