How safe are ETFs for online investors?

bluefukurou

bowlhead99 wrote: »

Just to add some colour........

Thanks for such a long and detailed post. I think I've got the information from the thread I was hoping for.

FatherAbraham

Linton wrote: »

.It is correct to say that brokers do not own your investments but merely have the right to manage them under your instructions. So if one went bust your investments could not be used to pay their debts.

I'm intrigued at your sanguinity, given the recent case of Beaufort Securities' collapse, and the losses imposed on the owners of investments held with the firm:. https://m.citywire.co.uk/money/david-kempton-my-outrage-at-beaufort-fallout/a1122602

Were the investors' protests ultimately upheld?

masonic

FatherAbraham wrote: »

I'm intrigued at your sanguinity, given the recent case of Beaufort Securities' collapse, and the losses imposed on the owners of investments held with the firm:. https://m.citywire.co.uk/money/david-kempton-my-outrage-at-beaufort-fallout/a1122602

Were the investors' protests ultimately upheld?

This was discussed earlier in the thread. Client investments can be used to pay for the cost of an Administration. In the case of Beaufort, this was capped at £10k per investor (all UK investors could reclaim this from the FSCS). However, it would be prudent to imagine if you had several hundred thousand invested with one firm, you might be subject to a haircut under different circumstances.

dunstonh

FatherAbraham wrote: »

I'm intrigued at your sanguinity, given the recent case of Beaufort Securities' collapse, and the losses imposed on the owners of investments held with the firm:. https://m.citywire.co.uk/money/david-kempton-my-outrage-at-beaufort-fallout/a1122602

Were the investors' protests ultimately upheld?

Beaufort was very different. They retailed high risk, niche investments that were not liquid. They are going to take years to liquidate. That is where the cost was going to be.

Whereas mainstream equity funds are liquid.

masonic

dunstonh wrote: »

Beaufort was very different. They retailed high risk, niche investments that were not liquid. They are going to take years to liquidate. That is where the cost was going to be.

Whereas mainstream equity funds are liquid.

There are scenarios in which a more mainstream platform might not be straightforward to wind down.

For example, if the platform outsourced its IT, obtaining and reconciling client accounts could be challenging, especially if the provider had not been paid for several months and the infrastructure had been "decommissioned" as a result, and/or if staff with knowledge of the systems had been made redundant or left on hostile terms. Some platforms have never been profitable and run on a shoe-string budget, so there may be little assurance that all of the necessary precautions to prevent such a scanario (or others) occurring have been taken.