Diamond Investment: Mis-Sold Pensions, Scams, And Frauds
Diamond investments are typically sold as brilliant and sparkling opportunities, just like the valuable stones that underly them. You may have been told that diamond investment protects you from market volatility and offers virtually guaranteed positive returns. Diamonds are often positioned as the paving-stones on your road to a retirement of safety and luxury.
The truth of the matter is that diamond investments fall into the category that professionals call ‘Unregulated Investments.’ They also meet all the criteria for being judged ‘High Risk.’ If they are sold to investors who lack the financial resources to absorb losses, diamond investments can cause catastrophic damage to the investor’s retirement plans.
If you are not a ‘High Net Worth Individual,’ a ‘Sophisticated Investor,’ or a risk-taker, and yet you have pension funds invested in diamonds, please review the information provided here carefully. Below you’ll learn how UCIS investments like diamonds really work, the true risks they pose, and how you may have been mis-sold diamond investments that are unsuitable for your retirement needs.
Mis-Sold Diamonds: Pension Scams And Fraud
Many investors are lured into diamonds by a cold (i.e. unsolicited) call. You are rung up by a marketer, a boiler-room operator, or perhaps even a regulated financial adviser who warns you that your current pension arrangements are ‘underperforming.’ They sell you on a curious solution: Moving some of your money into diamonds, one of the most expensive commodities being traded today.
The legitimacy of each diamond investment offer depends on the people involved. In the past few decades, some diamond investment operations have proven to be legitimate while others have been exposed as scams. Salesmen have grown greedy or negligent and over-stated the safety and return potential of diamond investments. Some of the firms offering ‘sound as a pound’ diamond investments have collapsed into liquidation.
With both legitimate and fraudulent salesmen, many investors are pushed into making diamond investments that they would not agree to if they were in full possession of the facts. Some of these unfortunate individuals risk losing all the money they have saved for their retirement.
How Diamond Investments Work
Diamond investments cover a range of different instruments. They might oblige you to invest in companies that mine and produce diamonds or to put your money into diamonds or derivative trading assets.
Mining & Production Shares
Some diamond investments take the form of ownership shares in a mining company. The returns these investments deliver depend on the individual company’s ability to find diamond-bearing seams, extract useful gems, and wholesale them on the global market.
Other investments involve buying mined and cut stones. These stones are put into storage on the assumption that diamond prices will rise in the future and that they can be sold for a profit.
Both forms of diamond investment rely on stable or increasing diamond prices and steady diamond production in order to deliver positive returns. You are unlikely to have received a full and fair explanation of these factors (as well as many others) if you have been mis-sold diamond investments.
Many UK investors rely on a SIPP to make diamond investments. Pensions typically represent an individual’s largest lump of financial resources after home ownership. While pension funds can’t be withdrawn and used prior to age 55 and/or your retirement, you CAN invest them with a SIPP.
SIPP stands for Self-Invested Personal Pension. SIPPs are unique because of their favourable tax position.