Interactive Investor

ii welcomes FCA proposal to make mini-bond marketing ban permanent

These ultra high-risk financial products should come with a health warning.

18th June 2020 10:54

Myron Jobson from interactive investor

There is no such thing as a free lunch, and these high-risk financial products should come with a health warning.

Commenting on FCA proposals to make mini-bond marketing ban permanent, Myron Jobson, Personal Finance Campaigner, interactive investor, says: “There is no doubt that firmer action by the FCA was needed to protect customers from these high-risk products. 

“It is easy to see the allure of mini-bonds amid the low interest rate environment which has wreaked havoc on saving rates, but there is no such thing as a free lunch, and if something looks too good to be true, it probably is. With the best buy five-year fixed rate savings account now paying below 2% in interest, it’s important to do your homework if you want to look beyond savings accounts.

“Mini-bonds should come with a health warning. They are ultra-high-risk investments and are difficult to assess and there isn’t the same in-depth research that is normal for the equity and corporate bond market. But, like it or not, the mini-bond market continues to grow, so today’s news, while unsurprising, is welcome.”

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