How much compensation cover if online broker goes bust ?

dunker1

Hi everyone, i understand the financial compensation system for banks and building societies, but whats the situation regarding online investment brokers like self trade ? If a company like that was to go under what level of protection is offered and would you consider this when deciding how much you would hold with an individual broker ?
Thanks

Aegis

The assets you hold with a broker are ring-fenced off from their business assets, belonging to you rather than them. I believe that if a broker goes bust, your assets are still 100% separated, and only money you actually hold on account in cash with them would require any form of protection.

I can't remember the levels off the top of my head I'm afraid.

Mr_Mumble

As Aegis says your assets should be ring-fenced. There is always the possibility of fraud, in such cases the FSCS compensation levels are:

100% of the first £30,000
90% of the next £20,000
So effectively £48,000 is government secured for those with £50,000+.

Most stockbrokers are owned by big banks (including Selftrade which is ultimately owned by Societe Generale). How much to hold with any individual broker? That'll depend on personal circumstance, attitude to risk and the financial strength of the broker.

There is always the option, outside ISAs, to hold units or shares in certificated form rather than in a nominee account.