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UK investors draw a blank on investment exit strategies

Exit-Man-Door-Depart-Leave-700.jpgA quarter of investors in the UK are unsure of how to liquidate the  investments they hold, figure show.

Property investment company Experience Invest found 32 per cent of respondents to a survey said they have tried to exit an investment, but ultimately did not after learning they would incur unexpected fees for doing so.

The poll asked UK investors about challenges they face when it comes to exiting an investment, finding nearly two thirds (64 per cent) believe investment providers need to provide more education around exit strategies.

Eighty per cent also said they want firms to be more transparent with investors in explaining how and when they can exit an investment.

Almost three quarters (72 per cent) said the ease of liquidating an investment is what initially draws them toward particular asset classes.

Experience Invest business development and acquisitions director Jerald Solis says: “It’s reassuring to see that the vast majority of investors in the UK are thinking carefully about their exit strategies before making an investment. But there are still many who don’t.

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“It is surprisingly common to hear of investors who, several years into an investment, are unsure of exactly how they can get their money back out.

“Many investors get stuck with assets they cannot liquidate – both they and the investment providers must be diligent in ensuring potential exit strategies are clearly explained.”

The survey shows property remains a popular asset in the UK due to being relatively straightforward to offload.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Thanks, good article.
    Perhaps the answer is that the FCA, as it has in so many other areas, mandates providers to offer better clarity on how to exit an investment.
    Where one typically mentions “How to Invest” it should also mention “How to Liquidate”.

  2. Not sure why people are agreeing with this. The vast majority of OEICs (Woodford and others being notable exceptions) and ISAs can be exited without penalty if unit linked. Old fashioned contracts and those with old fashioned charging structures designed to pay higher allocation at the expense of exit charges are an exception, along with the St James Place lock in charging structures. I do agree that people do need to know how to exit as well as enter investments, but proper advisers should make this clear as part of the advice process. If they don’t then hopefully customers will complain about them.

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