The FOS, which is setup to resolve disputes between consumers and firms in the financial services sector, has produced a list of the top five alternative investments that it has received complaints about or relating to in the last year.
Alternative investments are often based overseas, and are unregulated by the FCA (Financial Conduct Authority). This puts them in the HIGH-RISK category, meaning that they present so much risk that they are only suitable for certain people, usually those earning enough (£100k+ per year) and with sophisticated investor experience.
Many people are persuaded to invest in these high-risk investments via SIPP pensions, and some go on to lose their pensions as a result, not matter how legitimate the scheme appears.
TOP 5 alternative investments for complaints
In this type of scheme, an investor puts his or her money into a fund which buys however many trees. The trees are then sprayed with a chemical that encourages truffles to grow, which can then be sold for profit, at least in theory.
For some investors, hunting for sunken treasure isn’t an activity left to peg-legged pirates of the past, but an alternative investment in a treasure tracing and salvage firm.
Cambodian Jatropha Trees
This has been a big one in recent years – investing in companies set up to grow, harvest and develop bio-fuels. See Sustainable AgroEnergy for an example.
Burial Plot investments
Its true that real estate for the deceased can be invested in, but it remains high-risk because it is unregulated.
Much like wine investments, whiskey investments can go wrong if batches get ruined, and they remain unregulated investments.
Mis-sold pension investments
Of course, there are way more than just 5 types of alternative investments with complaints linked to them.