What Happens If Your Broker Goes Bust?
If your broker fails, is your money gone? For a regulated broker, almost never. Your cash and investments are held separately from the firm and, if there is a shortfall, a statutory scheme compensates you up to a set limit — £85,000 under the UK FSCS, up to €20,000 under most EU schemes, or up to $500,000 under US SIPC. What no scheme covers is a fall in the value of your investments. Scheme facts verified July 2026.
Reviewed by Yaniv Barshaf, CPA · Fees verified July 2026 · Our methodology
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Investor protection by broker
Which entity holds your money, which scheme covers it, and up to what limit. Regulators are drawn from each broker's profile; scheme limits are verified against our per-broker safety guides and official sources. Where the exact position depends on your account, we say so.
| Broker | Regulator(s) | Scheme & limit | Cash vs securities | Not covered |
|---|---|---|---|---|
| eToroeToro (UK) Ltd / eToro (Europe) Ltd, by region | FCA, CySEC, ASIC | UK clients: FSCS up to £85,000. EU clients: Cyprus ICF up to €20,000. | Securities held in segregated custody; the scheme backstops a shortfall on firm failure. | Crypto and CFD positions fall outside these investor schemes. |
| Trading 212Trading 212 UK Ltd / Trading 212 Markets Ltd (Cyprus), by region | FCA, CySEC | UK clients: FSCS up to £85,000. EU clients: Cyprus ICF up to €20,000. | Cash safeguarded at partner banks; securities segregated with custodians. | CFD money is not covered the same way as share-dealing assets. |
| XTBXTB UK Ltd (FCA) / XTB entities under CySEC & KNF, by region | FCA, CySEC, KNF | UK clients: FSCS up to £85,000. EU clients: Cyprus ICF up to €20,000. | Client money held in segregated accounts, ring-fenced from the firm. | CFDs are leveraged products outside ordinary share protection. |
| WebullConfirmWebull Financial LLC (US) / Webull UK Ltd (FCA), by region | SEC, FINRA, SIPC, FCA | US clients: SIPC up to $500,000 (incl. $250,000 cash). UK clients: FSCS up to £85,000 where it applies. | Securities held in segregated custody under SEC/FINRA or FCA rules. | Exact UK FSCS position depends on custody arrangements — confirm with Webull. |
| RevolutRevolut Trading Ltd (investments) / Revolut Bank (deposits) | FCA, CySEC | Investments via Revolut Trading Ltd: FSCS up to £85,000. Eligible deposits at Revolut Bank: FSCS up to £85,000. | Investments FSCS-covered; e-money balances still under safeguarding are ring-fenced, not deposit-guaranteed. | Crypto is generally outside FSCS protection entirely. |
| FreetradeFreetrade (FCA-authorised, UK) | FCA | FSCS up to £85,000 for eligible UK clients. | Cash held at partner banks; securities held in a nominee, segregated from the firm. | Covers firm failure only, never market losses. |
| InvestEngineInvestEngine (UK) Ltd (FCA-authorised) | FCA | FSCS up to £85,000 for eligible UK clients. | Client money and ETF holdings held separately from the firm under CASS rules. | Covers firm failure only, never falls in ETF value. |
| LightyearLightyear U.K. Ltd (FCA, FRN 987226) / Lightyear Europe AS (EFSA), by region | FCA, EFSA | UK clients: FSCS up to £85,000. EU clients: Estonian Investor Protection Sectoral Fund up to €20,000. | Cash at partner banks/money-market funds; US securities via Alpaca carry SIPC up to $500,000. | Crypto is not covered by any investor-compensation scheme. |
Scheme limits as of July 2026: UK FSCS £85,000; Cyprus ICF up to €20,000; German deposit guarantee €100,000 (cash) plus investor compensation 90% up to €20,000 (securities); Estonian Investor Protection Sectoral Fund up to €20,000; US SIPC up to $500,000 including $250,000 cash. A "Confirm" flag means the exact position depends on your account — check with the broker and the scheme directly.
Cash, investments, CFDs and crypto are not protected the same way
The single most misunderstood thing about broker safety is that "my money is protected" is not one fact but four, depending on what the money is doing. Treating them separately is the key to knowing where you actually stand.
Cash. Uninvested cash is usually held at one or more partner banks, ring-fenced from the broker. At a licensed bank — the German neobrokers such as Trade Republic, Scalable Capital and DEGIRO — that cash enjoys the €100,000 EU deposit guarantee. In the UK, cash held by an investment firm generally falls under the single £85,000 FSCS limit rather than a separate deposit guarantee.
Investments (shares and ETFs).Your securities are held in segregated custody or a nominee account, kept legally distinct from the broker's own assets. Because they are held for you, the first line of defence is simply that they should be returned or transferred if the firm fails. The compensation scheme — £85,000 in the UK, €20,000 under most EU schemes — is only a backstop for a genuine shortfall, not the everyday value of your holdings.
CFDs. Contracts for difference are leveraged bets, not owned assets. Firm-failure protection works differently for them, and they are not covered the way share-dealing securities are. On top of that, CFDs carry a high risk of losing money rapidly due to leverage — the majority of retail investor accounts lose money trading them — so the everyday product risk usually dwarfs the firm-failure question.
Crypto.Cryptocurrency held through a broker is typically outside FSCS, CySEC, German and Estonian investor-compensation schemes entirely. If the firm fails, your crypto may have far weaker or no statutory protection, on top of crypto's own volatility. Treat it as the least-protected pot in your account. For the mechanics of the UK scheme specifically, read our guide to FSCS protection when investing.
If your broker fails: frequently asked questions
What happens to my money if my broker goes bust?
In almost every case your cash and investments are held separately from the broker's own money — cash at partner banks, and your shares in segregated custody or a nominee account — so they are held for you rather than for the firm's creditors, and the aim is to return or transfer them. If there is a genuine shortfall, a statutory compensation scheme steps in up to a set limit. What no scheme ever covers is a fall in the value of your investments, which is ordinary market risk you carry yourself.
How much does the FSCS protect if a UK broker fails?
The Financial Services Compensation Scheme (FSCS) protects eligible UK investment clients up to £85,000 per person if the firm fails and cannot return your money or assets, as of July 2026. It applies to firm failure and a shortfall in the money or assets held for you — not to losses caused by markets falling. Eligibility depends on being a client of the UK-regulated entity and meeting the scheme's conditions.
What protection do EU investors get?
It depends on where the broker is authorised. Cyprus-regulated (CySEC) firms fall under the Investor Compensation Fund up to €20,000 per person. German banks such as Trade Republic, Scalable Capital and DEGIRO protect cash under the €100,000 deposit guarantee and securities under the German Investor Compensation Scheme up to €20,000. Estonian-authorised firms use the Investor Protection Sectoral Fund up to €20,000. These EU limits are notably lower than the UK's £85,000.
Is my cash protected differently from my shares?
Usually, yes. Cash and securities often sit under different schemes. At a licensed bank (for example the German neobrokers), cash can enjoy the €100,000 deposit guarantee while securities are covered only up to €20,000 under investor compensation. In the UK, both cash and investments held by an investment firm generally fall under the single £85,000 FSCS limit. Always check which entity holds each part of your account.
Are crypto and CFDs covered if the broker fails?
Generally no. Cryptocurrency held through a broker is typically outside FSCS, CySEC, German and Estonian investor-compensation schemes entirely. CFD and spread-betting money is also treated differently from share-dealing assets and is not covered the way owned securities are. Treat crypto and CFD balances as higher risk, because if the firm fails you may have far weaker or no statutory protection on those positions.