How Your Investments and Pension Are Protected

Investments in an Invinitive Investment Account are generally held through nominee and custody arrangements. This means the legal registration may be in the name of a nominee, but the records identify the beneficial ownership of the investments held for you.

The assets are kept separate from Invinitive Financial UK Ltd's own business assets. FCA custody rules require firms to make arrangements that safeguard clients' ownership rights, particularly if the firm becomes insolvent, and to prevent client investments being used for the firm's own purposes without express consent.

Where assets are held with a third-party custodian, firms must carry out due diligence when selecting and periodically reviewing that custodian. This includes considering its financial resources, creditworthiness, regulatory status and the arrangements used to safeguard client assets.

When you buy shares in a company, an ETF or a fund, you are exposed to the financial performance of that underlying investment.

For example, if a company whose shares you own becomes insolvent, the shares may lose some or all of their value. That is an investment risk rather than a failure of Invinitive or the custodian.

Similarly, if a fund or ETF performs poorly, or its underlying holdings decline, FSCS protection would not normally apply simply because the investment has fallen in value.

If a custodian, broker or nominee firm fails, the objective is normally to identify the client assets held in custody and return or transfer them to another provider.

There may be a temporary delay while records are reconciled and a transfer process is arranged. Trading, withdrawals or transfers may also be restricted for a period during an administration.

A shortfall could arise only where assets or client money cannot be fully identified or recovered. In that situation, FSCS may potentially provide compensation of up to £85,000 per eligible person, per failed investment firm, subject to the type of loss and eligibility.

Your investments should not form part of Invinitive Financial UK Ltd's own assets simply because Invinitive operates your Investment Account.

The likely process would be for client assets and records to be reconciled, then transferred to another regulated firm or returned to clients where appropriate. There may be disruption while this takes place, but the purpose of the custody structure is to ensure the investments can be identified separately from Invinitive's corporate assets.

FSCS may provide eligible Investment Account clients with compensation of up to £85,000 per person, per failed firm where there is a valid claim for loss caused by the failure of an authorised investment firm.

The underlying shares, ETFs, funds and cash within an Invinitive Stocks and Shares ISA are generally held through custody and nominee arrangements, in much the same way as an Investment Account.

The key difference is that the assets sit within an ISA tax wrapper. The ISA wrapper provides the relevant UK tax treatment, while the investments themselves remain subject to normal investment risk and the custody protections described above.

Your investments are intended to be identifiable as client assets and held separately from Invinitive Financial UK Ltd's own assets.

The risks are broadly the same as for an Investment Account.

If the company behind a share fails, or if a fund's investments fall in value, this is an investment loss and is not normally covered by FSCS.

If a UK authorised fund manager, broker, custodian or investment firm fails and there is an eligible loss, FSCS may potentially provide compensation up to £85,000 per eligible person, per failed firm.

The relevant protection is linked to the failed firm, not to the total value of your ISA or the number of different investments you hold.

The ISA does not disappear because the firm operating it experiences financial difficulty.

The usual objective would be to protect the ISA assets, reconcile the records and move the ISA to a replacement regulated ISA manager or make suitable arrangements for clients to transfer elsewhere.

During a transition, there may be delays to dealing, withdrawals or transfers. However, the holdings themselves remain separate client assets rather than becoming part of Invinitive's own general estate.

FSCS investment protection may apply up to £85,000 per eligible person, per failed firm, where the conditions for compensation are met.

A SIPP is different from an Investment Account or ISA because it is a pension arrangement.

Invinitive Financial UK Ltd provides administration, platform and operational services for the Invinitive SIPP. However, the pension assets are held within the SIPP and trustee/custody structure for the benefit of members.

This is an important distinction: if the firm operating a SIPP fails, the pension itself does not automatically disappear. The normal objective is to preserve the pension arrangements, protect the member records and appoint or transfer administration to another authorised SIPP operator.

SIPP investments are generally held through nominee and custody arrangements for the benefit of the pension scheme and its members.

The underlying investment risk remains with the investment selected. If the SIPP holds shares in a company that fails, those shares may become worthless. If it holds a fund that performs poorly, the pension value may fall.

That risk belongs to the investment itself. It is not the same as Invinitive, the trustee or a custodian failing.

As with an ISA or Investment Account, the normal process would be to identify and reconcile the custody assets, then transfer or return them.

There can be delays while records are checked, especially where a failed custodian enters special administration. In a previous custody failure involving Reyker Securities, FSCS support helped many clients transfer assets to new brokers without deductions from their assets for special-administration costs.

Where an eligible loss arises from the failure of a UK-regulated investment provider or custodian, FSCS may potentially compensate up to £85,000 per pension scheme member, subject to the facts and eligibility rules.

If Invinitive Financial UK Ltd were unable to continue operating, the likely outcome would be a managed transition of the SIPP administration to another regulated operator.

There could be a short period where transfers, withdrawals or trading were delayed while the replacement arrangements were finalised. However, the purpose of the process would be continuity of the pension scheme and protection of members' assets.

The Financial Services Compensation Scheme states that, where a SIPP operator fails and compensation is payable, it may normally pay up to £85,000 per eligible person, per firm.