Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.
What are the key risks?
- If a business that you invest in through this fund fails, you are likely to lose 100% of the money you invested in that business.
- Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker here.
- Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA regulated firm, FOS may be able to consider it. Learn more about FOS protection here.
- The fund(s) may invest in unlisted companies which are not liquid. As a result, the timeframe for returning funds are not guaranteed and, particularly where substantial withdrawals are requested, the process to realise investments could take much longer.
- Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well. A good rule of thumb is not to invest more than 10% of your money in high-risk investments.
- The percentage of the business that you own will decrease if the business issues more shares. This could mean that the value of your investment reduces, depending on how much the business grows. Most start-up businesses issue multiple rounds of shares.
- These new shares could have additional rights that your shares don’t have, such as the right to receive a fixed dividend, which could further reduce your chances of getting a return on your investment.
Important Information
The products shown on this link will place capital at risk and investors may not get back the full amount invested. Any tax relief referred to may be subject to change and will depend on the investor’s individual circumstances. Please note that any reference made to past performance or forecasted performance of these products is not a reliable indicator of future results.
MHA Wealth therefore recommends that investors seek specialist tax or financial advice before investing. This communication is for general information only and is not intended to be individual investment advice, or a recommendation, and should not be construed as such.
If you are interested in learning more about how to protect yourself, visit the FCA’s website here.
