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Between Banks and Fines, Is Investing in Diamonds Still Worthwhile Today?

Between Banks and Fines, Is Investing in Diamonds Still Worthwhile Today?

Diamonds are an ancient and exclusive form of investment, but certainly not very widespread. In Italy and not only in recent years, however, many asset management companies and especially banks have started offering investment diamonds in their portfolios as assets with great potential and as some of the best safe investments.

Investing today in diamonds, not an easy choice

The formulas used by credit institutions obviously focused on the strong points of these precious stones, which undoubtedly have unique and exclusive advantages: the refuge asset par excellence, a limited asset capable of acquiring value with the passage of time, a small and tax-free jewel, able to withstand crises and even strengthen them. All relatively true points, however, which should not make investors forget the other inevitable side of the coin.

In fact, investing in diamonds is certainly not an easy process, as we have explained in the various articles dedicated to the subject in the past and the same is true today, but regardless of this many readers will remember the Report broadcast on 17 October 2016, which brought to light in a survey service the non-transparent investments in diamonds offered by the Italian financial giant Banca Intesa Sanpaolo in collaboration with the Diamond Private Investment sector company. The team of hounds of journalist Milena Gabanelli brought national media attention to the issue, even if for a short time, discovering a scandal of national proportions. Consob immediately distanced itself, while the Antitrust Authority began its checks while waiting to take measures that only in the last few days were finally disclosed.

Diamonds are still a safe investment, watch out for financial partners

Antitrust and Competition Authority decreed that consumers would be deceived by officials of the credit institutions involved, who took advantage of the characteristics of investment diamonds to carry out a scam against the savers themselves. A fine of over €15 million was therefore imposed on the 4 Italian banks involved, i.e. Monte dei Paschi di Siena, BBPM, Unicredit and Intesa Sanpaolo, as well as on the 2 companies specialising in trading and buying and selling diamonds involved (Dpi and IDB). Specifically, the authorities complain to the IDB and Dpi companies of ‘unfairness profiles for misleading and omissive information disseminated through the website and promotional material (also intended for banks) on the sale price of diamonds, the trend in the diamond market and the easy resale of diamonds’.

In addition to the incorrect behaviour of the companies, however, the fault remains with the institutions, which are guilty of having offered investment diamonds to savers at much higher prices (even 70%) than the real ones, which we remind you are not accessible to everyone but are reserved for the few insiders who have a Rapaport price list. Finally, the authorities speak of the “conditions of sale and purchase prepared by IDB and Dpi, which have violated the rights of consumers relating to the rethink without making available the relevant form or specifying the terms of exercise”. Now, however, the matter has been closed, but this has certainly contributed to tarnish the reputation of an otherwise interesting asset such as diamonds, which Italian savers are now particularly wary of. The blame in this case, however, lies with the companies and banks, who have simply leveraged the strengths of an asset that in itself is a very good safe investment.


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