Diversifying across multiple platforms for S&S ISAs/SIPPs

darkidoe

HI

I am coming to a point where I am thinking whether it is prudent to diversify investment holdings in different platforms. I wonder what are people's practices or thoughts of opening various S&S ISAs or SIPPS to spread risk of platform failure.

I don't see myself having a vastly different strategic holdings in the two platforms that I might have. I might buy the same stuff for simplicity.

Is it worth the hassle or am I a worry wart?

bostonerimus

The risk of failure is small if your are with mainstream platforms. Even if they did fail you'd still own the funds. What you should do is keep good records of your holdings. This is why I still get quarterly statements mailed to me for all my accounts. If the computers go down for any reason I have a fairly recent hard copy.

Linton

As Bonstonerimus says the risk is very small. However as there is no advantage in having your SIPP on the same platform as your ISA you may find it reassuring to put them on a different one. Similarly with his and hers investments. Mrs L and I use 3 platforms. Going further with one person having multiple SIPPs or ISAs on different platforms is likely to add significant hassle to managing ones investments.

shinytop

I'd also have enough cash/credit to ensure solvency for a few months in the case of a failure.

Albermarle

However as there is no advantage in having your SIPP on the same platform as your ISA you may find it reassuring to put them on a different one. Similarly with his and hers investments. Mrs L and I use 3 platforms.

Just one rider to this , there is at least one platform ( Fidelity) where they add up all funds on the platform ( whether unwrapped/ISA's or SIPP ) and if you reach £250K the platform charge drops from 0.35% to 0.2 % for the whole £250K .
Also this discount can be applied to any immediate family members with investments on the platform.

AnotherJoe

I think there's very little harm in having two or three platforms so yes, why not do it. The main issue would be if you wished to rebalance and that spread across platforms when it would become impractical. I have two consolidated down from four (baggage of previous employments) and am happy to keep it like that. One I keep for long term stable funds I essentially never change, the other is a bit more fluid.

talexuser

I have my SIPP on a different platform just because it is cheaper to run, otherwise I wouldn't be bothered because your funds are ringfenced, if the platform folds, another will take over the accounts.

AnotherJoe

talexuser wrote: »

I have my SIPP on a different platform just because it is cheaper to run, otherwise I wouldn't be bothered because your funds are ringfenced, if the platform folds, another will take over the accounts.

That's fine as long as you can tolerate a potentially very long delay before you can access your funds.

talexuser

What's a very long delay? A year?

pafpcg

talexuser wrote: »

What's a very long delay? A year?

Easily! And probably more if liquidation became difficult if fraud were suspected or assets were found to be missing.

The SVS platform has been in administration since early August and assets won't be available until at least the 1st quarter of 2020 (probably April), see here: https://forums.moneysavingexpert.com/discussion/6032496/svs-securities-shut-down. In this case, it's a relatively small platform (£300Mill), it entered administration voluntarily under the supervision of the FCA, the administrators say that the assets match the client records, the administrators have retained the IT staff, etc, etc, but it'll still take about eight months (or more) before clients can regain access to their holdings.

talexuser

Ok then, if I can't sleep at night because the probability of Halifax (ie Lloyds) and Fidelity going bust, then I sensibly won't invest at all, and give up my bank accounts too.