Partner Insights: Will Labour get Britain building?

Risk summary for investments in speculative illiquid securities which are arranged by a firm by way of an online platform.

Estimated reading time: 2 min

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be very complex and high risk.

What are the key risks?

You could lose all the money you invest
- By investing into a real estate project through Shojin you will be investing in a Bond instrument issued by Special Purpose Vehicles (SPV’s) which provide a funding facility for the purpose of real estate development. If the project fails, Investors can lose some or all of the money they invested.
- Advertised rates of return aren’t guaranteed. This is not a savings account. If the project doesn’t pay the SPV back as agreed, you could earn less money than expected or nothing at all. A higher advertised rate of return means a higher project risk with an increased probability of losing your money.
- Due Diligence and project oversight is carried out by the platform on each Shojin project that you are investing into to assess how well they are expected to perform. However, you should always also do your own research before investing.
- These investments are sometimes held in an Innovative Finance ISA (IFISA). While any potential gains from your investment will be tax free, you can still lose all your money. An IFISA does not reduce the risk of the investment or protect you from losses.
You are unlikely to be protected if something goes wrong
- Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker here.
- Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA regulated firm, FOS may be able to consider it. Learn more about FOS protection here.
You are unlikely to get your money back quickly
- This type of property investment could face delays that can delay payments. These investments could also fail altogether and be unable to repay investors their money.
- You have the opportunity to sell your investment early through the secondary market but there is no guarantee you will be able to find someone willing to buy.
This is a complex investment
- This investment has a complex structure to ensure the interest of investors is protected. Investments are made into each designated project SPV and are ringfenced from other project SPV's to ensure full transparency of each investment made.
- You may wish to get financial advice to understand how the structure works before deciding to invest.
Don’t put all your eggs in one basket
- Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well.
- A good rule of thumb is not to invest more than 10% of your money in high-risk investments.

If you are interested in learning more about how to protect yourself, visit the FCA’s website here.

For further information about minibonds, visit the FCA’s website here.

Close

In an insightful interview, Kirat Dhillon from Shojin Private Clients sits down with Jemma Hotta and Michael de la Fuente, Partners at law firm Oury Clark, to unpack Labour's ambitious legislative agenda aimed at revitalizing Britain's housing market.

Drawing on their extensive legal expertise, Jemma and Michael offer critical insights into:

The potential exodus of landlords due to rental reform and looming tax hikes
Implications of transitioning from leaseholds to commonholds for property investors
The real impact of planning reforms on housing affordability amidst rising interest rates
Assessing the adequacy of Labour's house-building targets
How proposed legislation could reshape the landscape for international investors

Join us as we delve into these pressing issues shaping the future of UK real estate.

About Oury Clark

Oury Clark are an expert team of chartered accountants, lawyers, chartered tax advisors, auditors, recruiters, insolvency practitioners, financial advisers who work closely together to provide intelligent and pragmatic solutions.

The firm take a pioneering integrated approach to professional services cuts through the complicated layers of the legal and accountancy world to give you straightforward joined-up advice and opinions.

Visit: ouryclark.com

Garett Stanhope

Published

04 September 2024

Back to top

Subscribe to newsletter

Subscribe to receive the latest Shojin insights and resources to your inbox every week.

More in this series

Similar insights you might like

View all

Take your investments to the next level.

Sign up for access to our expertly selected investment opportunities. Build your diversified property portfolio today.

Sign up

Go further with Shojin

1. More opportunity

No management fees. Smaller sums to take part. Lowered barriers for access.

2. Shared risk

Shojin earns revenue based on the success of each project. We share in the risk and rewards together

3. Knowledge

We use our thorough due diligence and expertise to ensure the best outcome – and you’re not left out the loop.

4. Wealth

You get paid out before we do. You’remore likely to gain higher returns than traditional, inflexible investing routes.