Advisers “misunderstand residential property”

Advisers “misunderstand residential property”

Advisers have shown a fundamental misunderstanding of the residential property asset class in steering clients away from it, Christopher Down, chief executive of Hearthstone Investments has claimed.

Mr Down said that advisers who failed to recommend residential property to their clients were often doing so because many people already owned personal residences.

But he added: “For the majority of people their home is not an investment but a lifestyle purchase.

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“The private rented sector is very different and a residential property fund enables clients to enjoy total returns from many different property types in many different regions.”

Hearthstone Investments research, where advisers were anonymously presented with the performance characterises of the TM Hearthstone UK Residential Property Fund, found that 77 per cent said they would be likely to recommend it.

The same research found that usually only 22 per cent of respondents would consider recommending a residential property fund.

Some 94 per cent said they would consider recommending equities, 83 per cent said they recommend multi-asset and 74 per cent said they would recommend commercial property.

Mr Down added that clients would be reliant on advisers to help them build a strong, diversified portfolio as Isa season came into full swing.

He said: “Advisers should be taking a holistic approach and consider all sectors and asset classes when renewing their clients’ portfolios.”