What happens if bank of brokerage firm blows up?

arsenal009

Recruit
Messages
3
Hi guys, let's say I am trading with a brokerage firm & the bank they work with goes bankrupt.

Does that mean all my money I have in my account with the brokerage firm is gone too?

Basically a brokerage firm I am looking into works with a really small bank & I am wondering what my risks are.

Thanks
 

bigdolly

Sergeant Major
Messages
944
Depends on what licenses it has. FCA, ASIC, CYSEC has compensation funds, so your deposit should be in safe hands I guess, but the procedure of recovering your money can take weeks, months (even years).
 

Jeff Martinez

Recruit
Messages
100
If you try to find a broker that wants to make their clients a success you will not find one. That is not the business they are in. If a broker opens up 200 live forex accounts and 100 people blow up their account and they keep 100 accounts active this is the statistic they use to measure their success. They opened up 100 "net" new accounts. The 100 people who lost their accounts is not their concern and never will be.
 

bigdolly

Sergeant Major
Messages
944
Make sure you're legally protected from broker bankruptcy by checking if they include investor compensation fund. Many broker s from solid regulators have it, but if your broker offshore you may have no guarantees in case it goes bust.
 
Messages
72
Basically there are no broker who actually work for their client’s success. They works only for their success. Because if their client got success they would be succeed in their business. This is the business. In this business from the total number of traders minimum 50% trader will blow up their account so they will keep only those account which are active. Thus how broker’s success is measured. So, those accounts which are blow up is actually not concern of them.
 

Naxramos

Recruit
Messages
120
In any case, you are absolutely right, Makenzie Malachi. However good a broker may be, he or she will always think about their benefit first, and only then about the client's interest. Unfortunately, this is the truth.
 
Top