Select Page

Fisher Investments UK Reviews How to Spot and Avoid Financial Scams

According to the UK’s Office for National Statistics, there were 3.7 million incidents of fraud in England and Wales in the year ending December 2022 – and losses amounted to £2.46 billion in the fiscal 2021/2022 year.[i] In Germany, law enforcement officials estimate nearly €1 billion in investor losses due to online trading fraud each year.[ii] Across the Atlantic, US consumers lost over $8.8 billion to fraud in 2022, according to the Federal Trade Commission – a 30% increase from the prior year.[iii] Fisher Investments UK reviews many kinds of financial fraud worldwide, and in our view, knowing more about criminals’ common tactics can help investors avoid them.

The financial publications Fisher Investments UK reviews highlight myriad stories of how bad actors took their ill-gotten gains. In 2020, police gaoled Scottish financial services director Alistair Greig for coordinating a Ponzi scheme (when earlier investors are paid out with new investor money without their knowledge).[iv] His firm, Midas Financial Solutions, lured investors with so-called guaranteed high-interest accounts, providing the swan song of high returns safe from loss. Meanwhile, Greig used client payments to fund a luxurious lifestyle – buying expensive cars, acquiring holiday properties and attending numerous Premier League football matches. Earlier this year, US police arrested Raymond Brewer for stealing over $8 million from investors. Brewer falsely claimed to be building machines – called anaerobic digesters – that could convert cow manure into biogas, thereby generating millions in revenue.[v] He said investors would receive two-thirds of the profits, plus tax incentives. Similar to Greig, Brewer used client funds to furnish an extravagant lifestyle – a common trait amongst fraudsters, in Fisher Investments UK’s experience.

Besides Ponzi schemes, investors must also contend with a relatively newer threat: technological advancements, which have changed the investment fraud landscape. According to Barclays, 77% of financial scams now happen on social media, online marketplaces and dating apps.[vi] Fraudsters use these platforms to cast a wide proverbial net, reaching thousands of people instantly – sometimes dubbed phishing. Scammers can also use artificial intelligence (AI) technology to clone someone’s voice and impersonate a friend or family member to request money – a threat recently highlighted by UK Financial Conduct Authority chief Nikhil Rathi.[vii]

Fisher Investments UK reviews these stories in our coverage of financial headlines, and we have found some common warning signs. For one, fraudsters often request transferring funds from the victim to another individual’s account or an unregistered custodian. In many cases – like the aforementioned examples – the destination is actually the criminal’s personal account. Secondly, investment scammers tend to make unrealistic guarantees. We have observed some bad actors tout huge, flashy returns to grab investors’ attention. Relatedly, we have also seen many fraudsters promise steady or stable returns, year in and year out, regardless of the broader market environment. Though global equities’ long-term annualised return is 10.0%, that figure includes plenty of negative volatility and down years along the way.[viii] Fisher Investments UK thinks it is suspicious if someone promises a steadily positive, uniform return with no downturns. Overly complex investments or strategies (e.g., complicated technological processes or never-before-seen asset classes) might be a red flag, too – in our view, purported sophistication can be a distraction and divert investors’ attention away from fraudsters’ intent.

Fisher Investments UK thinks investors benefit from checking a few key boxes as a safeguard against fraudulent activity before choosing investments or advisers. First, only transfer your money to an established third-party custodian – in our view, not giving a crook custody of your assets is the most effective fraud aversion technique. This separates investment decision-making and physical custody of the assets, and if you don’t transfer money to a bad actor, they cannot run away with it. Online access can help too, in our view, as it allows you to check on your money when you want. If you are using an open-end investment company or fund, understand who is doing the accounting and oversight – ensure this is a non-affiliated third party. Secondly, know what you are investing in. Your adviser should be able to help you understand both the products and the strategy – both the risks and how they generate returns. Finally, set realistic expectations for investment returns. Understand that negative volatility is simply part of investing – there is no way around it, in our view. You will inevitably face down years when investing in capital markets, and any financial professional who claims they can avoid it and still deliver equity-like returns is presenting a very unlikely picture you should probably question.

This list isn’t exhaustive. In Fisher Investments UK’s review, avoiding financial scams is a perpetual process, with technology offering new twists along the way. But with these tips in mind – along with a healthy amount of scepticism and carefulness – we think investors are better prepared to elude financial fraud throughout their investing horizon.

Get exclusive stock market knowledge in your Markets Commentary guide as the first of our ongoing insights

Follow the latest market news and updates from Fisher Investments UK:


This document constitutes the general views of Fisher Investments UK and should not be regarded as personalised investment or tax advice or a reflection of client performance. No assurances are made that Fisher Investments UK will continue to hold these views, which may change at any time based on new information, analysis or reconsideration. Nothing herein is intended to be a recommendation or forecast of market conditions. Rather, it is intended to illustrate a point. Current and future markets may differ significantly from those illustrated here. In addition, no assurances are made regarding the accuracy of any assumptions made in any illustrations herein. Fisher Investments Europe Limited, trading as Fisher Investments UK, is authorised and regulated by the UK Financial Conduct Authority (FCA Number 191609) and is registered in England (Company Number 3850593). Fisher Investments Europe Limited has its registered office at: Level 18, One Canada Square, Canary Wharf, London, E14 5AX, United Kingdom. Investment management services are provided by Fisher Investments UK’s parent company, Fisher Asset Management, LLC, trading as Fisher Investments, which is established in the US and regulated by the US Securities and Exchange Commission. Investment management services are provided by Fisher Investments UK’s parent company, Fisher Asset Management, LLC, trading as Fisher Investments, which is established in the US and regulated by the US Securities and Exchange Commission. Investing in financial markets involves the risk of loss and there is no guarantee that all or any capital invested will be repaid. Past performance neither guarantees nor reliably indicates future performance. The value of investments and the income from them will fluctuate with world financial markets and international currency exchange rates.

[i] Source: National Crime Agency and ONS, as of 7/9/2023.

[ii] “Germany Hunts for Cyber Criminals Amid Billion-Euro Scams,” Karin Matussek and Steven Arons, Bloomberg, 18/8/2023. Accessed via Yahoo! Finance.

[iii] “New FTC Data Show Consumers Reported Losing Nearly $8.8 Billion to Scams in 2022,” Federal Trade Commission, 23/2/2023.

[iv] “Fraudster Alistair Greig Jailed for ‘Cruel’ £13m Investment Lie,” Staff, BBC, 15/4/2020.

[v] “Central Valley Man Sentenced to Over 6 Years in Prison for $9 Million Cow Manure Ponzi Scheme,” US Justice Department, 26/6/2023.

[vi] “Banks Warn of Big Increase in Online Scams,” Tom Gerken, BBC, 5/5/2023.

[vii] “Financial Firms Must Boost Protections Against AI Scams, UK Regulator to Warn,” Jasper Jolly, The Guardian, 11/7/2023.

[viii] Source: FactSet, as of 7/9/2023. Statement based on MSCI World Index annualised return with net dividends in pounds, 31/12/1970 – 31/12/2022. Citing in British pounds due to the euro’s limited history. Currency fluctuations between the euro and pound may result in higher or lower investment returns.