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Your Own ISA Outside "the System"
Harry Munro
Posted: 16 January 2018 15:48:59(UTC)
#1

Joined: 16/01/2018(UTC)
Posts: 2

I want to max my ISA allowance every year, but I am distrustful of our financial institutions. I understand that shares held by the bank or stockbroker on our behalf are pooled with other institutions and investments, and then allocated to customers.

This to me represents a single point of failure which could be hacked, frozen, tapped into for emergency funds by the government or simply mismanaged, so over a life time I'm not particularly happy tying up a large part of my assets to it.

Is there a way to create my own ISA wrapper independently and then buy physical share certificates to go inside this wrapper?

Or has the government made it impossible to do this - forcing you to use an institution?

N.b. owning share certificates has the other advantages of votes, AGM and no "admin fees" from the bank.
Mickey
Posted: 16 January 2018 16:46:44(UTC)
#2

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Don't know about setting up your own ISA but of course, you can own shares directly. We still hold a few with various registrars though.

http://www.londonstockexchange.com/traders-and-brokers/private-investors/private-investors/about-share/how-hold-shares/how-hold-shares.htm
Blue S
Posted: 16 January 2018 17:39:15(UTC)
#3

Joined: 13/06/2017(UTC)
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The problem is that personal CREST accounts cannot be used for ISAs.
See:
http://crestaccounts.co....ounts-be-used-for-an-isa
1 user thanked Blue S for this post.
Mickey on 16/01/2018(UTC)
King Lodos
Posted: 16 January 2018 17:51:14(UTC)
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This seems to be the problem.

I'd wonder about buying a dormant offshore company, registering it as a unit trust, and holding share certificates through that?

Keith Cobby
Posted: 16 January 2018 18:16:32(UTC)
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I am quite satisfied with the nominee system which I think it is fair to say has reduced dealing and custody costs over time.

My investment trust plans (with F & C and Baillie Gifford) produce reports and invitations to AGMs etc.
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Mickey on 16/01/2018(UTC)
Alan Selwood
Posted: 16 January 2018 18:26:58(UTC)
#6

Joined: 17/12/2011(UTC)
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All shareholdings may now be assumed to be electronic, even if you hold paper share certificates, since the registrars store electronic registers (which are just as capable of being hacked as anything else!) and rely on those rather than on pieces of paper that you send them.

A Crest account is a useful way to remove platforms from the equation, though you can't hold an ISA via your own Crest account. Equally, your Crest account could be hacked......!

The other big problems with Crest are:
Lack of brokers that will deal for Crest accounts for you (without brokers, you can't deal).
Cost of holding a Crest account
The increased dealing costs via Crest accounts.

Since everything is potentially vulnerable, I would suggest holding a number of platform portfolios with different broking firms, and also holding assets elsewhere (your house, some gold bars in a vault abroad, etc).

Then if there is a security breach, there should be only a partial hit to your total wealth.
1 user thanked Alan Selwood for this post.
Mickey on 16/01/2018(UTC)
Mr Helpful
Posted: 16 January 2018 18:46:17(UTC)
#7

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Harry Munro;55491 wrote:

This to me represents a single point of failure which could be hacked, frozen, tapped into for emergency funds by the government or simply mismanaged, so over a life time I'm not particularly happy tying up a large part of my assets to it.
Is there a way to create my own ISA wrapper independently and then buy physical share certificates to go inside this wrapper?


For an investor plagued with these sort of worries :-

1. For ISAs : Keep below investor protection limit per broker (£50k?).

2. Another option : Won't be tax free, but many investors equally uneasy with Stocks and such (remote?) possibilities, are then led to bricks and mortar, rented out or other. Those investors enjoy being able to keep a watchful eye on their investment (plainly visible).
Unfortunately Rental Real Estate is also quite fully valued today.
Cash sated times!
jeffian
Posted: 16 January 2018 19:03:07(UTC)
#8

Joined: 09/03/2011(UTC)
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You're obviously a very fearful chap, Harry!

"This to me represents a single point of failure which could be hacked, frozen, tapped into for emergency funds by the government or simply mismanaged"

You could say the same about your bank account.

I share your cynicism about governments but my own fear about ISA's and other tax shelters is not that the nominee system will be compromised but that, as with the pension system, one day a government will be unable to resist the juicy prize and simply move the goalposts to limit or withdraw the tax advantages.
3 users thanked jeffian for this post.
Tim D on 16/01/2018(UTC), Captain Slugwash on 16/01/2018(UTC), Alan Selwood on 16/01/2018(UTC)
Tom Mozy
Posted: 16 January 2018 19:59:38(UTC)
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Buy some gold and dig a hole, buy a nice picture, or a nice vintage car or bottle of wine.

Everything else is inside the system.
1 user thanked Tom Mozy for this post.
dlp6666 on 17/01/2018(UTC)
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