The Safe Investor - Issue 1 2020

HAVE YOU
LOST MONEY
BECAUSE OF
POOR FINANCIAL
ADVICE?
THE FINANCIAL SERVICES
COMPENSATION SCHEME
EXISTS TO GET YOUR
MONEY BACK. FIND OUT
HOW.
IN THE FIRST SIX MONTHS OF
2019, INVESTORS LOST £43M
DUE TO MIS-SOLD FINANCIAL
PRODUCTS. DISCOVER EXACTLY
WHAT IS COVERED BY THE
SCHEME IN OUR QUICK GUIDE.
WHAT IS THE
FINANCIAL SERVICES
COMPENSATION
SCHEME (FSCS)?
The Financial Services
Compensation Scheme
(FSCS) protects
customers from losing
some of their cash if
authorised financial
services firms go bust.
It also protects against
unscrupulous advisers
from mis-selling
financial products.
In some
circumstances, you
could be covered for
more than £85,000.
There’s a measure to
protect temporary
high balances in bank
accounts - where you
have money resulting
from things like house
sales or inheritances
- when you’ll be
covered for some
types of funds up to
£1m for six months.
AM I ELIGIBLE FOR
THE FSCS?
You can only claim the
FSCS compensation in
certain circumstances,
and certain criteria
must be met. The
rules have been set by
the Financial Conduct
Authority (FCA)
and the Prudential
Regulation Authority
(PRA). The criteria are
as follows:
• the financial
services firm must
have failed and be
unable to return
your money itself -
ie it is ‘in default’
• the FCA or
PRA must have
authorised the firm
when you used it
• you must have
actually lost money
• you’re claiming
for personal
money you’ve
lost - although
some businesses
and charities
may be able to
claim in some
circumstances
DOES THE FSCS
COVER MORTGAGES,
INSURANCE AND
INVESTMENTS?
It’s not just your
savings that are
protected by the
FSCS – it also
covers investments,
mortgages and
insurance. The
compensation
limits are different
to savings, and vary
depending on the
type of product you
own. Current limits for
each product area are:
• Investments: 100%
of the first £85,000
if the firm failed
after 1 April 2019,
£50,000 if before
• Mortgage advice
and arranging:
100% of the first
£85,000 if the firm
failed after 1 April
2019, £50,000 if
before
• Long-term
insurance (eg life
assurance): 100% of
the claim
• Compulsory
general insurance
(eg third-party
motor insurance):
100% of the claim
• Non-compulsory
general insurance
(eg home
insurance): 90% of
the claim
• General insurance
advice and
arranging: 90% of
the claim. Advice
for compulsory
insurance is also
protected up to
90% of the claim.
Each product type is
treated independently
under the FSCS rules,
so if you choose to
bank and invest with
the same provider
you would be entitled
to compensation for
each of the products
you hold, up to
the relevant FSCS
limits. While the
limit for investment
compensation will
be increased to
£85,000, some other
intermediation
changes are also
due to take place in
2020. On 1 April last
year, investment
intermediation,
life and pensions
intermediation,
and home finance
intermediation all
increased from
£50,000 to £85,000.
DO YOU THINK
YOU MAY HAVE
A CLAIM FOR
COMPENSATION?
CONTACT CLAIMS
DIRECT AND SET
THE WHEELS IN
MOTION. YOU MIGHT
BE ENTITLED TO
THOUSANDS OF
POUNDS! WHAT
A GREAT WAY TO
START 2020 RIGHT?
CLICK ON LOGO
BELOW
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