If Your Brokerage Fails, What Happens To Your Account? (Schwab, Fidelity, Vanguard) | Rob Berger

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What will happen to your investments if you have them in a major brokerage -- like Schwab, Fidelity or Vanguard -- that goes bankrupt?
Personal finance expert Rob Berger explains in today's video.
He also addresses the question: How can tell I tell how safe my bank is?
In his answer, Rob mention this ratings agency as a resource: weissratings.c...
Here's what SIPC covers: "SIPC first divides up the broker’s remaining assets among investors, then uses its own funds - up to $500,000 per account, with a limit of $250,000 in cash - to buy the same number of shares you originally owned and replace your cash. Depending on the amount of property the brokerage is able to recover, you may receive more than $500,000 and SIPC has been successful in making most customers whole, says Josephine Wang, CEO of SIPC"
Follow Rob at his RU-vid channel: / @rob_berger
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#brokerage #banks #bankruptcy
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IMPORTANT NOTE: The information and opinions offered in this video by Wealthion or its interview guests are for educational purposes ONLY and should NOT be construed as personal financial advice. We strongly recommend that any potential decisions and actions you may take in your investment portfolio be conducted under the guidance and supervision of a quality professional financial advisor in good standing with the securities industry. When it comes to investing, past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All investments involve risk and may result in partial or total loss.

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1 окт 2024

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Комментарии : 137

@helenoliver4838 11 месяцев назад

The markets remain doubtful that the Federal Reserve will keep to its plan to raise interest rates until inflation is under control, even though bond yields are rising while stock prices are falling. What is the best method to profit from the current bear market while I'm still considering whether to sell my $401,000 worth of stocks?

@greenquake11931 11 месяцев назад

I advise you to seek professional advice because building a strong financial portfolio is more challenging. Your long-term objectives and budgetary preferences can be catered to in the ideas you get after that.

@georgereynolds906 11 месяцев назад

Working with a reputable investing coach is currently the greatest market strategy. I've been in contact with a coach for a while, mostly because I don't have the breadth of knowledge or mental fortitude to handle current persistent market conditions. I made over $700k throughout this recession, demonstrating that the market is trickier than most people believe.

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@@georgereynolds906 I need suggestions to assist me recover my portfolio and create more effective strategies because of the huge dips. How do I locate this coach?

@georgereynolds906 11 месяцев назад

@@theresagarcia1218 There are many financial coaches who excel in their profession, but for the time being, I employ 'BRIDGET MARY TUROW", because I adore her methods. You can make a research and find out more about her services.

@mayacho4910 11 месяцев назад

@@georgereynolds906 Thank you very much. Because investment fascinates me so much, I'm happy to have found your message. I will find her and contact her.

@ryanyoung8663 Год назад

Annnnnd....it's gone!!

@pedantic70 Год назад

South Park ... Love it!

@ShamileII Год назад

Haha....I remember that episode!

@leecaryer2569 Год назад

I have an account at Schwab and called to ask about their protection weeks ago. The answer was, money in their bank insured through FDIC; brokerage $2.5M insured under SPIC; beyond that insured by Lloyd's of London, no limit. I did have to ask several people to piece that together. Ask questions!!

@IwillEndureToTheEnd Год назад

But what happens if Lloyd's goes bust..?

@robinsoncrusoejr7089 Год назад

It had a MASSIVE wobble about 30 years ago. !🙄

@ackerrj Год назад

Nice interview, but I would be more comfortable with this if you had taken the time to ask and answer these questions PRE INTERVIEW, as a lot of the answers fall in the "Vague but true" category, in other works, not answers, but best guesses. I can do that kind of thing on my own. For example the SPIC coverage question, which you answered in the notes. An unanswered question: Details on the additional 3rd party insurance purchased by these firms: What are the limits, are they per account, or per the firm as a whole? A billion dollars of 3rd party insurance sounds like a lot, but what if the firm has a trillion in assets under management? Is that a billion for each account (unlikely) or a billion for the firm as a whole, which would mean they only have 1 percent coverage? You would only find out by reading and staying current with the actual policy.

@maureenberendonk4662 Год назад

Do you guys get paid to keep the public calm or what? He says once you give these places your money then “they own it, it’s not yours” and right after says “but they have an obligation to pay it back” Lolol…nothing is safe and they know it…why does everybody get talked into giving their hard earned money to others as if we’re all too stupid to just save it…I’d rather save my money myself than trust it to any of these sheisters

@cloudiermonk Год назад

Thanks but this guy doesn't give me confidence... I know there were new rules about money market funds and other asset investments

@jeffersonblackmon Год назад

It is your money until they decide it is not

@tlebryk Год назад

He forgot to mention that during the GFC, Merrril Lynch was bought out by Bank of America, and no one lost any stock and bond investments. The hysteria about Schwab is way overblown.

@mwaurelius1 Год назад

Banks can't go into your (not so) safe deposit box? I would point out that past events argue you are wrong. As for non-bank safe deposit boxes, the business can't go into the boxes, the FBI just comes in and takes the frames, boxes, and contents wholesale and demands you prove you came by your property lawfully.

@annmarielamb7748 Год назад

Great topic... spot on.... i am so grateful to you. this has been my biggest worry for months.

@DrunkenXiGinPing Год назад

No! I don’t want to rob bergers. I want to buy bergers !

