Basset & Gold Bonds - should I invest?

maltmunro · 11 July 2017 at 9:21PM

Would really appreciate some advice from financially astute forumers. My husband and I have got a chunk to invest of about £100k and we're considering Basset & Gold premium bonds which claim to have a guaranteed interest rate of 6.22-7.46%. We haven't looked into it in much detail so wanted to check whether anyone has come across it and what opinions people have. We need easy access and have already done our ISA allowances. Thanks in advance!

robber2 · 11 July 2017 at 9:32PM

Only you know your attitude to risk and loss but heres what they say themselves;

Risk Warning
Past Performance is not indicative of future results. Investment through the Basset & Gold Fixed Income Bonds involves lending to companies or individuals and therefore your capital is at risk and interest payments are not guaranteed if the borrower defaults and investors should note that it could take the time it takes to liquidate an asset held as security, such as selling a property, in order to get money back at an acceptable price. Detailed risk information is available in the invitation document that is provided exclusively to eligible investors.

bigadaj · 11 July 2017 at 9:32PM

100% capital loss potential, I wouldn't but it's your money.

Gadfium · 11 July 2017 at 11:09PM

maltmunro wrote: »

Would really appreciate some advice from financially astute forumers. My husband and I have got a chunk to invest of about £100k and we're considering Basset & Gold premium bonds which claim to have a guaranteed interest rate of 6.22-7.46%. We haven't looked into it in much detail so wanted to check whether anyone has come across it and what opinions people have. We need easy access and have already done our ISA allowances. Thanks in advance!

Why on earth would you consider these bonds when the ones offering a "guaranteed" 6.22% are not easy access??
And are you prepared to lose your capital "Bonds involves lending to companies or individuals and therefore your capital is at risk and interest payments are not guaranteed if the borrower defaults and investors should note that it could take the time it takes to liquidate an asset held as security, such as selling a property, in order to get money back at an acceptable price."

jimjames · 11 July 2017 at 11:30PM

maltmunro wrote: »

We haven't looked into it in much detail so wanted to check whether anyone has come across it and what opinions people have.

I'd strongly suggest that you do look into it in detail, a lot of detail, before handing your money over. If you're prepared to lose all your money then surely investing in shares (funds) would be a far better way to protect your money

bowlhead99 · 12 July 2017 at 6:17AM

If you were to make an investment in one of these, in common with most of these sort of schemes for "non-readily realisable securities and investments" which are illiquid (can't be sold on or easily converted to cash once acquired), the FCA rules will prevent you receiving all the information and applying for the investment unless you can certify your status under one of the special categories of - for example - high net worth investor, sophisticated investor, restricted investor or advised investor.

If nobody is giving you explicit paid professional advice in relation to the opportunity and you are not 'high net worth. or 'sophisticated' under the definitions, you would have to volunteer yourself as being a restricted investor. This would mean you would confirm that the amount invested by you in the last 12 months and the next 12 months into non-readily realisable investments would not exceed a tenth of your net assets ; and for that purpose you exclude your home, money raised through mortgage on your home, and your pension assets / benefits.

And in doing the certification, whichever route you follow (sophisticated, HNW, restricted, advised) you would need to confirm that you accept that "the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested", and that you will have access to sufficient liquid resources after you've made the investment, and that you have made similar investments recently or are familiar with the type.

Basically by doing that you'd be cutting off all routes to compensation for a mis-sale when/if you lose some or all of your money, because you confirm you know what you're getting into or are deliberately lying about your knowledge or financial resources to con someone into letting you participate. The signoff that you make by way of certification means you can't claim you never saw the risk warnings of the type other people have pasted in this thread, and that you agree you meet the FCA criteria for you to be able to take a punt on the product while acknowledging the 100% loss potential.

badger09 · 12 July 2017 at 11:48AM

maltmunro wrote: »

Would really appreciate some advice from financially astute forumers. My husband and I have got a chunk to invest of about £100k and we're considering Basset & Gold premium bonds which claim to have a guaranteed interest rate of 6.22-7.46%. We haven't looked into it in much detail so wanted to check whether anyone has come across it and what opinions people have. We need easy access and have already done our ISA allowances. Thanks in advance!

Why?

How did you choose this particular investment?

