Is Your Money Safe If Schwab, Fidelity or Vanguard Fail | SIPC Protection
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- เผยแพร่เมื่อ 31 พ.ค. 2024
- So what happens to your money if Schwab, Fidelity, Vanguard, Merrill Edge, E-Trade, TD Ameritrade or another big brokerage company were to suddenly fail - like Silicon Valley Bank collapsed? Will your stocks, bonds & other investments be safe & returned to you?
www.sipc.org/for-members/memb...
www.sipc.org/for-investors/wh...
www.sipc.org/list-of-members/
www.sipc.org/for-investors/in...
www.sipc.org/for-investors/in...
www.sipc.org/media/annual-rep...
www.fidelity.com/why-fidelity...
www.merrilledge.com/help-support
us.etrade.com/l/f/asset-prote...
www.schwab.com/legal/account-...
www.tdameritrade.com/retail-e...
personal.vanguard.com/pdf/v71...
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Thanks for visiting our personal finance channel! We hope this free content will help fast-track your financial journey! Everyone's financial journey is different. Please note that there are questions/ comments which I will not be able to answer without fully understanding your financial, personal & other circumstances.
Silly question - Does securities protected include ETFs and mutual funds in addition to Cash and stocks?
Hi. Are treasury bills purchased thru a brokerage firm separate from the $500k SPIC insurance? That is, are they still backed by the US Treasury even if it is purchased thru a brokerage firm OR only if purchased an Treasurydirect? Interested in buying some Tbills and seems going thru my brokerage firm would be simpler based on your other helpful videos, but just want to make sure it doesn’t affect the US backing of T-bills if purchased thru brokerage instead of directly thru Treasurydirect. Please help!
Also, would like to avoid having my T-bills affect or be part of any of the $500k SPIC insurance for my stocks and cash at my brokerage firm. I’m assuming if I purchased $300k of T-bills thru my brokerage firm, the $500k I have in stocks and cash would still be fully covered by SPIC in event brokerage firm fails and the $300k in T-bills in my brokerage account would be separately backed by US Treasury. Does this sound right? Searched internet but could not find answer anywhere.
Thank you so much. Since excess SIPC coverage is thru a private insurance company, aren't we hoping the insurance company can cover those losses. Wouldn't the insurance company go bankrupt if millions of accounts had losses, during a bad economic situation.
Diversification !Diversification !Diversification !
Thumbs way up to the hardest working financial channel on TH-cam !
Great job Jen !
If Schwab per customer limit is $149.5m, but the total for all is $600m, is that mean they will run out of excess SIPC coverage after 4 customer of $150M in security each?
this is the way that I read it too. Additionally, I see NO REFERENCE (at least, as of 11/5/2023) to the $149.5M number - ONLY the $600M aggregate number, on Schwab's website!
Please do a video on what kind of documentation we should have from our Brokerage firms to ensure that we could file a successful SIPC claim. Thanks!
Thanks, Very informative. Fidelity alone has $9.6 trillion in assets under management. No insurance can protect that amount. $1 billion coverage for aggregate accounts is far, far short of assets. Vanguard claimed told me there was $49.5 million of coverage per account. (Enough for my accounts, lol)
Jen, I called Fidelity TWICE ABOUT SIPC COVERAGE and TWICE (2 separate reps) said that ALL my accounts COMBINED WERE COVERED UP TO 500K. No mention whatsoever of "separate capacity." I found your channel today and subscribed. Thank you for your thorough dive in this and the clear explanations. God bless.
It is great to see how well you listen to your community on what we want you to cover next. I was not expecting you to put the SIPC coverage video out so soon and was pleasantly surprised to see it pop up already today! It’s hard to not let anxiety get away from us with the increasing complexity and(what appears to be) near chaos in our financial systems. Your clear and thorough explanations help a lot. Thank you for what you do. It is very much appreciated!
Neat video! Merrill Lynch is owned by Bank of America. E-Trade is owned by Morgan Stanley. Both are publicly traded companies. You would think there is some visibility into those two brokerage firms and some accountability to shareholders through the parent's annual and quarterly reports. Fidelity is privately owned by the Johnson family. There is a lot less visibility, if any, into the inner workings of Fidelity. In "Abigail Johnson We Trust"? I watched an interview of her here on TH-cam somewhere and she said something interesting when asked if Fidelity will ever go public. Heavily paraphrasing, she said going public is one way to raise capital. Fidelity doesn't need capital, so why ask for it? I would love to see Fidelity go public just to get a peek under the hood and see the engine in motion. I'm not worried about Fidelity falling apart or anything, but we should keep this in mind when thinking about Fidelity. That said, I adore Fidelity!
