Fewer advisers are recommending bonds to their clients, while satisfaction with bond providers has also fallen, a study by Defaqto has found.
The annual Investment Bond Service Review showed just 35 per cent of advisers would recommend onshore bonds, compared with around 50 per cent in 2022, and just 19 per cent would recommend international bonds.
Advisers were also selecting fewer different types of bonds and in 2023 the average number fell to 1.48 from 2.76 the previous year.
Advisers reported a drop in satisfaction with bond providers in the year, on average by eight percentage points.
Ben Heffer, wealth and protection insight consultant at Defaqto said: “The administration categories that are ranked most important to advisers saw the biggest drop in satisfaction.
“Existing business administration and administration staff took the biggest hit with drops of 15 and 12 percentage points respectively.
“These results indicate a general dissatisfaction among advisers with their chosen bond providers, with administration appearing to be the main cause of disapproval.
“The highest performing category was provider strength and brand with a satisfaction index of 79 per cent, but even that is down by six percentage points compared to last year.”
Defaqto surveyed more than 300 advisers between August and September 2023.
The popularity of providers was also determined by the number of advisers surveyed that placed business with them in the 12-month period covered by the review.
For onshore providers, Prudential dominated the market with 46 per cent of advisers recommending its bonds to clients, a 7 per cent increase on the previous year.
Quilter, Canada Life and Aviva meanwhile, all had the support of almost 20 per cent of advisers, with Quilter edging ahead of Canada Life into second place this time.
In January, Canada Life closed its onshore bonds and personal pension to focus investment on offshore bonds.
Defaqto said this poses an opportunity for other providers to increase their market share.
In international bonds, Canada Life remained the most recommended provider.
tara.o'connor@ft.com
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