Ask Citywire: Is my money safe?

Your last entry mentions offshore deposits. Guernsey has a Depositors Compensation scheme, but beware, it has many limitations, such as being capped at £100 million in any five years, most retail deposit takers are well above the £100 million mark, so the phrase "you will get back up to £50,000", is very relevant especially the "Up to".

It is funded by the banks who at present are building that fund up, but at it is apparently well underfunded at the moment, (difficult to get figures from anyone) and even with the States of Guernsey guaranteeing £20 million top up, (Tax payers money?) through their own insurance, you need to check very carefully before committing your money.

The Guernsey Financial Services Commission have now said that Bank letters of Comfort & guarantees are worthless and depositors have to be responsible for their own due diligence when depositing money. In other words, your on your own. Guernsey doesn't really want to know about you as a depositor, especially a small depositor.

What about cash held in a platform?

My late husband and I received a Letter of Guarantee from Landsbanki hf when they took over Cheshire Gurensey. This was actually signed but the Letter of Guarantee presented to the Guernsey financial authorities was not. (to which of course ordinary folk had no access before the 2008 crash)

I realise at that time we were definitely 'unsophisticated investors' : sadly trusting those in authority and believing what was written on what turned out to be worthless. Sales Description Act ? Forget it. So Landsbanki-Guernsey collapsed in October 2008 and is still in Administration. Guernsey State sat on their hands waiting to introduce their Depositors' Guarantee until a year AFTER these events as apparently 'everyone knew' this bank was in trouble in the Spring of 2008. Being retired Brits we would much rather have put our savings into a UK deposit account somewhere but of course weren't permitted under the Anti-Terrorism Laws

You make it sound so simple, you have forgotten the endless forms to fill in, the delays etc..

When the Icelandic Banks failed it took just a few weeks BUT when a Financial Adviser took us for many thousands it took over 3 years to get just over £30,000 from the FSCS. They give you nothing for lost interest and nothing for all the letter writing and copying documents etc..

The FSA, the FOS and the FSCS leave a lot to be desired, they are less than helpful; we know! Try to avoid them, if you can.

Your articles are all so nice , BUT in practise no no no. Almost lost all the money in ICESAVE bank, which was authorised by FSA. Got the money back , invested in KEYDATA>>> again, authorised by FSA. Monthly payments stoped, and capital, if & when received, we will be lucky. We are not the only ones, there are thousands in this sunkunk boat.

I have heard from two members of staff working in Customer Services, for a Building Society based not a million miles from Swindon, that the UK limit is going to fall into line with the Euro Limit of 100,000 Euros - converted to the Stirling exchange rate, on 1st January next.

Ask Citywire: Is my money safe?

Ask the Landsbanki Guernsey DEPOSITORS(Not investors)

Answer : No

Can anyone explain how things stand with organisations like hargreaves lansdown sipps and isa's.

Say I held a schroder fund in my h-l isa and a fidelity fund in my h-l sipp. Now am i right in thinking as long as they are not "offshore" funds schroder and fidelity are covered by fscs and if there was any malpractice id be covered. Similarly am i right in thinking if there was any malpractice at h-l id be covered up to 50k on all my funds held there, be it isa and/or sipp. I think h-l, schroders, fidelity etc use a nominees arrangement so that things are very safe so even if the company goes bust the funds are not assets of the company anyway so FSCS protection only comes into play if things not recorded properly.

The Guernsey authorities changed the rule about comfort letters in what I can only describe as secret. They did not bother to inform any depositors about this change.

They appear to have done nothing at all to help the depositors who, like my wife, and I lost all we had.

Were it not for the receivers I would be living on the street. Would I put any money in Guernsey again? Would I advise against placing any trust in a Guernsey bank? I think not.

The proposed increased compensation for EC countries is a particularly valid point in consideration as to where you place your hard earned savings and will make a major impact on offshore dependancies who currently offer an 'up to' £50,000, with added questionable frailities in their own DCS.

In the case of the stricken Landsbanki Guernsey depositors their position is further compounded by the choice of where they deposit their savings, as, for instance, Guernsey based depositors have such limited opportunities to open UK retail accounts, National Savings being the most responsive to their requests.

Why are offshore British citizens treated differently in regard to opening retail bank accounts in the UK, it is difficult enough worrying about how safe your savings are, never mind not having a real choice as to where you place that worry?

I note "davva's comment that Schroders and Fidelity use nominee arrangements for Sipps and Isas deposited with them so that, even if the company goes bust, the funds are not assets of the company anyway.

Does the Ft100 company, Alliance Trust Savings of Dundee, use similar nominee arrangements

How often are these nominee platforms audited? (HL..ATS.Cofunds.Funds Network etc.)

Is there not a case for brief statement from the Independent Auditors being regularly appended to the platforms own statements?

Over cautious? Just think Bernie who Madoff with $65billion..

Thanks to Victoria for her further research here-- see also Money Forum-- Eggs & Baskets??

Hi, Note I used the words "I think" a lot so my post was asking if there was someone out there who knew 100% how it all hangs together. Any chance of an article about how organisations like H-L and fidelity funds network are covered including things like isas and sipps held within them. Also what happens if there was a problem with the company providing a fund within the isa. So for example my h-l vantage isa or sipp could hold serveral funds within it. What happens if there was a problem with one of those companies.

Ask any depositor (not investor) with Landsbanki in Guernsey what they think of GFSA, FSA, FSCS etc etc and how they protect the small investor and you will get a definate NO!

You are safer keeping your money in a little tin box buried at the bottom of your garden than trusting any of these institutions.

Over 2000 depositors in Guernsey have lost a big chunk of their life savings through the collapse of Landsbanki; have they been supported by anyone? again you will get the answer NO!

We are but an insignificant number to them.

I have lost my life savings, and because of that my home and any chance of retirement. What will they say to me when I knock on their door looking for a bed for the night? I'll bet the answer is NO!

Can you advise what happens to business funds held in these institutons? Is there any cover?