What other in vestments do you & your husband already hold?

AnotherJoe · 12 July 2017 at 11:58AM

maltmunro wrote: »

Would really appreciate some advice from financially astute forumers. My husband and I have got a chunk to invest of about £100k and we're considering Basset & Gold premium bonds which claim to have a guaranteed interest rate of 6.22-7.46%. We haven't looked into it in much detail so wanted to check whether anyone has come across it and what opinions people have. We need easy access and have already done our ISA allowances. Thanks in advance!

Never come across it but I can say with 100% gold-plated* certainty that with such an interest rate, the word "guarantee" doesn't mean what you think it does. Most likely its "guaranteed" by the company (or a subsidiary via multiple hops) so if they go bust, your guarantee is worthless. A bit like claiming against your guarantee on the double glazing which you bought from a cheapo company that went bust 2 years ago.

* see what i did there

cashbackproblems · 12 July 2017 at 8:23PM

bowlhead99 wrote: »

If you were to make an investment in one of these, in common with most of these sort of schemes for "non-readily realisable securities and investments" which are illiquid (can't be sold on or easily converted to cash once acquired), the FCA rules will prevent you receiving all the information and applying for the investment unless you can certify your status under one of the special categories of - for example - high net worth investor, sophisticated investor, restricted investor or advised investor.

If nobody is giving you explicit paid professional advice in relation to the opportunity and you are not 'high net worth. or 'sophisticated' under the definitions, you would have to volunteer yourself as being a restricted investor. This would mean you would confirm that the amount invested by you in the last 12 months and the next 12 months into non-readily realisable investments would not exceed a tenth of your net assets ; and for that purpose you exclude your home, money raised through mortgage on your home, and your pension assets / benefits.

And in doing the certification, whichever route you follow (sophisticated, HNW, restricted, advised) you would need to confirm that you accept that "the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested", and that you will have access to sufficient liquid resources after you've made the investment, and that you have made similar investments recently or are familiar with the type.

Basically by doing that you'd be cutting off all routes to compensation for a mis-sale when/if you lose some or all of your money, because you confirm you know what you're getting into or are deliberately lying about your knowledge or financial resources to con someone into letting you participate. The signoff that you make by way of certification means you can't claim you never saw the risk warnings of the type other people have pasted in this thread, and that you agree you meet the FCA criteria for you to be able to take a punt on the product while acknowledging the 100% loss potential.

Are you sure? As a retail investor they are not allowed to "promote" a non-mainstream investment to you, but you can buy it execution only remaining retail and thus holding the same protections, so no need to be opted up to sophisticated/hnwi? However of course you would not be protected in case of poor performance or if you claim not to have understood the risk of the product

maltmunro · 12 July 2017 at 8:42PM

Thanks everyone for the advice. We'll look into other options

bowlhead99 · 13 July 2017 at 12:22AM

cashbackproblems wrote: »

Are you sure? As a retail investor they are not allowed to "promote" a non-mainstream investment to you, but you can buy it execution only remaining retail and thus holding the same protections, so no need to be opted up to sophisticated/hnwi?

Are *you* sure? How would you buy this bond "execution only" - what stockbroker is going to execute the transaction for you and buy it, on what market? It is a participation in an issue of a privately issued bond with no ready tradeable secondary market.

Perhaps you are mixing up "non mainstream pooled investments", with this one which is under the "non-readily realisable securities and investments". The category types of investors to whom they can be promoted are similar.

If you went to their website they mention that they are issuing bonds that offer a certain interest rate with full loss of capital possible; to find out more information or get a prospectus you have to give them your personal details and then confirm what category of qualified investor you fall into, before you can get your hands on a prospectus where the opportunity would be "offered".

If you don't certify yourself as HNWI or sophisticated you would have to certify your restricted investor status by confirming you haven't bought these sort of opportunities as over 10% of your assets in the last 12 months and won't do so in the next 12 months either. There's no option to say "I'm not going to certify that stuff, just give it me execution-only".

I guess you could certify you were an advised client if you'd paid your adviser for advice and wanted to disregard the advice and pay off your advisor to help you buy in as a persistent client against advice...

Maybe I'm missing something, as I haven't actually looked into it in much detail - as I don't want the product.

Basset & Gold Bonds - should I invest?

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