With all these holiday companies collapsing....

[cleaner]

I prefer to keep it in Betfair as I think out of the two it is the safer option.

BF is not a bank and they do not keep your money in their offices
You just put your trust in Barclays in disguise

[munk]

Another way of looking at all of this is in terms of financial investments. One of the keys to successful financial investment management is to diversify your portfolio as much as possible so you're invested in a little bit of everything - if one asset class / type of investment gets hit, the other parts of the portfolio should still be OK.

Same with bookie accounts to some extent, spread the money around and avoid having too much in any one place, if one book goes bust then yes that's bad news but at least it's not your whole float. I suppose somewhere like Betfair would count as a core holding in the 'investment portfolio', bit of a BP or an RBS type of holding... (lol?).

That said though... with the financial storms over the last 2-3yrs, portfolio diversification hasn't really been much use at all, every type of investment as a rule has been hit and the only safe place to be has been cash (at the peak of the storm anyway)... but then even cash got hit as we know with all the banks falling down / having to be bailed out!!!

I suppose it's just about knowing the risks involved with what you're doing and trying to match it to your own risk profile so you're not sweating it too much.

On a similar subject - I find it quite hard sometimes managing the maximum I want in any one place. Say it's somewhere I don't have a WR and I can withdraw at any time, but I do want to use it fairly regularly (say avg £2-300 bets) - if I think to myself 'ok I want no more than £1000 in here', then at what point do you withdraw? When it goes to £1000.01? And how much do you withdraw if it gets to £1000.01? Or do you wait until it gets to £2000 and THEN withdraw £1000 so your balance is just £1000?!

[nish81]

the only safe place to be has been cash (at the peak of the storm anyway)... but then even cash got hit as we know with all the banks falling down / having to be bailed out!!!

I wouldn't say cash got hit, afaik no-one actually lost their deposits in a bank did they?

On a similar subject - I find it quite hard sometimes managing the maximum I want in any one place. Say it's somewhere I don't have a WR and I can withdraw at any time, but I do want to use it fairly regularly (say avg £2-300 bets) - if I think to myself 'ok I want no more than £1000 in here', then at what point do you withdraw? When it goes to £1000.01? And how much do you withdraw if it gets to £1000.01? Or do you wait until it gets to £2000 and THEN withdraw £1000 so your balance is just £1000?!

I'd see it as more of a bottom/upper limit range thing. I want at least £1000 in there, but I withdraw if it gets up to, say, £1500. I'd make it a reasonable range - not too small, because I'll spend way too much time managing the funds in that account, but not too big because that defeats the point of having any sort of limit.

[Landprofits]

Well, Neteller's parent company are regulated by the UK Financial Services Authority. Doesn't that give the same level of customer protection (ie £50000) as the banks do?

Note that I AM NOT CERTAIN ABOUT THIS. Just thought I'd read it somewhere is all. Other opinions are obviously welcome.

FWIW, Moneybookers are regulated by those guys as well so the protection would apply there too if I'm right.

Not sure about Neteller but with moneybookers the FSA regulation stipulates that whatever money they have deposited has to be held in low risk investments.

However, what you are referring to is the FSCS - Financial Services Compensation Scheme which guarantees UK regulated bank accounts and ISA's - you are protected up to £50,000 (per account).

However this doesn't apply to moneybookers or any other ewallet - in fact when you register at moneybookers you actually tick a box to say that you understand that the FCSC does not apply.

In my opinion all ewallets should only be used for moving money about - not for keeping money in! If you have a big balance there which you are not using send it back to your bank. Otherwise fund the bookmakers/gaming sites that you are using but I don't think it's necessary to keep more than you "need" in moneybookers.

I have a fair amount of cash moving through moneybookers like everyone else on here but I think it's important to remember that such companies are not bank accounts.

However it's also probably prudent to point out that whilst the passive investment of a bank account is low risk - your money isn't working very hard for you! Bigger gains = bigger risk in any form of investment.

[racer54]

BF is not a bank and they do not keep your money in their offices
You just put your trust in Barclays in disguise

This is a email i recieved from Betfair some time ago regarding ringfencing of funds:
All customer funds are ring-fenced in the UK and provide the same level of protection as in Australia. Here are some further details:



· Betfair is required by Gambling Commission regulations to segregate operating funds from client funds and this is something Betfair has always done.



· The way in which we separate client funds is by putting in place an arrangement (the Trust) so that The Sporting Exchange (Clients) Limited holds client funds on trust for customers. Customers are entitled to a share in that Trust at all times, equal to their contribution to the Trust. The Trust deed describing this arrangement is on the site. Client funds are held with The Royal Bank of Scotland (which owns Natwest), one of the largest banks in the UK.



· The Sporting Exchange (Clients) Limited is a Group company that exists purely to hold client funds. The only payments it is authorised to make are withdrawal requests to customers and monthly payments of commission/rake to the relevant Betfair group companies.



· This arrangement means that not only can Betfair not use client funds to run the business, but in the case of a Betfair insolvency, creditors would have no claim over client funds because they are held by a separate group company which has nothing to do with the running of the betting business, the payment of invoices etc, etc.



· Because all funds are held on trust pursuant to a trust deed and all customers are beneficiaries of the trust, all customers are protected by the laws of equity. This provides additional security in the form of remedies that include the right to “trace” funds and take advantage of the laws of restitution. When no trust is involved funds are simply held pursuant to contract and if a company goes under a person has a contractual claim against the company (often not much use because creditors need to line up behind others who are owed funds). When a trust is involved and the laws of equity apply, a creditor (who is a beneficiary of the trust) is in a much stronger position because he can actually follow funds spent by a debtor to source (i.e. trace) and claw them back.



· So, if The Royal Bank of Scotland go under, customers will be able to trace their funds and have an improved chance of recovery AS WELL AS being able to get in line with other creditors of the bank. Short of having some form of security (mortgage/debenture etc) this is therefore the best possible protection we can give our customers above and beyond the ring fencing rule (i.e. that there is always enough money in our accounts on trust to pay all customers back at any time).



Regards

[fatman1962]

Lucky for me the wife seems to spend mine before i build up loads in betfair. lol

[snowdogg]

Problem is this kind of business model relies solely on people actually using your product/ website. If enough people moved away from betfair or eBay, they wouldn't be able to pay their admin costs and go belly up. Same with most businesses but this kind of model is more susceptible to it.

Andy's way is the best though. Keep money in as many (secure) places as possible so that even if one does run into problems, the overall impact for you is small.

Realistially, I think if people were to stop using betfair we would stop using it once the liquidity dropped off and would be able to get our money out early. The only danger is for those who leave money in there for long periods without doing anything, but what is the point having funds sat in there if they are not working for you