Money Talks, So Should You

Q&A: What happens if my brokerage firm goes under?

Tom Roberts
by Tom Roberts, The Garrett Network

Relax. The majority of brokerages in the U.S. are members of Securities Investor Protection Corporation (SIPC) and their investors are covered for lost or missing investments.

You can find out if you are covered by looking at the brokerage's website for "Member SIPC". If you don't see these words, call the main office. If they are not members, I would find another broker.

READ: Five questions to ask before choosing a financial adviser

If your brokerage is a member, you are covered for up to $500,000 of lost or missing investments. Up to $250,000 in cash is included. You are not covered for investments losing value, just if the brokerage gets into trouble or your investments go missing. If you have more than $500,000 invested with a broker, check to see if they have bought extra insurance. Most of the large brokerages have bought extra coverage up to several million dollars per customer.

Check out the SIPC site for more details.

Don't be a victim, confirm you are protected now.


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Tom Roberts is a Certified Financial Planner, fiduciary and registered Investment Advisor. His educational background includes the CFP practitioner certificate from Florida State University, MBA from Goizueta Business School of Emory University and BS Mechanical Engineering from Worcester Polytechnic Institute.