Segregated client money is kept apart from a firm's own money under the rules that apply to the account. It is not a promise of an immediate, complete repayment if the firm fails. Compensation eligibility and any insurance policy are separate checks.
Start with the legal company on your agreement. A group may operate under several client-money regimes; the name on its app does not establish which one applies to you. Our entity checker provides research leads, while your agreement and the relevant regulator's rules establish what to investigate.
What segregation actually means
For a UK investment firm subject to the relevant FCA CASS 7 rules, client-money arrangements include separation from the firm's own money and records and reconciliations to identify client entitlements. The client bank account acknowledgment template also addresses how the bank treats money held for clients.
Do not read “segregated” as “a personal bank account in my name.” Ask whether money is pooled with other clients, where it is held and what records identify your entitlement. Also distinguish cash, financial instruments held in custody, and margin arrangements: the relevant rules and agreement may treat them differently.
Check the regime, not the marketing phrase
The FCA's client-assets overview describes rules for firms holding or controlling client money or custody assets. Australia has a different framework: ASIC's RG 212 specifically addresses client money used for OTC derivatives.
Neither a UK licence somewhere in the group nor the label “offshore” answers the question for another entity. Check that entity's rules, reporting or audit requirements and client agreement. An unverified arrangement should remain unconfirmed; it is not evidence that no local rule or oversight exists. A register entry alone also does not demonstrate that the firm complied with its client-money duties on a particular date.
What happens if a broker fails?
Segregation and the return of money after insolvency are connected, but they are not the same process. An administrator may need to reconcile entitlements and arrange distributions. Missing money and distribution costs can affect the amount returned.
There is a concrete UK example: the FCA's Beaufort administration information explains that eligible clients could receive FSCS compensation for shortfalls and distribution costs, while ineligible clients had to bear their own costs and shortfalls. That is evidence of how one administration worked, not a timetable or payout prediction for another firm.
If money is missing, check the relevant compensation scheme separately. The company, activity, claimant and type of claim matter. Ordinary market losses are a different issue; segregation does not reverse a losing trade.
Three claims to keep separate
- “Client money is segregated.” Ask which rule and agreement provision applies, and how the money is held and recorded.
- “A compensation scheme applies.” Check the named entity, covered activity, claimant eligibility, exclusions and claim limit with the scheme itself.
- “We have insurance.” Request the policy or coverage summary. Identify the insured company, covered event, exclusions, claim route and whether a headline limit applies per client or across claims. Do not assume this is a statutory compensation scheme.
A practical account check
Imagine two agreements carrying the same trading brand. One names a UK company and cites CASS; the other names a different company and describes its own client-money arrangements. You cannot transfer the first agreement's rules or compensation position to the second. Nor can you conclude that the second has no requirements without checking its jurisdiction.
For each account, save the agreement and ask:
- Which company receives my money, and which client-money rules apply to this service? Match the legal name with the official register.
- How are cash and margin held? Ask about pooled accounts, third parties, reconciliation and any contractual exceptions.
- What happens if the company or holding bank fails? Request the relevant terms and distribution process; do not substitute a normal withdrawal estimate.
- What separate compensation or insurance could apply? Confirm the conditions with the scheme or policy, rather than relying on a logo or headline amount.
An unanswered question is a gap to resolve before relying on the claim. The account research report can help organise entity details, sources and open questions; it cannot inspect a firm's bank balances or certify compliance.
Sources and correction
The linked FCA and ASIC sources were read on 17 October 2026. The UK and Australian examples are scoped to those regimes; this article does not verify an individual account's arrangements.
Correction, 17 October 2026: removed unsupported claims that offshore entities have no external audit or regulatory enforcement, and that segregation alone establishes a complete return of funds. The relevant entity, rules and insolvency process must be checked separately.