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Investor compensation schemes – are you covered?

I got a bit of a shock when researching this post. Like many investors I assumed that if the very worst happened and my investments were stolen away then I’d be protected by the UK Financial Services Compensation Scheme (FSCS) for the first £50,000.

It turns out that ain’t necessarily so.

If you own investments domiciled beyond the UK – say in Ireland or Luxembourg – then the FSCS safety net doesn’t protect you at all. Instead, you may fall under the aegis of a much less generous scheme, and you may not even get that.

Most Exchange Traded Funds (ETFs) available to UK investors – and many index funds – are domiciled in Ireland, so there’s a good chance you don’t have the protection you thought you had.

But before we open that can of vipers, let’s talk through what compensation is available to UK investors and how it works.

Hmm, I was hoping for more

In the same way that UK savers are protected to the tune of £75,000 if their bank goes belly up, the FSCS will also bail out UK investors with up to £50,000 if their investments disappear in a puff of fraud, negligence, mismanagement, or mis-selling.

Note, you don’t get £50,000 if you bought shares in a Transylvanian blood bank firm that couldn’t fail and then promptly did. The scheme protects you from institutional risk, not stock market risk.

If your broker / online platform goes under and takes your monies with it, then you can claim for up to £50,000, if there’s no other way to get your money back.

Same again for your fund manager. For example, if Vanguard failed and your money mysteriously vanished, you could be due up to £50,000 compensation in that scenario, too. Vanguard is one of the world’s largest investment firms and it almost certainly won’t go down, but it’s nice to have a cushion.

The important thing to know about the limit is that it counts per institution per person, not per fund.

138. Compensation schemes - are you covered

Of course, it shouldn’t come to this. There are regulations in place that require fund managers and brokers to segregate your assets from their own. If the mother company explodes, then your money should be safely ring-fenced in a separate pot and you’ll get it back once the smoke has cleared. The company’s creditors have no legal right to your piece of the pie.

That’s what is meant to happen, but any system can fail.

As Cofunds puts it:

As with any FCA regulated investment firm in the UK, while it is highly unlikely that Cofunds were to become insolvent, or cease trading and have insufficient assets to meet claims, we can’t provide a 100% guarantee that your money is fully protected.

So the FSCS compensation scheme provides a last resort backstop, in case the next Bernie Madoff happens to be running your brokerage while the cast of Dad’s Army is in charge of administration and oversight.

Who’s covered?

You’re only covered if the financial firm that pops its clogs is authorised by the UK’s Financial Conduct Authority (FCA).

Note, the word you’re looking for is authorised by the FCA. There’s all kinds of lullaby small print out there that may say the company is regulated by the FCA, but a company can be regulated for many different types of activity. A company must be authorised for compensation to apply.

You can check your broker or fund manager using the FCA’s search engine.

  • Scroll down and search by name, if you don’t have the company reference number (I didn’t!)
  • Then click on the basic details link (or the relevant subsidiary and then basic details) to check they are authorised.

When I checked the Irish spin-offs of BlackRock (AKA iShares) and Vanguard, the note said: Authorised (Schedule 5).

Ah, the ol’ fog of investing befuddlement descends once again!

The FCA’s advice on the relevance of Schedule 5 is:

Consumers considering or currently doing business with an Authorised (Schedule 5) firm, may wish to ask for further information from the firm or its UK branch about its complaints and compensation arrangements. This is because the position may differ compared to a UK authorised firm.

Here’s what Vanguard have to say about their position with the FSCS:

Funds that are domiciled in the UK are covered by this scheme, while Ireland domiciled funds are maybe covered by the equivalent Ireland scheme.

Maybe? What does maybe mean? A clarifying email later and it turns out that ‘maybe’ means that Vanguard Irish domiciled funds and ETFs are not covered by the Irish compensation scheme. The same is also true of State Street’s Irish domiciled SPDR ETFs, and iShares’ and I suspect of most other providers, too.

I recommend you check with your own fund / ETF manager to find out whether you’re covered by any particular compensation regime.

