What happens if a Financial Services Company/Stockbroker goes into administration in the UK?
Nothing. Stockbrokers set up nominee accounts, in which they hold shares on behalf of individual investors. Investors are still the legal owners of the shares but their names do not appear on the company’s share register. Nominee accounts are ring-fenced from brokers’ other activities so they are financially secure. Although I posted this question more than a year ago, I subsequently read information which may be of use as an answer, specifically regarding Pritchard Stockbrokers in the UK several years ago, in which the FSCS stepped in to compensate investors, as detailed in the following: http://www.fscs.org.uk/what-we-cover/questions-and-answers/qas-about-pritchard-stock-6n940n01k/ http://www.ft.com/cms/s/0/89957c56-21e4-11e3-9b55-00144feab7de.html#axzz3crZYbGZ9 For reference, in case the links above are at some point in future taken offline, the FSCS FAQ states: Q: I had “deposited” money with Pritchard so can I expect £85,000 compensation from FSCS?  A: No. Pritchard was not a deposit-taker so the money held does not qualify under regulatory rules as a deposit. The money will be treated as an investment, which carries maximum FSCS compensation of £50,000 per person. FSCS has no discretion to pay any more. Q: What happens if my losses are over the FSCS maximum of £50,000 and I accept the FSCS’s compensation?  A: If you choose to accept compensation from FSCS, you will be required to assign (or legally transfer) to FSCS all of your rights to claim in the Administration. FSCS will then claim in the Administration standing “in your shoes” and will claim for the whole of your loss, even if it was over £50,000. When FSCS receives the dividends in your place it will then pay to you any amounts recovered to ensure that you do not suffer a disadvantage for having accepted FSCS compensation first. Example 1: Loss = £80,000 FSCS compensation = £50,000 Dividend of 50p/£ received by FSCS = £40,000 FSCS pays £30,000 to claimant so he is fully compensated (total £80,000), and retains £10,000 recovery for itself Example 2: Loss = £100,000 FSCS compensation = £50,000 Dividend of 50p/£ received by FSCS = £50,000 FSCS pays £50,000 to claimant so he is fully compensated (total £100,000), and retains nothing for itself FSCS does not have to have make a full recovery of its £50,000 before it starts paying its dividend recovery on to claimants. Claimants are not compelled to claim from FSCS, or to accept the FSCS offer of compensation. If a person does not want to transfer his legal rights to claim in the Administration to FSCS in return for accepting the payment of compensation, then s/he can decline our compensation and continue his claim in the Administration. After s/he has received the dividend(s), s/he can then return to FSCS to claim for any remaining shortfall. Therefore, the answer provided by @DumbCoder was correct, but in circumstances where fraudulent activity would mean otherwise, the FSCS was willing to intervene on the behalf of investors.
"Not going to happen anytime soon. These old fatties won't go down without a bitter fight that will make us really hate them for a while longer.  New media (e.g. Netflix, youtube, Hulu...) still requires an internet connection. As it stands, the avenue to get connected to these services still goes through cable companies (e.g. Time Warner, Comcast, Cox...) or through telecom companies (e.g. ATT and Verizon).   The first step these antiquated orgs. will pull is putting caps on our internet usage. This will take the floor right from under online video services, which have worked off an ""all you can eat"" broadband model.  Right now caps are at something like 100-250GB, which seems like a lot. But imagine you replace your entire cable consumption with online consumption. Plus add in any other internet activity like games and downloads, 250GB may be a bit closer than you think.  Moreover, ISPs are moving to lower the caps on internet usage, probably around 50GB, which limits us even further on online media consumption.  So because they *cannot* compete with these services, they aim to stop us entirely from using them. Bully tactics, not good business through adaption and innovation.  They think by doing this, they will drive consumers back to their traditional services. Time will tell if the masses will play into their hand or actually shape demand for a non-restrictive, non-cable sourced ISP. Should such a service arise, cable companies are pretty much dead in the next 5-10 years.  As it stands, we still require cable companies to deliver our content. The battle between Old Media and New Media will be hard fought and we, the consumers, stand to get the brunt of this battle for a while longer." The money goes to the seller.  There are a lot of behind the scenes things that happen, and some transactions are very complicated with many parties involved (evidenced by all the comments on @keshlam's perfectly reasonable high-level answer), but ultimately the money goes to the seller.  Sometimes the seller is the company.  The billions of shares that change hands each day are moving between other individuals like you and investment funds; these transactions have no direct impact on the company's financials, in general. As a tenured professor, has your SO done any grant or departmental budgeting? If so, perhaps you can ask how your SO managed that and can apply the same techniques to the household budget. If your SO plans to become Chair or move into administration,  budgets will be necessary.  