Digital Assets and Related Investments – What You May Need to Consider

Is it direct holdings of digital assets? If not, you may need more details about the financial product. Is it future contract, OTC contract, an option? Please get more details, and consult with your financial expert/advisor/adviser.

Custody, where the digital asset stored? Is it regulated exchange? where is it regulated? Off-shore regulated entities may be more risky than US/UK/GERMAN/AUSTRALIA/FRANCE/SWITZERLAND regulated entities 🙂

Manipulation in the digital asset markets. Can the digital asset price can be manipulative easily? If yes, the asset price can be very volatile, and you may lose your invested capital.

Fee disclosure – do you know everything about the fees you will be charged? some business can cut a large sum from your invested capital, in order to make their business richer.

Liquidation – If you will need your funds back, how fast you will be able to get it back into your bank account? Some asset are not very liquidated, and you will not be bale to exchange your digital asset back to FIAT. You may not be bale to pay your monthly expenses, including rent, electricity, mortgage, since those can only be paid with FIAT (EUR, USD, GBP, AUD, NOK, SEK etc.).

Technology and user friendly – do you know how to handle the registration process, where do you see all the disclosures, terms and conditions, your account balance, your account status, user interface, broker contact details? If not, make sure you control everything more than perfectly. No one else will do it instead of you.

What is your risk tolerance? if it is very low, you may need to consider more traditional investments, the regular stock market may be better option (S&P 500 stocks can be better option for you).

No investment products are absolutely risk-free. This can be particularly true with novel and previously-untested investment strategies. Investors should proceed with caution, ask questions, and consider their risk tolerance before investing.

Life is risky, and so is investing.

Should you transfer your defined benefit pension? Should you invest your pension?

Should you take more risk with your pension funds?

There are no easy answers to those questions. Moreover, the answers can be very risky. You may ,therefore, consider the following:

The FCA is concerned that firms are recommending that large numbers of consumers transfer out of their defined benefit pension schemes despite the FCA’s stance that transfers are likely to be unsuitable for most clients.

Megan Butler, Executive Director of Supervision, Wholesale and Specialists at the FCA said:

‘We have said repeatedly that, when advising on DB transfers, advisers should start from the position that a transfer is not suitable. It is deeply concerning and disappointing to see that transfers are still being recommended at the levels we have seen.

The FCA surveyed 3,015 firms and found that between April 2015 and September 2018:

  • 2,426 firms had provided advice on transferring their DB pension.
  • 234,951 scheme members had received advice on transferring.
  • Of those 162,047 members had been recommended to transfer out and 72,904 had been recommended not to transfer.
  • The total value of DB pensions where transfer advice had been provided was £82.8bn with an average value of £352,303.
  • 1,454 firms had recommended 75% of more of their clients to transfer. One reason a firm may be recommending a large number of clients to transfer is if the firm has a robust initial guidance service triaging clients. 1,346 firms reported data on the total number of clients who had not proceed past the firm’s initial guidance. The total number of clients reported as not proceeding to advice was 59,086. When these triaged clients are factored in 55% of clients were recommended to transfer.

Any customer who has concerns about the advice they received when transferring out of DB scheme should first off contact the firm which gave them the advice.

You should take action if you are among those people who transfer their defined benefit pension based on an advice received from an adviser.