What do you do with over 85K

As people are invited to have a GIA, ISA and SIP I wonder happens if you are successful and grow these substantially. I read of ISA millionaires and people with large pension SIP funds so they would exceed the 85K protection should the worst happen and Freetrade or whoever becomes insolvent. I can’t see these people having lots of accounts so are they just brave with all their eggs in one or two provider’s baskets? As far as I’m aware although the 85K is officially the limit of guaranteed protection, in the bank crisis people got all their money back. Are people really taking this risk since there are only so many providers if you have a lot of money to invest.

FSCS is oversold. its not the be all end all protection, its not even guaranteed for what you think it is.

if freetrade goes out of business, first off, your investments don’t just vanish. Your investments arent held by freetrade, they’re held by a nominee company so that in the event freetrade goes bust your investments are segregated from freetrade.

FSCS will normally provide compensation if you were given bad advice from a regulated firm that goes out of business. but freetrade doesn’t give advice so this doesn’t apply. FSCS may compensate you if freetrade goes out of business and they owe you money.

all other compensation seems to be at the decision of the fscs. they are not obligated to compensate you for things like administration fees for example, though they have in the past.

For your scenario to work, freetrade would have to have been running some big fraud scheme siphoning away all your investments so that you dont actually have any investments and they lied about what you had.

in that case. get a broker you trust. People are find with millions in investments because they understand the setup of the broker and know where they’re investments are. thats it. fscs protection doesn’t add much except to cover fees, cash, and any balancing issues.


That’s useful info, thank you. I was aware the actual shares are held outside of Freetrade but the do make a point to highlight the 85K protection in their information. Savings put in banks always mention up to 85k and is protected and advice from MoneySavingExpert is to get multiple accounts to stay protected. So I was wondering why people put all their share together, yet clearly no one would want to hold and pay fees with many share brokers.

Shares and cash savings are have different setups and different protection.

Cash isn’t held in a nominee account, your cash is used for various other banking activities. So if a bank fails your cash might not be available. The 85k protection covered the bank owing you your money.

In most cases shares should always tie back to you, even if they’re held overseas etc. the books say you’re the owner. It just might take a while to get them transferred by the administrator.

The other issue they might appear with shares is if the broker holds them in their own name, it’s possibly they could be sold to pay debts. Though I don’t know if this has happened in practice. It’s uncommon for brokers to hold shares directly but some new brokers have put it in their terms that they might do so