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Safety of Client Funds

absolutezero
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Re: Safety of Client Funds

#137466

Postby absolutezero » May 8th, 2018, 9:17 am

Midsmartin wrote:Insurance was mentioned above. As far as I can tell the big name brokers I use do not insure my funds against fraud/failure at their end. And even if they did tell me they had insurance, would I believe them if it turned out there was fraud going on?

So can I buy this sort of insurance myself? I've googled a bit with no success.

Brokers offering CREST membership seem thin on the ground, and those I've looked at seem to only offer phone dealing not DIY online dealing.

There don't seem to be any great options available.

I get mine through Charles Stanley Direct. £11.50 a trade and need to do one a month or you pay a £5 admin fee. All online but with telephone if you want it.
I was a transfer from Fidelity when they stopped offering CREST and it was all taken over by Charles Stanley - so I might be 'special'.
Worth looking into though.

Breelander
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Re: Safety of Client Funds

#137520

Postby Breelander » May 8th, 2018, 12:40 pm

absolutezero wrote:...I was a transfer from Fidelity when they stopped offering CREST and it was all taken over by Charles Stanley - so I might be 'special'.


You are special, so am I (got my Crest a/c with FastTrade, later renamed as Charles Stanley Direct). Crest accounts are no longer available for new customers, but as existing customers we can keep ours.

absolutezero
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Re: Safety of Client Funds

#137839

Postby absolutezero » May 9th, 2018, 5:12 pm

Breelander wrote:
absolutezero wrote:...I was a transfer from Fidelity when they stopped offering CREST and it was all taken over by Charles Stanley - so I might be 'special'.


You are special, so am I (got my Crest a/c with FastTrade, later renamed as Charles Stanley Direct). Crest accounts are no longer available for new customers, but as existing customers we can keep ours.

I occasionally get an email asking if I would like the 'convenience' of transferring it to a nominee account.
I always reply with 'no thanks - don't be silly'...

doug2500
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Re: Safety of Client Funds

#137841

Postby doug2500 » May 9th, 2018, 5:17 pm

I'm so glad I have my CREST account, but I feel sorry for anyone wanting to open one, they're thin on the ground these days.

I admire whoever said they forgo the tax advantages of an ISA to stay in CREST, but I've given in. I even opened a joint account, and it took me by surprise how much it annoyed me to open a nominee account to save tax.

daveh
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Re: Safety of Client Funds

#137849

Postby daveh » May 9th, 2018, 5:36 pm

I have a CREST account with II, hangover from Natwest stockbrokers. I guess they are not available to new customers. They charge me a fortune for it now (it was free with TD Direct) and I can't set the CREST fee against trades as you can with the normal qtrly fee. They haven't yet asked me if I want to transfer to a nominee, I'd say no as I like holding the shares direct.

I'm not sure why the brokers don't like CREST accounts as presumably a lot of work is cut out for them as for example divis are paid direct by the company registrar to my bank account.

And looking at the II tax certificate thread - there is something else they don't have to do - tax certificates, I get those direct from the company registrar either when each divi is paid or with the final dividend of the tax year showing all dividends paid.

doug2500
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Re: Safety of Client Funds

#137859

Postby doug2500 » May 9th, 2018, 6:10 pm

I'm not sure why the brokers don't like CREST accounts as presumably a lot of work is cut out for them as for example divis are paid direct by the company registrar to my bank account.


Conversely one reason they don't like them might be that dividends are not paid into the nominee account. It might not count for so much just now but a few years ago I believe all that cash lying about was a major source of income. The brokers could earn more in interest than they paid.

Lootman
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Re: Safety of Client Funds

#137861

Postby Lootman » May 9th, 2018, 6:15 pm

daveh wrote:there is something else they don't have to do - tax certificates, I get those direct from the company registrar either when each divi is paid or with the final dividend of the tax year showing all dividends paid.

And if you have fifty holdings? A hundred?

I feel the exact opposite way. The risk with a nominee account is trivial if you choose a broker wisely, and it is way less work. Especially as my positions are gradually migrating to a tax-free ISA.

But I guess if it helps you sleep at night . . .

SalvorHardin
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Re: Safety of Client Funds

#137865

Postby SalvorHardin » May 9th, 2018, 6:43 pm

I take the view that whilst it is unlikely to happen I consider what would be left if my assets with any one provider are lost with no recourse. In large part this is because I am at the stage of life where my number one investment goal is the preservation of the real value of capital and income, so I tend to have a somewhat different attitude towards risk.

Consequently I have split my shareholdings between five groups:

1) Several online brokers (nominee accounts)
2) An old style broker (ISA)
3) Certificated holdings
4) Multiple investment trust savings schemes (held by the managers)
5) Held by the registrars

I should point out that this requires quite a bit of organisation, particularly since I have over 40 holdings (some of which are foreign, held in multiple accounts and partially inside ISAs). Being an INTJ in the Myers-Briggs personality test, I'm the sort of person who is happy to maintain this level of record keeping. Heck, I don't even need the consolidated tax certificates because I log every dividend to the point where my tax return is ready on 6th April :D

77ss
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Re: Safety of Client Funds

#137915

Postby 77ss » May 9th, 2018, 8:46 pm

SalvorHardin wrote:I take the view that whilst it is unlikely to happen I consider what would be left if my assets with any one provider are lost with no recourse. In large part this is because I am at the stage of life where my number one investment goal is the preservation of the real value of capital and income, so I tend to have a somewhat different attitude towards risk.

Consequently I have split my shareholdings between five groups:

1) Several online brokers (nominee accounts)
2) An old style broker (ISA)
3) Certificated holdings
4) Multiple investment trust savings schemes (held by the managers)
5) Held by the registrars

I should point out that this requires quite a bit of organisation, particularly since I have over 40 holdings (some of which are foreign, held in multiple accounts and partially inside ISAs). Being an INTJ in the Myers-Briggs personality test, I'm the sort of person who is happy to maintain this level of record keeping. Heck, I don't even need the consolidated tax certificates because I log every dividend to the point where my tax return is ready on 6th April :D


Speaking as an INTP, I try to minimise such unnecessary complexity. Five accounts is more than enough for me (2 brokers, giving me 2 dealing accounts, 2 ISAs and 1 SIPP). With you on the tax return though :-)!


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