UK's FCA warns investors about risky, unregulated investments with high returns and limited protections.

The UK's Financial Conduct Authority warns investors to be cautious of high-risk investments from unregulated firms, which often use exemptions to avoid oversight. Products like unlisted loan notes and mini-bonds, frequently marketed with high promised returns, carry significant risks and are generally unsuitable for average investors. Without FCA regulation, protections such as the Financial Ombudsman Service and compensation schemes may not apply, making recovery difficult if things go wrong. The FCA urges people to verify a firm’s regulatory status, assess their own risk tolerance, and avoid investments that seem too good to be true. It advises diversifying portfolios and limiting exposure to high-risk assets to 10% or less, while cautioning against pressure to invest quickly or relying on influencer promotions.