What happens to my money if the broker goes bankrupt? FOGAIN explained

It's one of the most reasonable questions before opening a brokerage account: what happens to my money if the firm goes bankrupt? In Spain there is a concrete answer, and it's worth separating it from a different risk many people confuse with it: the market going down.

Two different guarantee funds, for different things

• FGD (Deposit Guarantee Fund): protects cash deposited at banks, up to €100,000 per holder and entity. Applies to brokers that are banks (like MyInvestor).
• FOGAIN (General Investment Guarantee Fund): protects the cash and securities (stocks, funds, ETFs) you hold at investment firms, portfolio managers, and fund management companies, also up to €100,000 per client and entity, when the entity becomes insolvent.

In practice, almost any regulated broker or manager in Spain is covered by one of the two, depending on its legal form.

What matters: what FOGAIN actually covers

FOGAIN kicks in when the entity can't return your money or securities because of its own insolvency — for example, if it goes bankrupt and can't hand back what belongs to you. It covers up to €100,000 per client and entity, combining cash and securities.

What FOGAIN does NOT cover (the part people confuse most)

Here's the nuance that really matters: FOGAIN does not cover your investments losing value. If your index fund drops 20% because the market fell, that's not a broker failure, it's the normal risk of investing — and no guarantee fund covers that, anywhere. FOGAIN protects against the entity's insolvency, not against market losses.

Why the real risk of "broker bankruptcy" is smaller than it seems

There's a structural reason broker bankruptcy is, in practice, less dangerous for your funds/ETFs than people fear: your holdings are registered in your name (or segregated in the client's name at the custodian), not part of the broker's own balance sheet. If the broker fails, those assets in principle remain yours and should be transferable to another entity — FOGAIN exists mainly for the exceptional cases where that fails (fraud, mismanagement of client assets, etc.), not as a general safety net for any bankruptcy.

How to check before opening an account

• Verify the entity is regulated by the CNMV (or its home regulator, if operating in Spain under freedom to provide services) and a FOGAIN member, or that it's a bank covered by the FGD.
• Check our broker fee comparison to see, beyond cost, what entity each platform actually is.
• Remember: guarantee-fund protection is insurance against the entity's insolvency, not against how your investments perform.