FSCS & money protection

What is the Financial Services Compensation Scheme (FSCS)?

The Financial Services Compensation Scheme is a fund of last resort available to compensate consumers if an authorised financial services provider cannot meet claims against it. This will generally be because a firm has stopped trading and has insufficient assets to meet claims, or is insolvent.

As a quick overview the Financial Services Compensation Scheme pays out:

  • Investments: up to £85,000
  • Bank deposits: up to £85,000

How is your money protected with Willis Owen?

As a point of note, Willis Owen does not hold customer monies, so in the very unlikely event that the Willis Owen business fails, you as a customer will not suffer.

Your investments through Willis Owen is held via the Willis Owen Platform (adminstrated by Embark; powered by FNZ). The Willis Owen Individual Savings Account (ISA), Junior Individual Savings Account (JISA), Self-Invested Personal Pension (SIPP) and General Investment Account (GIA) are provided by Embark. Embark is authorised and regulated by our regulator, the Financial Conduct Authority (FCA) and as such are covered by the FSCS. Embark hold (through a custodian) the cash either awaiting investment, or awaiting payment to an investor, they do not hold the investment directly. FNZ hold, for a short period, the money being invested into a fund, and a cash account. In the unlikely event that the Embark or FNZ business fails, your cash deposit will be covered under the FSCS.

Protection for cash desposits

Cash deposits you may hold whether through UK Banks, Building Societies or on a platform (such as the Willis Owen Platform) fall under the protection of the FSCS. If one of these institutions become insolvent and couldn’t return your money, you would be protected for 100% of the first £85,000 held with each financial institution.

The £85,000 limit applies per person, per institution. If you owe money to the bank (e.g. loans, mortgage) these will be taken into account before any compensation is paid.

Temporary high balances will be covered up to £1 million for six months from the date that monies are available in your account.

How are your investments protected by fund providers?

Fund providers such as Jupiter offering Unit Trusts or OEICS operate under well-defined FCA rules that require them to have robust controls in place to ensure the interest of investors are protected. These include:

  • the requirement for a fund provider to appoint a trustee (for Unit Trusts) or depository (for OEICs) to oversee their actions and ensure that investors’ cash is held in a separate ‘ring-fenced’ account that cannot be accessed by the fund provider. This account is held under the strict control of the trustee/depositary, the fund provider has no authority over it
  • the requirement for the trustee/depository to notify the FCA if it believes that the fund provider is not meeting its obligations in terms of its dealing and income distribution
  • the trustee/depository has the power to remove the fund provider if it believes that it is in the interest of investors. In the event that a fund provider was to become insolvent, the trustee/depository would take over the running of the funds and it’s their duty to find another management company.

Protection for money invested

In the unlikely event you were to suffer financial loss because a fund provider became insolvent you may be able to claim under the investment section of the FSCS. The maximum you can claim is up to £85,000 per fund provider regardless of whether your funds are held through the Willis Owen Platform or another platform. So, if you have an investment with Henderson and Jupiter and both Henderson and Jupiter were to collapse, you may be able to claim up to £85,000 from each fund provider.

It’s important to note that if a fund provider became insolvent and you hold investments from the same fund provider through different platforms, you can only claim up to £85,000 for all the affected holdings.

If you require any further information you can visit the FSCS website at Financial Services Compensation Scheme. You can also contact the FSCS by writing to: Financial Services Compensation Scheme, 10th Floor, Beaufort House, St Botolph Street, London EC3A 7QU. Alternatively, call them on 0800 678 1100 or 020 7741 4100