Shall I Split my isa for FSCS protection

Linton

I do not see any confusion...


FSCS is a cover for the regulated financial services companies, not investments. It seems to me that looking at the situation from that point of view makes things pretty clear.



FSCS cover only comes into force if a regulated financial services company is unable to meet its regulated obligations. So if a platform for any reason loses your investment and is unable to reimburse you then you are covered to the appropriate limit. If you invest in an OEIC/IT and the fund manager misplaces your money and cannot reimburse you, you are similarly covered. If you invest in a quoted or unquoted company and the company goes bust for any reason you are not covered because the protection of the value of your investment isnt a regulated activity. Similarly if you buy a fund from an incompetent fund manager.



Similarly for advice - a regulated adviser is regulated to provide appropriate advice. If the advice is not appropriate and the adviser cannot reimburse you, you are covered. If the adviser can reimburse you the FSCS cover doesnt come into force.

masonic

Linton wrote: »

I do not see any confusion...

It's the information provided by the FSCS website that creates the confusion.

System

A pointless debate about irrelevant protection that no one seems to understand.

talexuser

Not really, we are regularly told here that ITs and ETFs are not covered, but the quote for "stocks and shares" seems to imply that if the fund house providing the IT or EFT buying the underlying shares goes bust you may have some cover like an OEIC.

darkidoe

Economic wrote: »

A pointless debate about irrelevant protection that no one seems to understand.

Agreed. Anyone know any real scenarios that FSCS protection has been called to use as an example??

masonic

darkidoe wrote: »

Agreed. Anyone know any real scenarios that FSCS protection has been called to use as an example??

To my knowledge there hasn't been a DIY investment platform that has failed and needed to call on FSCS protection.

Audaxer

masonic wrote: »

To my knowledge there hasn't been a DIY investment platform that has failed and needed to call on FSCS protection.

I'd hope we are still protected in case a DIY platform does run into problems as could happen in future. I'd be very surprised following the agreed change from £50k to £85k protection after a full consultation, that DIY investors were not offered the same protection as 'advised' clients.

System

talexuser wrote: »

Not really, we are regularly told here that ITs and ETFs are not covered, but the quote for "stocks and shares" seems to imply that if the fund house providing the IT or EFT buying the underlying shares goes bust you may have some cover like an OEIC.

Which 'fund house' provides the F&C investment trust?

Linton

talexuser wrote: »

Not really, we are regularly told here that ITs and ETFs are not covered, but the quote for "stocks and shares" seems to imply that if the fund house providing the IT or EFT buying the underlying shares goes bust you may have some cover like an OEIC.

The IT is a separate legal entity to the fund house. The IT may happen to use a fund house to manage its investments( and can sack them as has recently happened). According to the FSCS website some businesses and charites may be eligible for compensation depending on the nature of the claim but what this actually means is not stated. But even if the IT was eligible for compensation for a failing fund house surely the customer is the IT, not you as a shareholder. £50K would not go very far.

talexuser

Economic wrote: »

Which 'fund house' provides the F&C investment trust?

Fair point, ok say company, since a board organises it? I'm as confused as anyone by the wording and what now is and is not covered.