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Alternative Investments

Pensions freedom and Brexit push demand for alternatives

Pensions freedom

Nearly half of mass affluents in the UK who benefitted from pensions reforms in 2015 say that this is because they now have greater control over their own investments, a new survey by YouGov has revealed. The survey included 506 adults with investable assets of at least £100k.

28 per cent of respondents said that they enjoy being able to withdraw their pension at a lower tax rate, while one in five felt that they can now diversify into tax efficient investments.

11 per cent of those surveyed said that they were interested in investing in private equity funds, with 9 per cent interested in startups. Among younger investors, 19 per cent of those below the age of 34 were willing to invest in the sector post-Brexit.

Higher returns (40 per cent) and tax efficiency (38 per cent) were the motivation for alternative investments. 33 per cent of those interested in the sector wanted to diversify.

Lack of knowledge regarding alternative investments was the biggest hindrance for those hesitating to invest (55 per cent), while others (36 per cent) stated risk factors.

Charles Owen, founder of CoInvestor said, “There remains some lack of understanding surrounding alternatives”. CoInvestor is an alternative investment platform which allows individuals to invest in unlisted companies alongside fund managers.

“Technology has fuelled the growth of a number of online platforms that now enable private investors to access asset classes that were previously exclusive. Financial advisors should be making it an absolute priority to work closely with these platforms and provide solutions for clients that allow them to diversify their portfolios and reap the benefits of this third asset class.”

“If financial advisers do not adopt these technologies they risk losing relevancy, especially amongst a growing, online-savvy younger investor audience that should be their next generation of customers.”

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Paul

The author Paul