The implementation of the RDR “should be regarded as a game changer” for the investment industry, according to the World Gold Council, with the yellow metal set to benefit from the axing of commission for IFAs.
In it latest report ‘Gold as a strategic asset for UK investors’, the World Gold Council claims the current commission structure in the UK has narrowed the range of products recommended “which has been suboptimal for clients’ risk preferences and diversification prospects”.
The World Gold Council backs the new regulation, arguing that it will lead to a broader range of assets being recommended by advisers.
“Re-focusing the advisory community and the clients it serves on the importance of asset allocation decisions, not just product selection, sits at the heart of wealth protection.” it adds.
“Encouraging a broader approach to investing across a wider range of asset classes, based on an understanding of the long-term increase in cross correlations within global investment assets, will be a positive development.”
The World Gold Council claims the precious metal can serve a portfolio diversifier, preserver of wealth and a risk management vehicle.
“During most market crises over the last 25 years, gold has consistently increased portfolio gains or reduced its losses,” it reports.
Managing director of investment Marcus Grubb, says: “These extremely challenging times mean it’s impossible to quantify the risks for UK investors. They are facing an unprecedented combination of threats to their assets including extreme and unexpected market shocks that can trigger widespread value destruction.
“As UK investors reduce allocations to traditional investments such as equities and bonds and increasingly dash to cash, they face a double whammy, with the potential for stagnation of capital due to the lack of returns from cash and the increased possibility of inflation as a result of ongoing monetary stimulation.
“In this context, an urgent reappraisal of how to protect and create wealth is required and our latest research reinforces gold’s credentials as a core portfolio asset which reduces losses and preserves wealth.”