Is it Independent Research or Paid Promotion?
Financial Conduct Board is urging the general population to think about the difference between investment advice and marketing publications. Spontaneous investment newsletters are usually conveyed via fax and email by firms that are paid to showcase investments. Before you follow up on the material, know that it may not give you a reasonable picture.
• Headings, for example, "Hot Tip" and "Special Alert" will draw you to information which seems definitive and proficient yet may not give the entire story.
• Statements such as "the possibility to make our users wealthier than they have ever imagined" show that potential isn't an assurance.
• Cases that other savvy investors are now following this advice in hopes that you will follow the group.
What you should be aware of:
• Fine print that opposes what's guaranteed in the newsletter. Search for statements such as "the reader expects all risk as to the to the precision and the usage of this report."
• Free stock research that you didn't request. Odds are that somebody who knows nothing about you or your investment goals doesn't have your best advantages as a main priority.
• Advancements for companies that are not recorded on a stock trade. These companies might be liable to a few regulations and have fewer disclosure requirements, which implies higher risk.
• References to recent developments like scarcity of commodity and worldwide terrorism to make a sense of urgency. These are high-pressure sales strategies.