What Safeguards are there for Investors in the UK?

Investments are likely to be among the most careful decisions we make in our lifetimes, especially when it comes to major outlays which are designed to protect our future. For this reason, it makes sense to take heed of the different options out there when it comes to safeguarding our investments.

Most investments will have some degree of risk, but the more we can educate ourselves on the different investment options, and prudent steps to take in the process of making an investment, the more peace of mind we can enjoy. Here are some methods of safeguarding investments which are available to those in the UK.

Seek Financial Advice

When there is a wealth of knowledge to tap into, the savvy investor will consider advice before taking the plunge. Look for advisers which are authorised by the Financial Conduct Authority (FCA), and check out the unbiased.co.uk website, which contains a wide selection of financial advisers to choose from. Also, Which? is another somewhat impartial source of advice on investment portfolios and risk.

Use Diversification Strategies

In investment, as in life, it is rarely a good idea to put all your eggs in one basket.

During a downturn, there are many investment principles which point to a diversified portfolio with a range of investments spread over several asset classes being able to outperform one which is concentrated. The diversification itself is accepted to reduce the kind of unsystematic risk which can come with investing in one company.

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Consider Commodities

Commodities such as energy, metals and agriculture are often seen as a more stable long-term investment than their alternatives. In times of political and economic uncertainty or inflation, commodities often go up in value, making them a strong addition to a diversified portfolio.

Deposit Protection (FSCS)

In the UK, the Financial Services Compensation Scheme (FSCS) protects consumers’ deposits up to £85,000 when regulated certain financial companies go bust. Not all types of products are covered, so it’s worth understanding this.

Protect Against Fraud

There are a number of ways to protect your investment against financial crime. The national fraud reporting centre’s Action Fraud website provides information on how to guard against prevalent threats. The FCA also provides advice on ways to avoid different scams. Then there is Cifas, which is an organisation which is committed exclusively to the prevention of financial crime.

Those are just some of the considerations which UK investors should take on their way to making an educated decision on future investments. By seeking the right advice and assessing the potential pitfalls, financial outlays can be safeguarded more effectively.

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Last updated: June 7th, 2017

Zachary Wyatt

Zach lives on the coast in the UK, with one eye fixated on the City. Prior to his writing, he got his feet wet with forex trading platforms.

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