CFD (Contract For Difference)

CFD’s are a non-regulated type of derivative trading which allows the investor to trade on the market as it happens but without ownership of the product which the investment is for.

This kind of trading is really for experienced investors who understand the market and are aware of the high risks involved. Unfortunately, many savers were not aware that their money was put into such a high-risk investment.

It seems that sellers of CFD’s often approach inexperienced consumers. The FCA found that the majority of retail consumers lost money that was invested in these schemes.

If your pension savings are tied up in CFD funds through a self-invested personal pension (SIPP), there’s a risk you may have lost a substantial amount of money.

Some financial advisers have been encouraging their clients to transfer their SIPP pensions into these investments in order to earn fees from pension transfers resulting in some investors possibly being able to claim compensation for mis-selling.

Many financial advisers become liable for compensation claims for financial mis-selling.

Why Is CFD High Risk?

When you invest in CFDs you are basically handing your money to a professional to make bets for you.

As with most bets, this means your investment can go up or down and more often than not you can often lose more money than you bet in the first place.

CFDs are also not regulated by the FCA (Financial Conduct Authority). The UK’s financial services watchdog does not have any authority over these transactions, meaning there is more potential for mistakes, misconduct, and mis-selling.

What To Do Next

You might be entitled to claim compensation if you have been advised to invest in a CFD investment by a financial advisor without being told of the risks involved.

There is a high chance you may have lost money through negligent financial advice if you have invested into CFDs through a SIPP pension,

The FCS (Financial Services Compensation Scheme) pay compensation to investors who have mis-sold CFD investments via their SIPP pension.

If you believe you have been mis-sold a CFD investment, it is important you receive expert legal advice immediately.

TYPES OF PENSION & INVESTMENT MIS-SELLING

  • You sold an investment without having properly been advised as to the risks.
  • Your personal circumstances or attitude to risk were not properly considered
  • You were advised to invest all or most of your pension savings into a single investment
  • You are advised to transfer the pension when it was not necessary
  • You were sold in esoteric, high risk investment
  • You now understand that your investment has significantly reduced in value or is worthless

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Questions or Concerns

If your claim is settled immediately by the provider who gave the advice, then there is no limit on the size of compensation. However, if it proves necessary to go to the Financial Ombudsman Service (FOS) then there is a limit of £160,000 for complaints about actions by firms from before April 1st 2019, and a £350,000 limit for actions by firms from after this date. If the adviser or business who provided the advice has since ceased trading, then an application could be made to the Financial Services Compensation Scheme (FSCS). The limit to claims made to the FSCS is £85,000 per individual per claim.

Once a complaint is placed with a provider, they have 8 weeks to make a final response. However, in exceptional circumstances, cases may take longer to handle. If a case has to go to the Financial Ombudsman Service (FOS, or, the Ombudsman) for arbitration, then it may take longer. However, most cases do not need to progress to the Ombudsman.

If the firm you were advised by is no longer trading, you may be eligible to make a claim to the Financial Services Compensation Scheme.

Even if you do not have copies of the paperwork yourself for any reason, we can usually obtain it directly from the provider. As such, while it is very helpful, it is not always necessary to have a copy of the relevant paperwork.

Currently there is no final time limit on claims being made, though some claims may be time-barred.
 
A claim may be rejected by the provider if the advice was given more than 6 years ago, or if the investment was surrendered more than 3 years ago. However, while time barring exists in some situations, our dedication and experience means we may be able to put together reasons highlighting why your case should not be time barred.

You do not need to use a claims management company or a solicitor to make a complaint  to your lender, and if your complaint is not successful you can refer it to the Financial Ombudsman Service, The Pensions Ombudsman Service (in the case of Pension related claims) or the Financial Services Compensation Scheme (where applicable) yourself for free.

After you’ve signed our forms, our team will first obtain the relevant paperwork from the adviser. To do this, we will file a Subject Access Request (SAR) with the provider. They must then disclose all information they hold related to you. Our team will then draw up a detailed complaint report to send to your provider, on your behalf, as to why they believe you were mis-sold the investment.

If the provider rejects this complaint, your case may be referred to the Financial Ombudsman Service, Pensions Ombudsman or Financial Services Compensation Scheme, where deemed necessary and eligible. You will be provided with regular updates on your claim, and will be informed when an offer of compensation is received.

If your claim is rejected by the provider, you have the right to bring the complaint to the Financial Ombudsman Service, Pensions Ombudsman Service or Financial Services Compensation Scheme (where applicable) (FOS) for an independent review.

A Self Invested Personal Pension is a type of pension investment approved by the UK government. It allows experienced investors to personally manage the content of their pension investment, allowing them greater control over the ways that their money is invested. As such, it can appear appealing to many investors as they believe that they will make a better return on their investments. While the product itself is not a bad thing, and can be highly beneficial to some consumers, it is often sold to people who it is not appropriate for.

You can make a mis-selling claim against any advised investment through Financial Claims. If you believe your independent financial adviser provided you with inappropriate advice on your investment, you could be due compensation.