Trading website ig.com - how safe leaving the stocks for long term?

everfor007

I am having share dealing account in ig.com and invested my saving  into few uk and us stocks i.e microsoft, apple etc and i want to leave it for long term for next 5 to 10 years.
As everything is online and no paper trail. How safe it's leaving the stocks for long term in share dealing website? what happens to my stocks if share dealing website  company gone burst ? Does my stocks ledger will be automatically registered to any govt financial body for retrievable?  

everfor007

Any advise - appreciated

ColdIron

IG have been around a while but I view them as more as a CFD and binary options provider. Personally I would use a more mainstream site but each to their own. Are you sure that you are trading stocks and not their CFD and binary offerings?

If they go burst they say that you may be compensated by the FSCS. You can read this information on their website. Obviously your shares receive no protection

https://www.ig.com/uk/client-funds

As a matter of course you should save your contract notes regardless of the provider. They are not saved to a govt financial body

Alexland

Personally I avoid platforms that promote gambling on CFDs or short term trading strategies as it suggests they have no regard for customer outcomes. However as ColdIron describes if they fail you might get FSCS protection up to £85k depending on the circumstances and you may be required to provide evidence.

Thrugelmir

Rather than worry so much about the platform. Keep an eye on the shares. All companies wax and wane over time.  Past largest companies in the S&P 500 include IBM, General Electric and Exxon. Where do they rank now? 

everfor007

ColdIron said:

IG have been around a while but I view them as more as a CFD and binary options provider. Personally I would use a more mainstream site but each to their own. Are you sure that you are trading stocks and not their CFD and binary offerings?

If they go burst they say that you may be compensated by the FSCS. You can read this information on their website. Obviously your shares receive no protection

https://www.ig.com/uk/client-funds

As a matter of course you should save your contract notes regardless of the provider. They are not saved to a govt financial body

Yes i am trading the stocks.  Not sure how to buy the US stocks on their own i.e mainstream site.  My investment is over 100k, i want ensure every penny is recovered. I was looking to Hl, they also backed by FSCS with  £85K but they stated net worth holding.


https://www.hl.co.uk/security-centre/how-safe-is-your-investment

We hold more capital than we’re required to, and are a financially strong FTSE 100 company with net cash of £394 million (30 June 2019).

is there any better provider in the market?  Can i buy the trading stock in fidelity.com?

everfor007

Thrugelmir said:

Rather than worry so much about the platform. Keep an eye on the shares. All companies wax and wane over time.  Past largest companies in the S&P 500 include IBM, General Electric and Exxon. Where do they rank now? 

I do agree, need to keep eye but I want to ensure my invested money in trading platform is recoverable or not, in event of something goes wrong. If you experience any better trading platform which safeguard my money, pls let me know. 

GeoffTF

Client assets must be ring fenced. With investments, the FSCS compensates you for your loss in the event of insolvency, not the amount invested. You should be safe to well above £100K. When SVS went bust, they divided the administrator's costs equally between the accounts and nobody lost out. On past experience, if you have less than £1 million invested you are likely to be safe. More than that, be very careful!

Linton

Your money is safeguarded on a mainstream platform.  The investments remain owned by you so if the platform goes bust the creditors cannot access your money/funds/shares.  What is most likely to happen is that anopther company buys out the platform before it goes bust  - the customer base is very valuable.

This is very different to bank deposits where "your" money is actually owned by the bank.  All you own is a promise by the bank to pay it back.

maxsteam

Further to the above, the FSCS only applies to cash balances. I'm not sure how deep IG's registrations and memberships go but, if you own shares through a broker who is a member of the London Stock Exchange and the broker goes bust, then you will still own those shares. It will take time to transfer them to another platform but you wont lose the shares.

As with all online accounts, it's worth keeping a few paper documents in a draw and telling close family that important papers are in that drawer.

GeoffTF

maxsteam said:

Further to the above, the FSCS only applies to cash balances.

No, that is not true:

https://www.investorschronicle.co.uk/managing-your-money/2019/11/07/what-to-do-when-your-broker-goes-bust/