ISA platform - FSCS protection

UpZord

Do people split their ISAs to benefit from FSCS protection? To cover the risk of the platform going down for any reason, not underlying investments.

I know it's a minute risk, but I am sooo grateful for FSCS back in 2008 hence the paranoia!

eskbanker

See this thread (among many others): https://forums.moneysavingexpert.com/discussion/6257976/platform-to-minimise-costs

UpZord

Very helpful, gotcha.. that allayed my fears.

dunstonh

Do people split their ISAs to benefit from FSCS protection? To cover the risk of the platform going down for any reason, not underlying investments.

No.   However, I only use well-capitalised companies which do not have high exposure to illiquid assets.

7 out of 10 platforms use just two software companies.  So, if your alternatives are all using the same software supplier, then you are stuffed regardless.

I know it's a minute risk, but I am sooo grateful for FSCS back in 2008 hence the paranoia!

The FSCS never came into play in 2008 for platforms.   Inded, the number of occurrences it has is tiny and its only been with obscure high risk ones which traded in obscure illiquid assets.  Even then, nobody lost anything even if their investments were over £85k as the with platforms, the cost of the administrators is really the only thing that needs to be paid and that is spread over the investors.   The investments themselves are ring fenced from the company.

d63

dunstonh said:

Do people split their ISAs to benefit from FSCS protection? To cover the risk of the platform going down for any reason, not underlying investments.

No.   However, I only use well-capitalised companies which do not have high exposure to illiquid assets.

7 out of 10 platforms use just two software companies.  So, if your alternatives are all using the same software supplier, then you are stuffed regardless.

I know it's a minute risk, but I am sooo grateful for FSCS back in 2008 hence the paranoia!

The FSCS never came into play in 2008 for platforms.   Inded, the number of occurrences it has is tiny and its only been with obscure high risk ones which traded in obscure illiquid assets.  Even then, nobody lost anything even if their investments were over £85k as the with platforms, the cost of the administrators is really the only thing that needs to be paid and that is spread over the investors.   The investments themselves are ring fenced from the company.

any ideas as to what would happen if ones investments turned out not to have been ring-fenced, due either to simple incompetence, or a deliberate fraud perpetrated by some person or persons unknown within the company running the platform?

Albermarle

d63 said:

dunstonh said:

Do people split their ISAs to benefit from FSCS protection? To cover the risk of the platform going down for any reason, not underlying investments.

No.   However, I only use well-capitalised companies which do not have high exposure to illiquid assets.

7 out of 10 platforms use just two software companies.  So, if your alternatives are all using the same software supplier, then you are stuffed regardless.

I know it's a minute risk, but I am sooo grateful for FSCS back in 2008 hence the paranoia!

The FSCS never came into play in 2008 for platforms.   Inded, the number of occurrences it has is tiny and its only been with obscure high risk ones which traded in obscure illiquid assets.  Even then, nobody lost anything even if their investments were over £85k as the with platforms, the cost of the administrators is really the only thing that needs to be paid and that is spread over the investors.   The investments themselves are ring fenced from the company.

any ideas as to what would happen if ones investments turned out not to have been ring-fenced, due either to simple incompetence, or a deliberate fraud perpetrated by some person or persons unknown within the company running the platform?

That is pretty much one of the very few scenarios where the £85K compensation would kick in .
The likelihood of that happening with a mainstream platform to an extent that it would affect customers directly is thought to be very small.

dunstonh

Albermarle said:

d63 said:

dunstonh said:

Do people split their ISAs to benefit from FSCS protection? To cover the risk of the platform going down for any reason, not underlying investments.

No.   However, I only use well-capitalised companies which do not have high exposure to illiquid assets.

7 out of 10 platforms use just two software companies.  So, if your alternatives are all using the same software supplier, then you are stuffed regardless.

I know it's a minute risk, but I am sooo grateful for FSCS back in 2008 hence the paranoia!

The FSCS never came into play in 2008 for platforms.   Inded, the number of occurrences it has is tiny and its only been with obscure high risk ones which traded in obscure illiquid assets.  Even then, nobody lost anything even if their investments were over £85k as the with platforms, the cost of the administrators is really the only thing that needs to be paid and that is spread over the investors.   The investments themselves are ring fenced from the company.

any ideas as to what would happen if ones investments turned out not to have been ring-fenced, due either to simple incompetence, or a deliberate fraud perpetrated by some person or persons unknown within the company running the platform?

That is pretty much one of the very few scenarios where the £85K compensation would kick in .
The likelihood of that happening with a mainstream platform to an extent that it would affect customers directly is thought to be very small.

Absolutely tiny considering how much of it is automated and the level of audit trails that exist with double checking, cross-referencing and anomaly reports.