Cask whisky is an asset that many investors looking to diversify or leave a legacy have found appealing, but in recent years, it has been an area that has been targeted by scammers.
Malicious actors take advantage of the fact that a number of the investors in the industry are whisky enthusiasts who trust what they are being told and accept a lot of things at face value.
Unfortunately, this means that many scammers have come to see the industry as something of a soft touch. We’re passionate about changing that with a little help from one of the most trusted names in the business.
Make Sure You Always Verify
“Cask whisky is an exciting and unique asset, but as with everything, it’s important to go with your eyes fully open,” says Alphie Valentine, Co-founder of Hackstons, established whisky specialists who provide opportunities for both investment and consumption.
His point is that if you don’t open your eyes to everything that could go wrong, you will never be able to make an informed decision.
Arguably, the biggest thing that can go wrong with a cask whisky investment is that years later, you find that you never owned what you were told you were buying in the first place.
When this happens, there is often little or no recourse, meaning that all of your investment will likely be lost, and there will be nothing that you can do about it.
To avoid this painful situation, Hackstons advises getting a Delivery Order, the ultimate proof of cask ownership, that allows you to comprehensively verify the asset: what it is, who owns it, and where it is stored.
Look for an Established Name
The longer someone has been in business and the more investors they have helped along the way, the more you may be inclined to trust them. This is perfectly natural and something that is also very important in an industry that is often seen as a target.
Looking for an established name not only protects you from being exploited by scammers, but it also ensures that you’re putting your money to work the smart way.
After all, there are always new entrants to a market who mean well but who may not have the full range of expertise and experience that you need to optimise the performance of your portfolio.
Avoid All Guaranteed Returns
When a high return is advertised, or a guarantee is made, what you’re being sold is something that has virtually no risk. It sounds great and may make you feel smart for having come across it in the first place, but it’s also just not realistic.
Even the most stable, mature asset classes have elements of risk that cannot be fully modelled and predicted. Cask whisky may be a maturing industry that has the potential to deliver steady appreciation over the long term, but it is far from able to offer guarantees.
Ask About Climate-controlled Storage
One of the easy things to overlook when it comes to cask whisky is how and where it is going to be stored.
If you look at online resources, such as Hackstons on YouTube, you will find extensive detail on every aspect of their operations, and that means you can learn more about how everything works. If in doubt, ask for more information and don’t be afraid to scrutinise what you’re being told.
Hidden Costs Are a Warning Sign
Fees that are not outlined at the beginning, high ongoing costs hidden away in the small print, and vagueness when it comes to selling the asset are all warning signs.
If you can’t see the costs and fees of each aspect of ownership laid out before you invest, you won’t be able to reliably estimate the level of risk you are exposing yourself to. Look for clarity and transparency to make sure that you are investing with the right people.
Walk Away From High-pressure Tactics
Lastly, if you work through all of the above only to find that the more questions you ask, the more pressure is applied to you, always walk away. High-pressure selling may be the norm in certain fields, but it is rarely done in line with your best interests.
A trusted company offering cask whisky investment opportunities will certainly never employ this type of approach when they are looking to bring you on board as a client.
Final thoughts
Taking the time to familiarise yourself with the key points and pieces of guidance outlined above will help you stay safe in the world of whisky investments.
It’s about taking control of the situation, giving yourself the information you need to avoid scams, and putting yourself in a position where you’re able to make an informed decision. If you can do that, you increase your ability to control the risk exposure of your portfolio.
Leave a Reply