Although this may frighten you SO and backfire,  you should also speak about what might happen if you become ill or otherwise unable to manage the finances.  Does your SO have any financially savvy friends or colleagues? A more independent voice may help. "I should think the primary reason is due why those countries have a higher standard of salary - its not what you get, but what it buys you. In a high-salary, low-exchange-rate country like Sweden, you get a lot of services that your taxes buy you. Healthcare and quality of life in a stable country is something you want when you get old (note that your viewpoint might be very different when you're a kid). Moving to a country that has less impact on your finances is often because that country has significantly fewer services to offer. So a Swedish citizen might think about moving to a 3rd world country and find that their retirement income isn't sufficient to pay for the kind of lifestyle they actually want, such countries tend to be pleasant to live in only if you are exceptionally wealthy.  Now this kind of thing does happen, but only ""within reason"", there are a number of old people who retire to the coast (in the UK at least) and many people who used to work in London who retire to the south west. For them, the idea of moving doesn't seem so bad as they are moving to areas where many other people in their situation have also moved. See Florida for an example for US citizens too." The headline mentions Harbinger Capital because they were making news this weekend because of an on-going SEC investigation. [Harbinger Capital Partners has been put on notice by the Securities and Exchange Commission that it could face a lawsuit for securities-fraud violations, according to published media reports.] (http://www.thestreet.com/story/11340855/1/harbinger-capital-gets-wells-notices.html) "The short answer is that the exchange of the stock in exchange for the elimination of a debt is a taxable exchange, and gains or losses are possible for the stock investor as well as the bank.   The somewhat longer answer is best summarized as noting that banks don't usually accept stocks as collateral, mostly because stock values are volatile and most banks are not equipped to monitor the risk involved but it is very much part of the business of stock brokers.   In the USA, as a practical matter I only know of stock brokerages offering loans against stock as part of the standard services of a ""margin account"". You can get a margin account at any US stock broker. The stockholder can deposit their shares in the margin account and then borrow around 50% of the value, though that is a bit much to borrow and a lower amount would be safer from sudden demands for repayment in the form of margin calls. In a brokerage account I can not imagine a need to repay a margin loan if the stocks dividends plus capital appreciation rises in value faster than the margin loan rate creates interest charges...  Trouble begins as the stock value goes down.  When the value of the loan exceeds a certain percentage of the stock value, which can depend on the stock and the broker's policy but is also subject to federal rules like Regulation T, the broker can call in the loan and/or take initiative to sell the stock to repay the loan.   Notice that this may result in a capital gain or loss, depending on the investor's tax basis which is usually the original cost of the stock.  Of course, this sale affects the taxes of the investor irregardless of who gets the money." Can you expand on your second point about how banks are now structuring these products to account for greater defaults and losses? Is it just that the securities are being correctly rated this time around as opposed to the MBS's back in the last crisis? "Legally speaking, if you do close a limited company, the funds belong to the government (""bona vacantia""). There's some guidance on this at Companies House and there is indeed a substantial amount of administration work to get it undone. Notable excerpts: You should deal with any loose ends, such as closing the company’s   bank account, the transfer of any domain names - before you apply. [...] From the date of dissolution, any assets of a dissolved company will   belong to the Crown. The company’s bank account will be frozen and any   credit balance in the account will pass to the Crown. [...] 4. What happens to the assets of a dissolved company? From the date of dissolution, any assets of a dissolved company will   be 'bona vacantia'. Bona vacantia literally means “vacant goods” and   is the technical name for property that passes to the Crown because it   does not have a legal owner. The company’s bank account will be frozen   and any credit balance in the account will be passed to the Crown. [...] Chapter 3 - Restoration by Court Order The registrar can only restore a company if he receives a court order,   unless a company is administratively restored to the register (see   chapter 4).  Anyone who intends to make an application to the court to   restore a company is advised to obtain independent legal advice. [...] Chapter 4 - Administrative Restoration 1. What is Administrative Restoration? Under certain conditions, where a company was dissolved because it   appeared to be no longer carrying on business or in operation, a   former director or member may apply to the registrar to have the   company restored. [...]"