Majority of UK public unaware of investor safeguards – survey

Maria Nikolova

Just 4% of respondents knew that the maximum level of compensation is £50,000 for clients of investment firms.

About two years have passed since the SNB decision on January 15, 2015 sent shock waves across the entire online trading industry, leading to the collapse of two investment firms in the UK – Alpari UK and LQD Markets UK. The events pushed numerous clients of the ill-fated brokerages to claim compensations for their deposits. Back then, the staff at the Financial Services Compensation Scheme (FSCS), the Financial Conduct Authority (FCA) and the special administrators appointed at the defunct companies had to explain to thousands of investors whether they are eligible for a compensation and, if so, what is the application procedure for getting any.

In the face of those events, today, the majority of UK public remains ignorant regarding its investor rights. This is exhibited by the results of a survey by consumers’ association Which?, whose findings were published earlier today.

The survey was conducted amid 1,692 people in November 2016 and found a lack of knowledge about investor safeguards in case the investment firm whose clients they are collapses.

The main findings:

  • Only one in three (32%) respondents was aware that investments fall under the remit of the Financial Services Compensation Scheme (FSCS).
  • Only 4% of people knew the maximum level of compensation is £50,000 if they are clients of an investment firm.
  • Two-thirds (67%) of those surveyed realized that deposits with a bank or building society are protected.

As a result, Which? concludes that regulators and investment firms are not doing enough to inform investors of their rights, given that compensation rules for investments are more complicated than they are for bank deposits.

Which? provides a brief summary concerning the cover provided by the FSCS and the Financial Ombudsman Service. It also publishes a quiz so that each investor can test his/her knowledge of his rights to receive compensations.

On January 16, 2017, FSCS announced it would levy the UK financial services industry £378 million in 2017/18, with the sum dubbed to reflect the “costs of protecting people”.

Read this next

Retail FX

Banxso announces 8.7% interest rate on deposits in South Africa

“With Banxso, they can enjoy the benefits of both worlds – earning competitive interest and having the freedom to trade, all within the same platform.”

Industry News

FINRA to publish transaction details in U.S. Treasury securities

“Consistent with our longstanding practice, FINRA is introducing greater transparency in a calibrated and careful manner, benefiting liquidity and resilience in this critical market while also mitigating potential information leakage concerns.”

Institutional FX

OpenYield launches “cheap and easy” fixed income trading for brokers

“We’re on a mission to make bonds cheap and easy to trade, and are excited about the opportunity to build generational capital markets infrastructure.”

Digital Assets

Sumsub and Mercuryo publish a guide for VASPs: “Mastering Travel Rule Compliance”

“At Sumsub, we’ve concentrated our efforts on filling the gap in understanding the complexity of Travel Rule regulation and helping organizations find the best solution to stay safe and compliant while minimizing costs and avoiding potential risks of non-compliance. This guide we created with Mercuryo, our trusted partner, is the ultimate navigation tool all VASPs can consult.”

Digital Assets

Bitget Wallet Leads with Record Swap Volume & New Crypto Innovations

This week, Bitget Wallet achieved a milestone by surpassing Metamask with a record 388,757 Swap order transactions, securing the global lead. The significant 7-day trading volume, almost 68,000 more than its rival, underscores its liquidity and user trust. This robust activity signals Bitget Wallet’s prominent role and reliability in the dynamic crypto market.

Digital Assets

Embarking on a Digital Currency Journey

Imagine you’ve stumbled upon a treasure map, leading you to untold riches hidden in the vastness of the internet. Instead of gold coins and jewel-encrusted goblets, this treasure comes in the form of digital currencies, the modern-day loot coveted by many.

Reviews

Traders Union Experts Share The Trading Analyst Review For 2024

Navigating options trading in rapidly shifting markets poses a considerable challenge. This is where options trading alert services become invaluable. They aid traders in keeping abreast of evolving opportunities and market trends. In this assessment, Traders Union experts scrutinize The Trading Analyst alert service to ascertain its efficacy. 

Digital Assets

BlockDAG’s Presale Achieves $9.9M: Aiming For A 5000-Fold ROI As Cardano’s Price Rises And Fantom Launches Sonic

Explore Cardano’s surge, Sonic’s efficiency, and why BlockDAG’s growth makes it the top crypto choice. A deep dive into the future of blockchain investments.

Digital Assets

US, UK probe $20 billion Tether transfers tied to Russian exchange.

U.S. and UK authorities are investigating the movement of $20 billion in the USD-pegged stablecoin tether (USDT) through Moscow-based exchange Garantex.

<