Warning over gap in pension knowledge
A lack of knowledge among financial advisers about alternative investments is potentially risking a poorer retirement for their clients, a property expert has warned.
Paul Smith, a former managing director of Allied Distillers in Scotland who now runs courses and seminars across the UK for property investors, said most advisers tend to direct their clients towards pension products such as annuities.
Smith, who heads Touchstone
Education, said that few people are made aware that it is possible to invest in other asset classes such as precious metals and commercial property.
Smith cited his own decision to invest part of his occupational pension, projected to provide an annual payment of £9,000 when he retired at 60, in a high street shop unit whose capital value has since risen significantly as well as providing his pension with an annual rental income of £25,000.
At 55 he is now able to draw this income without destroying the value of his pension fund.
“Most financial advisors have no expertise or experience with using your pension to invest in commercial property. If they do not have this experience, they will not be able to help you truly compare this option,” said Smith.
“If you want to evaluate further options, ensure your pension advisor has experience of using pension funds to buy other assets, such as commercial property,” he added.
Smith and his wife Aniko have built up a property portfolio worth over £8 million.