Where is the risk?

Uncle_Bob

I really should know this but I can't quite get my head around it ...


In terms of the potential loss of a pension fund through financial failure where does the risk lie? If I have a [Insert choice of platform here] SIPP and within it have a single investment in a [Insert choice of investment here] fund of some description, am I concerned about the platform provider going bust or the investment fund going bust?


My understanding is that the platform has purchased the fund on my behalf and so, assuming that they have actually done that, the risk lies in the investment fund. Is that right?

Marcon

Does this help? https://www.moneywise.co.uk/investing/funds/how-much-will-i-get-back-if-platform-goes-bust

Linton

Uncle_Bob wrote: »

I really should know this but I can't quite get my head around it ...


In terms of the potential loss of a pension fund through financial failure where does the risk lie? If I have a [Insert choice of platform here] SIPP and within it have a single investment in a [Insert choice of investment here] fund of some description, am I concerned about the platform provider going bust or the investment fund going bust?


My understanding is that the platform has purchased the fund on my behalf and so, assuming that they have actually done that, the risk lies in the investment fund. Is that right?

Yes. If the platform or fund manager goes bust you still own the units in the fund and the fund can carry on under a different platform and/or manager, though possibly with some delays whilst the transfer is arranged.


However if you hold an investment directly eg an ETF or IT, which goes bust, you as a shareholder are a long way down the list for recompense. That is an investment risk.

Uncle_Bob

Thanks both