Fscs limits not applicable for platform provider??

lostandconfused1357

A financial advisor has said the below when I queried the safety of increasing my Aviva ISA to over 85k fscs limit:

 “ with your Aviva ISA your money is not invested in Aviva, it is invested in a fund/s that contain a multitude of assets/different investments /different companies.  Aviva are only the administrator/ platform provider – so if Aviva go bust, we just move your funds to another platform. “   

 But I can’t find anywhere in writing in google that this is true? And their documents are just confusing to me.

But from what I understood the only place safe to have more than 85k was with NS&I?

Any advise would be very much appreciated.

born_again

TBH, if you are unsure contact the FCA 👍

eskbanker

lostandconfused1357 said:

But from what I understood the only place safe to have more than 85k was with NS&I?

You're confusing two very different styles of FSCS protection!

The £85K deposit guarantee protection applies to savings in banks and building societies, who actually hold your money for you, so in the event of failure those funds are no longer available and FSCS steps in.

For investments, the platform doesn't actually have your money, as it's with the fund manager, so if the platform fails then the funds will still be accessible and the FSCS investment protection therefore doesn't have the same significance.

masonic

It's partly right. If Aviva go bust, then administrators are appointed. They are responsible for arranging your assets to be moved to a nominated platform. They have costs, which must be borne by the owners of the assets. Some assets may be missing, these losses must be shared between investors in those assets. Both of these costs can be claimed back from FSCS, up to a maximum of £85k.

It is highly unlikely you would need to claim as much as £85k, even if you held 10x that much on the platform. This is where protection differs from cash savings (where the bank uses your money rather than keeping it ring-fenced from its own assets). When a bank goes bust, you would generally have to claim everything back from FSCS.

Albermarle

Also if a company like Aviva go bust, then we will all be heading for the hills anyway, making any FSCS cover irrelevant.