Buried in the FCA’s warning this morning about unregulated loan notes and mini-bonds is a sentence that most of the coverage will skip. Listing the people it wants to hear from when something looks wrong, the regulator names regulated firms, banks, payment firms, lawyers — and then accountants and auditors, “who may be involved in getting these investments to consumers”. That is an uncomfortable phrase to read over a coffee, and it is worth sitting with rather than shrugging off. The FCA is not accusing the profession of anything. It is making a much simpler observation: when one of these investments goes into a client’s hands, the accountant is very often the only qualified professional anywhere near the transaction.
Which makes this a story about the advice gap even though the words never appear in the press release. The lang cat’s State of Advice Report 2025 found that 9% of UK adults had paid for regulated financial advice in the preceding two years, and that 91% of those who did take advice found it valuable. The other side of that statistic is not a population sitting patiently on cash. It is a population making investment decisions anyway — and the firm that reaches them first is frequently the one with the biggest advertising budget and the fewest permissions. An unregulated loan note offering a fixed return does not compete with regulated advice. It competes with the absence of it.
What the FCA actually said
The warning follows the failure of Woodville Consultants Limited, a litigation funder that raised money from retail investors through unregulated loan notes; Robert Goodhew and Andrew Stoneman of Kroll Advisory were appointed joint administrators on 16 July 2026. A loan note or mini-bond, stripped of the marketing, is a loan to a company for a fixed period in return for interest. If the company fails, the investor can lose the lot — and, as the FCA has set out, is unlikely to be able to take a complaint to the Financial Ombudsman Service or claim through the Financial Services Compensation Scheme unless they dealt with an authorised person about a regulated activity.
Marketing speculative illiquid securities of this kind to ordinary retail investors has been banned since 1 January 2021, made permanent after a temporary intervention. Yet the adverts persist, because the ban has an edge to it, and the practices the FCA describes are all ways of working along that edge: unregulated introducers passing people on for a fee that comes out of the money invested; firms promoting high-risk investments without the permission to do so; ‘halo’ associations, such as an overseas exchange listing or the involvement of an FCA-authorised security trustee, dressed up to imply a protection that is not there. The regulator has issued more than 1,200 warnings so far this year. Lucy Castledine, its director of consumer investments, put the test plainly: “Big, fixed returns are a warning sign, not a guarantee.”
One detail from the accompanying consumer statement deserves particular attention from anyone who prepares accounts: in some cases the FCA has seen, only part of the money raised is used for the investment itself, with a high proportion going to the introducer, marketing and running costs. The investment then has to perform strongly simply to return the original capital, before any promised interest.
The tick-box, and why you are the only person who can check it
The mechanism that lets a banned promotion reach an ordinary investor is usually a box they tick. The FCA’s statement puts it bluntly: firms ask people to certify themselves as sophisticated, experienced or high-net-worth investors, and most people do not meet those criteria. Ticking it removes protections the person almost certainly does not realise they had.
Here is the part that matters for a practice. Those criteria are not vague. They sit in the Financial Promotion Order, and the current thresholds were set by the Financial Services and Markets Act 2000 (Financial Promotion) (Amendment and Transitional Provision) Order 2024, in force from 27 March 2024. The high-net-worth statement requires annual income of £100,000 or more, or net assets of £250,000 or more — reduced by that Order from the £170,000 and £430,000 figures briefly in place before it. The self-certified sophisticated statement can be satisfied in several ways, including having been a director of a company with turnover of at least £1,000,000 (reduced from £1,600,000), or having made two or more investments in an unlisted company in the previous two years.
Read that list again as the person who prepares the client’s tax return and their company’s accounts. Annual income. Net assets. Company turnover. You are, in most cases, the only professional in the client’s life who already knows the answer to all three — and therefore the only one in a position to notice that a client with £62,000 of income, a mortgaged house and a company turning over £480,000 has signed a document asserting something quite different. The client is not usually lying. They are ticking what they were told to tick to see the next page.
The client did not choose an unregulated investment over a regulated one. They chose it over nothing, because nothing was the only alternative on offer.
Where this shows up in work you already do
These investments almost never arrive labelled. They surface as interest received on a personal tax return with no bank or building society behind it. As a transfer out of a personal or business account to a name that appears nowhere else in the records. As an item on a company balance sheet described only as a loan, made by a trading company with no reason to be lending money to anyone. Occasionally as a question in a year-end meeting: “What’s the tax treatment if I’m getting 9% fixed?”
The most reliable marker is the missing paperwork. A regulated investment generates statements, valuations and documentation almost to a fault. An unregulated loan note frequently generates a certificate, a covering letter and then silence — which is why the client so often brings you a figure rather than a document. It belongs on the same list as the other things worth a second look in a client file, alongside surplus cash and an owner approaching retirement, which we set out in the six signals already sitting in your client file.
It also has an obvious relationship with the cash question. A company with a large idle balance and no plan attached to it is exactly the profile these promotions are built to find: an owner who knows the money is doing nothing, is mildly irritated about it, and has never had the alternatives put side by side. We looked at that build-up of unallocated cash, and what has changed around it this year, in the cash question. An advert promising a big fixed return lands very differently on an owner who has already had that conversation than on one who has not.
