An investment intermediary cannot provide investment advice on which instrument?

• A. Bonds listed on a Stock Exchange.
• B. Non-insurance tracker bonds.
• C. Collective investment funds.
• D. Contracts for Difference.

Answer: (D)

Contracts for Difference are leveraged derivatives that are highly complex and carry significant risk. Because of their complexity and the potential for rapid losses, regulators typically restrict giving personalised investment advice on CFDs to protect retail clients. This means an investment intermediary is not ordinarily authorised to provide tailored advice about CFDs, even though it can discuss other standard instruments more readily. In contrast, bonds listed on a stock exchange, non-insurance tracker bonds, and collective investment funds are standard products for which advisers routinely assess suitability and provide recommendations. So, the instrument you cannot provide investment advice on is Contracts for Difference.