Check before you invest

Do your own research on people, companies and investments

Page reading time: 3 minutes

Before you invest your money, check basic facts about what you are investing in and who with.

Use this list to check:

Are they licensed – is the company or person licensed by ASIC to advise on or offer this investment?
How does it work – can you explain the investment to someone else?
Is it real – are there signs of an investment scam?
What if something goes wrong – how do you complain?

Scammers are using real Australian Financial Services (AFS) licence numbers to appear legitimate. Check the AFS licence and contact details belong to who you are dealing with through AFCA's list of financial firms.

1. Check the company or person is licensed or authorised

Generally, a company or finance professional must hold an Australian Financial Services (AFS) licence to issue or sell investments in Australia. Or they must be an authorised representative of an AFS licence holder.

An AFS licence:

controls what kinds of financial products they can sell
shows the business meets basic standards such as compliance, insurance and training
gives better protection to investors if things go wrong (see step 4)

Holding an AFS licence does not mean that ASIC endorses the company, financial product, or advice. Or that you can't incur a loss from dealing with them.

How to check on a company or person

If they say they are:	Check this:
Licensed by ASIC (AFS licence)	ASIC's Professional Registers Search enter name, registration number or licence number ASIC Connect search in: Banned and Disqualified see if they have been banned from giving financial advice or managing a company
An authorised representative for a licensee (with an AFS licence)	ASIC's Professional Registers Search enter name, registration number or licence number
A financial adviser who can advise you on, or sell you, this investment	Financial Advisers Register enter name, adviser number, or Australian Business Number check what they are authorised to advise on
Offering an investment in a registered managed investment scheme	ASIC's Professional Registers Search enter name, registration number or licence number

Subscribe to ASIC's free Company Alert service for updates on a company. You'll get an email to tell you when they've lodged forms, and which ones.

2. Check you understand how the investment works

Make sure you understand how the investment works. A good way to test this is to see if you can easily explain the investment to someone else.

Ensure you know, and are comfortable with, how much risk you are taking on. Generally, the higher the projected return, the higher the risk involved.

For tips on how to research an investment, see how to invest.

Find and read the offer documents

Depending on the investment, an offer document may be a product disclosure statement (PDS) or a prospectus.

Before you invest, get the PDS or prospectus:

from the public website for the company
ask your financial adviser
search ASIC’s Offer Notice Board

For tips on reading offer documents, see research and compare companies.

Be wary of high-risk or unregulated investments

Investments not regulated by ASIC include crypto, direct investment in real estate or precious metals, and international investments not offered by licensed Australian providers.

Many of these investments are higher risk, so you’re more likely to lose your money. And you are not protected if things go wrong.

To find out more about high-risk investments, see investment warnings.

3. Check for the signs of an investment scam

Scammers are skilled at tricking you out of your money. It is not always easy to tell the difference between a real investment and a fake one.

For tips on what to look for, see investment scams.

Beware of imposter scams

Scammers impersonate real companies and financial investment firms, using publicly available details. Always independently verify who you are dealing with:

check company details through open-source searches and on the legitimate company website
call the number on the public website to ensure you are dealing with the real company and a real employee
be wary of fake offer documents sent by email

For more tips on what to look for, see investment scams.

Search the investor alert list

ASIC’s investor alert list is a list of suspicious companies, businesses and websites that are not to be trusted. They may be unlicensed or operating illegally. Search the investor alert list.

4. Know your rights if things go wrong

If you have a problem with a financial service or product from a licensed company or individual, you can complain. They are obligated to see if they can resolve the issue.

For detailed steps, see how to complain.

If you invest in something that is unlicensed and unregulated in Australia, it's harder to get help if things go wrong.