Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Don't want to troll Paul, but what advice would that be? The average so called financial adviser has no more expertise in investing than you or I and almost certainly less than me being a retired financial professional. It's a shame that many people pay these rascals a few hundred quid when they could learn most of what they need to know in the nearest public library.
Since Lehman Brothers I think there is a lot more oversight in large financial institutions, and while I would never say never, I think its very unlikly with large institutions with good reputations.
Personally were I concerned I would invest in some professional advice as it would be money well spent.
Good advice is rarely free, free advice is rarely good.
Hello all I was with svs when they were closed down shares were transferred to another broker at no cost to myself fees were covered by the financial authorities gla regards jack
Thanks all, useful exercise, power of discussion has illuminated some points.
Paul, one thing re your rather nice wad! You are right about the transfer but not necessarily the reasonable cost, that is the exact dependency I was worried about. Notably, provided Lloyds had enough assets to pay the receiver the cost of administration is covered. However the point of insolvency is that they have run out of money and gone bust hence assets are minimal or zero. Very very unlikely with Lloyds as they are overseen by a regulator but in many cases regulators have done a very bad job and been asleep at the wheel, we read that all the time, they are a useless blob of civil servants. That's what happened with much smaller brokers, Beaufort and LLC.
If you hold the share certificates (a pain and broker fees are higher) then I would assume its irrelevant if the broker is insolvent. There are some advantages as in scrip issue, which isn’t available via Hargreaves Lansdown.
Is it available through other brokers??
Even better reason then for using this platform as they don't do any trading on their own account I understand.
Continuing on this thread is a very good post from finumus: https://www.finumus.com/blog/what-if-my-broker-goes-bust
Well I've got in excess of £300k invested through Halifax, not sure what applies to you but if LLOY goes pop, the reciever might charge me the standard fees for transfer of stocks at a reasonable rate, which isn't much. However I believe I would simply pay the usual transfer fee to my new broker as you would under normal circumstances.
If unsure I suggest you seek financial advice for peace of mind.
Found this link which explains it. Doesn't sound likely in the case of HL or II but my pension is worth quite a bit in excess of the £85K protection limit so stuffing it in a SIPP with just HL may not be wisest. Additionally of course there are service breakdowns when you can't access/get money out for some reason so another string to the bow can be handy. Anyway, here's the link.
https://www.investorschronicle.co.uk/managing-your-money/2019/11/07/what-to-do-when-your-broker-goes-bust/
Thank you for the reply Paul. However, owning the stocks does not protect you 100%. Previously, brokers have failed and whilst the stocks and cash are ringfenced from their operations, this did not stop the liquidators charging hugely for their services. If there are not enough assets left at the failed company they have the legal right to charge the clients who own the stocks for these services which are usually multi millions.
While on this subject, when spreading money around to keep within the FCS limit, make sure the institutions are seperate, some institutions appear didifferent but are actually owne by one parent company. In that instance even if you had several accounts. for example if you had accounts at Halifax, Bank of Scotland, Scottish Widows, Schroders Personal Wealth, MBNA, Black Horse and Birmingham Midshires, they are all part of LLOYDS so your total cover accross all accounts would only be £85,000.
It only makes sense if on TORO you do not actually own stocks, like trading CFDs or something similar, with conventional stockbrokers like HL, Halifax etc. you own actual stocks.
This means if the broker goes bust, its only the cash held that is at risk, as you own the stocks. The stocks owned would simply be transferred to another account.
I assume that is why TORO needs insurance.
I don't know for sure though, just trying to make sense out of it.
Apologies as off subject but thought i'd ask.
Toro offers a 1M insurance against insolvency/fraud, the more familiar names such as Hargreaves and Interactive do not. Given I have a SIPP I want to put into drawdown that takes me above the FSCS limit of £85K, would it be wise to spread out amongst a few rather than one broker ? I appreciate it's unlikely HL will go bust and there are multiple protections in terms of separation of client assets but you never know and there's always corporate fraud.
I don't really want multiple brokers or to use eToro and would like for administrative purposes to have everything in one place.
I notice the US has $550,000 of securities and $250,000 of cash insured by the Gov - US always ahead of UK I guess.