Don’t invest unless you’re prepared to lose all the money you invest. This is a high - risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more
Don’t invest unless you’re prepared to lose all the money you invest. This is a high - risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more
Risk Information
Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.
What are the key risks?
- You could lose all the money you invest
- Most investments are shares in start-up businesses or bonds issued by them. Investors in these shares or bonds often lose 100% of the money they invested, as most start-up businesses fail.
- Some of these investments can be held in an Innovative Finance ISA (IFISA). An IFISA does not reduce the risk of the investment or protect you from losses, so you can still lose all your money. It only means that any potential returns will be tax free.
- Checks on the businesses you are investing in, such as how well they are expected to perform, may not have been carried out by the platform you are investing through. You should do your own research before investing.
- You won’t get your money back quickly
- Even if the business you invest in is successful, it is unlikely that you will be repaid before the end of the specified term.
- If the business you invest in does not meet its targets, it may not be able to pay you on the scheduled dates. You may find that you do not have access to your funds until later than expected.
- Some platforms may give you the opportunity to sell your investment early through a ‘secondary market’ or ‘bulletin board’, but there is no guarantee you will find a buyer at the price you are willing to sell.
- Don’t put all your eggs in one basket
- Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well. A good rule of thumb is not to invest more than 10% of your money in high-risk investments.
- The value of your investment can be reduced
- If your investment is in ordinary shares (as opposed to community shares), the percentage of the business that you own will decrease if the business issues more shares. This could mean that the value of your investment reduces, depending on how much the business grows. Most start-up businesses issue multiple rounds of shares.
- These new shares could have additional rights that your shares don’t have, which could further reduce your chances of getting a return on your investment.
- Under certain circumstances, the directors of a community benefit society have the power to write down the value of community shares.
- You are unlikely to be protected if something goes wrong
- The platform arranging this investment is not regulated by the FCA . Protection from the Financial Services Compensation Scheme (FSCS) only considers claims against failed regulated firms. Learn more about FSCS protection here.
- The Financial Ombudsman Service (FOS) will not be able to consider complaints related to this firm.
For further information about investment-based crowdfunding, visit the FCA’s website here.
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Innovative Finance ISA - Discover a way to take control of your ISA investment
Did you know you can make use of your tax-free ISA allowance while directly funding organisations that make a social and environmental impact?
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Tax-free transformation
With the Ethex ethical Innovative Finance ISA (IF ISA), you know the impact your investment is having because you invest directly into businesses with a clear social or environmental mission.
- Invest up to £20,000 in the current tax year.
- Choose to invest in one or more eligible businesses through the Ethex IF ISA
Double rewards
How it works
Set up a new IF ISA or
transfer an existing ISA to usInvest directly into
impactful businesses or organisationsReturns on your investment
are tax-free*
Make an existing ISA do good
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IFISA eligible investment opportunities
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Investments offered on the Ethex platform are not readily realisable, which means that they may be difficult to sell and you may get back less than you originally invested. Investments are not covered by the Financial Services Compensation Scheme (FSCS) and returns are not guaranteed. If you are in any doubt, you should contact an Independent Financial Adviser.
Investments offered on the Ethex platform are not readily realisable, which means that they may be difficult to sell and you may get back less than you originally invested. Investments are not covered by the Financial Services Compensation Scheme (FSCS) and returns are not guaranteed. If you are in any doubt, you should contact an Independent Financial Adviser.