Thank you! Another great presentation. I've actually been wondering a lot about this recently.
Wow, I was just googling this a few hours ago and boom here you are with a fresh video on it.
You're awesome Jen, thank you so much for doing this deep dive into SIPC. Just wondering if a SEP-IRA would be lumped into the same category as a traditional IRA or would they be considered separate accounts by SIPC?
Thanks for the timely information! I do have follow-up questions though, because I think there are two critical omissions about excess coverage: The first is to provide stats on the total amount of SIPC uninsured accounts that would have to be covered by excess insurance in each major brokerage. The reason is that even the biggest excess coverage of $1B doesn't provide a real clue of coverage if we don't know among how many accounts it is being applied, and how well-funded are those accounts (i.e., what the distribution of account balances are). I would understand if this information is hard to get, but I think we're really in the dark if we don't have an idea about this, basically because if many big customers use the max excess coverage and get paid first, they may exhaust that billion and leave the majority of customers empty-handed.
The second question is in which order will customers be paid for excess coverage when they have accounts that surpass the SIPC limit. Is this strictly first-come first-served according to the date of the claim? Is it a lottery? First-come first-served sounds savage to me, but I'd like to know if that's the case!!!
I am a client at Vanguard Personal Advisors and having the same problem you had obtaining written documentation of excess SIPC coverage. Vanguard always wants to state things verbally and won't back it up with written documentation. I am becoming disgusted with Vanguard and their treatment. They refuse to take my questions seriously nor provide adequate information for informed consent in dealing with them. I have asked repeatedly for this info because I am over the basic SIPC limit.
Excellent presentation; crisp and to the point. Thanks.
Well done! thanks for reassuring us all with this great research!
Another outstanding video! Again your very organized and logic presentation is FABULOUS!
I watched two of your videos and I immediately knew I had to subscribe. Your content is gold. Thank you
Your videos are great...this is the best SIPC explanation I've seen.
Exellent, clear explanations. I for one always wondered why TH-camrs didn't use more visual aids, slides etc as they're so useful to clarify or reinforce points. thanks
I really enjoy your videos. You explain things in such a concise way.
This is a timely piece of valuable information for most mutual fund holders, especially IRA investors.
Thank you. NO one does a better job than you when it comes to explaining these things.
Dittos' Jennifer.
This was excellent - thanks. My wife just last week asked me the exact same question and I didn’t have a clue. Thanks for informing the community!
Excellent summary! Very clear, and saves me from having to call my brokerage to get the explanation of coverage. Now, I can sleep peacefully at night!
Thank you!
I've been looking for someone to explain this. Thank you!
Thank you for your persistent investigative reporting!
Thank you for the education on SIPC protection. I think it's important for people to understand that SIPC is not a federal agency, nor back stopped (currently) by the federal government. The SIPC website chronicles on its site, its own track record and history, with big failures like Lehman Brothers and the Bernie Madoff saga. It's an interesting read, my net worth sounds like it would have been covered, but maybe not for some of your followers?
Very timely. Just what I need to know. Thanks for sharing the info.
Jen, you are a tremendous asset to all of us during these times. Your videos are timely and so important. I try to watch them just as soon as they come out. I do have a question on both FDIC and SIPC insured IRA accounts at banks or brokerages that fail. If the funds in those accounts are liquidated and returned, are taxes immediately owed on them? Hopefully those accounts would wind up intact at another institution in IRA form, but are there other possibilities that might trigger unexpected taxes? Thank you so much for your hard work and the information you share with us!
You are an excellent teacher. You explained everything so clearly and help people a lot. Thank!
Wow found this channel yesterday but this is my first video seen, very informative. Subscribed.
Thank you Jen, you explain things in a way that even I understand it.
Your videos are wonderful!!! You get ahead of me sometimes and I get a little lost in the information, but I have learned a ton and am very grateful for your thorough treatment of these issues. Keep ‘em coming!!!
This is so helpful. Thanks for doing this research and facilitating it to us!!
Excellent! The precise questions I was looking to be answered.
You forgot to answer one of the most important questions of all: Who insures US treasury obligations when purchased through a brokerage, SPIC or the US government?
Excellent video. Very helpful and your clarity is amazing...thank you.
Thank you so much, i was just beginning to research this and then i caught your video. You saved me so much time.
Great! Now what am I going to worry about?!
Thank you.
One of the easiest to understand, most informative persons on TH-cam. I hope you are making good $$💵💰 from these videos!
Thanks for the explanation, you did a better job than the Schwab brokers. The examples are very helpful. One question: does the 149million/customer coverage work the same way as SIPC? In other words, are there limits for each account category?
