More than wealthFebruary 21 2020

Fortnightly Thoughts: Marc Cane, Head of Compliance and Risk, on ScamSmart and the FCA’s Checklist

2 mins read

Marc Cane

Head of Risk & Compliance

Equipped with new technologies, and easily available data, scammers are becoming increasingly hard to spot, and awareness is crucial. The Financial Conduct Authority (FCA) launched its ScamSmart campaign to raise awareness to the changing and more professional nature of scams.  An annual £197 million was reportedly lost to investment scams in 2018, with victims losing £29,000 on average (FCA, 2019)

Scammers target individuals who are expected to have money in excess for investment, therefore high net-worth individuals are especially at risk. Investment scammers can appear as legitimate companies with online resources, samples and advisors. It is important to be informed about these risks and the importance of seeking professional and impartial advice before making investment decisions, or conducting the necessary checks.

Nearly 50% of those investing in unregulated goods, such as wine, diamonds or land, via unregulated firms do it without professional advice, and 27% of over 55s scammed were by unregulated products via unregulated firms, which highlights the importance of receiving professional guidance or advice when selecting such investment products.

The guidelines to select such products recommended by the FCA are the following:

However, a family office can help you by constantly vetting, monitoring, and controlling these transactions, usually along even stricter guidelines than the ones recommended by the FCA. This constant awareness is crucial, as scam firms often change names and image, and updating the FCAs directory, or posting a warning about a clone firm often takes time and does not happen instantly.

Wider access to resources such as industry experts, and trusted contacts help them to give you the best possibilities when it comes to investing. They can also lift the burden of managing these investments, which in the case of ultra-high net-worth families can prove quite complex, and require high levels of expertise.