Advisers need to gain working knowledge of alternative investments

Advisers will need to gain a working knowledge of some of the alternative asset classes and vehicles available in the industry if they wish to remain independent. Our guide to alternative investments, comments that the Retail Distribution Review (RDR) policy statement, which was published in March 2010, states that any adviser firm that wishes to remain independent, will have to “make recommendations based on a comprehensive and fair analysis of the relevant market and to provide unbiased, unrestricted advice”.

Although it is possible for firms to decide that certain products would not be suitable for their clients, this cannot be used as a get-out clause as the policy goes on to say that the firm is expected to demonstrate clearly why a particular market or product is not suitable.

Even when investment is outsourced by the adviser, perhaps to a multi-manager or discretionary manager, the regulators will still expect advisers to be in a position to make a judgement on whether the investments used are suitable for their client.

Our free alternative investments guide will provide you with a sound knowledge of a range of asset classes and investment vehicles, including:

• Property
• Private equity
• Venture capital trusts
• Commodities
• Structured products
• Investment trusts
• Hedge fund techniques.