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Seeking security
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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The limitations of nominees
8 August 2008 [0 comments]Q:
Having read various pieces in your magazine at different times regarding the merits and demerits of certificated and nominee share dealing, it seems to me that certain advantages of holding certificates have been missed.
Indeed, I recently attended an Alliance Trust Roadshow and sat on a ‘shareholder club’ discussion group, where I was amazed to find, among a fairly sophisticated bunch of investors, such a lack of appreciation as to the shareholder rights one loses with a nominee account.
As an extra thread, I also recently attended the AGM of an investment trust in Edinburgh. As a trustee to my grandchildren’s funds, my name was missing from the list at reception. I was told that I was welcome to the meeting as long as I didn’t participate in the voting.
I was further informed that had I informed the plan managers of the trusts beforehand, I could have voted. It occurred to me that nominee shareholders may well find that if they feel strongly about an issue, they might be able to exercise their voting rights in a similar way. I would be interested in your panel’s thoughts on this subject.
Bev Wilkinson
via email
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