Advisers face extra FSCS bill for £13m CfD failure

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Advisers are expected to have to pay part of a FSCS compensation bill for the alleged mismanagement of high risk Contract for Difference (CfD) investments which could total £13m.

CfDs are highly-leveraged investments which open investors up to increased speculative gains but also large potential losses. Investors claim Glasgow-based stockbroker Direct Sharedeal, which entered administration last May, failed to suitably assess their attitude to risk, and managed their investments outside of its stated mandate, causing some to lose up to 98% of their capital. But Direct Sharedeal, which won the bulk of its business via referrals from IFAs, claims it was the advisers' responsibility, at least partly, to assess suitability. Extracts of a report by the joint adm...

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