In the meantime, on the off-chance that anyone is covered by the Irish compensation scheme, just how reassuring is it anyway?

The answer is: not very.

The Irish Investor Compensation Scheme

Ireland’s scheme pays out 90% of your loss, up to a maximum of €20,000 per investor.

Only firms regulated or authorised by the Central Bank of Ireland are covered. You can check who’s who here.

State Street did show up on this list even though they have confirmed to us that their ETFs are not covered by the scheme. Therefore, it’s worth contacting your fund manager directly rather than relying on this list.

Some investors may have ETFs domiciled in Luxembourg. You can find details of the applicable scheme here. It looks similar to the Irish scheme – that is, a €20,000 pay out at best.

The UK FSCS doesn’t cover the Channel Islands or The Isle of Man, either. These are Crown dependencies but are not part of the UK and therefore have their own arrangements.

Chew on this

Some other nuggets to consider.

Your £50,000 UK compensation limit doesn’t interfere with the £85,000 you can claim for lost cash deposits.

If a bank fails while holding your cash on behalf of your broker, then you can claim £85,000 back while still claiming £50,000 elsewhere for missing investments.

However, if your broker money was stashed with a single institution, say Lloyds, and you also had a personal account with those self-same black horsie people then you could only claim up to £85,000 for the two losses combined.

That’s because the limits apply per person, per institution, per claim category (i.e. cash is one category and investments another).

Similarly, if your broker went bust and you had £100,000 invested with it – split 50:50 between iShares and Vanguard – and for some reason your money hadn’t been properly ring-fenced, then you’d still only be able to claim for £50,000. In this case it’s the broker that has failed, not the fund managers, and you only get £50,000 per institution that goes down the Swanee.

Remember there are other regulations in place to ensure that your investments are not bound up with the fate of these institutions. It’s unlikely that they’ll fail and leave you with absolutely nothing.

If you decide to diversify your money between brokers, then check they are not part of the same financial group. iWeb and Halifax Share Dealing are in the same group, for example.

Building a stakeholder pension, SIPP, or workplace defined contribution scheme? Then £50,000 is your lot, per institution, as above.

Defined benefit pensions have their own rules that you can enjoy here.

A little known benefit of annuities is that your income is protected up to 100%, with no upper limit on the amount.

Claims can take a long time to recover your cash – six months or more. Don’t put all your eggs in one basket if you’re likely to need the money in a timely fashion, even if your funds are well under the limit.

Schemes are paid for by a levy on the financial firms covered. If you want to launch a campaign to argue that the compensation limits should be higher, then rest assured the industry will claw back the cost from all of us.

That said, the equivalent US scheme covers up to $500,000.

Now what?

This piece is meant to inform not alarm. It’s worth reiterating that the chances of an unrecoverable failure are very low. However, the risk is not zero, so the answer – as in most things, except husbands and wives – is diversification.

I’m not suggesting that you choose another broker or fund manager every time you breach the £50,000 limit, but perhaps think twice about those nice offers to ‘consolidate’ all your investments in one, convenient place.

How many ways you slice your pie will depend on how much fragmentation you can handle and how comfortable you are with the thought of a black swan sailing merrily through all the fail-safes.

Remember there are no absolute guarantees out there, despite all the internet jousting that goes on about Crest and certificates of ownership locked in fireproof boxes.

And whatever you do, don’t let stress about compensation schemes derail your main aims. My Irish domiciled funds aren’t covered but I’m not going to sell a single one. What I will do is diversify among more fund managers over time.

Far better to diversify across asset classes to protect yourself against a probable risk than to live in fear of the improbable.

Take it steady,

The Accumulator

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{ 42 comments… add one }
  • 1 dearieme December 17, 2013, 1:06 pm

    What a public service: well done, that man!

    Would anyone like to add more e.g. about Jersey, Guernsey, IoM, or even Canada?