What a joined-up conversation looks like here
This is the point where the case for accountants and financial planners working together stops being abstract. The accountant sees the money and the numbers behind the certification. The planner holds the permissions to assess whether an investment is suitable, and to say so on the record. Neither can do the other’s half, and the client is exposed precisely in the space between them.
In practice, a joined-up handling of this looks unglamorous. The accountant notices the unexplained interest or the outbound transfer and asks about it factually, without offering a view on the merits. If the client is still deciding, the accountant explains what the self-certification statement is actually asserting — and, with the client’s agreement, opens the conversation with a regulated firm before the money moves rather than after. The regulated firm forms the opinion on suitability, because that is the regulated act. The boundary is the same one that governs any referral of this kind, described in who does what: the accountant describes what they have seen; the authorised firm decides what it means.
None of that requires the accountant to become an investment expert or to hold any permission. It requires them to treat an unexplained fixed return the way they would already treat an unexplained director’s loan — as something to ask about rather than post.
Two things worth doing this week
First, run a targeted look through personal tax returns for interest received from sources that are not banks, building societies or recognisable platforms, and through company balance sheets for loans made to unconnected companies. This is a filter, not an accusation; most of what it surfaces will have a perfectly ordinary explanation. The ones that do not are worth a phone call.
Second, learn the FCA’s Firm Checker well enough to use it in front of a client in under a minute. Its value is not that it produces a verdict but that it makes the question concrete: does this firm hold permission for what it is actually doing here? The FCA’s own guidance points at the same check, including the specific trap of an ‘FCA-authorised security trustee’ being named in a proposal — acting as a security trustee is not a regulated activity in its own right, and its presence does not mean the investor is protected.
What is still unresolved
The FCA has been clear that its own powers do not reach the root of this. In its Perimeter Report, the regulator has asked the government to review the legislative exemptions that allow certain high-risk investments to be promoted outside FCA regulation — the self-certification route among them. That request is live and unanswered; no change to those exemptions has been made, and no timetable for one has been published. Separately, a new regime governing offers of securities to the public came into force in January 2026, and how far it narrows this particular route will only become visible in the pattern of cases over the coming year.
Until either of those shifts, the exemption stands, the adverts continue, and the last realistic checkpoint before a client’s money leaves is a professional who happens to know what their income and net assets actually are. That is a thin line of defence. It is also the one that exists, and the wider argument for closing the advice gap is not really about products at all — it is about who is in the room when the decision gets made.
Common questions
What do the high-net-worth and sophisticated investor exemptions actually require?
They are set out in the Financial Promotion Order, and the thresholds were changed by the Financial Services and Markets Act 2000 (Financial Promotion) (Amendment and Transitional Provision) Order 2024, in force from 27 March 2024. The high-net-worth statement requires annual income of £100,000 or more, or net assets of £250,000 or more — reduced from the £170,000 and £430,000 figures briefly in place before that Order. The self-certified sophisticated statement can be met in several ways, including having been a director of a company with turnover of at least £1,000,000, reduced from £1,600,000, or having made two or more investments in an unlisted company in the previous two years. Signing one is a statement of fact about the person signing it, not a formality.
Where would an unregulated loan note show up in records we already see?
Rarely under a heading that announces itself. It tends to surface as interest received on a personal tax return with no bank or building society behind it, a substantial transfer out of a personal or company account to a name nobody recognises, or a company balance sheet carrying an investment described only as a loan. Sometimes it arrives as a question rather than a document — a client mentioning a fixed return they have been offered, or asking how the interest will be taxed. The absence of ordinary paperwork is itself the signal: no dividend voucher, no platform statement, no annual valuation, and often no written explanation of what stands behind the word asset-backed.
Does raising this with a client stray into regulated advice?
Not if you keep to observation and process. Telling a client what you can see in their records, explaining what the self-certification statement is asserting, and pointing them at the FCA’s Firm Checker so they can confirm whether a firm holds the relevant permission are all factual acts. What would cross the line is telling them whether to buy, hold or sell a particular investment, or offering a view on whether it suits their circumstances — those are regulated activities and belong with an FCA-authorised firm. The distinction is the same one that governs any introduction: you describe what you have seen, and the regulated firm forms the opinion.
Are we obliged to report a client’s unregulated investment to anyone?
The FCA’s request that accountants and auditors report anything suspicious about high-risk investment promotions is exactly that — a request, and a route for information rather than a new statutory duty on your firm. Your existing anti-money-laundering obligations are unchanged and turn on your own suspicion of criminal property, assessed under your firm’s procedures and escalated to your money laundering reporting officer in the ordinary way. Those two things can point in the same direction without being the same decision. The practical answer in most practices is to record what you saw, raise it internally rather than resolving it alone, and let the firm’s MLRO judge whether anything further is required.
A client has already invested and it has gone wrong. What can they actually do?
Their position depends heavily on who they dealt with. The FCA has said investors in mini-bonds or loan notes are unlikely to be able to take a complaint to the Financial Ombudsman Service or claim through the Financial Services Compensation Scheme unless they dealt with an authorised person and the complaint relates to a regulated activity. Where money may still be moving, the FCA’s guidance is to contact the bank straight away and report it through Report Fraud, and to report the firm or promotion to the FCA. None of that is a recovery route in itself, which is the uncomfortable part, and it is why the useful moment is the one before the money leaves.