eToro Cash ISA - QMMF - is it covered by the FSCS or not?

moneywow1

I know money held in QMMFs usually isn't covered, but on the website they straight up claim

"Know your funds are safe

Your funds are held in segregated accounts with MFM Investment Ltd, which is covered by the Financial Services Compensation Scheme (FSCS) with protection of up to £85,000."

and 

"Where is my money held?

As an investment firm authorised and regulated by the FCA, Moneyfarm is obligated to segregate client funds and assets. This means that your money and investments are held separately from Moneyfarm’s own bank account and cannot be mixed with their own funds.

Moneyfarm believes that the safest way of looking after your investments is to appoint a custodian bank which holds your money and the investments we purchase on your behalf, with a reference number unique to you. Moneyfarm holds your money and investments using carefully selected, regulated financial institutions such as Barclays and Saxo Capital Markets UK Ltd, and Moneyfarm ensures that these institutions meet the relevant criteria to keep your money safe.

Your funds are covered by the Financial Services Compensation Scheme (FSCS). In the event of the firm’s failure, Moneyfarm is covered by the FSCS in relation to investment products which means you would be eligible to claim up to £85,000 (across all brands operating under MFM Investment Ltd) if there was any shortfall in the assets held for you, or if you had another claim against Moneyfarm relating to your investments."

Sources: https://www.etoro.com/investing/cash-isa/

So is it covered or not?

Also, another question on top of this: It says you need to deposit or transfer by the 31st. I currently have my money with T212 which is a flexible ISA.I guess I can withdraw £500 from there, then deposit £500 into eToro, then transfer the rest after?

Thanks

Eyeful

1. Only money held in a Bank, Building Society of Credit Union on the FSCS list is covered by the FSCS Savings Protection up £120,000.

2. Investments (like the  QMMFs) are not covered by the FSCS Savings Protection (as they are not savings).

3. Protection checkers:
https://www.fscs.org.uk/check/

Eyeful

1, Investments may or may not be be covered by the FSCS.
Use the investment protection checker:
https://www.fscs.org.uk/check/investment-protection-checker/

2, From the etoro link you supplied in the FAQ it states:

How is my money protected under the FSCS?

Your Cash ISA is invested in qualifying money market funds and is protected under the Financial Services Compensation Scheme (FSCS) investment protection, not the deposit protection scheme. This means you may be entitled to compensation of up to £85,000 if MFM Investment Ltd were to fail and you suffer a financial loss as a result. FSCS protection does not cover losses from market performance.

3, Remember Investing means you are putting your money at risk. You hope to get more money out than you put in. This is not guaranteed.

masonic

moneywow1 said:

So is it covered or not?

It depends how you lose money. If MFM Investment Ltd never invest it in the QMMF and instead embezzle it, then you'd be covered. If is was invested in the QMMF and some catastrophic economic event caused the fund to lose money then you wouldn't be covered.