Does your Spanish investment bond have you tied up in knots??

investment bonds

Sam Kelly DipPFS, EFA, BA (Hons) Managing Partner, Chorus Financial.
Sam Kelly.

By Sam Kelly,
Managing Partner,
Chorus Financial.

I’m a big believer in investment bonds, and many of my clients here in Spain hold them, in particular Spanish compliant investment bonds. There are a range of providers for Spanish Compliant Investment Bonds including Quilter International, Prudential International, Lombard, SEB and STM.

Investment bonds offer great tax efficiency – as an example, a net return of 7% per annum would actually double your investment over 10 years thanks to the gross roll-up (compound growth) these bonds allow you to benefit from. (As always, returns aren’t guaranteed, and the figures given are for illustration purposes only).

Alongside that, if your bond is appropriately advised and designed for you as a resident here in Spain, it will also be fully tax compliant, meaning it is effectively taxed at source, and under most circumstances you won’t have to declare the bond itself on the Modelo 720, or indeed your annual gains or income.

Within a bond you can hold a fully diversified portfolio, and if that portfolio is advised through Chorus you will also benefit from our promise of access to FCA regulated funds, and a guarantee of no hidden fees or commissions.

So, with all these advantages, where can a bond fail to provide what you’d expect as an investor?

Firstly, the annual charges. Did you know that you could be paying more for exactly the same bond depending on which firm you sign up through? I’ve seen people commit to annual charges of as much as 1% a year for as long as 5, 8 or even 10 years on a bond.

That’s an unnecessarily high charge, and if you’d taken that exact same plan through Chorus, you would be paying far less. This is because your financial adviser may be artificially inflating the cost of the bond to you to pay them a high commission. This can have serious long-term implications on your returns.

tiedYou also need to be very aware of the investment funds your advisor uses within your Spanish bond. As I’ve been saying for many years here in Spain, the use of commission paying funds is prolific, particularly among larger firms who have ‘arrangements’ in place with one or two fund houses that can severely restrict your options and artificially raise your annual fees by as much as 2%.

It can be incredibly hard for you to identify these practices, so always get a second opinion before signing any paperwork or agreeing to any charges.

A well put together Spanish investment bond can offer so many advantages and can be a fantastic long-term investment solution, but sadly many advisors here in Spain fail to put them together with their client’s needs at the forefront of the advice.

Your long-term financial security is simply too important to risk not asking enough questions, getting a second opinion, or signing paperwork until you’re 100% sure you’re getting the best possible deal and the best possible investment advice.

If you are considering a Spanish Compliant Bond, or a pension transfer or other financial solutions, contact me for a like-for-like quote. As Chorus are transparent with our charges, we are happy to confirm these via email or telephone first, without any obligation.

To find out more, visit, where you can find information about Spanish Compliant Investment Bonds, pension transfers to SIPP & QROPs and more, email me on or call direct on +34 664 398 702.


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