Pretium Securities Ltd - anyone?

iso_2

Hi,

I've been contracted by Pretium Securities - a CFD broker. They're looking to take some money and invest it for me. They've sent me some emails on CDF trades that seem to have done pretty well.

I'm still very dubious - if it were so great why aren't they piling in themselves.

Anybody know of them or have any thoughts on these guys/schemes?

iso

dunstonh

I'm still very dubious

As you should be. CFDs are an experienced investor product and should not be cold marketed like that.

No decent investment firm/advising/stockbroking firm is going to cold call you. On top of that, to be cold marketed an experienced investor product is quite disgraceful as well.

New rules introduced by the Financial Services Authority (FSA) on 1 November 2007 have an effect on how contract for difference (CFD) services are sold to private investors,

The appropriateness test introduced by the FSA as a result of the new EU Markets in Financial Instruments Directive (MiFID) has the aim is to increase investor protection, so firms will be required to gather information from the individual client to prove that they have the knowledge and experience to understand the risks involved in certain, more complicated transactions, such as CFDs.

A firm needs details such as clients’ risk profile and level of investment experience before attempting to sell them certain products. So, if you get an approach by email or post from someone offering you a CFD and you don’t know them, you should be extra wary. If the trader doesn't know you, they can't possibly know whether CFDs are appropriate for you. That means they are not complying with the legislation and are almost certainly dodgy.

iso_2

dunstonh wrote: »

As you should be. CFDs are an experienced investor product and should not be cold marketed like that.

Hi dunstonh - I wondered whether you'd answer this :-) You are like the voice of reason that lurks at the back of my mind :T

SJCFDs

dunstonh wrote: »

A firm needs details such as clients’ risk profile and level of investment experience before attempting to sell them certain products. So, if you get an approach by email or post from someone offering you a CFD and you don’t know them, you should be extra wary. If the trader doesn't know you, they can't possibly know whether CFDs are appropriate for you. That means they are not complying with the legislation and are almost certainly dodgy.

Well hang on a second........you can't just make a sweeping generalisation like that!! I agree that emails and postal contact is something to be wary of, but really it's all about how the process of procuring clients is carried out from start to finish.

It depends on the way the product is sold over the phone for example. Of course any company worth its salt will FULLY explain the concepts and potential risks of any investment product they are pitching, but the fact that they communicate via phone, does NOT mean they are by definition "dodgy" as you put it.

If you are coerced/pressured or misled into an investment that you do not fully understand or one that is not suitable to your individual needs, then of course you should take issue with that.

But, once the product has been introduced over the phone and the potential client wishes to find out more - then before ANY actual investment is made - ALL checks and FSA "Know Your Customer" procedures must be carried out.

In theory, even if the potential client would like to proceed but the sales trader does not think CFDs are suitable for them - then he should say so and dissuade them from investing.

THAT is what separates a legitimate firm from the dodgy ones. NOT the fact that they know how to use a telephone or email system.

Come on guys - how else do people communicate in this day and age!!!!

pete80

SJCFDs wrote: »

Well hang on a second........you can't just make a sweeping generalisation like that!! I agree that emails and postal contact is something to be wary of, but really it's all about how the process of procuring clients is carried out from start to finish.

It depends on the way the product is sold over the phone for example. Of course any company worth its salt will FULLY explain the concepts and potential risks of any investment product they are pitching, but the fact that they communicate via phone, does NOT mean they are by definition "dodgy" as you put it.

If you are coerced/pressured or misled into an investment that you do not fully understand or one that is not suitable to your individual needs, then of course you should take issue with that.

But, once the product has been introduced over the phone and the potential client wishes to find out more - then before ANY actual investment is made - ALL checks and FSA "Know Your Customer" procedures must be carried out.

In theory, even if the potential client would like to proceed but the sales trader does not think CFDs are suitable for them - then he should say so and dissuade them from investing.

THAT is what separates a legitimate firm from the dodgy ones. NOT the fact that they know how to use a telephone or email system.

Come on guys - how else do people communicate in this day and age!!!!

I am of the opinion that CFD's have their place but on an execution-only basis not advisory as SOME of the less trustworthy firms seem to operate.

After visiting a traders exhibition involving spread betting, CFD and Fx Trading companies I got far more hassle off the Advisory CFD firms who had scanned my admission badge and pestered me with phone calls.
Bl** Index, Galv** Research and a couple of other firms were not able to get me to open an account in order to make CFD trades in order to gain their commissions. There is enough info on different forums about people having their accounts blown away by the names I have mentioned.

