The content of this website has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. Reliance on this promotion for the purpose of engaging in investment activity may expose an individual to a significant risk of losing all of the property or assets invested.
We believe in full transparency. Before investing, it is essential you understand the risks involved with property bond investments. Please read this page carefully.
Your capital is at risk. The value of your investment may go down as well as up, and you may not get back the full amount invested. These investments are not suitable for everyone. You should not invest money that you cannot afford to lose. Please seek independent financial advice if you are unsure whether this investment is suitable for you.
All investments carry risk. Below we outline the principal risks associated with investing in Smart Legals property bonds.
When you invest in a Smart Legals property bond, your capital is at risk. This means there is a possibility that you may lose some or all of the money you invest. Unlike a bank savings account, your investment is not held as cash in a deposit-protected account.
The return of your capital depends on the performance of the underlying property assets and the ability of the borrower to repay the loan. If property values fall significantly or the borrower defaults, your capital could be at risk. You should only invest money that you can afford to lose entirely.
Investments made through Smart Legals are not covered by the Financial Services Compensation Scheme (FSCS). The FSCS protects deposits held with banks and building societies up to £85,000, but this protection does not extend to property bond investments.
This means that if Smart Legals or the borrower were unable to meet their financial obligations, there is no government-backed compensation scheme to reimburse you for any losses. This is a fundamental difference from traditional savings and deposit accounts.
Smart Legals property bonds are fixed-term investments, typically for 2 or 4 years. During this period, your capital is locked in and cannot be accessed or withdrawn early. There is no secondary market for these bonds, meaning you cannot sell your bond to another party before it matures.
You should therefore only invest funds that you will not need access to for the duration of the bond term. If your financial circumstances change during the investment period, you will not be able to retrieve your capital early.
The bonds issued by Smart Legals are secured against UK property assets. The value of property can fluctuate due to a wide range of factors, including economic conditions, changes in interest rates, government policy, local market conditions, and supply and demand dynamics.
If property values decline, the security backing your investment may be worth less than the outstanding loan. In a worst-case scenario, if the borrower defaults and properties need to be sold, the proceeds may not be sufficient to repay your full investment. Past property market performance is not a reliable indicator of future values.
The repayment of your capital and interest depends on the borrower's ability to meet their obligations under the loan agreement. If the borrower experiences financial difficulties, they may be unable to make interest payments or repay the principal on time.
While the security trustee holds a legal charge over the property assets, enforcing this security can be a lengthy and costly process. The recovery of funds following a default is not guaranteed and may result in a return that is less than your original investment. Additionally, there may be delays in receiving any recovered funds.
The regulatory environment for financial services and property investments may change over time. Changes in legislation, taxation, or regulation could affect the returns on your investment, the tax treatment of your income, or the way in which Smart Legals operates.
For example, changes to ISA rules could affect the tax-free status of IFISA investments, or changes in property taxation could impact the profitability of the underlying property developments. While we monitor regulatory developments closely, we cannot predict or control changes that may adversely affect your investment.
Investing a large proportion of your savings in a single asset class or investment product increases your exposure to specific risks. Consider diversifying your portfolio across different asset classes.
Where bonds fund property developments, there are additional risks including planning permission delays, construction cost overruns, and project completion delays that could affect returns.
The fixed-rate nature of the bonds means that if inflation rises above the bond interest rate, the real value of your returns may be eroded. Your purchasing power at maturity could be less than anticipated.
As with any company, there is a risk that Smart Legals or any associated entities could face financial difficulties. While a security trustee is in place, the insolvency of any party could lead to delays or losses.
Past performance: Past performance is not a reliable indicator of future results. The value of investments and the income from them can go down as well as up.
Not financial advice: The information on this website does not constitute financial advice. You should consider seeking independent financial advice before making any investment decisions.
Suitability: These investments may not be suitable for all investors. You should carefully consider your investment objectives, level of experience, and appetite for risk before investing.
Tax treatment: Tax treatment depends on individual circumstances and may be subject to change in the future. Tax reliefs are not guaranteed and their value may change.
Regulatory status: The content of this website has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. Reliance on this promotion for the purpose of engaging in investment activity may expose an individual to a significant risk of losing all of the property or assets invested.
Independent advice: We strongly recommend that you seek professional financial advice from an FCA-authorised independent financial advisor before investing. They can help you understand whether these investments are appropriate for your personal financial circumstances.
Our team is here to help you understand the risks associated with our investment products. Get in touch for a detailed conversation.