Fidelity Index World P Acc

michaels

mears1 said:

Alexland said:

mears1 said:

Have posters got most of their money invested in just 1 passive fund? 

For a £20k pot, 75% in 1 passive global fund would seem unremarkable. But for a £100k pot, would 75% in 1 global passive fund be crazy, rather than a  2-3 global funds even though they might track the same index?

I have a strong bias to keeping things reasonably simple while also spreading our money across a few reputable and unrelated platforms and fund managers. We have various types of accounts on platforms such as iWeb, Fidelity and AJ Bell but within those accounts, even the six digit ones, we often only have a single passive fund/etf from the likes of Blackrock, Vanguard, HSBC, L&G, etc.

Thanks for sharing. Spreading across different platforms is sensible for financial protection up to £85k.  I use iWeb because of the low charges, at the moment, not sure if I could keep track of portfolio with multiple platforms.

Does the 85k apply to money invested in funds? - I thought these were ring-fenced so any risk is with the fund provider not the platform?

Alexland

While fund managers and platforms are required to segregate client assets from their own business you could be relying on FSCS protection if fraud, theft, administration errors, etc caused the client assets to be missing and the provider was unable to compensate you.
We don't stick to the £85k limit and even have large holdings in ETFs with no protection but just like to spread our investments around a bit to average out the risk of uncompensated loss. Our charges are super low anyway and we need various types of account so it's not really costing any more.

michaels

Alexland said:

While fund managers and platforms are required to segregate client assets from their own business you could be relying on FSCS protection if fraud, theft, administration errors, etc caused the client assets to be missing and the provider was unable to compensate you.
We don't stick to the £85k limit and even have large holdings in ETFs with no protection but just like to spread our investments around a bit to average out the risk of uncompensated loss. Our charges are super low anyway and we need various types of account so it's not really costing any more.

Interesting.  Splitting an example 850k pot over 10 platforms sounds pretty costly in terms of fees especially as I don't know if there are 10 cheap providers. 

I guess you could choose two cheap ones but then there is 345k at risk at each one still.

Would you also want to choose different funds at each platform so your 650k in global trackers would need to find 8 different global tracker index funds?

Alexland

michaels said:

I guess you could choose two cheap ones but then there is 345k at risk at each one still.

That's what we are doing with more than that in a Vanguard ETF in my SIPP (and an HSBC ETF in my wife's SIPP) and in recent years we have been leaving new sal sac contributions to build up in our workplace pension (same employer) which is 100% protected and a lot cheaper since moving to a master trust with all schemes costing no more than 0.20% including platform and fund charges.

Although our SIPPs are on the same platform we would still have £170k of cover between us if that failed. So although an unrecoverable total loss with a single ETF provider or the SIPP platform would be pretty bad it wouldn't be the end of the world.

The only real concern is our workplace pension seems unlikely to give us the protected age 55 access and although we have plenty in our SIPPs to cover those early years it might be preferable to crystallise everything at 55 due to our LTA positions.

mears1

Alexland said:

While fund managers and platforms are required to segregate client assets from their own business you could be relying on FSCS protection if fraud, theft, administration errors, etc caused the client assets to be missing and the provider was unable to compensate you.
We don't stick to the £85k limit and even have large holdings in ETFs with no protection but just like to spread our investments around a bit to average out the risk of uncompensated loss. Our charges are super low anyway and we need various types of account so it's not really costing any more.

Your using a range of platforms, each with different global funds sounds ideal.
But for a user who wants to keep Platform charges low (iWeb), would 2-3 Global trackers instead of 1 offer better protection, if any of them went bust? (Although, would incur a slight increased transaction charge £5 x3, instead of £5)

But if iWeb went bust, the whole lot bar £85K would be at risk?

QrizB

mears1 said:

But if iWeb went bust, the whole lot bar £85K would be at risk?

As I understand it, if iWeb goes bust the only things at risk are your cash holdings with iWeb (which are covered up to £85k).

Your investments are still yours and, eventually, will be returned to your control.

mears1

QrizB said:

mears1 said:

But if iWeb went bust, the whole lot bar £85K would be at risk?

As I understand it, if iWeb goes bust the only things at risk are your cash holdings with iWeb (which are covered up to £85k).

Your investments are still yours and, eventually, will be returned to your control.

That's reassuring! Thank you