Quarter of UK investors stuck with illiquid investments

A quarter of UK investors currently hold investments they want to liquidate but are unable to as a result of unexpected fees, research from Experience Invest has revealed.

Furthermore, the findings highlighted that a third of investors have tried to exit an investment in the past five years but have decided not to upon learning they would incur unexpected fees.

Nearly two thirds (64 per cent) of the investors surveyed argued investment providers need to provide more education surrounding exit strategies, while 80 per cent called for firms to be more transparent with investors in explaining how and when they can exit an investment.

However, the data from Experience Invest highlighted that 80 per cent of UK investors carefully consider potential exit strategies before making any investment. Also, almost three quarters (72 per cent) say the ease of liquidating an investment is a key factor when they decide which asset classes to back, with 62 per cent saying they consider property as an attractive option for this reason.

Commenting, Experience Invest business development and acquisitions director Jerald Solis said: “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.

“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. Indeed, our research underlines how 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.”

Solis argued that, in light of this issue, it is “easy to understand” why assets such as property – which can be sold in a relatively straightforward manner, on an open market – remain popular with investors.

“Nevertheless, all investments should be made with a clear exit strategy in mind; doing so will enable the investor to manage his or her portfolio effectively,” he concluded.

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