The Broker, he says ‘No’

You find a security you want to buy – in this case a straight sterling fixed interest bond – and then are told you cannot buy it. Brokers like Raymond James and Hargreaves Lansdown are blocking some of us from buying fixed interest securities that they say are ‘complex’: but a broker can be persuaded…guest post by Robert Warren

In the last few months, I have been placing that fixed interest part of my portfolio’s asset allocation, because, if I can get 6% yield to maturity, that’s actually more thah the current PCI benchmark’s five year performance for my risk rating. But my broker looked at my limit order list of potential fixed interest buys and declined on half of them. Based on the resarch I had already done, I decided to challenge that.

When it comes to buying through my SIPP or my ISA, no problem, the broker knows I am a retired asset manager and they have no liability for selling me a security that is ‘complex’. But the dealing account is joint and I can’t quite prove that my spouse has the necessary knowledge to be declared ‘competent’.

The broker at Charles Stanley considered XS0139563166 Southern Electric Power Distribution 5.6% 2032 and asserted “that is complex’, so ‘no deal’.

You can search through every available public source and I believe you will find no mention of ‘complex’. Indeed, you will probably find Terrapin Finance saying it is not ‘callable’ nor ‘puttable’: finanzen.ch reporting it as not callable: and other platforms (Markets Insider, Deutsche Börse) listing it as a plain fixed-rate bond with a hard maturity of 7 June 2032 and no special cancellation or option features.

But, that’s not quite evidence of a straight mistake by Raymond James when they said “it is puttable”. To do that we need are the original Terms or the Prospectus, and these are no longer publicly available.

However, I was not trying to prove them wrong when they said it was ‘puttable’: I was trying to question their knee jerk reaction to therefore call it ‘complex’.

It turns out that some of the bonds I wanted to place are indeed ‘puttable’ – but by the investors and for full value where there is a restructuring or take over. This does not mean
that the bond definitely is ‘complex’. The FCA definition follows the MiFID legislation which to a tax practitioner seems missing in several key elements (who? how?).

It says, in relation to non-complex bonds “… bonds or other forms of securitised debt admitted to trading on a regulated market or on an equivalent third country market or on a MTF, excluding those that embed a derivative or incorporate a structure which makes it difficult for the client to understand the risk involved”.

There were no embedded derivatives in any of the bonds I was asking to place, but some did have ‘Call’ options for when the issuer wanted to wind it up early, and some of them had ‘Put’ option for the investors upon a takeover. Hargreaves Lansdown appears to have decided that many such fixed interest bonds are going to markedby them as ‘complex’.

They have every right to do so: but I say the investor can be expected to understand, and therefore this decision is open to persuasion.

I wrote, pointing out my thoughts for

• XS2327297672 London Stock Exchange Group 1.625% 2030
• XS0221324154 SEGRO plc 5.75% 2035 .
• XS0139563166 Southern Electric Power Distribution 5.6% 2032
• XS0097777253 Severn Trent Utilities Finance 6.25% 2029

 
So, what did Charles Stanley (now Raymond James) do?

They said “Our complex bond classifications are with the assistance of a third-party (not the FCA!) internal classifications.” And then they said I could buy what I wanted in the joint account.

Trust them to be practical.

The moral is that when the broker says “complex, nothing I can do” there is something you can do. The ‘complex’ label is a faint mis-direction since the broker has the discretion. If the bond is quite clearly straight, no calls or puts, is not subordinated, no special conditions then challenge their discretion. The point is, by challenging in a coherent and careful way you’ve already proved you understand the bond.

Copyright 2026 R Noble-Warren all rights reserved

Robert Warren is a retired asset manager with more than 30 years’ experience in investment management. A long-standing advocate of direct investment, he has spent much of
his career helping investors understand and control their own assets rather than delegating decisions to opaque financial products. He now writes on investing, taxation and the
practical challenges faced by DIY investors.

robert@clientkmi.com
rob@noblewarren.co