  • 2 Fi December 17, 2013, 1:11 pm

    Monevator, your blog is worth its weight in gold. I was trying to get my head round this issue last week and gave up (my brain hurt). Thank you. I will be looking at the domicile of my ETFs more closely in the future when deciding which to buy.

  • 3 Rob December 17, 2013, 1:16 pm

    Thanks for the info TA, all good to know. Are SIPPs and ISAs covered by the same limit? E.g. if someone has an ISA with broker A and a SIPP with broker B, each with £50k in Vanguard funds, would they only be covered for £50k total?

    Lots to think about here. 20% of my portfolio is Irish domiciled and I hadn’t considered the lack of UK FSCS compensation, to be honest. Like you TA, I’ll stay put for the time being but I’ll be reconsidering my diversification strategy in the future when buying.

    Also, the US scheme (SIPC) seems to only cover broker failure and not fund managers, as far as I can see. Which means it’s probably not any practical use for those in the UK looking for further protection by buying US domiciled funds.

  • 4 Paul Claireaux December 17, 2013, 1:28 pm

    It certainly is a hornets nest.

    I think however that PPPs and Stakeholder pensions issued by UK insurers are covered by the policyholder scheme – which is 90% of the liability with no upper limit.
    A case for insurance based products rather than DIY perhaps.

  • 5 Jonny December 17, 2013, 2:26 pm

    @Rob
    Judging by this article TA says it’s “per institution, per person”

    So I think it depends on what you’re worrying about. From your example:

    – if Vanguard lose your money, you’d only be entitled to claim £50K (and so would in turn also lose £50K)
    – if either broker failed, you’d be able to claim the £50K that broker held
    – if due to extraordinary circumstances both broker A AND broker B lose your money, so long as they are completely different institutions, (my understanding is) you’d get back £50K from each.

    Now if broker A, broker B and Vanguard simultaneously do things to lose your money…. (I’m have no idea!!!)

  • 6 BeatTheSeasons December 17, 2013, 2:35 pm

    If there was so much financial turmoil that multiple financial institutions went bankrupt then I wouldn’t rely on the government to keep its compensation promises, even if it could afford to do so.

  • 7 dearieme December 17, 2013, 3:48 pm

    “so much financial turmoil that multiple financial institutions went bankrupt”: heavens, it might just be the result of one successful hacker bringing down a couple of stockbrokers. The rest of the financial system might well be able to continue funding FSCS.

  • 8 Jon December 17, 2013, 3:49 pm

    TA, I opened a Charles Schwab US dollar account. SEC protection is $500k for investments, $250k for cash. There is currency risk of course, but that averages out over time. Feels good to have an account external to UK in a more shareholder friendly country. No stamp duty to pay on shares either.

  • 9 ermine December 17, 2013, 7:25 pm

    @Jon does that $500k hold for aliens as well as US citizens? If you fill out a W8-BEN then you’re kinda declaring a lack of interest, though if you don’t then I guess Uncle Sam owes you the shelter of his fiscal wing…

  • 10 The Accumulator December 17, 2013, 7:48 pm

    @ Paul C – Great spot on pensions via insurance companies. Here’s the link: http://www.fscs.org.uk/what-we-cover/eligibility-rules/compensation-limits/insurance-limits/

    @ Rob – Jonny’s right, it makes no difference whether you’re in ISAs, SIPPs or regular accounts. The compensation limits apply to your claim category e.g. cash, investments, insurance and then your institution e.g. broker, fund manager, bank. So you can claim per institution that fails, per claim category per person. So feasibly if you had a Cash ISA with HSBC then you could claim back £85,000 while claiming back £50,000 for the stocks and shares ISA you also held through HSBC.

  • 11 Jon December 17, 2013, 9:51 pm

    @ermine, yes, UK citizens are fully covered. Complete the W8 BEN form, you will pay 15% tax on dividends. I only buy blue chips, Coke, JNJ, PG, McDonalds etc No ETFs that would get complicated (non reporting status and all that). Charles Schwab is a mega listed broker, great website and customer service, no charges for re-investmenting dividends – as a rule I only use brokers that are listed.

