How safe is my money in HL?

Any

I had no idea that you would be covered for every fund provider, not the provider you invested through.
Very good to know. You learn something new every day!

Srcandas - if you were worried about £1m invested, but that is only third of your wealth, are you available to marry?:D

srcandas

Any wrote: »

Srcandas - if you were worried about £1m invested, but that is only third of your wealth, are you available to marry?:D

Sadly any I don't have 1 million; I was referencing the OP. Secondly I have a lovely Spanish lady as my partner. But I wish you all the best in your search

And back to the OP there is I think a very serious issue of security here. Suppose your account was hacked and drained. The platform would claim you had givin your passwords away. You'd claim it had been hacked. .............

When I chose HL it was after rejecting a heavily pumped "cheap" platform here who had minimal login security and happily gave me my pasword over the phone (note: quality systems are designed so the company cannot see your password).

So I guess security might be a good reason to split your investments :cool:

gadgetmind

srcandas wrote: »

I think a very serious issue of security here. Suppose your account was hacked and drained.

HL do have a two level log in, with the second level being designed to fool keystroke loggers, and then there is yet another password to make any trades.

Nothing is fool-proof, but they have clearly made an effort.

jimjames

srcandas wrote: »

And back to the OP there is I think a very serious issue of security here. Suppose your account was hacked and drained. The platform would claim you had givin your passwords away. You'd claim it had been hacked. .............

With HL the funds have to be transferred to your bank account, any changes are sent to your home address.

I guess it may be technically possible for the hacker to change your home address, change your bank account then sell all your holdings but at least one of the letters should get through to you.

jimjames

Jegersmart wrote: »

Investors are likely to be covered by the provisions of the Financial Services Compensation Scheme (FSCS), if Hargreaves Lansdown ceases trading. It can award up to £50,000 (increased from £48,000 in January 2010) in compensation to any one investor where they decide that an investment business is in default and is unable to satisfy any claims against it.

These posts seem to be trying to create concern and worry for people where there is none. I repeat again, the funds are not held by HL but by the fund house once invested so for an invested portfolio there is no claim against HL and it would not need to claim on FSCS.

The circumstances in which this might conceivably ever happen are if you are investing more than £50k in one go and HL go bust at the same time you place your investment - the first part is unlikely for most investors even if the second happens. The same would be the case for selling more than £50k of holdings in one go and HL then went bust.

By splitting the sale to £50k chunks across different days you would be protected and again I would suggest this would affect very few people even if the scenario ever happened.

Quoting FSCS rules without clarifying how they would apply seems to be scaremongering with no reason.

Jegersmart

jimjames wrote: »

These posts seem to be trying to create concern and worry for people where there is none. I repeat again, the funds are not held by HL but by the fund house once invested so for an invested portfolio there is no claim against HL and it would not need to claim on FSCS.

The circumstances in which this might conceivably ever happen are if you are investing more than £50k in one go and HL go bust at the same time you place your investment - the first part is unlikely for most investors even if the second happens. The same would be the case for selling more than £50k of holdings in one go and HL then went bust.

By splitting the sale to £50k chunks across different days you would be protected and again I would suggest this would affect very few people even if the scenario ever happened.

Quoting FSCS rules without clarifying how they would apply seems to be scaremongering with no reason.

Haha, I am not trying to scaremonger. When I asked Fidelity on this issue they told me that each company I am invested with would be insured up to £50k, the fact that I am using Fidelity as a platform is irrelevant (unless invested with them) and this applies to HL as well.

What I am pointing out relates to £1M invested with one company - and my understanding based on Fidelity's explanation to me is that if you are invested in one company you are insured for £50k. Is this incorrect?

J

srcandas

Jegersmart wrote: »

What I am pointing out relates to £1M invested with one company - and my understanding based on Fidelity's explanation to me is that if you are invested in one company you are insured for £50k. Is this incorrect?

J

I think you are right but of course we mostly are not investing in the company per se be it HL or as in my example Aberdeen. We are investing in a fund managed by a company.

Aberdeen could be on the verge of bankrupcy but it's funds could be stuffed with money (and I hope it would be illegal for it to support itself by stealing fund funds (if you get me ).

So perhaps another question might be how easily could a rogue trader rob me of my wealth? And what if any protection is there?

Again I make it clear I have 99.999% confidense in hl and aberdeen :beer:

jimjames

Jegersmart wrote: »

What I am pointing out relates to £1M invested with one company - and my understanding based on Fidelity's explanation to me is that if you are invested in one company you are insured for £50k. Is this incorrect?

J

I guess you need to define what risks you think you are insured for and the likely event of each of them.

Risk of platform (HL) going bust
Risk of platform bankers going bust
Risk of fund manager going bust
Risk of fraud by platform
Risk of fraud by fund manager
Risk of stock market dropping in value
Risk of investment in the fund going bust

Some of the above are more likely than others and some would not affect the value of your investment. HL's FSCS would not cover all of these eventualities.

grey_gym_sock

jimjames wrote: »

The circumstances in which this might conceivably ever happen are if you are investing more than £50k in one go and HL go bust at the same time you place your investment

that would only be an issue if HL fraudulently/carelessly put the cash in their own name. the cash is actually held in a nominee account with a (or more than 1?) major bank, so HL's creditors (if it had any) could make no claim on your cash.

once you are invested, your units/shares are also held in a nominee account. however, the same issue potentially applies if HL wrongly took it out of the nominee account.

how the £50k limit works depends on who's defaulted. if it were HL, it would be 1 limit for whatever they're responsible for. if it were 1 of the fund managers whose funds you hold through HL, it'd be 1 limit per fund management group.

these risks are pretty small, but i wouldn't completely discount them.

it's nice for platform providers to be financially stable. which is not the same as the share price not crashing. HL specifically keep on pointing out that they have no debt and large cash balances of their own. that is the kind of thing i mean by stability. a share price can crash when the market decides that future profits will be lower than they'd been hoping. but that doesn't particularly matter for security, at least if the company will continue to make profits rather than losses.

i would also tend to split my investments up among perhaps 2 or 3 providers, no matter who they are.

pqrdef

jimjames wrote: »

If the money is in a fund through the HL Vantage service then the fund is held by the fund house themselves.

Always assuming that H-L did actually buy the fund. You've got no evidence that this transaction ever took place.