Reply To: A Possible Nasty

Participant

You are probably thinking about the Financial Services Compensation Scheme (FSCS) which covers various financial products if the relevant institution becomes insolvent, e.g. up to £85,000 currently for banks (per person, per bank) or up to £50,000 for claims against investment firms that are in default. But remember, even if you hold shares in nominee form, they should not be held by the investment platform as their assets, but are held on your behalf by a trustee. True, who is trusting the trustee, but in either case you would be concerned more about outright fraud rather than a platform going bust. The only money of yours they might hold will be your trading cash, which will be minimal and should be covered by the FSCS. But the shareholdings are yours. For more information, see the links below or just google FSCS:

https://www.fscs.org.uk/what-we-cover/compensation-limits/
http://monevator.com/investor-compensation-scheme/ (slightly out of date, but most still holds true)

Jeff.