Regarding the IFAs who face ruin over Propertybourse investments (FA, 26 May), investing an excessively large percentage of any asset class into a single asset class is contrary to what level 4 should teach you.
So when the story says: “Activate advised a client to invest £200,000 in the Mission London Residential Investment and German Capital Cities funds” and “One client was advised to invest £350,000 of her pension fund in the Mission property scheme,” it begs the question: what proportion of each client’s portfolio did these represent?
Now to be fair, one has to wonder why the Financial Conduct Authority allows non-level 4 investment qualified advisers to recommend inexperienced investors to opt for a buy-to-let (BTL), investing 100 per cent of a client’s money with gearing via a BTL mortgage in one single BTL property purchase.
Investing all your money in a roof over your head is one thing, but when you risk the roof over your head to invest in a property to let to someone else? In addition, our fixation with buying rather than renting, especially if one’s job requires mobility is questionable too.
There is little difference between a BTL and the unregulated collective in property which has failed in this case. But being a collective, one could argue that it’s a lower risk than a single BTL property.
Phil Castle
IFA,
Financial Escape,
Ramsgate,
Kent
