What to Look for in a Broker

The checklist before you open any account — regulation comes first

6 min read Beginner

"The broker you choose determines what you can invest in, what it costs, what protections you have if it fails, and whether your money is actually segregated from theirs. Most people pick based on the app. This chapter covers what actually matters."

For educational purposes only. Nothing in this chapter is financial advice. All figures are illustrative examples. Tax rules, account types, contribution limits, and regulations differ by country and change over time. Always verify current rules with official government sources or a qualified financial adviser before making any investment decisions.

Why Broker Choice Matters

The broker you choose determines what you can invest in, how much it costs, what protection you have if the firm fails, and whether your assets are held safely. Most people choose based on the app. The app is the least important factor.

A broker that fails while holding your assets in an unprotected structure can cost you everything. Regulation, segregation of client assets, and compensation scheme coverage are the things that matter first.

The Checklist Before You Open Any Account

Regulation

Critical

Is it regulated by the FCA (UK), SEC/FINRA (US), or equivalent credible regulator? Check the regulator's public register.

Client asset protection

Critical

Are your assets held in segregated accounts — separate from the broker's own money? If the broker fails, can you get your assets back?

Compensation scheme

Critical

FSCS in UK covers up to £85,000 per person per firm. SIPC in US covers up to $500,000. Know your limit.

What you can invest in

High

Does it offer the specific assets you want — UK stocks, US stocks, ETFs, ISA wrapper, SIPP?

All-in costs

High

Spread + commission + FX conversion + platform fee. Not just the headline commission.

Withdrawal process

Medium

How long does it take? Is there a fee? What is the process?

App and tools

Lower

Charts, order types, alerts. Useful but secondary to the above.

FSCS Protection — What It Does and Does Not Cover

The Financial Services Compensation Scheme (FSCS) protects UK investors up to £85,000 per person per authorised firm if the firm fails. This covers cash held at the broker, not investment losses from market movements.

What FSCS does not cover

Investment losses (the market going down)
Firms not authorised by the FCA
More than £85,000 per firm (split between firms if you have more)

FAQs

How do I check if a broker is FCA-regulated?

Go to the FCA Financial Services Register at register.fca.org.uk and search by firm name. Only use firms with "Authorised" status for investment activity.

What is nominee vs custodian model?

Nominee: your shares are held in the broker's name on your behalf — common and acceptable. Custodian: similar. Direct registration: shares in your own name — rare in the UK, more common in the US.

Can I have accounts with multiple brokers?

Yes, and it is sensible if your total holdings exceed the FSCS limit of £85,000. Spreading across two FCA-authorised firms gives you up to £170,000 in compensation coverage.

Does the ISA wrapper affect broker choice?

Yes — not all brokers offer ISAs, and ISA transfers between brokers can take 15–30 days. Confirm the broker offers a Stocks and Shares ISA and check the ISA transfer process before opening.

Key takeaways

Regulation first — check the FCA register before opening any account.
Client asset segregation means your investments are protected if the broker fails.
FSCS covers up to £85,000 per firm — split holdings between firms if you exceed this.
All-in costs (spread + FX + platform fee) matter more than headline commission.
The app is the least important factor. Choose based on protection, regulation, and cost.