Wednesday, 18 November 2015

Regulated Guaranteed Investments - What Are The Risks & Differences with Unregulated Investments?

It's apparent from posts on various discussion boards that there is a big gap in understanding the differences between regulated and unregulated investments and the protection they offer.

A regulated investment has to comply with strict rules from the FCA about what can and can't be said as well as having to include the standard disclaimers:
"Past performance is not a guide to the future" and "Your capital is at risk"

A regulated investment is also protected by FSCS so if the company selling the investment goes bust you are protected up to £50,000. This doesn't cover you if the investment performs badly.

Unregulated investments aren't burdened by such requirements and can make pretty much any claim. I've seen a very useful statement saying that "marketing for unregulated investments should be considered fake unless verified by a professional". I'd add that it should be verified by a professional employed by you. It's not much use relying on the statements of someone commissioned by the seller of the investment.

Some examples of unregulated investments are Airport Parking spaces, Storage Pods, Shipping containers and things like Carbon Credits and Rare Earth metals. All of these types of investment seem to attract their share of scammers who are purely out to rip off consumers.

An unregulated investment can make claims of guaranteed returns and future values but these do not have to have any basis in reality and guarantees are generally worthless as they rely on the company honouring them. One example of storage pods having guaranteed values but when the time came to sell the value was no longer available.

Storage pods sold for £30,000 each were being auctioned for £10,000 for a block of 9. That's a drop of £30,000 to £1,100 per pod, a loss of nearly £29,000 per pod or capital loss of over 95%.

UNREGULATED INVESTMENTS are hugely RISKY. Unless you fully know what you are buying and understand that you could lose your entire investment then do not invest. They are NOT suitable for putting your entire pension pot into and unregulatedGuaranteed Income Investment Pension Options are generally fake.

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