Before You Invest: Follow the Money (and Find the Charge)
Someone asked me whether they should put £5,000 into a pharmacy chain investment. I won’t comment on any particular deal — but there’s one concept everyone should understand before they invest in anything: follow the money, and find out who actually holds the charge.
The short version — watch it on TikTok.
The short version
- Trace where your money goes — it rarely stops at the company you paid.
- A “charge” is security — a legal claim over a company’s assets, like a mortgage.
- Holding a claim on Company A is not the same as holding a charge over the company the money ends up in.
- No security = unsecured = the back of the queue if things go wrong.
- Higher return = higher risk. The fees are usually certain; the returns are only hoped for.
First: understand where the risk lies
When you invest, you’re not really “buying a pharmacy” or “buying a business.” You’re acquiring a claim — a contractual right against a particular company. The single most important question is: which company, and what does that claim actually entitle you to if things go wrong? Most people never ask. They see a headline return and a familiar-looking platform, and they assume the structure protects them. Often, it doesn’t — not because anyone’s doing anything wrong, but because of where they sit in the chain.
Follow the money: the chain of claims
Here’s the pattern to watch for. You put money into Company A. Company A moves it to Company B. Company B invests it into Company C — the business that actually holds the assets (say, the pharmacies). And here’s the twist: Company B takes a charge over Company C. So if C fails, B — as a secured creditor — can recover from C’s assets.
But you didn’t invest in B, and you didn’t invest in C. You invested in A. So ask yourself: does A hold a charge over C, or over anything at all? In many retail structures, the honest answer is probably not. And that’s the whole point — where’s your charge? Where’s your guarantee? If it isn’t held by the entity you actually invested in, you may be far more exposed than the headline suggests.
Holding a claim on Company A, which holds a charge over Company C, is not the same as holding that charge yourself. There’s a door between you and the security — and you don’t have the key.
Secured vs unsecured: which one are you?
This is the distinction the whole thing turns on:
| Secured | Unsecured | |
|---|---|---|
| What you hold | A charge over specific assets. | Only a promise to be repaid. |
| If it fails | Recover from those assets first. | Share what’s left, after everyone secured. |
| Your place in the queue | Near the front. | Near the back. |
Plenty of legitimate products leave the retail investor unsecured, even when there’s security elsewhere in the structure. That doesn’t make them bad — it just makes it essential that you know which one you are before you commit.
The honest caveats — both directions
Two things keep this fair. First: the possibility of losing your money is true of all investing, not a flaw of any one product. And when a return well above the low single digits is on offer, that reflects higher risk — there’s no reliable high-return, low-risk investment. Second, and just as important: being unsecured is not the same as being unprotected. In the UK, legitimate investment platforms are typically authorised and regulated by the Financial Conduct Authority (FCA); since 2023 the FCA’s Consumer Duty requires firms to deliver fair value and good outcomes for retail customers; there are usually risk warnings, appropriateness checks and cooling-off periods; and the Financial Ombudsman Service exists for complaints. So your protection is contractual and regulatory — not proprietary. You’re protected by rules and promises, not by owning security. Those are real — but they’re tested only when things go wrong, and they’re only as strong as the documents you can actually read.
The five questions to ask before you invest
You don’t need to be a lawyer. You need five answers, in writing:
- What am I actually buying? Shares, a loan, or a note? They rank very differently.
- Do I personally hold any security — or does a company in the structure?
- Where do I rank if it all goes wrong? Secured, preferential, or unsecured?
- What are the fees — and are they paid whether it works or not?
- Who holds the charge over the company where the money ends up? And is that me, or someone else?
A good provider will answer all five clearly. If the only way to find the answers is behind a login wall, that’s your cue to read every line before you commit — not after.
So follow the money, find out who holds the charge, and be careful — because it’s your money, and it’s the questions you ask before you sign that protect it.
How I can help
I’m not a financial adviser and this isn’t advice — but if you’re a pharmacist or owner weighing up how a pharmacy business or investment is structured, understanding corporate structure and where risk sits is exactly the kind of thinking I help people work through. For the business side of pharmacy, my writing on how two pharmacy groups ended and building a niche pharmacy are useful next reads.
Frequently asked questions
What is a charge in an investment?
A charge is a legal claim over a company’s assets — like a mortgage over a property. If the company fails, whoever holds the charge (a secured creditor) is paid first from those assets, ahead of unsecured creditors. The key question isn’t whether a charge exists somewhere in the structure — it’s whether you hold it. Holding a claim on a company that holds a charge is not the same as holding the charge yourself. General education, not advice.
What’s the difference between a secured and unsecured investor?
A secured investor has a charge over specific assets and can recover from them if the borrower fails — near the front of the queue. An unsecured investor has only a promise to be repaid, no asset security — near the back, sharing whatever is left. Many retail products leave the individual unsecured even when there’s security elsewhere in the structure, so always check which one you are.
How do I know where my money goes when I invest?
Follow it through the structure. You might pay Company A, which moves money to B, which invests in C — and the charge might sit between B and C, not between you and A. Read the documents to trace what you’re buying, which company you have a claim against, which company holds any charge, and over what. If the security isn’t held by the entity you invested in, you may be more exposed than it looks. Ask the provider and take regulated advice.
Are higher-return investments riskier?
Generally, yes — a higher targeted return usually reflects higher risk, and there’s no reliable high-return, low-risk investment. The chance of not getting your money back is a feature of all investing. Only invest what you can afford to lose, and understand the risk before you commit.
What questions should I ask before investing?
Five: (1) What am I buying — shares, a loan, or a note? (2) Do I hold any security, or does a company in the structure? (3) Where do I rank if it fails? (4) What are the fees, and are they paid win or lose? (5) Who holds the charge over the company the money ends up in? A good provider answers all five in writing. If the answers are only behind a login wall, read the contract before you sign.
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