“UCIS” is a collective investment scheme that is not authorised by the FCA.

This means the clients may invest in less liquid or “esoteric” assets.

What is a UCIS

There are several types of unregulated investment. The first are “unregulated collective investment schemes” or UCIS. Some can be attractive, offering investors exposure to unusual assets that do not perform in line or “correlate” with your normal pension investments. These range from investment funds targeting fine wines and classic cars to agricultural crops and carbon credits. Some are legitimate and operated by respected, expert firms. Others are outright scams.

A second type of unregulated investment involves “fractional ownership”. An asset is split up into individual units, plots or investments (storage units and car parks are common) and then sold off individually. Such fractional ownership investments are often marketed more aggressively than UCIS investments, and are equally risky.

As the UCIS’s are not regulated it leaves the clients without the protection of the Financial Ombudsman Service or the Financial Compensation Scheme.

However, if the client has been advised by a regulated Financial Adviser to invest and they feel that the adviser has not fulfilled their obligations – they may have a claim for compensation.