Investment accounts

Authorised and regulated by the UK’s FCA to provide investment accounts, we are bound by CASS rules to segregate and protect client assets.

March 2021 investment update

Our March investment update is now available to download.

The cyber security skills gap

The cyber security skills shortage has been making headlines for years, but the Covid-19 pandemic has made it more critical than ever.

Diamonds might be forever

Can technology disrupt the diamond industry, or will carbon crystals formed over millennia still capture consumers’ hearts?

14 July 2020 / Lifestyle

Turn left out of Antwerp’s cathedral-like Centraal station and you’re soon walking through a neighbourhood of uninspiring backstreets. That’s until you look through the shopfronts lining the Belgian city’s diamond district. Brilliant rainbow sparkles of light play off the surface of thousands of cut and polished gems in window after window – it’s an impressive visual display, and a reminder of why diamonds have long captured the imagination.

The global diamond market is estimated to be worth some $90bn, according to Grand View Research, and – at least pre-coronavirus – was expected to continue to grow in the coming decade. That said, even before the pandemic struck (and knocked seven per cent off the industry’s value in March), 2020 was expected to be a difficult year. The sector was already facing unprecedented challenges, including changing consumer tastes and new technologies. Can it adapt?

Earning a crust form the earth’s crust

Natural diamonds take billions of years to form. Deep in the earth’s crust, a combination of heat and pressure force fragments of carbon to crystallise and form diamonds. Volcanic eruptions drive rough diamonds to the surface, where they are recovered by mining conglomerates, artisanal river panning and other techniques.

Most of the value generated by diamonds comes from those of sufficiently high quality to be used in jewellery.

Rough diamonds are then sold through a network of intermediaries. Most end up being used in industry, where they are valued for their physical properties, notably their extreme hardness. But industrial diamonds are often low-grade; most of the value generated by diamonds comes from those of sufficiently high quality to be used in jewellery.

After rough diamonds are cut and polished (India currently dominates here), they are sold by brokers to jewellers who mount and fit the stones. In Europe, North America and China, the preference is for big rocks to go on engagement rings. Melody Lin, Analyst on Dolfin’s China desk, notes that in her home country, “If you want to get married you need a diamond – and it better be a big one!”

In India, by contrast, the taste is for designs that use many smaller gems. Also, in cultures where arranged marriages are common, there is a trend for purchasing ‘love diamonds’. A man might not initially be smitten with his ‘arranged’ wife, but will buy her a diamond when he falls for her.

Slow to change

“The industry is quite old school and doesn’t like to change,” says Graham Tom, a diamond expert and Registered Valuer in London. He adds that, like many industries, traditional bricks and mortar jewellery stores have been undermined by online outlets.

Today’s lab-grown stones are almost indistinguishable from natural gems.

And there are other challenges facing the industry. Most pressing is the emergence of synthetic diamonds – carbon ‘seeds’ are heated in high temperature vacuum chambers to make diamonds. Today’s lab-grown stones are almost indistinguishable from natural gems – Tom says that it is “difficult to tell” if one is looking at a synthetic or natural stone without a microscope. And, since synthetic diamonds can be created in a matter of days, they’re much cheaper than mined stones (although they currently only represent 1–2 per cent of sales).

The diamond industry is banking on people still wanting ‘authentic’ rocks, but the experience of the once mighty pearl trade, which was undercut by synthetics, offers a sobering lesson. Another worry is changing tastes. Millennials are particularly concerned about the provenance of stones – ‘blood diamonds’, which funded civil wars in African countries, have tarnished the industry’s reputation. Lower marriage rates in many places are affecting the engagement ring market, and diamonds are also competing with people’s taste for experiences and consumer electronics. As gifts, diamonds now compete with iPads and holidays to the Seychelles.

Rolling stones

Despite these challenges, the industry continues to generate multi-billion-dollar revenues. Dolfin’s Melody Lin notes that wealthy Chinese now treat diamond jewellery like works of art – something of a long-term investment. She also points to a new wave of high-end jewellery designers coming out of cities like Shanghai whose works are very popular. And a growing middle class in the world’s developing nations suggests demand could continue.

De Beers priced the range significantly lower than the standard for natural diamonds.

The industry is also responding to synthetics. Tom says De Beers (which holds over a third of market share) “laid the gauntlet down” by producing their own line of synthetic diamonds, called Lightbox, in 2018. De Beers priced the range significantly lower than the standard for natural diamonds – a shrewd move which will make it hard for other companies to sell lab-grown rocks for more.

The diamond industry might be in the rough at the moment but with a polish it may still sparkle for years to come.

Read More

Privacy in a pandemic

With the UK set to launch its Covid-19 track and trace app in June, we look at how technology has been deployed around the world to monitor the spread of the virus, and the implications for privacy and data security

/ 2 June 2020

Riding the wave together

As the world begins its first tentative steps out of lockdown, Dolfin’s Head of Business Development Georgios Ercan and Head of Investment Management Simon Black reflect on the preoccupations our clients have expressed during the Covid-19 crisis

/ 19 May 2020

Investment accounts

Dolfin’s investment accounts safeguard securities and cash, while ensuring you or your clients can take full advantage of multi-asset, multi-currency, and multi-strategy investments.

Learn more

About us

Founded as a London-based wealth boutique in 2013, today we’re a diversified financial services firm with an international presence and our own bespoke technology platform.

Learn more