As the New Year rolls around, people begin to think about different financial vehicles. With investments and financial products  featured prominently in the evening news, many investors want to figure out the best investment choice to grow their income. Unfortunately, the growth in financial advice has not been completely positive.

Many of the market analysts are offering investment tools and options that are not wise choices for the new investor. Each investment option contains pitfalls and common issues that can make even the most experienced of investor wary. When investors make a decision in the present, it can have huge consequences in the future. Different fees and commissions can cut into profits and new legislation on mis-selling has grown in the last few years. Despite the focus on investment mis-selling, there continues to be a huge problem with it in the marketplace.

Investors have to be especially wary because a triple-dip recession in the United Kingdom is a potential prospect in the coming year. For investors, the importance of researching a financial product is increasingly more important. To avoid this issue, investors must carefully consider the impact of their financial decisions and avoid investment schemes. In order to do this, they should keep some of the following tips in mind to prevent being mis-sold an investment.

Avoid investment mis selling

Many people dislike thinking about money. Due to this, many investors try to avoid thoughts of their finances. Although people dislike worrying about money, it is not just losses that are at stake. Bad financial advice can have future repercussions that last for years. When you make bad investment choices now, it can affect your ability to purchase a home or save for retirement in the future. Generally, any investment advice that appears too good to be really normally is. Many independent analysts are available in the marketplace who can give you realistic advice about an investment. Before you even consider investing money in something, you should review the market thoroughly. You need an independent advisor if you want to make a wise investment choice and earn additional income.

Check Everything

Researching a financial product is not always enough. You will need to check all of the risks available. Beyond just checking the risks, you should talk to an analyst and calculate the cost of the investment. You should also look into how the seller actually earns their profits. In the past few years, many pyramid schemes have come to light that could place your investment at risk. Even if the seller’s intent is honest, there are plenty of business plans that will not ever earn a return on your investment. To begin checking the investment, you should start with making sure the company is qualified and registered. You can do this by talking to your financial advisor or checking with the financial services authority register. By doing this, you can get a breakdown about the company’s licenses and what they are legally allowed to advice you about.

Browsing Online

Not everyone can afford a high-profile financial advisor. Luckily, you can do some of the research on your own. All you have to do is open you Web browser and research the company. You need to make sure you know what you need from a financial investment and should figure out the right risk level for you. Keep in mind that the financial compensation scheme will only protect you on investments for up to £50,000 and deposits of £85,000. If the amount you are investing is less than this number, you can relax a little bit. You never want to invest all of your money in one financial products. Make sure to diversify your investments to decrease your personal risk level.

Reading the Small Print

The stereotype is that no one actually reads the small print, but you should. Each investment firm is required to give you a Key Features document. In this form, you will find a great deal of information about your investment. Make sure to read this thoroughly so you can be certain that the investment matches up with your goals.

When Things Go Wrong

Investors can protect their funds by becoming informed. You should learn what your rights are and learn how you can put them into action. Whenever you think you have been mis-sold an investment product, you can start with filing a complaint with the company. At the time you file a complaint, you should notify them that you will also contact a financial ombudsman if the issue is not resolved. When the complaint is complex or you do not feel the investment company is addressing it properly, you can contact a professional claims company. They can take your complaint and figure out a solution to your problem. Before you do this, you should figure out if the company charges a fee and the rate they charge if the case is won.

Successfully navigating financial investments is necessary if you want to earn a profit. If you follow these tips, you can reduce your chances of being mis-sold an investment.

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Tim Capper

Bringing you financial news and information in plain english for Maple Leaf Financial. My aim is to help readers understand these often complex financial instruments.