Santander investments - FSCS covered?

D_Dickenson

When taking out some ISA's a couple of years ago with Santander I had to also take out some matched products that last 5 years. Now am I worried whether these products are covered or not by the FSGC scheme. Trying to get sense out of Santander is like talking to a mirror. Can anyone advise if these products are likely to be covered?

Guaranteed Plus Special Edition (5) ISA
Guaranteed Plus Special Edition (5) Direct Share
Investment ISA Santander Growth Plan issue (42) 5.5Yr
Investment ISA Santander Fixed Return Plan Growth

Many thanks

dunstonh

Most structured products have no FSCS protection once they hit their strike date (the investment date). Santander structured products also tend to be dire on terms as well. You may get a good rate on the savings account as they cross subsidise it from the rubbish investment product. Try and avoid doing that again

D_Dickenson

That doesn't sound good!

What does structured products mean?
I guess the ones above that are related to the price of the FTSE are structured, but one is simply a fixed rate return upon the 5 year expiry of the product - hopefully that one might be covered?

Is there anyway to determine exactly which products are covered and which are not?

dunstonh

What does structured products mean?

To give them their full title, they are called "structured capital at risk products". Abbreviated to structured products or SCARPS for short.

Structured capital-at-risk products aim to return the original money invested at the end of the term unless the index or asset price to which the product is linked has fallen below a predetermined threshold. If this happens you can quickly lose your original money.

If Santander was to fail you get no FSCS protection. You could lose everything.

The Financial Services Authority, considers it good practice for investors to limit their exposure to structured products to 25% of their overall investable assets, with no more than 10% of these assets being exposed to a single financial institution. IFAs will tend to follow that guidance but it is probable that tied sales reps of banks may not.

I guess the ones above that are related to the price of the FTSE are structured, but one is simply a fixed rate return upon the 5 year expiry of the product - hopefully that one might be covered?

Is there anyway to determine exactly which products are covered and which are not?

The ones linked to the FTSE or other index are the SCARPS. There are a small number which are deposit based and do get deposit protection under the FSCS. It will tell you in your product literature if they come under the deposit FSCS.

A quick and dirty check indicates that they are all SCARPS and have no FSCS protection. Not even investment level protection that traditional unit linked investments would have. Santander have had a lot of complaints on these as they misrepresented the FSCS protection in their literature and were fined 1.5 million earlier in the year for marketing them as guaranteed when they are not (the fine didnt question the sales process but the actual product literature - problem is that tied agents rely on what they are told by their employer). So, if you feel they were mis-sold to you then you should complain.

D_Dickenson

Yes this article refers to the fine you mention
Santander fined £1.5m over FSCS cover confusion

It also agrees coverage should be in the key facts documents - I'll try and dig them out.