In New Zealand, most fund platforms have a custodian - an entity that holds the assets you buy on the platform. If the platform busts, you’re safe because your assets are held with the custodian and not the platform.

But that then begs the question, what happens if the custodian goes bust? Well custodians also have a custodian, diversifying the risk one step further (but not completely). Custodian inception!

Further on this here:

https://moneykingnz.com/what-happens-to-your-money-if-invest...