1. What is the FSCS?
The Financial Services Compensation Scheme (FSCS) is the UK’s statutory compensation scheme. It protects customers of authorised financial services firms if those firms fail and cannot return your money.
2. Is InvestEngine covered by the FSCS?
Yes. InvestEngine Ltd is authorised and regulated by the Financial Conduct Authority (FCA) and is covered by the FSCS for certain activities. However, it's important to understand what is and isn’t protected.
3. What does the FSCS cover?
If InvestEngine Ltd were to fail, and you suffered a loss as a result of this, then the FSCS may compensate you up to £85,000 per eligible person.This protection does not cover investment losses due to market performance.
4. How is my money and investments protected at InvestEngine?
Your money and investments are protected in several key ways:
- Segregation: Your cash is held by InvestEngine for your benefit and kept separate from InvestEngine’s own money
- Custodian accounts: InvestEngine is the custodian of your ETFs, held by one of our nominee companies for your benefit.
- Client money rules: Any uninvested cash is held in line with FCA rules, in segregated client accounts.
These measures help ensure your assets are protected even if InvestEngine or any other firm associated with your InvestEngine account were to go out of business.
5. Is the money in my InvestEngine account held in a bank account?
Yes, any uninvested cash is held in a client money account at a major UK bank. These accounts are ring-fenced from the bank’s and InvestEngine’s own funds.
6. Does FSCS cover losses from poor investment performance?
No. FSCS does not compensate for:
- Losses due to market movements
- Poor performance of ETFs or funds you hold
- Wrong investment choices in DIY portfolios
Investing always involves some risk, and returns are not guaranteed.
7. Do different InvestEngine accounts (ISA, General, Business) each have FSCS protection?
FSCS protection applies per person, per firm, not per account type.
This means if you have both an ISA and a General Investment Account with InvestEngine, your total FSCS protection with us, across all accounts, is up to £85,000.
8. I thought the FSCS protection limit was increased to £120,000?
The FSCS has only increased their protection limit to £120,000 for deposit takers, such as a bank or building society.
For an investment firm, FSCS protections will be unchanged at £85,000 and will have the same areas of scope as at present.
To understand more on the deposit taker protection increase, click here.