Guidance

EVERY INVESTMENT CARRIES RISK

By law we are not able to offer advice on individual financial investments, nor can we recommend financial advisers. We have produced the following guidance to help Islanders protect themselves from investment mis-selling and poor advice.

By observing these guidelines, local investors should be better armed to make more informed choices with their money and investments.

Read on for our key guidance points.

Avoid “putting all your eggs in one basket” – splitting your money between a few investments could help to reduce potential losses

Be wary of promises of a high rate of return with apparently little or no risk. All investments carry some degree of risk. Greater returns mean greater risk

Always research the person and the company selling you the investment, even if you know them personally and believe them to be trustworthy. You may have developed a good relationship but regard this as a business transaction and always ask yourself whether they are acting in your best interests – not their own

Are the adviser, the company and the product regulated? Although this does not always guarantee consumer protection

Licensed advisers are required to fully assess your attitude to risk, capacity for loss and ensure solutions are suitable. Ask for evidence of these key points

Make sure you fully understand the proposed investment and how much you could potentially lose. Only invest if you are completely informed, know the risks and how returns are generated

Beware of putting money into "can't miss", "once in a lifetime" and "guaranteed return" opportunities or investments in which your adviser claims to have already invested their own money

Is there a choice of investments on offer or is your adviser just proposing a single product? And be wary if you are you being invited to cash in an existing investment such as your pension

Consider what compensation may or may not be available should the investment fail or the company selling it become insolvent. Jersey does not have an investor compensation scheme. What would a total loss scenario mean for you?

Never be rushed; always be aware of pushy sales tactics. A professional adviser should never pressure you into making an immediate decision. If you are not given enough time, steer clear

Do not sign any investment/product agreements that you do not fully understand. Always read the small print and any supplementary documentation. There may be hidden terms and conditions. Take the paperwork away and read it in your own time. If you don’t understand something ask for help

You are the client - ask questions and make sure you get the answers so you are fully comfortable with your decision; how long will you be tied in for? Could you lose all your money?

Reflect, research and take advice. Consider talking to friends, family or a third party expert before you proceed. Perhaps have someone present when you meet with your adviser, particularly if you do not consider yourself an experienced investor

Do not be fooled by cleverly worded marketing material on websites and in brochures – it could be misleading

When considering ‘alternative investments’ (e.g. wine, coins, stamps) rather than traditional financial services products, always do your research and understand the associated risks. These products, and usually the companies that sell or advise on them, are not regulated by the JFSC

If you do invest, make sure you monitor the investment and ask for regular updates

Remember it’s your money. Never be afraid or embarrassed to ask questions or complain.

It’s an old adage but if it sounds too good to be true, then it usually is.

YOU CAN CHECK WHETHER A FIRM OR ADVISOR IS LICENSED HERE


For more information and guidance from UK national organisations: