Wahed Invest really FSCS protected?

Investment Questions and Chats General Investment
#1

As salaam alaikum

Wahed Invest (and WealthKernal, who are their customers’ custodians) say that they are FSCS protected. However, when you check this through the FSCS website, it turns out that WealthKernal are not protected:

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Would this then mean that Wahed Invest are not protected too? Wahed Invest are not even listed on the FSCS website. This concerns me as I would like to invest in something that I know has FSCS protection, but is my understanding incorrect? I wanted to put majority of my life savings in a S&S ISA with Wahed Invest but I am apprehensive now after realising this. Can someone please enlighten me on this?

JazakAllahu khairan.

Bilal

#2

Salaams

As a customer of Wahed I was worried when I read your post, as I am sure that I checked this when I first opened an account a couple of years ago. I carried out further research -

  1. WealthKernel appear on the FSA website with two different registration numbers (723719) and (918171). The first of these appears to be a custodian of funds and the second a payment processor. Reading through the custodian of funds entry on the FSA website, it says

“This firm must protect the money it holds and/or controls on behalf of customers. It cannot lend this money or use it to finance its own business.”

  1. However, Wahed does not make it absolutely clear (with reference number) in what capacity WealthKernel is working for them.

  2. Looking at the FSA website Wahed are registered under Firm Reference Number 833225

  3. However, they do not appear on the FSCS website for some reason.

  4. On the Wahed UK website if you scroll down there is a link right at the bottom that says Client Prospectus. If you download this, it says deposits are FSCS protected. I would keep a copy of this for your records, if you decide to invest.

  5. If I was in a position to deposit significant amount of cash I would always spread this between different companies and leave some scope for investments to grow and still be under the FSCS protection limits.

However, this still leaves the question of why Wahed do not appear on the FSCS website. Is it an issue with the FSCS website itself or is it something else? Also what is the relationship between WealthKernal and Wahed (custodian or payment processor)? I think additional research is required. Anyone else got any ideas?

#3

The link mentioned is for bank deposit accounts only. Neither Wahed or Wealth Kernel offer a deposit account and so therefore they would not show on this register.

The link below, however, explains what the process is to establish if an investment firm is protected under the FSCS scheme. https://www.fscs.org.uk/what-we-cover/investments/property-scam/

Wahed’s registration on the FCA website (registration number 833225) confirms they are covered by the FSCS and the Financial Ombudsman Service (FOS).

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#4

I can also vouch for both WahedInvest and WealthKernel. Know the founders and have spoken to them extensively.

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#5

Whenever these kind of questions arise, I would always suggest that you look at the firm’s investment agreement, sometimes known as terms of business.

Section 2 of the agreement explains that Wealth Kernel undertake both a custodian function (holding client assets) and execution of transactions on Wahed’s behalf.
https://legal.wahedinvest.com/uk/client-agreement/index.html#section-2

I hope this helps.

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