FEAR OF FINANCE Simon Pincombe

The only event more unsettling than the launch of "a new product'' is the launch of "an exciting new product''. This is the signal for an industry feeding frenzy and there is very little we nervous investors can do except close our eyes and get eaten.

The sharks are already circling for the summer banquet. This particular predator is called a corporate bond pep and the betting is that British savers will see a large chunk of their collective wealth removed in one sickening gulp. Indeed, corporate bond peps have been described as "very exciting new products''. So you can be sure they will cause distress on a national scale.

To make matters worse, next month's launch of "this extremely exciting new era for investors'' has collapsed into confusion thanks to a balls- up between the Treasury and the Inland Revenue over the tax treatment of bonds.

None of this is very reassuring. Especially since corporate bond peps, which we are promised will offer up to 8.5 per cent tax free, are being touted as the "exciting alternative'' to building society deposits. Should the saver yield to the temptation of higher yield? There lies the angst. At least you know where you are with a deposit account. It's hard to feel warm about bonds, preference shares, convertibles and Euroconvertibles - even if they are wrapped in a tax-free personal equity plan.

To the non-cognoscenti, the corporate bond pep is like some laboratory manufactured virus - a baffling cocktail of frightening components. Take a little-understood market, inject a dose of naive investing public, wrap it all up in a pep for good measure and hey, presto - the financial services answer to ebola.

Come to that, what is a bond? Why it's a company or government IOU which pays a fixed rate of interest, warbles your adviser. Pretty tame stuff, you think. Well, not if the company in which your money is invested is a fly-by-night property concern. There's something else to remember - bonds are negotiable. They are bought and sold in a market which means their price can go down as well as up.

Okay, so most bond peps (and there are very few yet launched) will be managed by professional fund managers. Still, higher investment returns normally signal higher risk - not something the average building society member is particularly familiar with.

For your money to be safe, your bonds should at least be creditworthy. But for those with a tendency to worry about these things, the temptation will be to lie awake at nights wondering whether your pep manager has swapped his ICI debt for some higher yielding bonds issued by Honest Joe's Scrap Emporium - just to tweak the fund performance a bit.

Then again, these wretched things will probably be all the rage. Then everyone else will be earning serious dosh while you plod along in a Halifax 90-day account. Perhaps it is wiser to brood awhile and see what's on offer after a few months.

There are early indications that the insurance industry has pulled a masterstroke with yet another in a long list of exclusions from health policies. A 47- year -old reader rings to say that Norwich Union has agreed to insure her but not for menopause-related ailments. She had, apparently being seeing her doctor on this matter, although why that should come as a surprise to the Norwich is a mystery.

If this sets a precedent, the outlook is bleak. Unless, of course, you happen to be in the insurance business.

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