- Home » Expat News » FCA warns UCIS holds too many risks for most investor
FCA warns UCIS holds too many risks for most investor
| Published: | 22 Oct at 6 PM |
Want to get involved?
Become a Featured Expat and take our interview.
Become a Local Expert and contribute articles.
Get in touch today!
Become a Local Expert and contribute articles.
Get in touch today!
The UK’s Financial Conduct Agency (FCA) is warning retirement savers that unregulated collective investment schemes (UCIS) are considered too risky for the vast majority of investors.
The FCA is backing up its warning by conducting an investigation into the marketing of UCIS in order to weigh up the scheme’s pros and cons. At the same time, specialist financial lawyers are warning that, unless a due diligence team examines the contract’s small print very carefully, UCIS investments are foolhardy.
SIPPS investors are at high risk, according to lawyers, as most do not have the expertise to spot the danger signs and may find themselves dealing with unprincipled FAs, particularly in overseas locations. Gareth Fatchett at Regulatory Legal says his firm is acting for investors in Sustainable Agro Energy, Harlequin Properties and Arck, and warns that the risk element of UCIS products is even higher at present, adding that he's amazed that peole invest in such schemes.
The warnings come as investigations into at least two UCIS schemes are ongoing at the UK’s Serious Fraud Office. According to Fatchett, investors should attempt to analyse the short term gains offered against the long-term risks, with the comparison speaking volumes about the safety of the vast majority of the financial instruments.
The DCA enquiry will cover the resources claimed by SIPPS operators, the quality of the investments and the operational controls and procedures of SIPPS companies. Providers will face penalties if their services are discovered not to be in the best interests of their customers, and all registered SIPPS providers have now been sent a strongly-worded email warning of the review.
The FCA is backing up its warning by conducting an investigation into the marketing of UCIS in order to weigh up the scheme’s pros and cons. At the same time, specialist financial lawyers are warning that, unless a due diligence team examines the contract’s small print very carefully, UCIS investments are foolhardy.
SIPPS investors are at high risk, according to lawyers, as most do not have the expertise to spot the danger signs and may find themselves dealing with unprincipled FAs, particularly in overseas locations. Gareth Fatchett at Regulatory Legal says his firm is acting for investors in Sustainable Agro Energy, Harlequin Properties and Arck, and warns that the risk element of UCIS products is even higher at present, adding that he's amazed that peole invest in such schemes.
The warnings come as investigations into at least two UCIS schemes are ongoing at the UK’s Serious Fraud Office. According to Fatchett, investors should attempt to analyse the short term gains offered against the long-term risks, with the comparison speaking volumes about the safety of the vast majority of the financial instruments.
The DCA enquiry will cover the resources claimed by SIPPS operators, the quality of the investments and the operational controls and procedures of SIPPS companies. Providers will face penalties if their services are discovered not to be in the best interests of their customers, and all registered SIPPS providers have now been sent a strongly-worded email warning of the review.
Comments » No published comments just yet for this article...
Feel free to have your say on this item. Go on... be the first!