  • 12 peas & gravy davy December 18, 2013, 3:50 pm

    The important thing to know about the limit is that it counts per institution per person, not per fund.

    Wow.

  • 13 The Accumulator December 24, 2013, 3:24 pm

    iShares have got back to me and confirmed their Irish domiciled ETFs aren’t covered by the Irish Investor Compensation Scheme.

  • 14 Jeremy January 26, 2014, 10:06 am

    Hello. If my reading of the above is correct, clearly I must have a fundamental misunderstanding of how a brokerage firm works. If I own say £20k of a UK domiciled fund through broker A, why is it relevant if the broker goes bust – don’t I own £20k of this fund and in this scenario they haven’t gone bust? I can understand if I had £1k of cash sitting in my brokerage account that this would be subject to the FSCS compensation scheme. Likewise if the UK domiciled fund went bust, I understand that this is covered by the FSCS scheme.

    I appreciate this is probably not an answer that some can give in a few sentences, so if there is a webpage out there that explains the business model that results in the need for the FSCS to cover funds invested through a broker, that would be appreciated. thanks

  • 15 The Accumulator January 26, 2014, 11:56 am

    Yes, you do, unless the broker didn’t keep accurate records of your investments or simply stole the money. MF Global is the poster child for this kind of nightmare: http://en.wikipedia.org/wiki/MF_Global

    Reread the Cofunds quote. Check your own broker’s T&Cs.

    Here’s another quote from the FSCS:

    FSCS provides protection if an authorised investment firm is unable to pay claims against it. For example:
    • when an authorised investment firm goes out of business and cannot return investments or money.

  • 16 Jeremy January 26, 2014, 12:51 pm

    OK. I think my gap in understanding is the definition of client money. So assuming the broker did not steal the money and correctly executed the purchase of the relevant fund, then isn’t that money paid to the fund and therefore no longer “client money”? And if inadequate records are kept, surely the fund itself has a record of my ownership?

  • 17 Jeremy January 26, 2014, 2:11 pm

    OK, I browsed the T&Cs and it is an eye opener. I did not realise my client assets were not held in my name. Is this typical, even if I held a share directly?

    “6.
    Where we register your Investments in the name of one our Nominees or hold them with a Sub-custodian, the Nominee or Sub-custodian will hold your Investments together with those of our other clients in a pooled account. The Investments held in a pooled account in this way cannot be distinguished by individual client. This means that if the Nominee or Sub-custodian defaults or becomes insolvent and there is a shortfall in the pooled account which cannot be reconciled, you (and our other clients) may share proportionately in that shortfall.
    7.
    We will hold your Investments in one or more pooled accounts, therefore, you may receive dividends or other distributions net of tax which has been paid or withheld at rates that are less beneficial than those that might apply if the Investments were held in your own name or not pooled. In addition special benefits to shareholders or shareholder incentives attached to your investments may be lost”

  • 18 The Accumulator January 26, 2014, 6:30 pm

    The pooled nominee system is highly typical of online broker operations.

    That’s why the fund manager won’t know who you are. The broker holds your units on your behalf and it’s up to them to keep a record of the beneficiaries. I’m actually preparing a post on the pooled nominee system but am awaiting a tardy broker to reply on some of the hairier aspects of their T&Cs.

    Shares fall into the same system unless you request physical certificates or find a broker who uses the CREST system.

  • 19 GHDorset January 30, 2015, 6:16 pm

    I’m with The Accumulator.

    Thisismoney.co.uk recently outlined ‘Five things to consider when picking a platform’.

    http://www.thisismoney.co.uk/money/diyinvesting/article-1718291/Pick-best-cheapest-investment-Isa-platform.html

    No mention of any risk to your funds.

    One platform has a web page about their service titled ‘How safe is your investment?’. In the text the word ‘safe’ is not used so I assume that the custody of money and investments with their (and any other) platform is ‘not safe’. Similarly there must be risks at fund providers, nominees, etc. The web page does, however, explain all the safeguards.

