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  • October

    30

    2018
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Some Financial Regulations for Property Investing

Some Financial Regulations for Property Investing

As always, we need to be compliant…so below we have got some information on how to identify different groups of investors.

 

Differences between a HNWI (High Net Worth Investor) and a Sophisticated investor

 

HNWI – if you have an annual income of at least £100,000 a year or have at least £250,000 in net assets not including your home or pension benefits you qualify as a High-net-worth-investor. This means that deal arrangers can put their deals in front of HNWI.

 

Whereas a sophisticated investor is someone who the FCA considers to have a high level of knowledge, experience in property investing to be able to weigh the risks for themselves. The main assumption is that if you were to lose your investment, it would not be catastrophic to your finances. How to identify as a sophisticated investor –

  1. You have had more than one investment in a non-readily realisable investment.
  2. You have been a member of a business angel organisation
  3. You have worked in the private equity sector
  4. You have been a director of a company with a turnover of £1million or more

 

 

Remember that compliant marketing material will focus on promoting the property company and its activities, as opposed to a specific deal they are looking to fund.

When a secured loan with attractive returns are advertised on social media this is considered to be an invitation to engage in investment activity, this activity is considered to be illegal.

 

Be careful as to HOW you ask for investment funds & WHO you ask and WHO you give the investment funds too.

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