Almost three quarters of advisers have seen a surge in demand for ESG investments in bonds, a new report shows.
Research by HSBC Life was published in a report The Three I's of Investable Capital.
It found 72 per cent of advisers reported they had seen an increase in demand for sustainable investments to be held in onshore bond structures while 16 per cent reported a "significant increase".
Advisers estimated almost half of their client based holds onshore bonds with advisers writing an average of 45 onshore bonds cases a year.
It comes after cuts to the level of the capital gains tax (CGT) annual exemption from £12,300 to £6,000.
Of the advisers asked, half said dividend allowances were having a positive impact on the sector and 47 per cent noted a positive impact from the reduced CGT annual exemption.
Mark Lambert, head of onshore bond distribution at HSBC Life (UK), said: “As a provider of an open architecture onshore bond we believe we are well placed to rapidly enhance our range of available investments in response to changing investor demand with the growing interest in ESG and sustainability just one aspect of the innovation across the sector.
“Recent changes in tax treatment of investments, including the relatively low annual dividend allowances and cuts to CGT annual exemptions which will happen again in the next tax year, is turning the spotlight on how onshore bonds can deliver tax efficient investment growth and regular income in a changing taxation climate.”
The research involved interviews with 200 advisers which took place in December 2022.
tara.o'connor@ft.com
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