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Q:
My wife and I have transferred ISAs, shares and unit trusts totalling around £135k to the Hargreaves Lansdown Vantage Service. The investments are held in the name of Hargreaves Lansdown Nominees, but we remain the beneficial owners.
In view of the recent problems in the banking sector I am wondering what our position
would be if Hargreaves Lansdown became insolvent. Would the full value of our investments be returned to us, and how straightforward would this be to arrange?
Many thanks.
Mr R Taylor, via email
A:
Anna Bowes replies:
Hargreaves Lansdown’s financial situation has absolutely no link to the situation in the banking sector – HL is an independent financial adviser (IFA).
Within the Vantage Service, the underlying investments remain invested into the underlying investment companies and, even then, are ringfenced should there be problems with these underlying companies. So your money is secure, although not guaranteed.
In the unlikely event that HL were to become insolvent, you would still be able to access the money invested in the underlying funds by simply writing to the companies and asking for the money to be encashed. However, there would be no reason to do this unless you need the money, as encashing your ISAs would mean that you lose the allowances forever.
HL has a section on its website entitled ‘How safe is your investment?’, which may help put your mind at ease.
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I wish to draw your attention to the ‘Resources Investment Trust’, which is listed in What Investment in the sector entitled ‘Specialist: Liquidity’. In fact, this trust should be in the sector entitled ‘Specialist: Commodities & Natural Resources.
The trust was correctly listed in ‘Specialist: Commodities & Natural Resources’ up to and including August 2007, issue 293, but in the next issue, September 2007, it had been moved to ‘Specialist: Liquidity’.
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