    The FSCS compensation scheme for cash deposits is relatively easy to understand but I’ve not yet found a good explanation of the ‘£50k per person per firm’ for investment firms and whether it covers ETFs (the same platform provider’s website suggests Unit Trust and OEIC providers only). TA’s post has clarified this for me. Thankyou.

    One concern is that ordinary savers, who understand the FSCS compensation for cash deposits, and who are being encouraged by low interest rates to move their money into investments, may not appreciate the differences in the FSCS scheme when it relates to purchasing investments via a platform.

    I would like to think that each platform, nominee company, broker, Unit Trust/OEIC/ETF provider, etc, has all the right things in place to protect against human error, systemic failure, mismanagement or fraud, so its unlikely that investors will ever need to understand the conditions of the FSCS £50k compensation scheme.

    But at the back of my mind I know there are risks. I just don’t fully understand them nor best practice in protecting myself against the risks.

    My approach from now on is to spread my investments between products and providers. I’m already in the situation where my SIPP, my Stocks & Shares ISA, and my sharedealing account are with different platforms/brokers. I will continue with that, despite the marketing offers tempting me to have everything in one place. I’ll invest with different ETF providers. I’ll invest in Investment Trusts as well as ETFs. My next year’s ISA will start a new account with a different platform.

    My costs of investing will be higher, but at least I’ll be happier.

  • 20 Naeclue February 3, 2015, 1:43 pm

    What a great article. This sort of stuff is incredibly difficult to pin down.

  • 21 David March 15, 2015, 7:50 pm

    I recently read that compensation for s&s isa may be matching those of savings I am a bit concerned as I have mistakenly gone above the limit I wonder if anyone has any news on this as I don’t want to rash Thanks

  • 22 SlowToLearn March 29, 2015, 3:03 pm

    I’d be grateful for confirmation, from one of your wise folks, that I’ve understood things…

    Broker A – £100,000 in Vanguard fund held in an ISA, UK domiciled.
    Broker A – £100,000 in Vanguard fund held in a SIPP, Ireland domiciled.
    Broker B – £100,000 in Vanguard fund held in ISA, UK domiciled.

    In event that Broker A falls over, £50,000 compensation from the FSCS for the UK investment and, possibly, £20,000 from ICCL for the Irish investment. £130,000 loss.

    In event that Vanguard fails, FSCS compensation for £50,000 for the one institution, and similarly £20,000 from ICCL. £230,000 loss.

  • 23 The Accumulator March 30, 2015, 7:10 pm

    @ Slow – spot on. Though I’d be more confident in Vanguard than any broker.

  • 24 SlowToLearn March 30, 2015, 9:35 pm

    @TA – thanks. I also asked my broker and the FSCS, both who are paid to help. I’m still waiting…

  • 25 David April 10, 2015, 4:48 pm

    Hi any news on compensation rates being increased my broker is iweb and I have gone over the limits with vanguard in s & s isa more concered with iweb really any advice
    thanks

  • 26 Snowman April 11, 2015, 2:02 pm

    The compensation rules for annuities are changing according to this document

    http://www.bankofengland.co.uk/pra/Documents/publications/ps/2015/ps515.pdf

    From 3rd July 2015 annuities (which are covered under the insurance part of the FSCS) will be 100% protected, whereas at the moment they are 90% protected

  • 27 The Accumulator April 11, 2015, 3:59 pm

    Thank you Snowman! As ever, I tip my hat to your nose for news

  • 28 David April 11, 2015, 5:29 pm

    Does that include my s&s isa recently transferred from cash isa
    thanks

  • 29 Sceptical Investor April 13, 2015, 3:41 pm

    What makes me doubt these schemes is the real life example of Equitable Life. As far as I understand it tens of thousands of EL clients lost out when EL could no longer afford to pay out on their policies. These people did not receive the 90% compensation that the FSCS claimed it would cover for insurance companies (100% of the first £2000 and 90% of the remainder). Instead the government set up independent compensation packages for far less than that amount. Things like this make me doubt these schemes. When it comes down to it how often will the providers try and wiggle out of paying on some technicality or interpretation of certain clauses?

