• Funds, Trusts & ETFs
  • Investor protection
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How is my money protected when I invest with Fidelity?

Sometimes customers are concerned that they might have all their eggs in one basket when it comes to investing. Below is a series of questions and answers to help explain how your money is protected when you invest with Fidelity. Please feel free to contact us if you have any further questions. You can do this by logging into your account and sending us a secure message or by calling us on 0333 300 3350.

Key words:

  • Provider: A company that manufactures its own investments (also known as a ‘fund provider’ or ‘investment provider’).
  • Distributor: A company that sells investments from a range of providers (also known as a ‘fund distributor or an ‘investment platform’).

How financially stable is Fidelity?

Fidelity is an independent global investment company that was established over 45 years ago and is still owned by the founding family, senior management and staff. As we are privately owned we do not have to answer to shareholders so we can make decisions for the long term on behalf of our customers.

In accordance with Financial Conduct Authority rules, Fidelity always holds a significant amount of liquid (i.e. easily accessible) capital. In the unlikely event it is required, this will help with the winding down of the business and make it easier to return your money and assets in an orderly way.

We also maintain Professional Indemnity insurance to cover us if someone claims to have suffered a loss as a result of our professional negligence. The level of cover and the policy terms and conditions comply with Financial Conduct Authority requirements and are regularly reviewed. In addition, we have Financial Crime insurance, which covers us against any losses that are the direct result of dishonest or fraudulent acts committed by our employees.

Is Fidelity regulated?

Fidelity has different companies that provide and distribute investments to retail clients in the UK. All of these companies are authorised and regulated by the Financial Conduct Authority, which requires us to have appropriate systems and controls for managing our business, with strict rules about the way we hold client money and assets.

You can visit the Financial Conduct Authority website at http://www.fca.org.uk or telephone the Financial Conduct Authority Consumer Help Line on 0800 111 6768 to check the registration for our companies.

What is the difference between Fidelity as a provider and Fidelity as a distributor?

Some Fidelity customers are concerned that holding all their investments together with us means they are “putting all their eggs in one basket”. However, this is not the case. There is a significant difference between Fidelity as a provider of its own investment options (such as the Fidelity Special Situations Fund) and our role as a distributor of other companies’ investment options (such as OEICS and Unit Trusts on our fund supermarket). The money you invest with Fidelity in either or both capacities, whether it is, for example, £8000 or £800,000, is protected by strict regulatory requirements, known as client money and asset rules. These rules apply whether you hold all your investments with a single distributor, such as Fidelity, or you hold your investments through multiple distributors.

What protection do I have under the client money and asset rules?

Unlike banks, investment firms, including Fidelity, are required to separate client money and assets from their own resources. We are not permitted to use client money and assets in the course of our own business activities and your money would be ring-fenced in the unlikely event that we became insolvent.

What happens if a distributor becomes insolvent?

When you invest through a company that distributes funds, such as Fidelity, any cash held on your behalf is placed with a range of different banks in designated client bank accounts. As the cash is kept completely separate from Fidelity’s own money, if we became insolvent it would be returned to you in an orderly manner.

When you invest in funds, they are held by Fidelity using a nominee structure. This allows us to administer your investments efficiently, whilst ensuring that you are clearly identified as their owner. This means that, in the unlikely event of Fidelity becoming insolvent, your money cannot be touched by any creditors.

What happens if a provider becomes insolvent?

For mutual funds such as OEICS or Unit Trusts, a trustee or depositary holds the legal title to the underlying stocks in the fund (i.e. they are not owned by the provider). This means that if a provider, such as Fidelity, gets into financial difficulty your investments would be protected from its creditors.

What is the Financial Services Compensation Scheme?

The Financial Services Compensation Scheme (‘FSCS’) is an independent body set up by the Government under the Financial Services and Markets Act 2000 and funded by the financial services industry. As the “fund of last resort” for customers of authorised financial services firms, it can pay you compensation if a firm is in default and cannot meet any valid claims against it.

In what circumstances might the FSCS apply to my investments?

The FSCS would only apply to your investments if the protection measures that distributors and providers have in place (as described above) were to fail.

The FSCS might apply if you lose money because your investments have not been administered correctly, or as a result of misrepresentation or fraud, and the authorised firm concerned has gone out of business and cannot pay compensation or return your investments or any cash held on your behalf.

The FSCS will not pay compensation if your investment performs poorly as a result of market conditions.

Are there limits to the amount of FSCS compensation?

Yes. The maximum amount of compensation payable to an individual under the FSCS will depend on the type of financial product that you hold and who the claim is against.

  • If a provider is in default the limit is £50,000 per provider for UK domiciled mutual funds (OEICS and Unit Trusts).

  • If a distributor is in default there is a limit of £50,000.

  • If one of the banks used to hold client money is in default then the limit is £75,000.

If you would like to know more, please visit the FSCS website or call the FSCS on 0800 678 1100.

If a client invests through Fidelity and holds UK domiciled mutual funds from both Fidelity and other providers, does the limit of £50,000 per provider still apply?

Yes. The limit is still £50,000 per investment provider regardless of whether you hold your investments with one distributor or whether you hold them across multiple distributors.


Here to help

If you have any questions, please call our freephone UK-based team.

Here to help

0333 300 3350

Monday to Friday, 8am to 6pm
Saturday 9am to 6pm.

Please note the value of investments may go down as well as up, and you may not get back what you invest. Fidelity gives information on products and services but does not offer advice based on individual circumstances. If you are unsure of the suitability of an investment, please contact a financial adviser.