What Happens if Your Broker Goes Bankrupt?

[@jademurray7666]

After crunching some numbers, I think whether someone sticks with Vanguard really depends on how much they like it, the funds they're into, and the overall platform, especially if their portfolio is under £32,000. If it's under £15,000, I’d personally switch, but if it's over £15,000, I’d probably stay since the fee difference isn't huge. If you want the lowest fees, switching might be the way to go, though it all comes down to how much you like Vanguard.

[@ZanderKaneUK]

I've always wondered how the 85k rule worked. Never had 85k invested yet so never looked into it. Had thought it weird with say a Stocks shares ISA over a lifetime of saving you would want a bigger pot that 85k to snowball with compounding but was risking loss if broker went bust, but that investment would be covered by CAS (ring fence).

[@FinancialInterestcom]

Exactly! You own your investments, not your broker

[@gothenburg83]

Can the FSCS bring back Shetland? 🤣 Just kidding...great video as always.

[@FinancialInterestcom]

You would have to use the FSCS Protection Checker to research that 😅

[@geoffyin]

So if I understand correctly, if I have cash invested into ETFs in my trading212 account, does it matter if trading212 goes bust? Regardless of the amount invested, my investments should still be there in my name as long as the ETFs themselves doesn’t go bust (which is unlikely since they are made up of many companies)?

[@FinancialInterestcom]

Your understanding is correct: you own your investments, not Trading 212. You'd get the assets back into a different broker account if they went bust except for the events of fraud or negligence, in which case you'd be covered by FSCS.

[@geoffyin]

@ Thanks!