The Financial Services Authority (FSA) is to investigate risks posed to retail investors by property funds.
The FSA aims to examine the various funds in the market and the quality of advice given. Speaking in London earlier this month, Howard Davies, chairman of the FSA, said: ‘While residential property investment is familiar to many householders…the financing structures of indirect commercial property investments can be complex and there is ample scope for retail investors to fail to understand the risks involved.’
However, Charles Pinder, director for Pinder Fry & Benjamin, which specialises in the limited partnerships market, said: ‘There is a certain amount of muddled thinking going on in lumping together things that are going on in the market.’
He continued: ‘The FSA is talking about everything from £5,000-£6,000 investments in Isas to someone with one of our products with a minimum investment of £40,000.’
As such, Pinder hoped the FSA would not treat the whole commercial property investment market with a broad brush, but accept it had a large spectrum of products that had different needs and client bases.