An Unregulated Collective Investment Scheme (UCIS) is a pooled investment fund whereby a number of investors transfer their money into one pot. A fund manager will then take the money and invest it into various assets. These assets can be anything from property, crops, agricultural assets (farmland), bonds or even stocks and shares. UCIS’s are not subject to regulation and FCA restrictions and are by their very nature, high risk and highly speculative.

The FCA published a warning on 16 May 2016 warning that UCIS’s are not suitable for the “general public” or retail clients. The FCA states that UCIS investments are in fact only suitable for a small group of investors. A group that includes those who hold the proper certification and those who would be classed as sophisticated investors, and have a great deal of investment experience.

Despite this, a number of our clients were advised by their Independent Financial Advisors to transfer out of their safe and traditional pensions and invest into UCIS’s. Examples of such UCIS schemes include; GAS Verdant Australian Farmland and Sustainable Agro Energy.

The Financial Ombudsman Service (FOS) has dealt with numerous claims regarding retail clients who have been negligently advised to invest into UCIS’s. In Case 125/10 FOS upheld a complaint against an Independent Financial Advisor for failing to give suitable advice to a retail client and instead advising that their money be invested into a UCIS.