If Vanguard went up in smoke, would the FSCS protect BOTH (my ISA and my SIPP) up to £85000?
15 February 2022
Question by Jonathan
I have ISA investments with Vanguard of around £80,000. I am now thinking of moving a SIPP to them, valued at about £100,000. If Vanguard went up in smoke, would the FSCS protect BOTH up to £85000?
Answered by Chris Broome
The short answer is that it that FSCS protection is complicated and giving a simple answer to this question is difficult.
The longer answer is that Vanguard is an investment manager, a fund manager, an ISA manager, a pension scheme trustee and a pension scheme administrator. But in legal terms, there are differences when it comes to FSCS protection. ‘Vanguard’ is, variously:
Vanguard Asset Management, Limited. This entity operates the ISA, GIA and SIPP Administration. It is a distributor of Vanguard funds.
Vanguard Group (Ireland) Limited manages Vanguard Funds plc and Vanguard Investment Series plc. This is the fund management activities.
Vanguard Investments UK, Limited. This is the Authorised Corporate Director (the company with the legal responsibility for running the funds) for some of the Vanguard funds available through Vanguard Asset Management, Limited.
Vanguard Pension Trustee UK Limited. This entity is the SIPP Trustee.
So, as you see, there are lots of different businesses. This should give you comfort that the realistic chance for any event that would need you to claim against any Vanguard entity is very small. Simply put, there is a lot of investor protection through oversight in each of these businesses.
Furthermore, as well as the different legal entities within the Vanguard group, within the FSCS, you, as an ISA investor, are a different person to you, as a member of a pension scheme. Simply because you don’t own the assets in your pension – the trustees of the pension scheme own them on your behalf.
If any part of the Vanguard chain defaulted within the SIPP, the trustees would have to make the claim on behalf of the members of the pension scheme. At this point, your ownership of other Vanguard funds could limit the overall level of protection you have across each tax wrapper (ISA/SIPP/etc).
The circumstances of any claim will, ultimately, be individual to you.
I appreciate this isn't a simple Yes or No answer to your question, however I hope this provides some insight.
Please let me know if I can be of any further assistance, and good luck with your investing.