Security of Managed Funds

Rheumatoid

If I invest in funds through a company such as fidelity, how secure are they and what protection do I have. I appreciate that if a stock in a fund goes bust then the fund just takes a hit but what if the whole fund goes bust or if fidelity who look after my funds goes bust?

Thanks

R.

Lokolo

http://forums.moneysavingexpert.com/showthread.html?t=1359077

A whole fund isn't going to go bust. It would require all the things invested in it to fail. We are talking of millions and millions of £'s investments failing.

Rheumatoid

Lokolo wrote: »

http://forums.moneysavingexpert.com/showthread.html?t=1359077

A whole fund isn't going to go bust. It would require all the things invested in it to fail. We are talking of millions and millions of £'s investments failing.

What about if it goes bust through mismanagment or fraud?

R.

dunstonh

What about if it goes bust through mismanagment or fraud?

Mismanagment is nothing you can claim for. Bad decisions with hindsight are just bad decisions. Fraud will depend on the solvency of the company in question and the type of fraud but then you have FSCS protection using either investments FSCS levels or life and pensions FSCS levels.

cepheus

I believe that certain types of investments (Self select ISAs, SIPPs) are ring fenced so the risk is limited to the underlying bank going bust if the investment is kept in cash? In which case the FSCS would step in.

Investment FSCS protection is very complex, and can vary with each product's structure. Always check with your provider.

• Investments.
  
  If you've invested in an investment fund (e.g. through a discount broker), you'll get the first £30,000 back, plus 90% of the next £20,000 (a total of £48,000).
• Pensions & Life Assurance.
  
  Stakeholder pensions and money paid into life assurance products usually fall under the category of 'long-term insurance', meaning the first £2,000 is fully covered, then 90% of everything else in them. This is the same even if your stakeholder pension is held in 'cash funds'.
• Self Invested Personal Pensions (SIPPs).
  
  A Sipp is a completely DIY pension. which gives you complete control of your pension pot – for better or worse! The protection your cash gets depends on how you decide to use it. But importantly, in general the cash is ringfenced from the Sipp provider, meaning if IT goes bust, your money is safe.
  
  If you choose to invest in stockmarket funds or other investment vehicles, 100% of the first £30,000 is covered plus 90% of the next £20,000 (a total of £48,000). It's also possible to hold the money as cash within the Sipp; here you are covered under the standard £50,000 per person per institution. Sipp providers will tell you which banks the cash is held in, so you can check if it's linked to any others you have savings with (See Institutional links table).

http://www.moneysavingexpert.com/savings/safe-savings