How much is covered by uk government if Investment house goes bust

HappyHarry

Sorcerer2018 said:

Also worth noting that if the investment fund house goes bust and has no money of their own left. The administrators have the legal right to take your money as their fees and pay you what is left over. So they could sell your shares, use some of it for their wages and pay you the rest.

The first £85,000 of which is covered by the FSCS.

With platform providers / fund houses providing services to hundreds of thousands if not millions of investors, the administration costs per investor should be smaller than the £85,000 of cover.

Linton

Sorcerer2018 said:

Also worth noting that if the investment fund house goes bust and has no money of their own left. The administrators have the legal right to take your money as their fees and pay you what is left over. So they could sell your shares, use some of it for their wages and pay you the rest.

I believe, but may be wrong, that the fees the adminisatrators take would relate to the cost of recovering the assets rather then general costs.  This should not be an issue for mainstream funds held with a mainstream platform.  This was a particular issue with the collapse of SVS which was not a mainstream platform and was often used for non-mainstream investments.

In any case a mainstream investment house going bust would almost certainly be bought by one of its competitors.  The value of the customer base should be worth more than the cost of administration though any buy-out would probably take place prior to the investment house failing.