JFSC MIS-SELLING OF INVESTMENTS CAMPAIGN

This campaign is a Jersey Financial Services Commission (JFSC) jointly funded initiative in association with the Personal Finance Society.

THE MIS-SELLING OF INVESTMENTS IS OFTEN HARD TO SPOT

Investment mis-selling is a growing issue in Jersey. In recent years there have been some cases where Islanders have lost some or all of their life savings after investing in high risk products.

These local investors did so seemingly without understanding or being appropriately advised of the potential dangers that they could lose their money.

Unlicensed advisers and scammers are an increasing concern in the Island, but in some instances, Jersey residents are making these high risk investments via licensed financial advisers. Often the professional is someone the investor knows and trusts.

While the majority of professional financial advisers give appropriate and suitable advice which can be relied upon, Islanders need to be aware of the risks associated with seeking higher returns.

WHAT IS SAID: http://bit.ly/2jnG8sk

ARE YOU LOOKING AFTER YOUR OWN BEST INTERESTS?

If you rely on financial advice to make investment decisions, is the advice that you are receiving appropriate, reliable and from a credible source

Your investment choices must be well-informed and about your wealth and the level of risk that you are prepared to take – investments can go down as well as up

You must ensure you fully understand the risks and rewards of the products on offer and your capacity for loss

You should diversify your investments to help spread the investment risks. Putting all your money in one investment is highly risky.

Reducing the risk to local investors and protecting Jersey’s reputation are key responsibilities for the Jersey Financial Services Commission (JFSC). It is impossible for us to prevent every single case of investment mis-selling that affects Islanders, whether the adviser is licensed or not. If, however, a local adviser or company is found to be acting inappropriately we will deal with them accordingly.

By raising awareness, we hope to encourage local investors to reflect carefully on whether an investment recommendation is actually in their best interests.

EVERY INVESTMENT CARRIES RISK: http://bit.ly/2iZGKkq

By law the [jfsc] are not able to offer advice on individual financial investments, nor can we recommend financial advisers.

The JFSC 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