Risk of losing money if broker goes bankrupt?

[bfd]

Hi all,

I was wondering what the risk is of having lots of money in an online brokers account? What if the broker goes bankrupt? Can you lose all your money?

Thanks.

 

[Adamus]

Yes you can. Check with your broker about the level of protection they offer, which national jurisdiction it's under etc.

 

[TomTom]

In USA most brokers accounts are segregated and have deposits with national savings banks.
So money is relitively safe in USA.
As for some SB firms and UK brokers cant really comment.
The riecent letter from Finspreads is intresting reading.

 

[shadowninja]

Google Echelon Wealth Management. They recent went pop and I understand some clients are managing to get their funds back but others are still waiting.

 

[TomTom]

Dodgey times shadowninja, surprised so many firms like this are folding so quickly.
I thought wealth management firms were clued up on these markets ?

 

[trader3cnd]

Even if the money is safe, the problem is getting it in case of failure. Liquidation of broker assets and arbitrations may take years. I play with money I can afford to lose and also afford to wait for a few years to get back. DO NOT put your life savings with a broker in this environment.

 

[ns1000]

In USA most brokers accounts are segregated and have deposits with national savings banks.
So money is relitively safe in USA.
As for some SB firms and UK brokers cant really comment.
The riecent letter from Finspreads is intresting reading.

In the US, Forex brokers are legally not allowed to segregate clients' funds. This is only allowed for futures and stocks. If you're trading forex, you may find your money safer with a regulated European broker which segregates client funds.

 

[Alibubble]

Yes this sort of thing can happen. There are actually many brokers right now that are close to going bankrupt but of course they don't tell their customers that.

Always try to find a broker that not only works well for you but is also safe to deposit money with. You wouldn't want to lose thousands just because the broker went bankrupt. That would be terrible.