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Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more
Risk Warning
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more
Risk Information
Estimated reading time: 2 min
The Financial Conduct Authority (FCA), which regulates financial services and markets in the UK, considers projects on the Collective to be high-risk investments due to potential for investment losses.
What are the key risks?
- You could lose all the money you invest
- If the project you invest in fails, you’re likely to lose 100% of the money you’ve invested.
- Advertised rates of return aren’t guaranteed. This is not a savings account. If the project you invest in does not generate profits, you could earn less money than expected. A higher advertised rate of return means a higher risk of losing your money. If it looks too good to be true, it probably is.
- While the Collective carries out due diligence on projects, we can’t guarantee the project will pay dividends and repay your investment. You should always do your own research before investing.
- You won’t be able to access your money for a set length of time
- You can’t sell your investment or get your money back before the end of the investment term.
- Dividends aren’t guaranteed and might not be paid regularly.
- You shouldn’t put all your eggs in one basket
- Putting all your money into a single company or type of investment is risky. You should consider spreading your money across different investments so that you’re less dependent on one doing well.
- A good rule of thumb is not to invest more than 10% of your money in high-risk investments.
- You are unlikely to be protected if something goes wrong
- You won’t be protected by the Financial Services Compensation Scheme (FSCS) if a project you invest in fails or performs worse than expected. See the FSCS investment protection checker for more info.
- You also won’t be protected by the Financial Ombudsman Service (FOS) if a project you invest in fails or performs worse than expected. However, if you have a complaint about the Collective, FOS may be able to consider it. Learn more about FOS protection.
Resources to learn more
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