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Investor Compensation

Investor compensation is an encompassing term that refers to the insurance of client funds and, as a leading broker, Willis Towers Watson can collectively place a wide range of global investor compensation insurance.

We have developed key relationships with investor compensation schemes and their members all over the world. Many companies buying this insurance protection have said that they find it beneficial and some have reported that it helped increase their client base and volume.

Excess of FSCS (Financial Services Compensation Scheme)

What is Excess of FSCS Insurance?

To address the concerns of your clients who have assets that exceed the FSCS’s threshold of £85,000, we created Excess of FSCS Insurance. The policy provides protection on a per client basis, underwritten by Lloyd’s of London, which currently has an A+ (Strong) rating from Standard & Poor’s.

How does this help you gain a competitive edge?

The Excess of FSCS Insurance solution creates a competitive advantage for you, as investors are increasingly paying more attention to the security and solvency of the firm that they are dealing with. It also attracts customers into holding higher amounts in custody, leading to increased trading revenue associated with higher net worth investors. There is often increased sales activity after this product is launched and advertised.

Why Willis Towers Watson?

In bringing this product to market in close collaboration with KPMG, Clifford Chance and the FSCS, Willis Towers Watson has demonstrated that it understands the structure, application and response of the product and is able to guide you through the process of providing this cover to your clients.

We help your sales teams create compliant proposals and train sale personnel so they fully understand what they are promoting and can articulate effectively. No other insurance broker specialises in this as their core product, or has the same experience.

Excess of Multi-Jurisdiction

Willis Towers Watson has developed a product that is similar to Excess of FSCS and Excess of SIPC which applies to almost any country or jurisdiction.

This product was designed after the European Securities and Markets Authority (ESMA) passed a ruling in August 2018 to reduce the amount of leverage across Europe. The impact of this ruling meant that many brokers, especially FX/CFD firms, looked for a regulatory hedge in alternative geographies like the Bahamas, the Cayman Islands and St Vincent, among others.

The benefit is that clients have protection against their brokers in geographies that may not necessarily have an underlying compensation scheme. Not surprisingly, there is greatly increased sales activity for from this product.

Excess of SIPC (Securities Investor Protection Corporation)

The Securities Investor Protection Corporation (SIPC) protects customers if their brokerage firm fails. If this happens, Excess of SIPC protects the securities and cash in your brokerage account up to almost any amount per customer you require, with aggregated limits that can reach $1,000,000,000, in excess of SIPC Insurance $500,000 (securities) and $250,000 (cash).

Willis Towers Watson has for a number of years handled the largest Excess of SIPC placements in the London market. We have consistently increased capacity and reduced premiums for our Excess SIPC clients.

Investor Compensation Schemes (insurance for the scheme itself)

Investor compensation schemes provide investors with confidence in investment firms and the protection and safety of their funds. The long-term sustainability of investor compensation schemes relies upon the security and liquidity of its members.

Willis Towers Watson understands the challenge investor compensation schemes face in ensuring they are adequately funded to sustainably meet their obligations to investors — while making efficient use of their capital, by providing insurance that sits above the investor compensation scheme

There are two main benefits:

  • Schemes can increase their fund size by using  capital more efficiently
  • Cost-effective premiums enable the continued growth of fund size without adding pressure to members for additional levies

Willis Towers Watson is the only insurance broker to have experience in placing all the major Lloyd’s of London policies for investor compensation schemes

Dedicated expertise – a unique capability

We are the only insurance broker to have a dedicated specialist for Investor Compensation Insurance.

Umar Awan is focused entirely on this class of business, and is the leading expert in this line in the market. This dedicated resource is a key differentiator between Willis Towers Watson and other insurance brokers, who have their brokers managing multiple lines of business. Instead of managing many priorities at the same time, we are dedicated solely to this product. 

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