Investment safety

norfolkfred

Hi

I'm a newbie to investing and looking at hargreaves lansdown platform, my question is if I buy funds & equities via them , if in the unlikely event that they failed as a business would my investments be safe?
I realise any actual cash held would be subject to fcsc limits

Thanks for any help

Iain_For

FSCS protection (currently £50k, rising to £85k next year) applies to both fund managers and brokers. The FSCS only applies when a fund manager or broker goes bust, or for a loss arising from bad advice. If your investments go belly up, you're on your own. Actual funds are usually held with a Custodian Bank, not the fund manager or broker so are 'ring-fenced' - lessons from Beaufort Securities not withstanding.

Linton

With bank accounts, the bank owns the money but provides a commitment to pay it back on request. In extreme circumstances they may not be able to meet that commitment. With H-L and other similar platforms you own the investments. H-L just have the right to manage them on your behalf at your request. So if H-L went bust they could not use your investments to pay their debts.


In practice what would probably happen is that H-L would sell their business to some other platform, so apart from a possibly some disruption during the transfer you should not be seriously affected.

dunstonh

Equities do not get FSCS protection. Nor do ITs or ETFs (unless done via an IFA under advice). OEICs/UTs get FSCS protection to £85k (from April 19) per fund house per person (not per fund. i.e. £850,000 spread across 10 funds from the same fund house would get just £85k protection).

HL have £85k FSCS protection but its largely irrelevant if you keep your investments in mainstream tradeable assets. It is the illiquid holdings which have trading restrictions where issues could arise.