When you set up an investment portfolio, invest in a pension or ISA or other ‘tax wrapper’, you need to appoint a platform or wrap custodian/administrator. The primary role such an organisation is to provide efficient administration, reporting to HMRC where relevant and secure ‘custody’ of investors’ assets.
For many years we have recommended abrdn (previously known as Standard Life before the rebrand in 2021) to provide this role for most of our clients. We make this recommendation after a rigorous due diligence process and comparison with the 20 or so alternative administrators available.
The primary reasons we recommend abrdn is their institutional strength (they are highly rated by the leading risk analysts such as AKG), service levels and charges. On the last point, we have negotiated preferred terms for our clients, ensuring the lowest possible costs and therefore improved investment returns.
In recent months you may have read articles in the financial press about abrdn, expressing concerns about the company’s management, particularly the fall in the share price which resulted in them dropping out of the FTSE 100 (the top 100 companies in the UK).
As you would expect, we are in regular communication with senior executives at abrdn and continually review their role in administering client portfolios. To be clear, we do not use any abrdn investment funds nor are any clients directly invested in their shares.
Although abrdn remain one of the largest financial institution in the country it’s worth taking a moment to clarify the position in the highly unlikely event of the company defaulting or becoming insolvent.
- Your personal investments in the form of mutual funds held on the abrdn platform are held in nominee accounts and are completely separate from their own assets.
- By segregating and ring fencing the assets, this provides adequate protection from creditors if a fund manager defaults.
- In other words, your investments are held in your name, separated from other assets which may be owned by abrdn.
- The regulator the FCA, polices this aspect rigorously and all platforms have to report to them regularly.
- So, in the unlikely event of a default, our job would be to appoint a new platform administrator and move your funds to them. This should be no more challenging than changing your electricity supplier should it ever happen.
I hope this offers you reassurance. Rest assured we keep very close to the situation and will advise if anything changes. Let me or your adviser know if you’d like to discuss this further.
