Lesson 7.5 · 5 of 5 · Tax, pensions and protection where you live
Investor compensation in Ireland: what if your broker or bank fails?
If an investment firm authorised in Ireland fails and cannot return your money or investments, the ICCL pays 90% of your loss, up to €20,000. Bank and credit union deposits are covered up to €100,000 per person per institution. Neither scheme covers falls in prices or bad investment choices.
Terms in this lesson
- Investor compensation scheme
- The protection that returns your cash and shares, up to a limit, if your broker goes bankrupt.
- Broker
- The firm through which you buy and sell stocks, ETFs and other investments.
- CFD
- A contract with your broker that pays or charges you the price move, without owning the asset.
- Crypto exchange
- The website or app where you buy and sell crypto with dollars, euros or other currencies.
Opening question
Your Irish broker goes bust. Your shares are held in a separate client account. What normally happens to them?
Client assets must be kept apart from the firm’s own money, so they are not part of what creditors share out. Compensation only matters if something is missing from the client account.
It does not matter if you get it wrong: trying first helps you remember.
How investor compensation works in Ireland (ICCL)
Definition
What is the ICCL?
Ireland’s compensation fund of last resort for clients of investment firms.
The Investor Compensation Company pays out when the Central Bank decides a firm cannot meet its clients’ claims, or a court ruling stops it returning their money or investments. It covers Central Bank-authorised investment firms, stockbrokers, insurance intermediaries and credit unions offering investment services. It pays 90% of the eligible loss, up to €20,000 per investor.
Work it out
An Irish stockbroker fails, and €30,000 of your money is missing from your account. The ICCL pays 90% of the loss, up to €20,000. How much do you receive, in euro?
A hint
Work out 90% first, then apply the cap.
90% of €30,000 = €27,000, which is above the cap, so you receive €20,000. With a €12,000 loss you would receive 90%, €10,800.
Real case
Bloxham Stockbrokers, 2012
In May 2012 the Central Bank ordered Bloxham Stockbrokers to stop trading after finding its capital had been overstated. The firm was insolvent, and the High Court appointed a liquidator. Its client business was sold to another stockbroker, and the Central Bank said the liquidation would not affect the transfer of client assets. The ICCL now lists it among its closed cases.
How the Deposit Guarantee Scheme protects savings in Ireland
The Deposit Guarantee Scheme is run by the Central Bank of Ireland. It covers deposits at banks, building societies and credit unions it authorises. All your deposits at the same institution are added together. In a joint account, each holder is covered up to the limit.
Check yourself
You hold €70,000 in a savings account and €60,000 in a current account, both at the same Irish bank. The limit is €100,000 per person per bank. How much is protected if the bank fails?
How sure are you?
Deposits at the same bank are added together: €130,000. Cover stops at €100,000 per person per institution, so €30,000 is at risk.
Client money and segregation: how Irish brokers keep your assets apart
Ready to start?
Why is segregation the first line of protection?
Because your shares and cash should never belong to the broker in the first place.
Under the Central Bank’s Client Asset Requirements, investment firms must hold client money in separate client asset accounts and keep client investments apart from their own, with records of what each client owns. If the firm fails, those assets should go back to clients or be moved to another firm. Compensation is for a shortfall, when something is missing.
- Segregationyour assets are kept apart from the firm’s
- Return or transferan administrator or liquidator returns or moves them
- ICCLcovers 90% of a shortfall, up to €20,000
Put in order
Your Irish broker fails. Put what normally happens in order.
This exercise is in the free account, where we also save your progress.
Create a free accountWhat investor protection in Ireland does not cover
- Falls in priceIf your shares or ETFs lose value because markets fall, no scheme pays you back.
- Bad advice or poor managementThe ICCL does not cover losses from bad investment advice, poor management or misrepresentation. Complaints about advice go to the Financial Services and Pensions Ombudsman.
- CFDs and leveraged lossesLosses from trading CFDs are trading losses, not missing client assets.
- CryptoCrypto held with an exchange is not a bank deposit and not covered by the ICCL or the Deposit Guarantee Scheme.
- Unauthorised firms and clonesIf a firm is not authorised, or is a fake copying a real firm’s name, nothing pays you. Check the Central Bank’s register first.
Myth or fact?
“If my shares fall 40%, the ICCL will compensate me because my broker is authorised in Ireland.”
This exercise is in the free account, where we also save your progress.
Create a free accountWhat would you do?
You read online that your broker may be in financial trouble. Your account holds €35,000 of ETFs and €5,000 in cash. What do you do?
This exercise is in the free account, where we also save your progress.
Create a free accountThis is a general description of the schemes as of 29 October 2026. For a specific firm, check the Central Bank of Ireland’s register, investorcompensation.ie and depositguarantee.ie.
What you learned
- The ICCL pays 90% of what a failed Irish investment firm cannot return, up to €20,000 per investor.
- Deposits are protected up to €100,000 per person per bank or credit union.
- Segregated client assets come back first; falling prices, bad advice, CFD losses, crypto and unauthorised firms are not covered.
One more time
The questions you got wrong, asked a different way.
Check yourself
A couple holds €150,000 in a joint account at one Irish bank and has no other deposits there. The limit is €100,000 per person. How much is protected?
In a joint account each holder is covered separately: €75,000 each, both under €100,000, so the full €150,000 is protected.
You reached the end
Keep what you learned
With a free account we remember your lessons, bring back the questions you got wrong exactly when you need them and keep your streak.
Save your progress with a free accountLessons are educational. They are not a recommendation to buy or sell. Investing involves risk and you can lose money. Sources: Investor Compensation Company DAC, Compensation limits, Scope of compensation coverage and Compensation cases (checked 29 October 2026); Deposit Guarantee Scheme, Compensation process and Calculation of compensation (depositguarantee.ie); Central Bank of Ireland, Client Asset Requirements, Chapter 1: Segregation; RTÉ News, 31 May 2012, on Bloxham Stockbrokers.