Multi-jurisdiction 💰
Government-backed compensation schemes provide a safety net for investors when authorised financial firms fail. This guide covers the major schemes worldwide, what they cover, and how to make a claim.
UK — Financial Services Compensation Scheme (FSCS)
The FSCS is the UK’s statutory compensation scheme for customers of failed authorised financial services firms.
- Investments: up to £85,000 per person per firm
- Pensions: up to £85,000 per person per firm
- Insurance: 90-100% of claim value
- Free to claim at fscs.org.uk
- Only covers FCA-authorised firms
US — Securities Investor Protection Corporation (SIPC)
SIPC protects customers of SIPC-member broker-dealers if the firm fails financially.
- Up to $500,000 per customer
- $250,000 limit for cash claims
- Does not cover investment losses from market movements or fraud
- Only covers SIPC-member firms
- Visit sipc.org
EU — Investor Compensation Schemes
Each EU member state operates an Investor Compensation Scheme under the Investor Compensation Schemes Directive.
- Minimum €20,000 per investor per firm
- Covers claims when authorised firms cannot return assets
- Contact your national NCA for specific scheme details
- Does not cover losses from investment decisions
Australia — No Federal Scheme
Australia does not have a federal investor compensation scheme equivalent to FSCS or SIPC. However, AFCA can award compensation against firms that are still operating.
- AFCA awards up to $1.085 million
- Covers complaints against operating AFSL-licensed firms
- No compensation if firm has failed and has no assets
- Some managed funds have their own compensation arrangements
Important Limitations
All compensation schemes have important limitations that investors should understand.
- Only cover authorised/licensed firms — not unlicensed scammers
- Do not cover investment losses from market movements
- Coverage limits apply per person per firm
- Claims must be submitted within time limits
- Fraudulent firms operating without authorisation are not covered