‘Election-proof’ assets in case of UK general election
The threat of a general election in the UK means investors with UK assets should act to ‘election-proof’ their portfolios from short-term volatility, according to deVere Group.
The financial advisory organisation chief executive, Nigel Green, said a general election and possible second Brexit referendum were becoming more likely.
Speaking in the House of Commons this week, UK Prime Minister Boris Johnson ‘paused’ his Brexit bill after MPs rejected his plan to fast-track it through Parliament and said he would push for a general election if the EU agreed to delay Brexit until January.
The last UK general election was held in June 2017, one year after the first EU referendum, and was won by the Conservative Party. However, Johnson cannot simply announce one, it would first have to be voted on by MPs and opposition MPs previously rejected the idea until it was ruled out that Britain would not have a ‘no-deal’ Brexit on 31 October.
Green said the mood in the UK was ‘extremely volatile’ as a result of Brexit which could lead to a disruptive election.
“The electorate is extremely volatile and there’s never been a more uncertain general election. Small shifts will move the needle considerably,” he said.
“With an uncertain UK general election inevitably on the way in the near future, if you are serious about protecting your money and assets you need to take action now.”
He suggested investors should remain invested, take advantage of any upswings created and be diversified across asset classes, sectors, currencies and regions.
The possible volatility of a general election was caused by the threat of a Labour government with Labour leader Jeremy Corbyn favouring anti-business, high tax and low profit policies which would likely spook financial markets and put pressure on financial assets.
Alternatively, it could result in a hung parliament where neither party has a majority.
AUTHOR
Laura Dew
Recommended for you
The month of April enjoyed four back-to-back weeks of growth in financial adviser numbers, with this past week seeing a net rise of five.
ASIC has permanently banned a former Perth adviser after he made “materially misleading” statements to induce investors.
The Financial Services and Credit Panel has made a written order to a relevant provider after it gave advice regarding non-concessional contributions.
With the election taking place on Saturday (3 May), Adviser Ratings examines how the two major parties could shape the advice industry in the future.
