Bond advice 'misleading'

Bond advice 'misleading'

A top discount adviser posted material pushing the controversy-hit Eurolife Secured Bond Isa that could be considered "misleading", it emerged this week.

In June 1999, Baronworth Investment Services sent out details of the apparently safe bond which paid 6.5% fixed interest for five and a half years. But the bond will now not be repaid on time on January 23 despite previous assurances.

Under "Return of Capital", the IFA wrote: "Provided the investment is held for its full term, your capital will be returned in full. This investment is not linked to any index."

There was no note to link that statement to small print material elsewhere in the mailing. This would have pointed to Eurolife Capital Funding, another part of the group, as the security. Capital Funding had no credit rating.

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Baronworth owner Colin Jackson says the transaction was "execution only" and given without advice.

"We assume the client signs to the effect that he or she understands that it is execution only and the client takes responsibility," he says.

But the Ombudsman has previously dismissed this argument, in cases including that of bust IFA David Aaron.

It looks at promotional material to check that it is "clear, fair and not misleading."

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