FSCS Investment protection

masonic

Audaxer wrote: »

For example, a couple with £600k in investments could have £300k each split between 3 platforms, which I think is perfectly manageable - to me that would indicate they are serious investors and not investing just pocket money!!

Manageable, perhaps, but not moneysaving as the cost impact of spreading between 3 platforms vs each of them picking one platform for their £300k is huge.

The cost over 10 years for a £300,000 investment invested in funds, 7% average growth, no trading:

SIPP spread between cheapest 3 platforms: £8651
SIPP in cheapest single platform: £2590 (2nd cheapest £2605)

S&S ISA spread between cheapest 3 platforms: £1999
S&S ISA in cheapest single platform: £59 (2nd cheapest £204)

So that's a significant cost impact of spreading between platforms with no appreciable benefit.

Audaxer

masonic wrote: »

Manageable, perhaps, but not moneysaving as the cost impact of spreading between 3 platforms vs each of them picking one platform for their £300k is huge.

The cost over 10 years for a £300,000 investment invested in funds, 7% average growth, no trading:

SIPP spread between cheapest 3 platforms: £8651
SIPP in cheapest single platform: £2590 (2nd cheapest £2605)

S&S ISA spread between cheapest 3 platforms: £1999
S&S ISA in cheapest single platform: £59 (2nd cheapest £204)

So that's a significant cost impact of spreading between platforms with no appreciable benefit.

That's true, there is a cost impact, but for peace of mind some people on here with significant investments prefer to use at least 2 different platforms.

salsify

Thanks to all who have contributed to this thread so far, in reply to my original posting.

You have mostly echoed my own misgivings about splitting ongoing investments across several platforms, purely in order to keep below the £85k FSCS protection limit. It seems a cumbersome strategy to manage, and a costly one in terms of charges.

Equitable Life and other debacles have shown me that even the apparently most robust of financial institutions can seriously wobble. But for all that, I also feel that any fears about a large investment platform going bust could be overdone. So I simply have to consider my own feelings about a very small risk, and progress accordingly.

Thanks for your thought-provoking and considered responses.

Salsify

masonic

Audaxer wrote: »

That's true, there is a cost impact, but for peace of mind some people on here with significant investments prefer to use at least 2 different platforms.

As my figures show, the cost impact of holding in two platforms vs. one platform can be low, at least for S&S ISAs - an extra £200 or so over 10 years. Adding a third platform takes this a lot higher, almost 10x the cost.

Edit: I should also point out that the cheapest two providers in that example are really one and the same for the purposes of FSCS protection