Is Your Money Safe If Schwab, Fidelity or Vanguard Fail | SIPC Protection

[@DiamondNestEgg]

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[@Appu3]

Silly question - Does securities protected include ETFs and mutual funds in addition to Cash and stocks?

[@Maxeys_mommy]

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!

[@Maxeys_mommy]

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.

[@robdigma8609]

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.

[@TheAzmountaineer]

Thank you. NO one does a better job than you when it comes to explaining these things.

[@craigroberts757]

Dittos' Jennifer.

[@mambodiehard]

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!!!

[@cometcal2]

Good concern. Only 1000 million makes up a billion.

[@1baddad315]

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!

[@usadaily135]

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.

[@WayneWBishop]

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!

[@San_Dee]

Wow, I was just googling this a few hours ago and boom here you are with a fresh video on it.

[@Happy_Harry]

One of the easiest to understand, most informative persons on KZbin. I hope you are making good $$💵💰 from these videos!

[@jbjohnson4728]

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!

[@bernardpaul7781]

This is a timely piece of valuable information for most mutual fund holders, especially IRA investors.

[@TaipanTex]

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.

[@yujie1973]

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.

[@followmesky]

I watched two of your videos and I immediately knew I had to subscribe. Your content is gold. Thank you

[@FrankTruslow]

Your videos are great...this is the best SIPC explanation I've seen.

[@kenmoist]

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)

[@jaygee2611]

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!

[@studenttrader6403]

Great content 👍 you got magic power to explain these complex issues in such a clear, direct, concise but also comprehensive way. Truly appreciate it.🙏

[@nickt2159]

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

[@bonanzatime]

What a natural teacher this gem is👍👍👍👍👍👍👍 She answers so many questions!

[@BorisLikesBonds]

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 KZbin 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!

[@stevethecat9194]

Wow. Scary. I never thought a brokerage firm could go under. Thank you for this.

[@minli143]

You are an excellent teacher. You explained everything so clearly and help people a lot. Thank!

[@CostaMesaPhotography]

Another outstanding video! Again your very organized and logic presentation is FABULOUS!

[@jnhentz]

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!

[@melindaaldrian9855]

You are awesome. I watched w my husband who has been nervous. Your resources which are included are invaluable. Thank you.

[@ktburger659]

My husband is also nervous. I’ll watch this with him so he feels more comfortable investing

[@timothythompson4036]

Great video. Remember, this is not protection grom market losses. Also, never putoney with the fintech banks. There have been enormous losses by customers who thought they were FDIC insured but they aren't.

[@ajayaiyar1907]

Excellent presentation; crisp and to the point. Thanks.

[@kc6715]

I would love it if you would do a video like this for credit unions! This was great - thank you!

[@DiamondNestEgg]

Noted - in the works!

[@followmesky]

Good one! It seems very few people are talking about credit unions.

[@montanarich5915]

I really enjoy your videos. You explain things in such a concise way.

[@mikef445]

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.

[@Howard2006]

This is really great video to understand what is covered in a hopefully unlikely event. Also, great explanation!

[@lexbotkin3729]

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?

[@taloweryus]

Thank you! Another great presentation. I've actually been wondering a lot about this recently.

[@Patrick70007]

Thanks for explaining SIPC protection.

[@joann8928]

Very timely. Just what I need to know. Thanks for sharing the info.

[@BearHunterSE]

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.

[@rdubitsk]

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.

[@yujie1973]

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.

[@doggonecrazyoveru]

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!!!

[@Escapetraveler]

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?

[@mikes1330]

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!

[@cometcal2]

Your logic sounds accurate. Personally, I feel these "extra insurance" claims are meant to encourage account holders to have account balances that exceed SIPC limits in each category.

[@elli003]

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.

[@LynnMarkie]

Thanks for the clear explanation of SIPC. I have a question about the impact of getting an SIPC cash equivalent settlement. If you are forced to get a SIPC cash equivalent for a stock holding at Gone-Bust Brokerage,does the IRS treat that as a taxable event on the previously unrealized capital gains / losses of your stock holding at Gone-Bust? Could you take the cash and buy the same or equivalent stock at another brokerage to avoid the taxable event?

[@myutube8x]

Really wonderful information. Thorough, detailed, clear, easily to understand. Masterful presentation. Greatly appreciated.

[@peterizzo6527]

Boomerang and Backfire Brokerages - love those names! Thanks as always for all your great info Jen!

[@just_joc]

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?

[@phillipborbon2059]

Wow found this channel yesterday but this is my first video seen, very informative. Subscribed.

[@ronjon12378]

Excellent! The precise questions I was looking to be answered.

[@tedfisk1211]

This is great information as I have been wondering what happens to my investments should my brokerage company go bust. Thankfully per this video my brokerage company is in great shape as far as SIPC. Thank you.

[@jelkaim]

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?

[@Jr2728]

Just like the banks they pay insurance premiums to the SIPC

[@cometcal2]

Your logic sounds accurate. Personally, I feel these "extra insurance" claims are meant to encourage account holders to have account balances that exceed SIPC limits in each category.

[@fubarbrandon1345]

Excellent video. Very helpful and your clarity is amazing...thank you.

[@checktowealth5524]

I've been looking for someone to explain this. Thank you!

[@aknotz]

I’m very happy I chose Fidelity for my brokerage acct.

[@agpilot2378]

Good information. Love the uptalk.

