Spreading your ISA risk?

Madeinireland101

I have a fair amount in S&S ISA’s but I have a number of longer term Cash ISA maturing this year and I will be moving them to S&S.
I am wary of keeping it all within the same platform and currently have some with Halifax and iWeb but I am aware that these ultimately have the same owner and when I make these transfers I will bust £85k limits (although I hear £50k limit mentioned sometimes as well).
What measures, limits and number of platforms used do you apply to your S&S ISA’s to ensure that should something bad happen your money is safe? Or do you not worry about that and stay with the same platform no matter how much you have?
Thanks...

Albermarle

This question has been asked many times before...
If the platform goes bust , you still own the money in the funds . Most likely another platform will buy the business anyway .
Also a platform or fund house are not banks , who lend money that might not get paid back , so are much less likely to get into trouble.
So you do not really have to worry about the £85K limit in the same way.

masonic

£50k was the old limit before they raised it in line with cash deposits.

I have 2 S&S ISAs, not because of the £85k limit (which is ample to cover the per-customer administrators' fees if the platform went bust), but rather to mitigate against the risk my assets could be frozen for as long as 6-12 months if my provider went bust.

Thrugelmir

The underlying investments are held in nominee form and are ring fenced. They do not form part of the platforms own operations. 

dunstonh

I am wary of keeping it all within the same platform 

What are you wary of?

What measures, limits and number of platforms used do you apply to your S&S ISA’s to ensure that should something bad happen your money is safe?

No limits.  However, I only stick to mainstream platforms and profitable platforms. 

 Small platforms often have to be unprofitable to obtain business.   They hope they get the business in time to then either hit a critical mass to become profitable.  Or increase their charges knowing that around 80% will stay.   Or a buyer comes along to get them.   The risk of failure is higher in the unprofitable platforms and those that have a higher ratio of exotic investments.  Avoid them then it really becomes a non-issue.

Madeinireland101

dunstonh said:

I am wary of keeping it all within the same platform 

What are you wary of?

What measures, limits and number of platforms used do you apply to your S&S ISA’s to ensure that should something bad happen your money is safe?

No limits.  However, I only stick to mainstream platforms and profitable platforms. 

 Small platforms often have to be unprofitable to obtain business.   They hope they get the business in time to then either hit a critical mass to become profitable.  Or increase their charges knowing that around 80% will stay.   Or a buyer comes along to get them.   The risk of failure is higher in the unprofitable platforms and those that have a higher ratio of exotic investments.  Avoid them then it really becomes a non-issue.

I suppose I am just wary of putting all my eggs in the same basket and as someone earlier said it going belly up or not having access to it.
What platforms would you consider unprofitable? How would iweb rank? I have most in there at the moment as I think it’s cheap and serves my purpose.
Thanks...

Thrugelmir

iweb is owned by Halifax which is part of the Lloyds Banking Group.  Hardly a small back street operation. 

dunstonh

I suppose I am just wary of putting all my eggs in the same basket 

You are not.   Your investments, if in funds, are spread around hundreds, if not thousands of companies.   The administrator for your statements and transactions doesnt own your investments.

and as someone earlier said it going belly up or not having access to it.

Most platforms would continue as a going concern until a buyer was found.  A sudden overnight failure is highly unlikely unless its a platform that invests in exotic investments.   

What platforms would you consider unprofitable?

The ones that are unprofitable.     The data is available.

Alexland

I would mostly agree with Masonic on this issue. If it helps you sleep at night splitting between a couple of unrelated providers then it's all cheap enough. We keep our different types of accounts on different platforms and have chosen to split our pensions across a couple of providers and will likely do the same when our S&S ISAs get more significant and access to withdraw starts to become more important. Still we don't rigidly stick to the £85k limit as that would be impractical.

csgohan4

dunstonh said:

I am wary of keeping it all within the same platform 

What are you wary of?

What measures, limits and number of platforms used do you apply to your S&S ISA’s to ensure that should something bad happen your money is safe?

No limits.  However, I only stick to mainstream platforms and profitable platforms. 

 Small platforms often have to be unprofitable to obtain business.   They hope they get the business in time to then either hit a critical mass to become profitable.  Or increase their charges knowing that around 80% will stay.   Or a buyer comes along to get them.   The risk of failure is higher in the unprofitable platforms and those that have a higher ratio of exotic investments.  Avoid them then it really becomes a non-issue.

I found this the hard way in the EQI. Was with them for less than 1 year and since they have been bought out and uncertainty regarding future charges and where LISA will go to, I am transferring to AJ Bell

Small price to pay for more certainty and a more established player. I also have SIPP with them and happy with their service and choices.