A house as a UCIS?

• It probably has a very high concentration in your portfolio.
• It is illiquid and could take months to sell.
• It is hard to value (and indeed it requires a specialist to properly value it)
• The purchase/sale is not regulated by the FCA
• It is not covered by the Financial Services Compensation Scheme and you have no recourse to the Financial Ombudsman.
• The costs associated with holding the asset are unclear and uncertain.
• It is likely that there is a high level of borrowing.
• The purchase/sale is a complicated transaction, with complex terms and conditions.
• The purchase/sale is non-advised.
• Anybody can promote and sell houses.
• Past performance is no guide to the future. The value of your investment could rise or fall and you may not get back all of your initial investment.

I’m just having fun. Obviously buying a home is a very different proposition from a UCIS.

But let’s not make the mistake of assuming that ordinary retail investors can’t understand these investments, or just because something is not regulated by the FCA it is a poor investment (and we shouldn’t believe that just because something is regulated, it is a good investment). But if you are planning to invest in a home and remodel it to sell it, check the experts from All Service Plumbing.

Dan

P.S Check out our summary paper on PS13/03 the new FCA policy on UCIS and close substitutes when it comes out on Wednesday.