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Linton

John464 said:

AskAsk said:

why would the investors be charged? 

When any firm goes bust people might say why does the administrator get paid (usually very well paid) when we don't
The answer is simple.
If the administrator is not guaranteed payment he won't take the job on.
But - HL fees are legendary so I can't see any risk of them going bust
They are highly profitable because they are ripping you off legally without any fraud
I'm more concerned about cyber attack
Their site has been down before
But I don't know enough about it to assess the risk of that.
So I'm split about 50/50 between 2 brokers (X-O and ishares)

If money was taken by a cyber attack or fraud HL (or whatever platform you use) would refund the money.  It is only if the cyber attack forced them into bankruptcy would other measures come into play.

areader

John464 said:

I'm more concerned about cyber attack
Their site has been down before
But I don't know enough about it to assess the risk of that.

I'd be more concerned about an accidentally botched IT upgrade than a malicious attack.

eskbanker

AskAsk said:
I work in IT and data is back up every day so if anything goes wrong, the loss would be that day of trading but they should be able to get back all the previous day's data.  I don't know if they back up the database more regularly for high activity sites like HL but i doubt it.

It would astonish me if an organisation like HL would ever be in a situation where daily backups would take precedence over other (more granular) records of regulated transactions!

Linton

eskbanker said:

AskAsk said:
I work in IT and data is back up every day so if anything goes wrong, the loss would be that day of trading but they should be able to get back all the previous day's data.  I don't know if they back up the database more regularly for high activity sites like HL but i doubt it.

It would astonish me if an organisation like HL would ever be in a situation where daily backups would take precedence over other (more granular) records of regulated transactions!

Indeed, they cant afford to lose a single transaction.  20-odd years ago I was involved in setting up a dual site mirrored computer system which automatically and seemlessly switched over from one site to the other in the event of a failure.  Isnt that routine now for critical systems?

eskbanker

AskAsk said:

eskbanker said:

AskAsk said:
I work in IT and data is back up every day so if anything goes wrong, the loss would be that day of trading but they should be able to get back all the previous day's data.  I don't know if they back up the database more regularly for high activity sites like HL but i doubt it.

It would astonish me if an organisation like HL would ever be in a situation where daily backups would take precedence over other (more granular) records of regulated transactions!

at my company they take a back up every day but i can't remember if it is more than once a day.  you can back up a database while it is still active as they never shut the database down at our office unless they want to do refresh.  i don't work in the back up area so i only know that our database is regularly backed up in case anything goes wrong and we need to retrieve the data.

i would guess HL would be backing up their database at least once a day, if not more often.

Daily backups have undoubtedly been a component of data security since day one, but the point is that they always have been a very blunt instrument and completely unsuited to protecting the integrity of high transaction volume environments, so much more sophisticated real time options have been prevalent for many years - these can be quite expensive but I imagine would be a prerequisite for regulated financial services businesses, ensuring that there is no data loss in the event of physical or logical disruption.

jamesd

Linton said:

eskbanker said:

AskAsk said:
I work in IT and data is back up every day so if anything goes wrong, the loss would be that day of trading but they should be able to get back all the previous day's data.  I don't know if they back up the database more regularly for high activity sites like HL but i doubt it.

It would astonish me if an organisation like HL would ever be in a situation where daily backups would take precedence over other (more granular) records of regulated transactions!

Indeed, they cant afford to lose a single transaction.  20-odd years ago I was involved in setting up a dual site mirrored computer system which automatically and seemlessly switched over from one site to the other in the event of a failure.  Isnt that routine now for critical systems?

To give an idea, a global top 100 site with far more traffic than HL used weekly formal backups but also had three or four database server replication setups, meaning that at least three database servers would have to fail before data could potentially be lost, and even then it would probably be a recoverable hardware issue not data loss.

It's totally routine to have things like:

1. individual shops in real time copying data to and from a central database server
2. a site in one place doing real time copying of data to other sites in different power or regional zones, including the other side of the world (though latency can be an issue).

Strictly, backups don't require a database server to be removed from service but it might be done for performance reasons. This is because a backup job like any other transaction can start a "consistent read view" that ensures that it sees a single point in time snapshot of the data. Other systems can take instantaneous snapshots of the file system state if the file system is on a single server.

Even so, I've seen cases like DBAs deliberately deleting all data and the firm having an ability to only recover from transaction logs that the DBA seemingly forgot about, which had only a day or so of transactions.

Any professionally managed place can be expected to have comprehensive backups, including measures to protect against deliberate corruption of backups or data over years or months in the background. Most of this is free of charge except for human costs in the leading open source databases like MySQL. That sort of software has taken considerable care in its detailed design to be robust against a wide range of corruption issues as well as providing live and periodic backup solutions.

jamesd

AskAsk said:

i would expect the money back in about 6 months as that is the timescale for the financial ombudsman to get round to sorting anything out.  a few years is a bit of a stretch.

why would the investors be charged?  they hold the investments and that is protected so that should go back to the investors.  all assets owned by investors would be readily available on the database as everything is recorded.  i always do my transactions online so there is always a record.  i can't remember if you can carry out transactions over the phone, but even if this was the case, it would still be recorded so it would be fairly simple to see who owns what.