I don't know about SJ CFD's, are you a newish outfit?

bassnick

Beware of this company; it is just another way for IG to take your hard earned cash from you - IG makes a lot of money, open a Pretium account and you will soon find out how easily they do it.
When they place losing trades the commission will almost double your losses, but if they manage to place a winner you still pay commission and therefore they need more winners than losing trades or your cash will quickly disappear.
A good trader can take losses because his winning trades should more than accommodate them; but then he's not paying hefty in and out fees. Plus; a decent trader is proficient long or short, whereas these guys only seem to profit in a strong Bull market and are clueless when the going gets tricky.
Unless you happen to open an account when they are getting lucky, then a couple of duff trades and you'll start to see your money eroding fast. Advice: Stay away!

vaporate

I'm no expert but would advise to just stick with services provided by well known financial institutions, ( big 4 banks).

turbobob

bassnick wrote: »

Beware of this company; it is just another way for IG to take your hard earned cash from you - IG makes a lot of money, open a Pretium account and you will soon find out how easily they do it.
When they place losing trades the commission will almost double your losses, but if they manage to place a winner you still pay commission and therefore they need more winners than losing trades or your cash will quickly disappear.
A good trader can take losses because his winning trades should more than accommodate them; but then he's not paying hefty in and out fees. Plus; a decent trader is proficient long or short, whereas these guys only seem to profit in a strong Bull market and are clueless when the going gets tricky.
Unless you happen to open an account when they are getting lucky, then a couple of duff trades and you'll start to see your money eroding fast. Advice: Stay away!

They are probably just using IG as the CFD provider. You are absolutely right in that you are up against it from day one with these types of firms due to their high commission. A string of losses (which will come sooner or later) will be doubly painful as they take their commission whatever. Someone I know was using one of these firms but I think has now seen the light and dumped them :T

Here is a cautionary tale for anyone considering an advisory CFD broker - http://www.contracts-for-difference.com/CFD-losses.html

nb Blue Index are not currently operating due to having their permission to advise on investments removed by the FSA.

bassnick

I believe Pretium is a trading arm of IG although the individual traders can use whatever platform they like.
Just thought I would emphasise that, as far as I know, there is nothing suspicious about Pretium - IG are an excellent company for the experienced Spreadbetter or CFD trader. It's just that Pretium is a win/win situation for them because of the fat commissions they take win or lose, but you the client can quickly lose a lot of money.
As a trader myself, I didn't particularly rate the Pretium traders I have encountered and these sort of accounts are only for monies that you CAN AFFORD to lose because there's a high chance you will!

LongTermLurker

SJCFDs wrote: »

Well hang on a second........you can't just make a sweeping generalisation like that!! I agree that emails and postal contact is something to be wary of, but really it's all about how the process of procuring clients is carried out from start to finish.
...
But, once the product has been introduced over the phone and the potential client wishes to find out more - then before ANY actual investment is made - ALL checks and FSA "Know Your Customer" procedures must be carried out.
...
THAT is what separates a legitimate firm from the dodgy ones. NOT the fact that they know how to use a telephone or email system.

Come on guys - how else do people communicate in this day and age!!!!

Marketing a product is one thing, but hitting the non-target market with something is another. CFDs are clearly a specialist product and as such they shouldn't be marketed to the general public over the phone unless Joe Public has expressed an interest.

If you phoned me and asked if I'd be interested in investing, I'd think you were dodgy. If you phoned me out of the blue and started talking about something extremely high risk, I'd think you were a con man.

You clearly work as a cold caller, and much as I despise such people, that's fair enough, but any decent salesman worth his salt will want to develop his client and the account attached to that. So with a financial product, I would expect you to try and get to know me and my needs before suggesting any particular product, let alone one which has a minority audience - you clearly agree, but the OP suggested that this firm didn't work like that.

dogsbody_69

iso wrote: »

Hi,

I've been contracted by Pretium Securities - a CFD broker. They're looking to take some money and invest it for me. They've sent me some emails on CDF trades that seem to have done pretty well.

I'm still very dubious - if it were so great why aren't they piling in themselves.

Anybody know of them or have any thoughts on these guys/schemes?

iso

Answer they make there money from the commision at your risk thats good sense dont you think,, but i am visiting Pretium to meet there investers/and look at the operation prior to investing with them as I would expect and advise anyone to do before passing any money to anybody< I will post you what I find out, thanks