Making sure your broker is FCA authorised

Before you transfer a single pound into a brokerage account, there is one check that takes under two minutes and could save you from a financial disaster. Most people skip it. Most people have never heard of it. Here is why it matters and exactly how to do it.

Every broker, investment platform and financial firm that legally offers services to UK retail investors must be authorised by the Financial Conduct Authority. The FCA is the UK’s financial regulator. It sets the rules these firms must follow, monitors their behaviour, and has the power to fine, suspend or shut down any firm that steps out of line. When a firm is FCA authorised, it means the regulator has looked at the business, approved it to operate, and taken on oversight responsibility for how it treats its customers.

That oversight translates into real protections for you as an investor. Authorised firms are required to keep your money separate from their own. This is called client money segregation, and it means that if a broker goes bust, your funds are not treated as part of the firm’s assets. You are not an unsecured creditor in the insolvency queue. Authorised firms are also required to give you clear information about what you are buying, treat you fairly, and handle your complaints through a proper process. If they fail to resolve a complaint to your satisfaction, you can escalate it to the Financial Ombudsman Service, a free independent body that has real teeth.

The most significant protection of all, though, comes from the Financial Services Compensation Scheme. The FSCS is a safety net of last resort. If an FCA-authorised investment firm fails and cannot return your money or investments, the FSCS will compensate you up to £85,000 per firm. That figure has been at this level since 2019 and applies per person, per firm. For most ordinary investors, that limit covers a substantial portion of what they hold. None of this protection exists if you invest through a firm that is not authorised.

Checking authorisation takes less time than making a cup of tea. Go to the FCA register at register.fca.org.uk and type in the name of the firm. The register will show you whether it is authorised, what activities it is permitted to carry out, and some basic details about the business. If the firm appears on the register with the relevant permissions for the service you are using, you are dealing with a regulated entity. If it does not appear, stop immediately.

There is a complication worth knowing about, and it is the reason you should not just search by name and assume the first result means you are safe. Clone firms are one of the most persistent threats in retail investing today. A clone firm is a fraudulent operation that impersonates a real, authorised firm. It uses the same name, similar branding, and sometimes even copies the real firm’s registration number. The fraud works because investors check the name on the register, find the genuine firm listed there, and assume they are dealing with that firm. They are not. They are handing money to fraudsters who have no connection to the real company whatsoever.

The way to protect yourself against clones is to go beyond just checking the name. Once you find the firm on the register, look up the contact details listed there and use those to make contact, not the phone numbers or email addresses the firm sent you. If someone cold-called you, emailed you out of the blue, or reached out via social media, treat that as a red flag regardless of what name they give. The FCA register will also show a warning notice if the regulator has flagged that a clone is operating under a particular name, so it is worth reading through the full entry rather than just confirming the name exists.

Unauthorised firms are a separate category. These are not clones of real businesses but entirely fictitious operations with no connection to the regulated sector. They tend to advertise heavily on social media, promise above-market returns, and create a sense of urgency to get you to transfer funds quickly. Because they are not on the register at all, a simple check will expose them immediately. The FCA also maintains a warning list of firms it has identified as operating without authorisation, which you can find at fca.org.uk/consumers/warning-list. It is worth a look before sending any money to an unfamiliar name.

If you are already using a platform like Hargreaves Lansdown, AJ Bell, Vanguard, Freetrade or Interactive Investor, you are dealing with FCA-authorised firms. These are well-established businesses with long regulatory track records, and your money is covered by FSCS protections up to the £85,000 limit. The checks described above matter most when you are approached by a new name, a smaller platform, or anything that came to you through an unsolicited message rather than your own independent research.

One more thing worth understanding is the difference between being authorised and being a member of a compensation scheme. Most authorised investment firms are covered by the FSCS automatically. However, some EEA-based firms that operated in the UK under EU passporting rules before Brexit may not be covered in the same way. The position has evolved since 2021, and if you are using a European platform that is now operating under a UK temporary permissions regime, it is worth checking the FSCS website directly to confirm the coverage that applies. For any UK-incorporated firm with full FCA authorisation, the standard £85,000 limit applies.

Checking the register is not a bureaucratic formality. It is the single fastest, most effective thing you can do to establish whether a broker is the real thing before you hand over your money.

TL;DR — the short version

• Any legitimate UK broker must be authorised by the Financial Conduct Authority before it can legally offer investment services.
• Authorised firms are required to keep your money separate from their own, so you are protected if they go bust.
• The FSCS compensates you up to £85,000 per firm if an authorised investment firm fails — this protection does not exist with unauthorised firms.
• You can check any firm on the FCA register at register.fca.org.uk in under two minutes.
• Clone firms impersonate real authorised businesses, so always use contact details from the FCA register, never those provided by the firm itself.
• The FCA warning list at fca.org.uk/consumers/warning-list names firms it has identified as operating without authorisation.

Disclaimer: The value of investments can go down as well as up, and you may get back less than you invest. This article is for informational and educational purposes only and does not constitute financial advice. Always do your own research and consider seeking independent advice before making any investment decision.

Nothing in this article is financial advice. Tax rules change frequently. Check the current ISA allowance, CGT exemption and relevant rules on HMRC’s website or consult a qualified financial adviser for your specific situation.

Money & Markets is a guide to personal finance and investing for people who want to understand the world they live in, updated as rules and markets change.