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Is there any disadvantage/risk with investing all personal saving via one single platform?

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Roselondon_2
Roselondon_2 Posts: 126 Forumite
Part of the Furniture 10 Posts Combo Breaker
edited 16 May 2021 at 11:42PM in Savings & investments
I mean...in principle, personal investment is protected by FSCS for up to £50,000. On the other hand, I understand diversification is important and one shall not put all eggs in one single basket. So does this mean I shouldn't entrust the entire household's saving with one single platform, even though this platform offers different products which have different risk factors and managing style? What's the risk/disadvantage in reality if I just keep it simple by putting all into a reputable platform like Vanguard, as long as I keep the investment under £50k per person? 

Thanks.

Comments

  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
    Sixth Anniversary 1,000 Posts Name Dropper
    It depends on the platform. If we are talking about major UK regulated platforms like H&L, Vanguard etc then the answer is no.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • eskbanker
    eskbanker Posts: 36,938 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    I mean...in principle, personal investment is protected by FSCS for up to £50,000.

    [...]

    as long as I keep the investment under £50k per person?
    The limit is £85K each, since 2019:

    https://www.fscs.org.uk/what-we-cover/investments/
  • Roselondon_2
    Roselondon_2 Posts: 126 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    edited 17 May 2021 at 3:41PM
    eskbanker said:
    I mean...in principle, personal investment is protected by FSCS for up to £50,000.

    [...]

    as long as I keep the investment under £50k per person?
    The limit is £85K each, since 2019:

    https://www.fscs.org.uk/what-we-cover/investments/
    Ah, thanks for correcting. I realised what I stumbled across was an old article with outdated info... £85k for investment is the current rule. Thanks.
  • HansOndabush
    HansOndabush Posts: 470 Forumite
    100 Posts Name Dropper Photogenic
    The risk would be that the platform goes belly up and you can't access your investments for months. See the thread on SVS securities where this happened. The larger the platform, the less risk, in general.
  • dunstonh
    dunstonh Posts: 119,579 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    The risk would be that the platform goes belly up and you can't access your investments for months. See the thread on SVS securities where this happened. The larger the platform, the less risk, in general.
    Whilst you are correct, it is also worth noting that SVS was neither a mainstream platform or one that many here would not recognise as a platform.   They specialised in providing high illiquid investments and made them available through their own software platform.    The delay was caused because of the illiquid assets having to be sold down rather than the wind down process itself.
    And not a single investor with them has lost any money.  Even those with 7 digits as the £85k FSCS limit is being used per person to pay the administrators.

    As usual with these things, it is not the platform itself where your risk of delay is.  It is the assets used in your investments that cause problems.   If the assets had been mainstream regulated funds from other fund houses then the administrator could have just offloaded the platform to another platform with the assets in situ or allowed the funds to be re-registered to another platform.
    The SVS issue is probably closer to Woodford than it is to a platform failure.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Albermarle
    Albermarle Posts: 27,662 Forumite
    10,000 Posts Seventh Anniversary Name Dropper
    I mean...in principle, personal investment is protected by FSCS for up to £50,000. On the other hand, I understand diversification is important and one shall not put all eggs in one single basket. So does this mean I shouldn't entrust the entire household's saving with one single platform, even though this platform offers different products which have different risk factors and managing style? What's the risk/disadvantage in reality if I just keep it simple by putting all into a reputable platform like Vanguard, as long as I keep the investment under £50k per person? 

    Thanks.
    Many posters on this site hold hundreds of thousands of Pounds with just one or two platforms . As long as it is a mainstream name then the risk is negligible .
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