Applications now open for next round of FCA’s AI Live Testing

The nature of mini-bonds and loan notes makes them high-risk. Taking higher investment risks can be right for some people, depending on your circumstances. But you need to make sure you're aware of the risks you're taking.

You should check whether the firm you're investing with is authorised.

If you're offered these types of investments from a firm not regulated by the FCA, there are generally fewer protections available. You're unlikely to be able to take complaints to the Financial Ombudsman Service or make a claim through the Financial Services Compensation Scheme. This may make it much harder to get your money back if something goes wrong (such as the firm going out of business).

We warned recently about our concerns that people were being encouraged to invest in risky schemes without appreciating the extent of the risks.

We've seen adverts promising higher rates of return than mainstream investments. We've also seen examples of firms over-stating how safe your capital is and under-stating the very real risk of losing some, or even all, of your money.

High-risk investments are unsuitable for all but the most experienced investors. These investors fully understand the risks, as well as the opportunities, of high-risk investments and have the finances to deal with losses.

We're gaining new powers as part of the new regime (including over unauthorised firms). But even with these new powers, we'll still have a limited ability to deal with unauthorised firms.