[@jeyre5996]

Exellent, clear explanations. I for one always wondered why KZbinrs didn't use more visual aids, slides etc as they're so useful to clarify or reinforce points. thanks

[@yuriw777]

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?

[@alexadams1627]

Thank you for your persistent investigative reporting!

[@Teresa-pz3sv]

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?

[@TheKid30912]

Thank you Jen, you explain things in a way that even I understand it.

[@tee-7307]

This is so helpful. Thanks for doing this research and facilitating it to us!!

[@johnmaul1829]

Great information. Can you now also do a segment on insurance companies and annuities?

[@codewizstw]

Well done! thanks for reassuring us all with this great research!

[@stephaniec.2520]

This is so helpful. I came back again & desire for my husband to hear this tomorrow. I am so sorry that with our computer glitch an empty icon will come up. Your video is very constructive & helpful. I also am wondering what these figures would mean during an age of hyperinflation. They seem huge now but perhaps would not then. Thank you much!

[@DeltadronesBr]

If you have money, it will be a problem. But if you have assets under custody, you can access them in another brokerage

[@rubbersoulboy]

You rock, Jen! Thank you.

[@davidmalone9022]

That was incredibly useful.

[@amitb1072]

Great information 👍🏼! Thank you !

[@jeffgraham2986]

Thank you for the information and counsel that you have provided.

[@ilsevanheerden4976]

Are we covered in Europe under SIPC? I see Interactive Brokers is on the list of members.

[@grantmattox8187]

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!

[@fangluoliu3624]

Thank you for the detailed info!🎉❤

[@joeblow1688]

Very good and clear explanation with graphics.

[@Ameleprep]

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?

[@aileleor]

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.

[@yelgohary]

Thanks for the video. Is money market fund like VMFXX is protected as well?

[@terrywatt4617]

This was timely information for me as well and very well explained. Thank you!

[@eliseleblanc740]

Say Boomerang Brokerage goes Bust 5 times fast 😅. Great content as always.

[@mddsgn]

This is what I have been asking ... thank you.

[@MultiMogman]

Thank you so much, i was just beginning to research this and then i caught your video. You saved me so much time.

[@kevinm320]

Thank you. Are cash sweep accounts in brokerage accounts insured?

[@doncanaday6406]

Thank you for this. By “aggregate” do they mean the aggregate of the multiple accounts controlled by “me” or the aggregate of all accounts held by the brokerage firm?

[@blue-neutrino]

so glad the google algo pushed your vid for me to watch! Learned a lot. Liked/Subscribed -- Cheers!

[@jdmxxx38]

Thank you for this terrific video. It helps enormously.

[@basamnath2883]

God bless you for the valuable information

[@michaelnorth1762]

I just came across your videos today and I am both very impressed and scared to death from the things I have learned..

[@WhittyPics]

Schwab bought TD Ameritrade a few years ago and they will be rolling those accounts into Schwab this year. We are basically Schwab customers now

[@athicomparinayakosol1963]

Thank you, this video really give an excellent explanation on the subject.

[@tellwilliams4493]

So now that citadel has been deemed too big to fail what does that mean for AMC stock?

[@rickj6048]

I'm ready for Jen's update on the latest estimate of the May 1,2023 I-Bond rate.

[@nickdifrancesco717]

haha me to. I think the i-bond interest rate will be lower than 0.4%. Planning to reup an i-bond prior to May 1.

[@murraypassarieu9115]

Currently looking like around 3.25 percent. If the .4 fixed rate holds, total of 3.65, so add that to 6.89 for anything purchased before the end of May and divide by 2 and you’ll get an annual return of 5.27 or so. Not bad. Beats 1 year t bills at least for now. Obviously the March inflation report could change this.

[@DiamondNestEgg]

Update video is coming next week

[@alicewong1924]

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?

[@carlosarodriguez7266]

A question in the case of millionaires who invest millions only have 500k under protection?

[@AK-qo6tx]

They will only cover $500k...the stock you think you own in a financial collapse is not really yours if over that amount....

[@dl-ce3so]

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.

[@lucywilson5765]

Thank you thank you, your information and explanation was so clear and important to me. 😊😊😊

[@Charlies1970TA]

Thank you. I feel better now!

[@davidliu4386]

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?

[@shoofly529]

I think Markus' Annual Evaluation is going to take a hit this year😉

[@Eddie-cc6py]

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?

[@cometcal2]

Your logic sounds accurate. Personally, I feel these "extra insurance" claims are meant to encourage account holders to have account balances that exceed SIPC limits in each category.

[@friendofcoal]

Well, I can scratch that concern off of my list. You've created another very informative, easy to understand & follow video. Thank you.

[@coachdennis8918]

Thank you! Excellent explanation.

[@cookmaster3626]

Thank you for the wonderful explanation detailing the insurance coverage. Are Mutual Funds also treated like stocks?

[@christopherbaker8621]

Mutual Funds are typically managed by someone like Fidelity or Vanguard but the actual assets are kept somewhere else by a different entity. If you look in the Mutual fund prospectus, you can see who has the funds.

[@Megan-ns8cu]

Thank you for another impactful video, Jennifer! Your explanations and examples are greatly appreciated and has help answer my questions. Thank you

[@cheninblanc8208]

.....you didn't say anything about taking possession of the stock certificates ? 🤔

[@petertulich7842]

What's the recommendation?