Risk Summary for Stellar ITS 

Estimated reading time: 2 minutes

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk. 

What are the risks? 

  1. You could lose some or all of the money you invest
  • The Service invests in a number of asset-backed qualifying business activities. If one or more of those activities fails, you are likely to lose a significant proportion of the money invested in that activity. 
  1. You are unlikely to be protected if something goes wrong
  • Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker here.
  • Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA regulated firm, FOS may be able to consider it. Learn more about FOS protection here.
  1. You won’t get your money back quickly
  • Even if the qualifying business activities the Service invests in are successful, it may take several months to get your money back. You are unlikely to be able to sell your investment early.
  • The most likely way to get your money back is if your shares are bought by another investor. Alternatively, the qualifying business activities assets have to be sold to another business and these sales are not common.
  1. Don’t put all your eggs in one basket
  • The Service invests in a range of qualifying business activities. Spreading your investment across different qualifying business activities helps to spread your risk. You could also consider different services.
  • A good rule of thumb is not to invest more than 10% of your money in high-risk investments.
  1. Tax reliefs are not guaranteed and Qualifying business activities are not certain.
  • The rate of tax, tax benefits and tax allowances are subject to change and are also dependant on personal circumstances. Any changes to what constitutes a qualifying business activity may have a material adverse effect on the value of the business, or Stellar’s potential to achieve the objectives of the service. Qualifying business activities may subsequently cease to qualify for Business Relief. In such cases, Business Relief could be lost or delayed.

If you are interested in learning more about how to protect yourself, visit the FCA’s website here.