Financial & Legal News

Explaining the alternative in investments

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When we begin our search for investment opportunities we often hear about the benefits of alternative investments. Pearson Solicitors and Financial Advisers LLP take a look into the alternative world of investments and explain the meaning, the benefits, the pitfalls and what an IFA can do to help make your investment portfolio a little more alternative.​

Investments, or traditional investments are assigned to three categories, cash, stocks, and bonds. These types of investments can be accessed by most people, often from the main high-street banks and are subject to strict financial regulations. These factors tend to make traditional investments low risk, but also usually only provide a relatively low potential growth return.

Depending on the level of assets you have available for investment, a financial adviser could recommend diversifying your portfolio with a range of alternative investments. The more common of these includes; property, hedge funds, gold and other commodities, but even buying into these products can be risky. This risk needs to be balanced with higher potential returns and the riskier the investment, or more alternative the investment, often the higher the potential return. Alongside the higher returns, alternative investments are not directly influenced by traditional investments and the global economic crisis. Those with assets invested in alternatives have seen greater returns (in some cases).

Regulations are not as rigorous though, so ensure your IFA performs the appropriate checks. Fees tend to be higher as the more volatile nature of the market needs to be monitored closely by specialist fund managers and this means alternative investments often require a higher minimum investment and are often only accessible to high-net-worth individuals and institutional investors.

Alternative investments are becoming more popular. Regulation is always tightening, but as new opportunities appear, regulation is often playing catch-up, so it is always wise to instruct an IFA to take a more detailed looked into a specific investment opportunity.

If you are keen to discuss suitable alternative investment options such as commodities, precious metals, or property then Make an enquiryget in touch.

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.

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