Risk of almost total pension loss

gadgetmind

Here is how HL and most other large platforms organise matters.

http://www.hl.co.uk/investment-services/vantage-service/how-safe-is-your-investment

And here is the same for Vanguard.

https://www.vanguard.co.uk/documents/portal/literature/investor-protection.pdf

Freecall

cedarmay wrote: »

Investors rely on the regulators and the company auditors to provide the necessary checks but history has shown both can and do fail.

Sure, but what's the alternative?

If you are worried about financial institutions in a regulated market then you will have to look outside of those institutions to avoid the risk which concerns you.

Cash under the bed perhaps?

Or maybe you should be concerned about cash as well since at the end of the day that is only a promissory note which ultimately is only as good as whoever or whatever made the promise.

cedarmay

gadgetmind wrote: »

Here is for HL and most other large platforms organise matters.

http://www.hl.co.uk/investment-services/vantage-service/how-safe-is-your-investment

And here is the same for Vanguard.

https://www.vanguard.co.uk/documents/portal/literature/investor-protection.pdf

Top answer! Thank you.

talexuser

Many years ago I had some funds in Morgan Grenfell European fund, large famous investment firm, which was a great performer. The manager turned out to have fictional figures and the fund halved in value overnight and never really recovered. The scandal was such the house was sold to Deutsch Bank and the name disappeared into oblivion. Much later the manager turned up in court dressed as a woman with a "breakdown" defense.

Is the regulation any better today? It seems the banks come up with scandal after scandal, each time saying systems have been changed to make sure it doesn't happen again... and particularly the old "rogue trader story"...link

gadgetmind

I thought MG covered losses on that one?

And wasn't it investing way beyond its risk profile, much as IP High Income did before recently being fined?

JuicyJesus

dunstonh wrote: »

Don't pick a provider/product where your assets are not ring fenced.

There is no option any more. Under the FCAs CASS sourcebook, client assets must be segregated and held separately from firm assets.

talexuser

gadgetmind wrote: »

I thought MG covered losses on that one?

If they did it in no way compensated for the drop, since it lost 50-60% overnight and from memory there was fraudulent book-keeping to cover up the bad bets? After all the name was then so toxic it had to be dropped to be wiped from memory (a la Barings, Northern Rock, etc)

Thrugelmir

cedarmay wrote: »

But I can pick funds from supposedly reputable investment fund managers and in theory client assets should be ring fenced. But that's only the theory. Investors rely on the regulators and the company auditors to provide the necessary checks but history has shown both can and do fail.

Maxwell Publishing had around a 160 subsidiary companies around the globe in order to disguise the true state of the group's finances, along with a group treasury function. If there's collusion fraud or deception can be difficult to detect.

dunstonh

JuicyJesus wrote: »

There is no option any more. Under the FCAs CASS sourcebook, client assets must be segregated and held separately from firm assets.

I think it is only on old conventional with profits plans that it isnt. Unless it was extended to those legacy contracts as well?