This is what I have been asking ... thank you.
Your securities (registered by CUSIP numbers) would go to the Registrar of Record for that security and may temporarily be held in 'Street Name', until all registrations clear. You may not be able to trade during that transfer period but you still have the stock. If you went short, short against the box or transacted derivatives, clearing houses like Pershing would bring to order.
Thank you, this video really give an excellent explanation on the subject.
Really wonderful information. Thorough, detailed, clear, easily to understand.
Masterful presentation. Greatly appreciated.
Boomerang and Backfire Brokerages - love those names! Thanks as always for all your great info Jen!
Wow. Scary. I never thought a brokerage firm could go under. Thank you for this.
What about a company sponsored 401k that goes above $500,000. How does that work? There’s not really a choice for employees to have separate 401k accounts at different brokerages.
Yup. Those aren't FDIC insured. SEC instead. The elite have made our lives a living hell the past 3 years and now they want your savings
Plus one on this question. I always try to roll over my 401k account over yo an IRA if / when I change jobs, but I've been with my current employer long enough for the account to get large enough to where this is a concern.
Some plans offer ‘in-service’ withdrawals which allow actively employed participants to withdrawal a portion of their account.
@@taloweryus it's your right to set up a new account elsewhere and transfer the funds to a new retirement account.
@@taloweryus ...without any penalty.
Excellent video! You are the best! Does it make any difference if the accounts are held one under individual and one under a living trust using the grantor SSN? Would these two accounts be counted as one or a separate coverage for purposes of the $500k coverage?
Thank you for this terrific video. It helps enormously.
You are awesome. I watched w my husband who has been nervous. Your resources which are included are invaluable. Thank you.
Thank you. Are cash sweep accounts in brokerage accounts insured?
Brokage companies hold securities off balance sheet, So all 401K and IRA securities, bonds, and money market funds would be transferred back to you or to another brokage company if they fail .
Great content 👍 you got magic power to explain these complex issues in such a clear, direct, concise but also comprehensive way. Truly appreciate it.🙏
Hello Jennifer! I love your videos. Could we have more frequent vids on T-Bill market rate direction and time frames? I see I all the continuous market turmoil reported by the news and talking heads. They are rarely correct. Currently, my read is that inflation is the number one threat to the economy. I don’t want that whole transitory philosophy to dictate Fed direction. Get this inflation under control. The jobs market still appears to be acceptable, despite all the big company layoffs. Don’t fully understand that.
I like your straightforward analysis of the impact of current events. You give enough causation details for me to evaluate and weigh into my thinking. Would love to see more frequent vids in this area.
Respectfully submitted,
Nick
Great information! I also want to know, if you’re holding stocks for example, how do you calculate the how many shares of stocks will be reimbursed given the total coverage limit? Is it based on the closing prices at the time of filing bankruptcy?
Diamond, nicely done. As a Schwab customer it definitely gives me some piece of mind. Take care and I look forward to your next video.
Actually very surprised that Vanguards excess coverage wasn't higher considering how enormous Vanguard's financial size is in the market. Also, your video's are professional and easy to understand. Nice job.
Thank you , for this lesson. This answered so many questions for me.
Awesome job with your SIPC explanation! I still have one question, SIPC is not the government but an association. How do we know if they have enough capitalization to pay an insurance claim in case multiple brokerage institutions fail?
Just like the banks they pay insurance premiums to the SIPC
I still cannot understand the excess SIPC coverage. If Schwab has 600 million coverage combined, how does it cover each customer up to $149.5 million?? $600M is only enough to cover 4-5 customers of $149.5M. So I am lost here. She did not give an example. Would anyone be able to shed some light?
Thanks for explaining SIPC protection.
Thank you for another impactful video, Jennifer! Your explanations and examples are greatly appreciated and has help answer my questions. Thank you
Thank you for a timely and informative explanation of SIPC and excess of SIPC protection coverage. However, my 403B plan administrator told me that SIPC does not generally cover 403B plans, but not to worry as there are safeguards in place. So it appears to me that 401K/4003B plans do not have that additional layer of coverage that IRA and brokerage accounts have.
Thanks for the video. Is money market fund like VMFXX is protected as well?
This was timely information for me as well and very well explained. Thank you!
Kind of a tangent but wondering about Sweep accounts at places like Fidelity when trying to find a balance between safety and return. Hoping for suggested links, videos, comments, or whatever. Thanks much!
