Under tier-1 regulation, brokers must hold client money in separate, ring-fenced bank accounts away from their own corporate treasury. If the broker goes bust, segregated client funds are not part of the estate and are returned to clients — usually through a compensation scheme like the UK's FSCS or the EU ICF.
Offshore entities often claim segregation without the regulatory teeth to enforce it. If you deposit with a broker entity regulated only in Saint Vincent or Vanuatu, your recourse in a solvency event is effectively limited to suing the broker in that jurisdiction — far more complicated than an FCA or ASIC claim.