Common risk features
High-risk investments may involve new markets, complex structures, thin liquidity, uncertain valuations, concentration in a small number of assets or limited regulatory coverage.
Total loss
You may lose some or all of the money committed. Losses can happen quickly and may be difficult to recover.
Liquidity risk
You may not be able to sell when you want, or you may only be able to sell at a lower price than expected.
Complexity
Complex products can be hard to understand, value or compare. If the explanation is unclear, pause.
Limited protection
Some activities or assets may sit outside compensation or complaint routes that apply to regulated services.
Questions worth asking
- Who is the firm and can it be verified independently?
- What exactly would I own or be exposed to?
- How could I lose money, and how much?
- What are all charges, spreads, exit fees and taxes?
- What happens if the provider fails?
Do not proceed because of pressure. Time pressure, secrecy, unrealistic claims or a request to move money quickly are warning signs.