Frequently Asked Questions Common Investor Queries

Since 2014, the Financial Conduct Authority has restricted ‘retail’ investors from investing in many investments, including unregulated bonds and loan notes.

If you are investing as an individual, then you will need to qualify as either a High Net Worth or Sophisticated investor as defined by the Government. You can currently self-certify as either of these investor types, but we reserve the right to require third-party verification of your status should we have any doubts about your status. 

It is in place to protect an individual’s capacity for loss if any investment were to fail.

An investor does not pay any fees at any time.

Fees may be charged by any independent regulated advisor that you appoint, or by third party stockbrokers or administrators if you invest via a pension or ISA

In virtually all investments you make, your capital is at risk. It includes include shares, loans, property and other assets like cars, wine, art along with even securities issued by Governments.

We seek to minimise risk through:

• A solid business plan, proven experience of the Directors, a defined exit strategy and stringent due diligence.
• Security in place
• Clear exit strategy
• Returns to investors that significantly outweigh the risk profile

A key point to realise is that you will lose capital every year if you invest in “safe” savings at (say) 1% pa return, but then inflation is 3%. So apparently low-risk investment choices can result in 100% surety of capital reduction year after year!

Maybe. It depends on a) the kind of pension, b) the pension provider and c) the status of the investment. If you have a SSAS pension and you are the administrator, then most likely ‘yes’ to all our investments. If you have a SIPP, then it may or may not be possible.

If you would like to invest through your pension, then it is worth a discussion with your Avantis broker. While we do not provide advice, we can share helpful information in respect of the possibilities.

The reduction in the capacity of traditional bank lending has led to difficulties for businesses looking to complete funding for their projects. The reasons they are willing to pay a significantly above market rate include:

• They need the funds fast to take advantage of market opportunities
• They have raised most of the funding required, but need a final piece to complete their capital stack
• A new opportunity has arisen, but existing lenders won’t provide finance
• They have exhausted traditional finance routes
• Banks are not lending to their sector
• They have security to offer but not in a form acceptable to mainstream lenders
• Cash-flow timing means they have identified a short-term requirement to see them through
• Compliance with mainstream bank lending can be unduly onerous, and our approach is more pragmatic

The high returns offered to investors can easily be covered and leave a decent profit for the investment provider, as the business analysis demonstrates. It would have flagged in our due-diligence process and would not been approved for client consideration.

Each investment has a defined time-scale, which may sometimes be varied by the investment provider. You should assume that you are ‘locked in’ for the period of investment, which we try to keep as short as possible. 12 – 36 months is the typical time-scales that are short in investment terms.

Do not assume that you can cash in your investment early, although in some investments there may be special provisions for early withdrawal.

One of the key reasons that the investment provider can offer such substantial profits is that in return, you commit to leaving your funds with them for the defined period.

We regard detailed Due-Diligence checks as critical in the decision of making an investment available to our clients. We update the report in the event of any material change, review each investment every 12 months and publish changes if there are any.

In general, our due-diligence process covers the following areas: Sector economic assessment, Business Model, Financials, Security, Legal framework, Directors, Company history & track record, Previous experience and more.

Our research can only examine what exists at the time, while it may reduce the chance of adverse outcomes and provide investors with information to make a balanced judgement, nothing can guarantee that trading difficulties won’t arise in the future.

Every investor is encouraged to do their due diligence on every investment decision. We make our research available to achieve maximum transparency in our choice to bring the scrutinised investments to our clients.

We receive a marketing allowance for bringing investment to the project or business. This is paid by the investment provider and is how they get exposure to the investment market.

Our work includes preparing and marketing the investment offer, completing Due Diligence, usually being responsible for AML (Anti-money laundering) and PEP (Politically exposed person) checks, certification as High Net Worth or Sophisticated investor, completion of the investment process, and distribution of investment updates for the life of the investment.

We are a cost-effective alternative to the investment provider setting up and running a complete marketing, administration, and client support team, currently provided by Avantis Wealth.

Neither as a business or individually. We are not regulated by the FCA and it would be illegal for us to do so. We only work with wealthy, self-determined investors who fit the criteria of being High Net Worth or Sophisticated Investors.

We require our clients to complete their own due diligence and make up their mind up about whether to invest or not. Clients should understand that they invest at their own risk and that the decision to invest is theirs alone.

We strongly recommend that you take the advice from a professional, regulated advisor if you are in any doubt about your decision. Furthermore, we strongly recommend that you do not invest funds that you cannot afford to lose.

No. There are many assets and investments which are not subject to Government regulation the FCA (Financial Conduct Authority), or indeed at all. The long list includes residential and commercial property (including the property you buy to live in!), Commodities such as gold, diamonds, alternative investments such as art, wine, vintage cars and certain financial investments such as loan notes and bonds which are not listed on a stock exchange.

As the investments are not regulated, then there is no benefit being so – considerable cost and extensive paperwork and reporting, add considerably to our overheads which would have to be recouped through charging fees.

We are simply a broker, introducing you to potential investments that might be interesting. You are always most welcome and indeed recommended, to take regulated professional advice prior to any investment decision, unless you are fully confident in your ability and investment experience.