    If anyone has any information on why I’m not correct about Equitable Life I would love to hear it.

  • 30 SlowToLearn April 17, 2015, 4:44 pm

    With regard to a Junior ISA, does anyone know whether the parent or the child is the investor (from a FSCS perspective)?

  • 31 SlowToLearn May 2, 2015, 8:48 pm

    The FSCS confirmed to me today that a parent invested through an ISA and their child invested through a CTF or JISA, at the same broker, which then failed, would both, independently be entitled to £50,000 investment protection.

  • 32 Steve April 12, 2016, 5:07 pm

    I don’t know if anyone will see this question but I’ll try here first…

    Suppose I hold £50k of an Irish-domiciled (for the sake of argument) ETF inside an FCA-authorised ISA. If the *ISA provider* goes under and has failed to properly ring-fence their client assets, am I right in thinking I am covered for the full £50k? It’s only if the ETF itself goes under I am thrown onto the non-FSCS compensation scheme?

  • 33 SlowToLearn April 12, 2016, 5:55 pm

    @Steve – It’s actually only £20k cover for an Irish ETF (via ICCL). Your UK broker is covered by FSCS.. See my comment on March 29, 2015 at 3:03 pm.

  • 34 Steve April 12, 2016, 8:38 pm

    @SlowToLearn Sorry, I’m still confused! My UK broker fails but the broker was holding an Irish-domiciled ETF (which hasn’t failed) on my behalf. Does the FSCS cover me for £50k because the UK broker failed, or am I getting £/€20k from the Irish scheme instead because the holding I’ve lost was Irish-domiciled? (It’s like your example, except broker A doesn’t have the £100k in the UK-domiciled fund – that makes your example “easy”, because the maximum FSCS guarantee is used up on the UK-domiciled fund.)

  • 35 SlowToLearn April 13, 2016, 8:57 am

    @Steve – I’m not surprised, it is confusing! My belief is that in that situation, once the dust settles, the records will show, from your failed broker, that you had an investment with an Irish ETF, and the administrators would be seeking to reconcile you with your investment. If the broker was holding uninvested cash on your behalf, then you could make a claim via FSCS, up to £50,000. But, if it was a UK bank(s) that failed, that was holding that money for your broker, then you could make a claim for £75,000, per institution. (Editor – perhaps the article could be updated to reflect the reduced level, when you get a mo).

    Skim re-reading this fine Monevator article this morning, I had forgotten the worrying response from Vanguard.

    I did spend quite a few weeks wringing my hands about all this, and so now I do track my potential compensation against my invested funds / use of brokers. But I keep to the limits fairly casually.

  • 36 The Accumulator April 13, 2016, 12:23 pm

    My interpretation would be that if the broker has failed and not kept records then that’s where fault would lie and you’d be eligible for £50,000. Assuming your holding couldn’t eventually be tracked back to the ETF that’s still in fine fettle. So much the same as SlowToLearn.

    Perhaps contact the FSCS though if it’s really bothering you.

    @ SlowToLearn – good point! Updated.

  • 37 Knowsnothingmuch February 25, 2017, 7:52 pm

    Hi,
    I’m not sure I’ve fully understood everything that has been said so far, and reading through my broker’s details, it isn’t too clear either. Here goes:
    I’ve already got £40k invested in Vanguard UK lifestrategy funds, through the iShares (UK) platform. I’ve got another £120k to invest now, and I was wondering whether to put that into the same place. I’m in agreement that Vanguard is low risk because of its management structure (no Bernie Madoff).
    But I’m not clear about what risk I’m potentially facing if I lumped it all in the same place here. I read in one place, that the platform can go tits up and your money is still ringfenced, courtesy of the custodian, though I’m not quite clear who the custodian of iShares is meant to be. They are currently owned by Blackrock but…? Their own prospectus says in one paragraph that the UK arm is regulated and authorised by the FCA, and then two paragraphs later that customers are not protected. My head is spinning. Who actually has my money in this case? Do I need to worry about iShares failing in terms of whether my money is protected? Or are they simply the ATM between me and Vanguard? (i.e. ATM breaks down, but your money is still in the bank itself).
    Help!

