Welcome back to Part 2 of Covering Your Assets. As we touched on last week, many of our clients have asked the question of how their assets are covered. While the topic is nuanced, we wanted to provide you with some information regarding the two types of insurance: FDIC (Federal Deposit Insurance Corporation) and SIPC (Securities Investor Protection Corporation). Our email last Thursday, April 20th 2023 covered FDIC. You can read it here, if you missed it.
SIPC protects against the loss of cash and securities – such as money market, mutual funds, stocks, and bonds – held by a customer at a SIPC-member brokerage firm. SIPC does not protect against the decline in value of customer securities (ie. due to market fluctuations). There is no requirement that a customer reside in or be a citizen of the United States; however, the customer must hold their funds at a SIPC member brokerage firm and should understand the coverage as it pertains to investment type and registration of the account.