I guess like me, you regularly receive emails asking for your help to “liberate” millions of dollars, or are surprised to learn that you have won a lottery – that you never entered. They are quickly deleted and sent to the trash can – no matter how tempting the offer is!
Sadly out of the hundreds of thousands of these types of emails sent out by these scammers, a small number of people respond and later find out that rather being the beneficiary of a financial windfall, they have lost money having been conned into paying money out to cover administration fees, bribes, etc. Other frauds cover investing in “assets” of dubious worth, if they exist at all. Such scams offer “investments” in fine wines, scotch whisky, land for future development, films, rare minerals, bitcoins and so forth. Hopefully none of you have fallen for these frauds, however some of the frauds are very convincing, and have very professional websites. Some will even post you glossy brochures and pamphlets. (Printing is cheap compared with the thousands of pounds fleeced from the naïve investor.)
I would therefore encourage you to be more vigilant in respect to the investment offers that could come your way, as well as raising the awareness of this amongst your family, friends and colleagues in respect to this type of fraud.
The problem we all face in this low interest rate environment is that we are all looking to enhance the returns we obtain from our investments. Given that bank interest rates are currently negligible, more and more people are seeking investments which can offer better returns. Whilst many people are starting to look at investing in the stockmarket, sadly many are “enchanted” at the returns “promised” by these so called investments.
As a traditional stockbroker CSS will only advise you on traditional stock market traded investments. At CSS we encourage our brokers to explore with clients, their willingness to take risks with their money. Some clients are very risk adverse and we find ourselves questioning with potential clients whether trading in the stock market is something they are comfortable with. Other clients are looking to achieve abnormally high returns from their money and we have to challenge them whether in seeking a high return they are also comfortable with the enhanced risk to their money together with their financial capacity to bear the loss should the investment strategy not work out. Whilst we do all this under the watchful eye of the UK regulatory system, we also hear, too often, the extremely sad stories of people who have lost their savings in the pursuit of high returns often promised by unregulated firms or by simply fraudulent schemes.
So how can you protect yourself? Firstly, don’t be rushed into making an investment. Whilst the stock market is constantly fluctuating there will always be another investment. Similarly, if the returns “promised” sound too good to be true – they usually are. Don’t invest in things you don’t understand. It is one thing for a sophisticated investor to invest in a film project or perhaps a wine connoisseur to invest via a reputable wine merchant – but if you don’t understand the investment or don’t know about the workings of the industry and its financing, then I would advise staying away from this type of investing. Always deal with firms who are registered with the Financial Conduct Authority, (the FCA). In general all firms which want to help you invest your money must be registered with them and comply with their rules and regulations. But do check that the firm operate from an office in the UK – and can you visit it? If they don’t want you to visit their offices why not? Finally, it is your money, your savings, if you feel you are being pressured to invest, just say “no”. No reputable firm will pressurise you to invest. By walking away whilst you may have lost an amazing investment opportunity – you will still have hold of your money. For many people having spent the majority of their working lives accumulating that financial worth – and all too often it “disappears” once the money has been transferred into a fraudulent scheme.
There is also a wealth of information on the internet all aimed at helping you avoid being a victim of a financial crime. Check out the information on:
- the Action Fraud website (actionfraud.police.uk) – run by the City of London Police,
- the Financial Conduct Authority also has a wealth of information and is running a campaign called Scam Aware (scamsmart.fca.org.uk)or even
- the scams section on Martin Lewis’s the Money Saving Expert website, http://www.moneysavingexpert.com/shopping/stop-scams
- also check out the resources on both the Citizens Advice and Trading Standards websites.
All these resources can help you educate yourself on the types and variety of frauds that are out there.
If you have been a victim make sure you report it via the Action Fraud website or if you prefer to call someone directly, Action Fraud can be contacted directly on 0300 123 2040.
Whilst I hope this piece doesn’t scare you off from investing, after all the FCA does regulate over 25,000 firms in the financial services sector, I hope that it has made you a bit more circumspect about who you invest with.
To this end by all means carry out your own due diligence on us. You will find the firm list online on the FCA Financial Services Register under either our name or registration number 483868, or speak with one of our Account Executives on 020 7153 1120, and arrange to come into the office and see our operation for yourself.
Our firm, and our founding partners aim, has always been to enhance the financial wellbeing of our clients, be that by advising them on their investments, or educating them on the markets by producing our guides or via the award winning newsletters. Whilst we can’t offer you any guarantees in respect to our advice, you can be assured that we have all our clients’ best interests at heart, and are always happy to guide you through the investment process.
If you would like to learn more about how CSS can help you with your Stockmarket Investments then you can request a call back here.