Long term investing reassurance (hopefully)

@Bob For (Stocks and shares) ISA’s you wouldn’t set up multiple, you would just keep your ISA together with the best provider. the recommendations to have many GIA portfolios is made by those whose opinion is that ALL of their funds should be protected rather than just a portion, so they aim to keep a balance under or near £85k for all of them, this has the benefit of reducing the impact in case one does go under as the rest of your funds are untouched, but it has the added tediousness of needing to go through many different accounts to make adjustments, take profits, collect dividends etc plus there’s a higher chance of one of the brokers/platforms you have a portfolio with facing difficulties.

an absolute headache if you ask me. the alternate and more popular opinion is to just hold everything with one, because now there is only the slim chance of that one platform/broker facing issues. The biggest risk of investing has always been the market and your decisions to hold/sell your positions at any given time.

@AlexK thanks for the specifics. It’s been a headache to try and go through some of the legal-speak in terms and conditions as a regular person, so I could only try to the best of my ability. Knowing that it referenced a hypothetical extreme-case scenario made deductions complicated for me :exploding_head: I just keep hoping to avoid misleading people or causing more confusion.

As a small check in case people ask again, would the ‘funds’ protected by the FSCS amount to just the cash balance, or combined cash&equity when looking to claim?

I still have much of the regulations and industry to read up on and get more familiar with to be able to respond with any more certainty to highly specific questions.

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@AlexK Hi AlexK,

Based on what has been written on this thread, would it be correct to say that since the shares are not held in our individual names, we would not be able to attend or vote at the Annual General Meeting (AGM) of the companies in which we have shares.

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@cantuar I think the Share Dealing Service Terms of Business https://www.trading212.com/en/client-agreement-st
state what is official :

20. Voting Rights, interest, Dividends, and Corporate Actions.

20.1. We are not obliged to but we may arrange for the exercise of any voting rights, or the exercise any conversion or subscription rights attaching to Investments we hold on your behalf.

20.2. We will be responsible for claiming and receiving dividends, interest payments and other income payments accruing to your Investments we hold on your behalf.

20.3. You shall be solely responsible for providing us with your instructions in respect of clause 19.1 and 19.2 above but if we are unable to obtain your instructions we may, without incurring any liability, use our judgement and act as we think fit in your best interest.

So if I understand Trading212 don’t say they will always provide for example certificates of ownership for shares so you can exercise potential voting rights, but they also say they might ! We just have to ask ! But what will the result be… Anyone has tried ? One of the team might say what the general procedure is ?

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@zyfihx @cantuar We’re working on enabling online voting for shareholders but that’s not very high on the list of priorities.
At that moment, it’s not possible to exercise your vote. We can issue a certificate of ownership but that doesn’t guarantee that you can attend a general meeting.

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@David @zyfihx Thanks for the information.

Thank you for the information, which makes me wonder…

If trading 212 is offering free trading but the equity is held in custody at Interactive Brokers and the funds are kept with Barclays… how do you guys make money? Just by the spreads on the shares?

Will we be notified beforehand if you ever decide to put fees on withdrawals?

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@Lmiturbe

They make a large portion from trades on their CFD platform.
70-80% of people lose money on CFD, meaning they make 70-80% for everyone using CFD.

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Also more info here.

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Thank you. I’m in the process of investing in a long term large portfolio and everything so far sounds too good to be true. The fact that it’s an approved company by the FCA gives me reassurance but still makes me wonder how safe our money is?

£85,000 is safe regardless.

Trading212 is safe, they have been around for a while now.
Great communication from their team, I’m happy with them so far.

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I believe it’s called due diligence. There have also been some inconsistencies in the terms versus information in emails and forums. I understand very well that more people are actually reading the terms now.

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Maybe I should read the topic to the end but… this is how I see it… Those £85 refers only to the cash, it’s EU law (100k in local currency). As far as I read, our money is at Barclays account, so if you have £80k in cash (and 10m in stock), and if Barclays goes bankrupt we are covered by FSCS even if we are not UK citizens. One question, if we all have separate bank accounts, why we have to wire money to the joint account and put reference in the description, why we don’t have our sort code and account num? If £85k applies to all customers’ accounts, that’s not enough, although Barclays certainly won’t go bankrupt.

Purely out of curiosity, is it technically possible that someone from a brokerage using our logins sells all the shares we have and transfers the money to a secret account?

Assets are at custody with IB, for example, purely theoretically, if you buy 95% of the shares of a company, you will not be listed as the owner, it will be IB.

Technically, they shouldn’t be able to see/know your login info.
Practically, anything is possible, i guess… :sweat_smile:

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the answer for T212 atleast is no. thats why the funds are with barclays and the shares with IB. protection against fraud for client piece of mind.

If there was an AGM that we wanted to attend, would it cost us for you to issue the certificate of ownership? I understand the company might not accpet it, just interested in my options.

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@Mistwarden No, doesn’t cost anything for us to issue it. We just can’t guarantee that the company will choose to accept it.

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So if it in custody with IB, would be better to have an account direct with IB instead? :thinking:

No. IB misses many features you get with T212. IB has a business model of providing back end services to entities like T212, encouraging such to innovate value added services that they do not seek to provide themselvea.

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**[quote=“Lmiturbe, post:30, topic:2159, full:true”]
Thank you. I’m in the process of investing in a long term large portfolio and everything so far sounds too good to be true. The fact that it’s an approved company by the FCA gives me reassurance but still makes me wonder how safe our money is?
[/quote]

**careful I have winning positions and I’m losing

This is going to be embarrassing for you.

The exchange rate has changed since you bought. Thus the dollar price is worth less then you paid in pounds even after dollar appreciation.