Financial Services Compensation Scheme query

jimjames

Audaxer wrote: »

I know it's probably unlikely, but do some large investors split investments between platforms in case there was such a fraud in one of the platforms, as they would only be covered up to £50k?

Some might do but I have over the FSCS limit with one provider but different funds.

Linton

Audaxer wrote: »

I know it's probably unlikely, but do some large investors split investments between platforms in case there was such a fraud in one of the platforms, as they would only be covered up to £50k?

After a lifetime of DC pensions and S&S investing one could easily end up with £500K in SIPPs and ISAs. Using 10+ different platforms would be a nightmare. I dont see it as an issue with mainstream providers, the risk being far less likely than those one takes every day simply living. At most it may be sensible to split £500K over 2 or 3 platforms.

ccie1793

I have been looking for a thread to cover this subject and wanted to clarify the position. I have a Standard life fund that invests in other SL funds - through my works pension scheme - its actually SL Passive Plus 3 Pension Fund. And the investment is over £500K.


the SL literature says each fund - internal or external uses a Depositary and Custodian (D+C) to segregate the investments from SL.

• there is a risk that SL goes bust - supposedly the D+C are independent so I still retain 100% ownership of the investments.
• there is a risk of bad advice/fraudulent activity by SL - then the FSCS steps in
• there is a risk of fraud by the D+C - then the FSCS steps in

FSCS says:


deposits up to £85,000 per person per firm;
100% of the claim with no upper limit for claims relating to long term insurance policies (such as pensions and life assurance); and
investments up to a limit of £50,000 per person per firm. These include for claims relating from bad investment advice, poor investment management or misrepresentation.




I do worry about having everything invested with one provider BUT if it is just time to recover rather than any loss that is ok.


Given that in this instance the investment is a Pension Fund - am I covered 100% by FSCS or is that just too easy and I have to look at the underlying investments to work out the risk?


any help gladly received.

dunstonh

Given that in this instance the investment is a Pension Fund - am I covered 100% by FSCS or is that just too easy and I have to look at the underlying investments to work out the risk?

Insured pension funds from the provider's own internal range is 100% protected with no upper limit.

It when you use SIPPs (using regulated investments) or PPPs with external insured funds that you get the £50k per fund house protection.

Alexland

Another question I have been pondering.

If holding a large adult SIPP with Interactive Investor they offer a free JISA - would the wrappers each have their own £50k FSCS protection as there are different beneficiaries in the same platform account?

Alex

dunstonh

Alexland wrote: »

Another question I have been pondering.

If holding a large adult SIPP with Interactive Investor they offer a free JISA - would the wrappers each have their own £50k FSCS protection as there are different beneficiaries in the same platform account?

Alex

in the case of II (and note that this is not all providers), it is per institution.

Alexland

So £50k total even if the SIPP was for the parent and the JISA was for a child in the same account? Wouldn't both the parent and child have individual claims on II for up to £50k? Similar to the 2x£85k that can be claimed on a joint bank account?

Keep_pedalling

Alexland wrote: »

So £50k total even if the SIPP was for the parent and the JISA was for a child in the same account? Wouldn't both the parent and child have individual claims on II for up to £50k? Similar to the 2x£85k that can be claimed on a joint bank account?

The JISA would be in the child's name so would get its own protection. You may have just a single account number to access your portfolio of products but each seperate wrapper within that portfolio will have its own unique identity.