As already mentioned, the recent WorldSpreads incident, and the performance of the financial services sector in general in recent years has given investors such a torrid time in the last few years, that doing some due diligence when it comes to depositing your money anywhere other than under your bed is now essential.
Two companies quick to attempt to restore investors confidence were LSE listed London Capital Group (parent company of Capital Spreads) and IG group. Both companies stated that neither had any financial exposure to WorldSpreads and that retail client monies are segregated at all times by the companies. The rumours regarding the WorldSpreads client money issue had been circulating all weekend, and the incident is likely to have a big impact on the Spread betting industry with tighter compliance and regulatory regimes that could have a knock on impact onto prices for Spread bettors which is a bit like kicking a man when he is down.
Whilst we cannot advise on the financial stability of Spread Betting companies, Capital Spreads is currently our preferred Spread Betting provider for the mass user, because of its competitive prices, leverage and markets available, and general professionalism of service.
Read more about Capital Spreads
"London Capital Group Holdings plc notes that Worldspreads Limited ("Worldspreads") has appointed Joint Special Administrators following the identification of a material shortfall in client money.
The Company has no financial exposure to Worldspreads and no commercial contracts of any nature with Worldspreads
LCG does not utilise retail client funds for its own or any other purpose. Retail client funds are fully segregated at all times whether required by regulation or not"
"IG Group Holdings plc ("IG" or the "Group") notes that Worldspreads Limited ("Worldspreads") has appointed Joint Special Administrators following the identification of a material shortfall in client money.
The Group has no direct financial exposure to Worldspreads. Worldspreads had a UK market share of approximately 3%, compared to the Group's share of 41%, according to the most recently available market research.
IG Group fully segregates all individual client funds, even where regulation permits otherwise and does not utilise client money for its own purposes."