Great video. Very informative. Thank you!!! ❤
Thank you so much for covering this!. I wasn't worried until last week since all my stuff is with TD Ameritrade for the past 15 years but Schwab recently bought TD Ameritrade and is moving all my stuff over to Schwab in May. And people are starting make some noise about Schwab going under. Thanks Schwab! I feel much better now that I understand what's covered by SIPC and for how much.
The securities in your Schwab account-including fully paid securities for stocks and bonds and excess margin securities-are segregated in compliance with the U.S. Securities and Exchange Commission's Customer Protection Rule. This is the legal requirement for all U.S. broker-dealers. Your segregated assets are not available to general creditors and are protected against creditors' claims in the unlikely event that a broker-dealer becomes insolvent.
Great video. SIPC isn't even necessary in most cases. The holdings at the mega brokerages are in custodial accounts and specific mutual fund and etf investments have third party custodians. There is some additional risk but it's much lower than uninsured bank deposits which are straight up claims against a bank. However, brokerages have illegally commingled customer funds. So risk is lower than bank risk but not zero. At a bank FDIC is primary source of protection. SIPC is of secondary importance for brokerages accounts.
You mean the following: The securities in your account-including fully paid securities for stocks and bonds and excess margin securities-are segregated in compliance with the U.S. Securities and Exchange Commission's Customer Protection Rule. This is the legal requirement for all U.S. broker-dealers. Your segregated assets are not available to general creditors and are protected against creditors' claims in the unlikely event that a broker-dealer becomes insolvent.
Very good and clear explanation with graphics.
Love your channel, you made everyone feel a whole lot better.❤❤
For the record: You crack me up in a good way!
Great info. Thanks for all your videos!
Great information 👍🏼! Thank you !
Thank you ! Very useful- and informative!
Great video! This answered a lot of my questions about protections on my retirement and brokerage accounts. To dive a little deeper, if I have a 401k with my contributions being Roth and my employer match being traditional would that be considered two separate capacities? So technically would by 401k have a total of 1 million in SIPC protection? I've been considering converting my employer's contributions to Roth but may give that a second thought if keeping the traditional offers additional protection.
Thank you for sharing! How about 401k account coverage?
Thank u so much for the great information u provide. ❤
Thx for this video.
IMHO there were several topics not covered and I’d like to know the answer to them.
1. What has to happen for Schwab and alike go totally broken?
2. Historical examples?
Good information. Love the uptalk.
Thank you Diamond!
Jen, THANK YOU SO MUCH!!!. I have a question, is 401k a separate capacity from IRA account in term of SIPC? I don't see 401k in the list.
You rock, Jen! Thank you.
Thank you! Great video!
Thank you for this explanation, I feeel better.
Thank you for this video and all the others! I was wondering if you would explain what US govt agency repurchase ( repo) agreements and agency floating rate securities are. SPAXX and FDRXX fidelity money market funds seem to be mostly investing in those. How safe is that for cash sitting in fidelity?
Wow! This newest video gives me more questions remaining than answers. When SVB collapsed and had to be taken over there was a huge daily outflow of depositor cash totaling in multiple billions. Now when I hear Jennifer state in the video the best brokerage houses who have the most "excess SIPC" coverage is only a single billion the math simply doesn't add up. If there is a run on a brokerage house both SIPC and "excess SIPC" coverage will not make all it's members whole! .... or am I missing something? I need more clarification personally.
so glad the google algo pushed your vid for me to watch! Learned a lot. Liked/Subscribed -- Cheers!
Thank you thank you, your information and explanation was so clear and important to me. 😊😊😊
Thank you! Excellent explanation.
Very Timely Thanks.
Thank you the excellent video!
What a natural teacher this gem is👍👍👍👍👍👍👍 She answers so many questions!
Thanks for your sharing!
SIPC covers stocks and bonds ... yes, but what about $$ invested in mutual funds? Good vid - Thx!
If Fidelity crashes & burns, taking my Apple stock with it, then I will be out on the street selling pencils. ;-) I am more concerned about a meteor strike than about a total failure of Fidelity...
Pencils ,what's that
Pencils must be some kind of penile implant
@@billybad1 what we'll all be using again if a total financial collapse occurs
If Fidelity crashes, it takes my 401K with it. When I retire, I’ll be right next to you selling pencils! 😀😀
You are super helpful. Thank you.
Thank you, first time in your channel. Very good explanation. Do you have any videos about insurance companie's annuities, how are they protected? And how can one make sure if one is covered? Thank you
there are state run insurance pools backing up the insurance companies.
i think there are limits. the best annuitant's protection from an insurance company about to go bust comes from other insurance companies who come in as buyers, to assume its book of business. it protects the reputation of all annuity providers if none of them rip off
purchasers of annuities.
Totally understandable. Thank you.