Industry commentators have warned the majority of independent financial advisers (IFAs) and wealth managers have failed to hedge their foreign currency holdings into sterling, meaning a rally in the pound could wipe out returns. In a further warning, they said unknowing investors in safe-haven assets such as global bond funds will be hardest hit by a sterling rally, as bonds are most affected by currency movements. In 2016,...
A sterling rally could hit UK investors ' heads because most independent financial advisers and wealth managers have not hedged foreign investment holdings into sterling . Investors in foreign assets profited when sterling fell sharply after the Brexit crisis in 2016 . However , the opposite will happen after the UK leaves the EU , regardless of how , said Christopher Peel , the chairman of Tavistock Wealth . Peter ##croft , a senior investment manager at 7IM , explained that government and corporate assets are systematically hedged but equities are not . Peel said the Financial Conduct Authority is aware of the issue but lacks the power to address it .