Some of the largest platforms have been contacted by the Financial Conduct Authority (FCA) following the suspension of M&G’s Property Portfolio fund and asked to provide details on the number of investors affected by the closure.
The FCA said it contacted platforms to ask for the number of clients who would be affected by the closure of the fund. It followed the news that M&G's Property Portfolio fund had been suspended after "unusually high and sustained outflows", with the fund's assets under management (AUM) falling by roughly £1bn since the start of the year.
A source, who preferred not to be named, told PA they imagined the platforms contacted included "the top dozen or so" because larger platforms are supervised directly by the regulator by virtue of their size.
The suspension of the M&G fund, which was decided upon by the fund's authorised corporate director M&G Securities in agreement with the fund's depositary and the FCA, will be monitored daily and reviewed every 28 days.
Langcat consulting director Mike Barrett said the investors involved should be thought of first, and that "for a property fund, even more than Woodford, you would hope that it is a fairly small percentage of your overall portfolio."
Barrett said investors appeared to be using the same sort of model portfolios and going into the same kind of funds, adding: "There's a lot of concentration of flows there and I'm not sure that helps particularly for funds which have problems with liquidity."
The platform expert said advisers who have advised clients to put a significant amount of money in a property fund are setting them up for a "big fall."
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