LTAFs have important role to play but investor understanding vital

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, comments on the FCA’s policy statement on new authorised fund regime for investing in illiquid assets, suggesting LTAFs have important role but investor understanding vital.

Helen Morrissey says:

“Investing in illiquid assets offers a huge opportunity for investors to boost their pension pots by investing in areas such as private equity and infrastructure. However, for this to succeed investors need to be very clear on what they are invested in, what they are paying and what their rights are when it comes to issues such as redemptions and dealing – getting this right is vital to building confidence in LTAFs and making them a mainstream part of the defined contribution landscape in the future.

“The question of widening the scope of LTAFs to other retail investors was also highlighted and we welcome the FCA’s decision to review this in 2022 – it is important to take the time to get this right. We believe there would be significant interest among certain individual investors but again it is important they understand exactly what it is they are buying and the role it plays in their overall investment planning.”

Kindly shared by Hargreaves Lansdown

Main photo courtesy of Pixabay