We are not authorised by the FCA to hold client assets or client money. We arrange for SEI Investments (Europe) Limited (“SEI”) to provide safe custody, administration and other associated services to you and as a result, there is a direct relationship between you and SEI. SEI is authorised and regulated by the Financial Conduct Authority (“FCA”), with firm reference number 191713.
All investment assets are held on your behalf by a nominee company, SEI Global Nominee Limited, a non-trading subsidiary of SEI. Keeping investment assets entirely separate within a nominee company ensures that in the unusual event of default of either Netwealth or SEI, your investment assets would not be available to an administrator or liquidator of Netwealth or SEI. SEI may use a number of third party custodians (also known as sub-custodians) to administer and hold some of your assets. For unit trust and OEIC fund investments in Netwealth portfolios, SEI uses CoFunds Limited and Allfunds Bank S.A. London Branch; for securities, including ETFs and UK government bonds (gilts), SEI uses HSBC Bank PLC.
Your investment assets and uninvested cash are protected by the Financial Services Compensation Scheme (“FSCS”) up to a current compensation limit of £85,000, per firm, per eligible claimant, for businesses that fail after 1 April 2019.
Any uninvested cash is kept in “client money” bank accounts which are established with trust status, meaning that money held within the accounts is recognised by the bank as belonging to Netwealth’s clients rather than to Netwealth or SEI.
Client money is currently deposited in a client money bank account at HSBC Bank plc and may then be subsequently deposited into client money bank accounts at a range of other banks chosen by SEI in order to reduce the risk of client money being lost in the event of any one bank failing.
If any of the banks chosen by SEI fail and cannot return your money, you may be eligible to claim compensation under the Financial Services Compensation Scheme (“FSCS”). The current compensation limit is £85,000 per eligible claimant, per bank and the limit covers money held with the bank whether through SEI or directly. It is important to note that if one of the banks fail your money will be pooled with money held in client bank accounts for other SEI clients and you will have a claim against the common pool of money rather than a claim against a specific sum in a specific account. As a result, any shortfall in the client bank accounts will be shared pro-rata between all SEI clients.