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October 29, 2024
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Staying safe in the world of alternative assets is something we all want to do, of course, but it’s also something that may not always be as easy as it sounds. The issue here is that a small number of determined scammers will always look to exploit the interest and passion of potential investors for their own gain. With this in mind, we’re going to cover the basic steps that you need to take to make sure you are safe when venturing into the world of alternative assets.
There is a difference between a marketing campaign from a trusted broker and a cold email that lands in your inbox out of the blue and promises you the world. The first is standard practice and something that you may be interested in taking a closer look at, and the second is a warning sign that you need to spot right away. Yes, there is always the possibility that the unsolicited approach is genuine, but why take the risk when there are so many trusted options out there? To play it safe, we always recommend ignoring unsolicited approaches, just in case.
With the unsolicited approaches unable to turn your head, you’re left with the established names in the industry. Look for an open, transparent, and personable team that is always willing to get you the information you have asked for without delay.
“One of the key questions that would-be investors shouldn’t be afraid to ask any company they’re looking to invest with is ‘Can I meet you? Can I spend some time with you and get to know who you are?’” - Alphie Valentine, Co-founder of Hackstons, specialists who provide opportunities for whisky investment and consumption.
Some investments are more likely to pay off than others, but there is no such thing as a guaranteed return. Hearing guarantees of this nature should be an immediate red flag. Either you are being approached by someone running a confidence scam, or you are dealing with someone who doesn’t have the requisite experience and a proper appreciation of risk. In either case, you should always walk away, safe in the knowledge that there are plenty of genuine opportunities out there.
Proving that the asset is what you think it is and that you own it is vital, and with cask whisky, you do this by requesting a Delivery Order. It’s a key document that it is all too easy to forget to ask for, but it’s vital that you have it. Slowing down and taking your time to double-check that you have everything you need will ensure that you don’t miss steps like this.
Sticking with the cask whisky example from Hackstons, you need to find out how your assets will be stored. Climate-controlled conditions and proper handling are non-negotiable if you want to safeguard the quality, and therefore the value, of the asset. Having a clear written description of how everything will be stored and the option to pay a visit in person will help put your mind at ease.
The more you have to chase for clarity on costs, the more warning signs there are that all may not be as it seems. Even if you still feel that you’re dealing with a genuine offer, do you really want to be in a position where you’re constantly chasing for information and finding out that there are deductions? Finding someone who will be able to lay out everything quickly and clearly is the key.
If you take a look at Hackstons on Trustpilot, you will see that they have built a solid reputation for personal service, transparency, and expertise. What you won’t find are any references to pressure selling or undue urgency. The moment you feel like you are being pushed to move at a pace you don’t feel comfortable with, we always recommend walking away. The last thing you want is to feel like you have to make an investment when you don’t feel 100% comfortable or when you don’t have all of the facts.
Take your time to review the key points above, work through this guide each time you consider a new investment, and take your time to get things right. If you do that, you will be able to make sure that you stay safe in the world of alternative investments.
One of the most immediate red flags is any promise of a 'guaranteed return'. Legitimate investments always carry some level of risk, and anyone who guarantees a profit is likely being dishonest or is inexperienced. You should also be very wary of unsolicited offers you receive out of the blue.
You should always request official documentation that proves your ownership. The specific document depends on the asset. For example, when investing in cask whisky, you must ask for a Delivery Order to confirm your legal title.
Look for a company with an established history and a transparent approach. They should be open about all fees, provide clear information, and never use high-pressure sales tactics. A trustworthy firm will encourage you to take your time and feel comfortable with your decision.
For physical assets, the storage conditions directly impact their quality and, therefore, their future value. An asset like whisky requires a climate-controlled environment to mature properly. Without it, the investment could be compromised.
If you ever feel rushed or pressured to make a quick decision, you should walk away immediately. Reputable investment opportunities will still be there after you have had time to do your research and feel 100% confident.
