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Advisers face deluge of marketing from potentially unregulated investments

Yvonne Goodwin

Advisers are continuing to receive emails from fund groups and prop­erty managers guaranteeing unreal­istic returns on investments with little proof behind them.

Yvonne Goodwin Wealth Management managing director Yvonne Goodwin says the advertising of unrealistic offerings has increased since the end of 2017 to at least one questionable email every day.

She says: “The risk is that the unsuspecting public will see the numbers and not see the risk that they could lose all their money and that such investments are not regulated and there is no protection from the Financial Services Compensation Scheme.”

One example is a property investment in a Heritage-listed textile mill conversion. In a distribution mail-out to advisers, the investment promises ‘assured’ returns of 10.5 per cent for the first two years for a minimum investment of £15,000, and
expected returns of 12.5 per cent over 10 years.

Another offering claims that 600 businesses collectively realised more than £700m in additional revenue by investing in a programme named Quantum Leap from a marketing company called Marketing Wizdom. The offer says it is “physically impossible” for investors to lose out.

Another offer, seen by Money Marketing, relates to the Laurence Place New Homes Development in Manchester. It alludes to the Gov­ernment investing £7bn in Manchester’s infrastructure, and says there will be a 6.6 per cent return and no rental restrictions, as well as returns for investors 63 per cent higher than they could get in London.

Select Property Group, the firm behind the development, is not associated or identified within the offer distributed to advisers. Money Marketing was unable to contact Sel­ect Property Group for comment.

None of these schemes allude to being, or expressly say they are, regulated.
Investment Quorum chief executive Lee Robertson says, at his firm, internal email systems designed to filter out potentially false offers have led to a reduction in communication.

The FSCS has paid out £26bn in compensation to consumers caught up in false investment schemes since it began operating in 2001.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Nicholas Pleasure 1st February 2018 at 1:18 pm

    It’s reassuring to know that the trusty FCA is on top of this and is sorting it.

    …oh, hang on…

  2. And what about those VCT and EIS that don’t fall under the FSCS and are in fact UCITS?

  3. I was reading an article the other day asking how short a suitability report can be.

    Sometimes I think it can be reduced to just two words:

    Steer clear.

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