Mini bonds - Does Asset secured Mean they are safe?
The collapse of yet another company offering unsecured mini bonds has highlighted once more the misleading phrases used around their promotion that have ensnared unwary savers into thinking they were buying something that they weren't.
As the above advert for London Capital & Finance shows the "full asset backed security" was given high prominence to investors alongside their claim of 100% track record. If you believed that this claim of asset backing meant that your investment was secure then you were misled.
As was shown with the company Secured Energy Bonds the words "asset backed" have absolutely no meaning in reality when there are no assets to be found to repay the bondholders.
These are all unregulated investments so the "asset backed" claim doesn't mean that you are guaranteed to get your money back. Interestingly despite a company called Secure Energy bonds going bust in 2015 there is now another company using exactly the same wording to advertise. The words "fully secured" also mean nothing when the time comes to get your capital back.
As the warning near the bottom of the advert say "capital at risk" the important thing to remember is that an unsecured investment in bonds like this is NOT FSCS protected and you can lose 100% of your money.
The terms "fully secured" and "asset backed" have no meaning in law for unregulated investments and do not imply that your investment is safe or guaranteed.
If you want to know if you should invest in unregulated investments such as these then consider if you are prepared to lose your entire money that you invest in the company. If you want an investment that is FSCS protected then you may want to look at bank accounts or regulated financial companies offering S&S ISAs with managed funds.
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| Mini bonds - Does Asset secured Mean they are safe |
As was shown with the company Secured Energy Bonds the words "asset backed" have absolutely no meaning in reality when there are no assets to be found to repay the bondholders.
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| Secured energy bonds |
As the warning near the bottom of the advert say "capital at risk" the important thing to remember is that an unsecured investment in bonds like this is NOT FSCS protected and you can lose 100% of your money.
The terms "fully secured" and "asset backed" have no meaning in law for unregulated investments and do not imply that your investment is safe or guaranteed.
If you want to know if you should invest in unregulated investments such as these then consider if you are prepared to lose your entire money that you invest in the company. If you want an investment that is FSCS protected then you may want to look at bank accounts or regulated financial companies offering S&S ISAs with managed funds.
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