Is a Stocks and Shares ISA worth less if the platform it is on fails?
15 July 2021
Question by John
If I allow the transfer of my Baillie Gifford Scottish Mortgage Trust ISA, will it just go into a bigger Hargreaves Lansdown ISA pot? Meaning that when Hargreaves Lansdown as a whole falls, my investment is worth less?
Answered by David Stone
Now that Baillie Gifford have decided to stop offering a direct investment service, you can choose to allow the transfer to Hargreaves Lansdown who have agreed to maintain the same charging structure for 3 years - equally you can transfer it anywhere else without penalty.
Your monies would be held on nominee by Hargreaves Lansdown and remain invested in the Baillie Gifford fund, unless you wanted to switch funds.
Your question was a little unclear on exactly what you meant by 'when Hargreaves Lansdown as a whole falls', so hopefully this covers what you meant:
The Hargreaves Lansdown share price can do whatever it wants in the background, and it would have absolutely no effect on the value of your ISA fund. You’d be better off keeping an eye on Tesla’s volatile share price which that fund does have a large holding in!
If Hargreaves Lansdown totally failed, i.e. went into liquidation, then there are all sorts of protections in place. However I would need to refer you on to Hargreaves, to clarify their exact position: https://www.hl.co.uk/security-centre/how-safe-is-your-investment
I hope this helps put your mind at rest.
David started Mansion House Capital with his (now) wife back in 2000, they advise across all areas and mainly look after London-based professionals who are too busy and/or too bored to prioritise planning their own finances. David is a Chartered Financial Planner and Fellow of the Personal Finance Society.