An investment intermediary CANNOT provide investment advice on which of the following?

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

Answer: (A)

Contracts for Difference are leveraged, over-the-counter derivatives that don’t involve ownership of the underlying asset and carry high risk and complexity. Because of this, regulators typically restrict giving personalized investment advice on CFDs to protect retail investors; an investment intermediary is generally not allowed to provide tailored advice on CFDs, though they may share information or offer execution services.

In contrast, collective investment funds, bonds listed on a stock exchange, and non-insurance tracker bonds are standard, regulated investment products with clear disclosure and suitability considerations. An intermediary can assess a client’s objectives and risk tolerance and offer advice about these products.

So, CFDs are the product category where providing investment advice is typically not allowed, making them the correct choice.