Investment mis-selling

Investment mis-selling is becoming a growing issue in Jersey. There have been a number of cases where Islanders have lost some or all of their life savings after investing in high risk products. These investors seemingly made these investments without understanding or being appropriately advised about the potential risk of losing their money.

Unlicensed advisers and scammers are an increasing concern for Islanders, 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.

Before you make an investment

• You should diversify your investments to help spread the investment risks. Putting all your money in one investment is highly risky
• Be wary of a high rate of return promise with little or no risk. All investments carry some degree of risk
• Research the person and company selling you the investment, even if you know them personally and believe them to be trustworthy. You may have developed a good relationship with them, but should treat this as a business transaction. Always ask yourself whether they are acting in your best interests – not their own
• Check that the adviser, company and the product are related - although this doesn't always guarantee consumer protection. View our regulated entities page to check if the company is legitimate.

Choosing an investment

• 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
• Be cautious about 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
• Ask for a choice of investments rather than just a single product. Be wary if you are asked 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 becomes insolvent. Jersey does not have an investor compensation scheme. What would a total loss scenario mean for you?
• 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.

Signing up to an investment

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

What to do if you have concerns about an investment

If you have concerns about your investments or the advice you have been given, in the first instance you should contact the provider that sold you the product(s).

If you are dissatisfied with their response, then you may wish to contact the Channel Islands Financial Ombudsman
www.ci-fo.org / (01534) 748610 / [email protected]

If you have concerns about the conduct of an adviser or a company, you can contact our Investment Business team on (01534) 822100 or by email.

Raising awareness

Reducing the risk to local investors and protecting Jersey’s reputation are two of our key responsibilities. It's impossible for us to prevent every single case of investment mis-selling, however, if a local adviser or company is found to be acting inappropriately, we will deal with them accordingly.

Watch the video below from our 'your own best interests' campaign, which was jointly funded by the JFSC and Personal Finance Society.