Why it pays to diversify your investments beyond property
The original version of this article appeared in The Telegraph on 30 May, 2025.
In the UK, people like to invest in what they can see – usually bricks and mortar – and judging by the property market over the last couple of decades, it’s clear why. “A whole generation of people have put money in their own homes, in rental properties, and by and large that’s turned out well – prices have risen, properties earn an income and people feel good about it,” says Matt Conradi, deputy chief executive of Netwealth. “In the UK, we tend not to see property as a risk.”
But when a new phase of life beckons, tax rules evolve and interest rates rise, having so much of your money in property can lose its appeal. “If you are beginning to think about a stable income in retirement, gifting some wealth to the next generation, drawing down on capital, then exposure to just one asset class – UK residential property – doesn’t give you much flexibility. All your eggs are in one basket,” he explains. Nor can you easily take out a little cash – as Matt puts it, “you can’t just sell a bathroom”.
At this stage, it makes sense to diversify. “Not only through different asset classes such as stocks and bonds but also diversification in its broadest sense,” he says. “That means flexibility in how your money is packaged, how and when you can use it and how much you need to meet life goals. A fixed rental income can take you over tax thresholds and doesn’t give much room for manoeuvre.”
With a spread of assets, individuals can take advantage of market price fluctuations and tax rules to withdraw cash more efficiently. “You don’t want to take money out when the market is 20 per cent down – it’s much harder to recover. So you diversify to minimise the risk.”
Property can also be inconvenient, especially for owners on the brink of lifestyle changes. “They might be poised to travel – they don’t want someone calling at 7pm to say the boiler is broken. They don’t want the hassle,” Matt says. That’s where the Netwealth team comes in – helping clients understand how to spread risk and plan around key milestones, from paying off a mortgage to gifting wealth or fixing a date for retirement.
Understanding how to balance risks can help you achieve your goals more easily.
Using a blend of expert advice, innovative technology that shows exactly where money is invested, along with tools to model future outcomes, Netwealth supports clients at every stage. The firm also stands out for its low fees – often as low as 0.35 per cent – thanks to its use of low-cost passive funds and efficient digital tools.
They’ll also help clients make the most of Isas and pensions, and adapt to changing legislation, such as the proposed changes to inheritance tax changes that are due in 2027. “Although you should never take any decision for tax reasons alone. It must fit with your goals,” he says.
“Expert advice and investment management combined with the latest technology – with much lower fees – help individuals to see how their own investments will fare in different scenarios and reveal trends to build long-term wealth preservation through excellent investment management,” Matt says.
Lower fees can save life-changing sums – tens of thousands of pounds over time, he adds. “Many people haven’t dealt with wealth managers before and might be sceptical about charges – ours are low and our technology offers transparency.”
After a lifetime of careful saving, some find it difficult to shift gears: to balance their portfolio, start spending or support their family. Personal finance projections (which you can use for free here) can offer clarity and confidence, showing whether goals are achievable or if wealth could be passed on more efficiently. Others may feel uncertain about market risk, which is why Netwealth offers flexible levels of support, including regular check-ins.
“We don’t say, ‘Come to us we'll be up 5 per cent when markets are down.’ Returns accrue over time and there will be ups and downs,” he explains. “We can’t predict markets or inflation – those are outside our control. But we focus on what we can manage: smart diversification, efficient tax use, paying lower fees and thoughtful planning. That will be how you get the benefit of better returns over time.”
Find out how we can help you make the right move for your money – and your future. Please get in touch.
Please note, the value of your investments can go down as well as up.
Netwealth offers advice restricted solely to our services. We do not consider the whole of the market, nor offer advice in relation to tax compliance, insurance products, or the transfer of defined benefit pensions.
