Question
My wife and I live in Wales and are are considering moving our ISA portfolio's from Hargreaves Lansdown to another platform. The favourite choice on cost is Alliance Trust who are domiciled in Scotland but wonder what the implications might be if Scotland became independant. Do you have a view on this?Answer
This is a good question to which I guess no-one knows the answer at this stage. However, assuming Scotland does become independent future then the following issues might be relevant in your case.
Will Scotland have its own financial regulator?
If Scotland has its own version of the Financial Services Conduct Authority (FCA) there's a question whether it'll be effective and whether it will have a complaints system comparable to the Financial Ombudsman Service (FOS). Some might argue it could hardly be worse!
If Scotland has its own regulator it will also need to introduce its own compensation scheme, to replace the Financial Service Compensation Scheme (FSCS). It's unlikely compensation limits would be below those of the FSCS, especially as the £85,000 (€100,000) savings limit is specified by EU law.
Will Scotland have its own version of pensions/ISAs?
Quite possible and there's a chance allowances and tax breaks could differ from those in Britain. It would be confusing, but I doubt there would be anything stopping Alliance Trust Savings and others continuing to offer British tax incentivised products to British customers as well as any new Scottish products to Scottish customers.
Will Scotland have its own currency?
Maybe, but if so I would expect Scottish financial institutions to still accept the British pound, so unlikely to be any change in practical terms.
In practice Scotland makes a lot of money from financial services, including from many customers based in England, Wales and Northern Ireland. So even if independence does go ahead I think it's unlikely Scotland would risk doing anything that would jeopardise this custom. We can never say never, as politicians don't always make the smartest of decisions, but I don't think the possibility of independence is currently a reason to avoid Scottish financial providers.
My wife and I live in Wales and are are considering moving our ISA portfolio's from Hargreaves Lansdown to another platform. The favourite choice on cost is Alliance Trust who are domiciled in Scotland but wonder what the implications might be if Scotland became independant. Do you have a view on this?Answer
This is a good question to which I guess no-one knows the answer at this stage. However, assuming Scotland does become independent future then the following issues might be relevant in your case.
Will Scotland have its own financial regulator?
If Scotland has its own version of the Financial Services Conduct Authority (FCA) there's a question whether it'll be effective and whether it will have a complaints system comparable to the Financial Ombudsman Service (FOS). Some might argue it could hardly be worse!
If Scotland has its own regulator it will also need to introduce its own compensation scheme, to replace the Financial Service Compensation Scheme (FSCS). It's unlikely compensation limits would be below those of the FSCS, especially as the £85,000 (€100,000) savings limit is specified by EU law.
Will Scotland have its own version of pensions/ISAs?
Quite possible and there's a chance allowances and tax breaks could differ from those in Britain. It would be confusing, but I doubt there would be anything stopping Alliance Trust Savings and others continuing to offer British tax incentivised products to British customers as well as any new Scottish products to Scottish customers.
Will Scotland have its own currency?
Maybe, but if so I would expect Scottish financial institutions to still accept the British pound, so unlikely to be any change in practical terms.
In practice Scotland makes a lot of money from financial services, including from many customers based in England, Wales and Northern Ireland. So even if independence does go ahead I think it's unlikely Scotland would risk doing anything that would jeopardise this custom. We can never say never, as politicians don't always make the smartest of decisions, but I don't think the possibility of independence is currently a reason to avoid Scottish financial providers.
Read this Q and A at http://www.candidmoney.com/askjustin/871/avoid-scottish-financial-companies-in-case-of-independence
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