RE: BLUE1 Aug 2024 16:06
From FSCS: 'With investments, the level of protection is £85,000 per person, per authorised firm. The FSCS does not provide compensation if you invest in a stock which loses value, or if your shares perform badly or if the share price goes to zero when a company goes bankrupt.'
So you have 100k in HL, HL commits fraud, goes bankrupt. FSCS protects you for their malpractice. You still own the shares and funds so nothing changes there, you still own the stock and funds etc.
If you have ISA with HL with money in it, not held in a stock or fund then that is what FSCS would cover. 85K relates to money held by an FCA registered company on your behalf. Pensions are often invested in funds and bonds. you hold that asset like a share so even if the broker/bank goes bust you still have the asset.
In short, don't keep money above 85K in any one FCA regulated institution. Holding shares, funds is an asset like buying a house. You still have the house even if your mortgage broker goes bust.