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Post-Brexit: how to keep property fund clients calm

Post-Brexit: how to keep property fund clients calm

Advisers have said their clients should keep calm and carry on rather than panic about their commercial property holdings.

Analysts have predicted other property funds will also stop dealing.

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Paul Holiday, director of Norwich-based GreenSky Wealth, said: “Others will follow suit now, but I don’t think there is any reason to panic.

“We had a discussion about it this morning and we don’t invest in those funds, but if you are considering any income you might need, you need to think about your asset allocation, because you would be withdrawing funds from other holdings.

“But the yield will stay, nothing will change. It is just driven by sentiment and feelings about what will happen.”

M&G, Aberdeen, Kames and Legal & General have all made ‘fair value adjustments’ to their property funds, thereby reducing the value of their portfolios, since the EU referendum on 23 June.

All portfolios currently remain open for trading.

Martin Bamford, managing director of Surrey-based Informed Choice Independent Financial Planners, said: “We have some clients with assets in that Standard Life fund, but not more than £8m in total; our main exposure is to L&G UK Property.

“We are telling clients not to do anything. We limit our exposure to property funds because of their liquidity. Our maximum exposure is 8 per cent and our clients are in it for the long-term.”

Kevin Morgan, managing director of Hertfordshire-based Consilium Financial Planning, said: “Property has been seen as a fail-safe, and it is not because there are comparatively low levels of liquidity.”

Meanwhile, some advisers could be forgiven for feeling smug. Radostina Dencheva, investment analyst at Norfolk-based Chadwicks, said she recommended her clients reduce their commercial property exposure in January.