Election 2017  

Hung parliament is damaging to us, say HNW investors

Hung parliament is damaging to us, say HNW investors

The general election result has fostered a sense of uncertainty among high net worth investors, which could have a negative impact on their approach to investments.

A poll by the Wealth Club has found just 18 per cent of affluent investors hold positive views on the hung parliament, compared to 65 per cent who do not.

Fear of a delay in Brexit negotiations were voiced by high net worth investors, with 62 per cent believing the election result will hamper effective discussions, and 88 per cent concluding the result will have implications on any plans for a hard Brexit.

On personal finance matters, 45 per cent of high net worth investors said the hung parliament will have a detrimental effect on their overall wealth, while 52 per cent expect to see personal tax levels rise.

Of these, 52 per cent predict an increase in inheritance tax and 37 per cent foresee changes to capital gains tax.

Alex Davies, CEO and founder of Wealth Club said: “While the result may keep Labour’s proposed tax rises at bay for now, there is no doubt there has been a huge lurch to the left. As a result, raising taxes on the population as a whole is not politically viable. Yet the country is still massively in debt. The option for the government is to go, once again, after the wealthy.

“Therefore if you are considered ‘wealthy’ and can afford it, it is certainly worth making use of tax-efficient investment vehicles, such as Isas, pensions, venture capital trusts and enterprise investment schemes, particularly as their relative value could be set to increase if further tax measures are passed.”

However Hayley North, chartered financial planner at Rose & North, warned against basing investment strategies on election results.

Ms North said: “We believe that a well-structured and adequately diversified portfolio of investments designed to serve the clients needs should try to ignore, as much as possible, unpredictable macro exogenous outcomes.

"It is not an advisers' skill set to predict political outcomes.  Politics is fluid and investment positioning around political outcomes isn't prudent for our clients.”