INVESTMENT CLINIC

I HAVE an Isa in an online investment account with Interactive Investor. How safe are my investments? Though unlikely, could my money be used to pay off creditors if the company went out of business? M.D., Poole, Dorset YOU’VE asked an entirely hypothetical question. There’s no suggestion that Interactive Investor is in trouble.

The Interactive Investor group is one of Britain’s biggest stock brokers and assured me it has no debts and its finances are sound.

It looks after £21 billion of cash and investments for more than 300,000 savers and has more than £100 million of assets itself.

Nonetheless, you do ask a reasonable question: what if the worst should happen?

The company’s two brands — TD Direct Investing and Interactive Investor — are regulated by the Financial Conduct Authority. That means they are subject to strict rules about how they hold your money. Your investments are held in a nominee account. Investments held in these accounts are given trust status, which means other creditors will not be able to get their hands on your cash if the firm goes out of business.

Some customers hold cash with the firm, meaning their money isn’t invested in funds or shares. This money is also held in a special account separate from the company’s own cash — the firm cannot mix your money with its own.

Again, this cash is protected from creditors if TD or Interactive Investor went out of business.

To give even greater protection to cash savers, Interactive Investor spreads client money among a number of different banks to avoid it all disappearing if one of them went out of business.

These banks are all covered by the Financial Services Compensation Scheme (FSCS). Under the scheme’s terms, the first £85,000 is protected in the event one of the banks went under.

TD and Interactive Investor are covered by the same scheme.

And if all the money you hold in shares and funds somehow disappeared, then you would still have up to £50,000 protected under the FSCS.

If you want more detail on the way both firms treat and hold your money, visit tddirectinvesting.co. uk/about-us/your-protection.

SEND questions to: Investment Clinic, Money Mail, Scottish Daily Mail, 20 Waterloo Street, Glasgow G2 6DB.