Are you a sophisticated investor? That doesn't mean you drink tea in bone china cups! How about being an individual of high net worth? No, nothing about how worthy as an individual you are.
Both are terms used by the FSA (Financial Services Authority) to define those people who have enough knowledge or experience that they can opt to receive information about non-regulated financial investments.
Companies shouldn't be sending such information to people who are not in a position to fully understand the risks involved. In order to be able to receive this sort of information, you used to have to apply for a certificate and prove that you satisfy the requirements. This has now changed a bit. Since March 2005 it is now possible - under certain circumstances (see the requirements below) - for you to sign a certificate classifying yourself as a high net worth individual or sophisticated investor (self-certification).
What about Company Partners?
We at Company Partners are not regulated by the FSA, we don't give financial advice and we don't sell or propose financial investments. Our job is simply to provide a service where potential partners of all sorts can meet. However we do try and give you as much useful information as we can to help you make your own mind up.
For instance we remind you to do your own due diligence on every partnership (investment or otherwise) that you may enter into - get professional advice - it will save you money in the long run. Take as much care in your dealings online as you would out in the "physical" world.
So what is a Sophisticated Investor?
You should only self certify as a sophisticated investor if at least one of the following applies:
- a member of a network or syndicate of business angels and have been so for at least the last six months before the date you self-certify;
- you have made more than one investment in an unlisted company in the two years before the date you self-certify;
- you are working, or have worked in the two years before the date you self-certify, in a professional capacity in the private equity sector, or in providing finance for small and medium enterprises;
- you are currently, or have been in the two years before the date you self-certify, a director of a company with an annual turnover of at least £1 million.
And what about a High Net Worth Individual?
You should only self certify as a high-net worth individual if at least one of the following applies:
- you had, during the financial year immediately preceding the date you self-certify, an annual income to the value of £100,000 or more;
- you held, throughout the financial year immediately preceding the date you self-certify, net assets to the value of £250,000 or more (excluding certain types of assets).
Should you therefore sign-up if you are able to?
You need to be confident of your own knowledge, since if you do self-certify in order to receive promotions on unregulated investments you are taking this on yourself and are not protected any longer by the FSA.
