FSA Account Protection for Stocks and Share accounts

dwini

Can someone clarify the protection? on Stocks and Share accounts (ISA or non ISA), as there is a lot of discussion about the cash but little on the shares. What I have gleaned is that if a provider was to go down, the cash is protected up to the limit (whatever that is at the time e.g. £80K) but the shares are safe as they should remain registered in your name and passed on to a new provider assigned by the FSA to take over the dealing. First question is, is this correct, and if so technically you can have more in the account as long as the value is in shares and you should be ok. Can someone clarify if this is correct and help point to where its clearly stated on any reference sites like the FSA. Thank you.

dunstonh

FSA Account Protection for Stocks and Share accounts

The Food standards agency do not provide protection for investments.    You mean FSCS protection which is the Financial Services Compensation Scheme.

Can someone clarify the protection? on Stocks and Share accounts (ISA or non ISA), as there is a lot of discussion about the cash but little on the shares. 

It is an FAQ that has been covered many many many times on the board.  Each provider explains it as well in their key features document/T&C documentation.   Some go into little detail. Some go into lots.

What I have gleaned is that if a provider was to go down, the cash is protected up to the limit (whatever that is at the time e.g. £80K) but the shares are safe as they should remain registered in your name and passed on to a new provider assigned by the FSA to take over the dealing. 

The investments are ringfenced from the provider and should be assigned to a new provider once the administrators find a buyer.   The issue is not really loss of money but an inability to trade whilst that happens.  

. First question is, is this correct, and if so technically you can have more in the account as long as the value is in shares and you should be ok. 

If you stick to mainstream you should never really have to worry about FSCS protection.   If you go to smaller/niche players or use niche/specialist/obscure investments then you need to be on guard.

The type of assets you use within the wrapper will also depend on further FSCS protections that may or may not be available.  e.g. shares, investment trusts and ETFs get no FSCS protection.  UT/OEICs get £85k per fund house.    Insured funds (pension funds) get 100% with no upper limit.

masonic

This is the link you are looking for: https://www.fscs.org.uk/what-we-cover/investments/