  • 38 The Accumulator February 25, 2017, 9:37 pm

    Hi, are you sure you mean the iShares platform? iShares / Blackrock are fund providers, same as Vanguard. They do the same job – offer funds to investors – and are rivals. Platforms tend to be separate institutions that offer a range of funds from different fund providers.

    Either way, you can have exposure to both types of institution. You give your £120K to the platform, they give most of it to the fund provider who buys shares with it.
    If the platform went bust before they handed over your money or they hadn’t really given it to the fund provider at all but used it to plug a hole in their accounts or blew it on coke and hookers then your exposure is to the platform. If your money has made it to the fund provider then your exposure lies there.
    Yes, everything is meant to be ring-fenced, and parked with a custodian, and FCA protected, and hopefully if one institution went down then others would step in to prevent an industry wide panic but… no guarantees.

    Same way no-one can guarantee you won’t be wiped out by a bus or a super-volcano tomorrow. Probably won’t happen, it’s a waste of life to fret about it (beyond sensible precautions e.g. make sure you carry your super-volcano umbrella at all times 😉 but nothing is 100% ‘safe’.

    Personally, I don’t stick to the £50K limit. But I do diversify between two or three different institutions at the fund provider and the platform level. That’s my version of a sensible precaution. Do what best helps you sleep at night.

  • 39 Knowsnothingmuch February 25, 2017, 11:50 pm

    Hi TA, and thanks for this – yes, you’re quite right – result of a mild brainfog after a long day’s work. It’s not iShares, it’s iWeb shares, owned by Halifax – should have double checked. [Explains why the iShares prospectus was perhaps less than helpful 😉 ] but I was still left with this uncertainty about platform-fund crashing and what it would mean. And I picked the iWebshares because it’s a one-off payment of £200 to set up, and only paying after that for actual dealing. I wanted to build the fund up to about £300k and then retire on that, so if it’s possible to keep it to just one platform, that’s preferable (and cheaper) than having to mess around with several.
    It’s reassuring then, what you say, about the platform not being involved beyond the passing on of the money, and – as you say, hookers and coke aside – that it’s Vanguard’s health I have to be concerned with (if that’s what you’re saying), which seems like a non-concern as far as Vanguard goes. But as you also say, good to diversify not just in Vanguard, but invest in some other fund providers as well. Difficult to want to do so when I see an APR of 17% in the funds I already have in there. The rational side of me is on tenterhooks waiting for that crash to happen… The irrational side of me is telling me to jack in work and live off the profits already. Must. Be Sensible.

    Thanks for giving us all this great blog – it’s been an immense help over the last year for me, a complete newbie to investing, but getting a little better at it as I go along.

  • 40 Snowman October 31, 2017, 10:44 am

    There is a proposal from the FCA for the investment limit (where it applies) to be raised to £85,000 from £50,000. A few news articles about but this is the source (FCA CP17/36)

    https://www.fca.org.uk/publication/consultation/cp17-36.pdf

    It doesn’t look like any proposed change if carried through following consultation would apply until 2019/2020 (see 6.1)

  • 41 Haphazard January 6, 2018, 11:02 am

    Thanks for picking up on this, Snowman.
    I’m no expert on these things but it sounds to me like a good thing that the limit should be increased to £85000 – as £50000 is strangely and awkwardly low. Why have it lower than for bank savings?
    Perhaps we could all respond to the consultation. They probably get lots of responses from financial institutions, but perhaps fewer from individual savers/investors.

  • 42 David February 23, 2018, 5:17 pm

    Hi all. Now we are into 2018 I was wondering if there is any news on bringing the compensation limits for investments in line with savings as mentioned in a previous post

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