You aren't going to get a penny until the administrator is sufficiently sure that you're going to finally get at least what they pay to you. That could take a long time, depending on the extent and nature of the issues which they have to resolve.

Investors pay because someone has to. Administrators aren't charities which work free of charge. If phone records are needed, someone will need to be paid to listen to the calls. If databases have been damaged or are incomplete someone has to be paid to sort out that mess, to the extent that it can be sorted out. While firms are required to reconcile cash daily, some firms didn't do it and have paid very large fines for their failures. They are undoubtedly not the last or only ones.

With a place like HL it's very likely that there would be a rapid takeover and return to normal service within a few weeks, but very likely isn't a guarantee.

Albermarle

AskAsk said:

jamesd said:

AskAsk said:

i would expect the money back in about 6 months as that is the timescale for the financial ombudsman to get round to sorting anything out.  a few years is a bit of a stretch.

why would the investors be charged?  they hold the investments and that is protected so that should go back to the investors.  all assets owned by investors would be readily available on the database as everything is recorded.  i always do my transactions online so there is always a record.  i can't remember if you can carry out transactions over the phone, but even if this was the case, it would still be recorded so it would be fairly simple to see who owns what.

You aren't going to get a penny until the administrator is sufficiently sure that you're going to finally get at least what they pay to you. That could take a long time, depending on the extent and nature of the issues which they have to resolve.

Investors pay because someone has to. Administrators aren't charities which work free of charge. If phone records are needed, someone will need to be paid to listen to the calls. If databases have been damaged or are incomplete someone has to be paid to sort out that mess, to the extent that it can be sorted out. While firms are required to reconcile cash daily, some firms didn't do it and have paid very large fines for their failures. They are undoubtedly not the last or only ones.

With a place like HL it's very likely that there would be a rapid takeover and return to normal service within a few weeks, but very likely isn't a guarantee.

investors assets with a broker are not assets that belongs to the broker so i don't see why that should be used to pay for the adminstration costs.  but i suppose as an analogy, creditors to a business that goes under may not see all or any of their money back so you could say that investors with HL are creditors I suppose.

with a big broker like HL, i would hope that the share of the administration cost would be small as it would be spread over a large number of investors.

does sound worrying that my money could be used to pay for the administration cost if HL goes under.

does sound worrying that my money could be used to pay for the administration cost if HL goes under

As mentioned several times , the chance of HL going into administration would seem to be minimal, so probably best to worry about something else.

Linton

AskAsk said:

jamesd said:

AskAsk said:

i would expect the money back in about 6 months as that is the timescale for the financial ombudsman to get round to sorting anything out.  a few years is a bit of a stretch.

why would the investors be charged?  they hold the investments and that is protected so that should go back to the investors.  all assets owned by investors would be readily available on the database as everything is recorded.  i always do my transactions online so there is always a record.  i can't remember if you can carry out transactions over the phone, but even if this was the case, it would still be recorded so it would be fairly simple to see who owns what.

You aren't going to get a penny until the administrator is sufficiently sure that you're going to finally get at least what they pay to you. That could take a long time, depending on the extent and nature of the issues which they have to resolve.

Investors pay because someone has to. Administrators aren't charities which work free of charge. If phone records are needed, someone will need to be paid to listen to the calls. If databases have been damaged or are incomplete someone has to be paid to sort out that mess, to the extent that it can be sorted out. While firms are required to reconcile cash daily, some firms didn't do it and have paid very large fines for their failures. They are undoubtedly not the last or only ones.

With a place like HL it's very likely that there would be a rapid takeover and return to normal service within a few weeks, but very likely isn't a guarantee.

investors assets with a broker are not assets that belongs to the broker so i don't see why that should be used to pay for the adminstration costs. (1) but i suppose as an analogy, creditors to a business that goes under may not see all or any of their money back so you could say that investors with HL are creditors I suppose.

with a big broker like HL, i would hope that the share of the administration cost would be small as it would be spread over a large number of investors.

(2) does sound worrying that my money could be used to pay for the administration cost if HL goes under.

1) If you put money into a bank and the bank goes bust then you become a creditor of the bank as the bank actually owns what you think is your money. You just own a promise by the bank to pay it back on demand.  The case with investments on a platform is very different.  Here you own the investments, the platform just has limited rights to manage them.

2) This is AIUI only a serious risk if the administrator incurs significant expenses retrieving your investments.  That may have been the case with SVC who went bust, though in the event the costs were covered by the £85K.  SVC was not a mainstream platform but specialised in niche investments, perhaps high risk loans to Cape Verde hotels etc.  With a platform like HL you could not hold this type of investment.

HL's customer base would probably be its most valuable asset and so would be sold on by the administrator to another platform.  The administrator would then have access to all the money he needs to undertake his duties.

biscan25

It's all on here How safe is your investment? | Hargreaves Lansdown (hl.co.uk)
I'm not worried at all about my HL investments, despite being a "victim" of SVS's criminal actions in the past.