@allenb.71 Год назад

Yes, Weiss is a longstanding good ratings company for US banks. Ratings for a particular bank, however, can be very fluid and so you can't find a high rating once and rest assured long term. It would be prudent to check the rating of your bank at least monthly. And in uncertain times, such as we are now experiencing, you should probably have your funds in a bank with at least a B rating.

@RobWilliams007 Год назад

Gooood morning. Ahhh, Rob Berger, I just started listening to him on his channel.

@bigworld6788 Год назад

Me too

@jonathanlee5185 Год назад

So, SVB receives a great rating from the finance profession a month before it fails. What ever happened to fiduciary responsibility and shame for not being good at your job?

@bigworld6788 Год назад

Yep! Feels like those doing the ratings may be in on the con… A key portion of the strategy to placate the sleeping public - so the general public is lulled into a false sense of security. 🧐

@4doorsmoorhoors542 Год назад

Same thing happened in '08 widespread. Everything was rated AAA

@DegenerateSpeculator Год назад

I wish they would do a video on "Sheltered Harbor" its a bank backup program for participating banks. Basically will keep a record if they ever go offline with say, a cyberattack 😊

@jonathanlee5185 Год назад

@@DegenerateSpeculator Thanks that's interesting to know. The idea of a cyber attack or network malfunction is worrying. And yes, therein is a topic which warrants a whole Wealthion episode.

@__-pl3jg Год назад

Yea, I had to roll my eyes when they showed the Weiss rating web page. Those ratings are a gimmick.

@DanielleParkpodcasts Год назад

Adam, margin accounts raise different concerns where firms can rehypothecate (repledge) client assets for their own levered investments. This was how customers of MF Global lost assets to JP Morgan. Bears a discussion.

@llee8325 Год назад

EVERY ACTION TAKEN BY CORZINE WAS CRIMINAL . The funds he send to London to be rehypothecated, and many times. Corzine had 90% of his business in Futures, and 10% in securities, so his case wasn't even heard in the right venue.

@PatrickMcKim-k9t Год назад

I doubt his "lockbox" analysis is correct. Stocks are held in "street name," and can be loaned out for many reasons, particularly short selling. So this isn't like the old days when you got your own stock cert and it was yours. The other thing this didn't answer was that if someone is short and holding cash and something happens, how is that handled. I don't feel this guest was particualarly sure of his answered. He didn't give me the "warm and fuzzies." The street name issue is big.

@mikeyb5591 Год назад

Typically, if you have a margin account then they can use/lend your shares. If you have a cash account then, typically, you have to agree to a securities lending program. The details will be in your firms account agreement.

@ExtraordinaryLiving 7 месяцев назад

Hmmmm, I wonder whether you guys have heard of David Rogers Webb, or have read his book 'The Great Taking' ........ 🤔

@realestateinfonet9041 Год назад

Very informative & helpful. Thanks!

@ralphdary4182 Год назад

It's called. "S.I.P.C." Security Investors Protection Corporation. Tweeked extremely rare. Been around some day for a century. Others say 44 years. I say the last one. Private individuals say the first. It for the Privailaged few. (Those of us that are indeed Privailaged know)

@cfischer137 Год назад

Not entirely true about FDIC insurance. If there was a massive nationwide bank run, the FDIC would only be able to backstop about 20% of everyone's holdings.

@chuck9210 Год назад

Do you plan to interview Brent Johnson again soon? It would be nice to see an update.

@jimplo1686 Год назад

If for example I am holding a Schwab mutual fund or money market account and Schwab goes under, what happens to those investments?

@macroeconomit7194 Год назад

Sipc covers 500k w/ FDIC 250 k held in cash in a brokerage acct. Total 750k right ? That's how I'm set up with different companies

@JR49300 Год назад

My two favorite RU-vid shows for investing . Rob Berger is the best and wrote a great book called retire before mom and dad .. much integrity…

@megret1808 Год назад

Do investment banks practice fractional reserve banking? If so, how leveraged are they?

@mint-tedpreciousmetals7735 Год назад

The majority of people worry too much!! Educate yourself and research. Take control of your currency. Diversify into many areas after educating yourself. That is all you can do 😂. Then enjoy your life! The deeper you dig, the more questions there becomes. All of which are often unanswerable anyway and may never occur!

@garygoldstein6023 Год назад

Some Weiss ratings are not current enough

@David-os9ej Год назад

So I have T-bills that mature in excess of 250k. Where does the money go in my Schwab account? Am I vulnerable for the period between maturity and the date it is reinvested into another security?

@freebird0147 Год назад

Holy cow, Rob Berger. I watch him weekly on MOnday nights at 7pm. It's awesome that you got an interview with him

@mrrazr8079 Год назад

This cleared up some uncertainty, Thank You! The only problem with so many people breaky the law, fraud included, no one is going to jail. Will we really be protected? The SEC is being investigated and nothing will be done.

@mickbadgero5457 Год назад

Signature wasn't even in trouble, so they can close any bank.

@brennanjones9292 Год назад

Why do none of your guests address the 3 types of stock ownership? Street registration Direct registration Physical certificates This is really important information for investors to know!

@jeffreyVB Год назад

Yes. It would be great if you could have a guest that can answer this question!

@mikeyb5591 Год назад

You can order certificates from the major brokerages but they are typically a few grand per stock

@pablomalaga4676 Год назад

Lehman was rated AAA 1 week before bankruptcy

@StockGenius152 Год назад

What happens to stock options held in a brokerage? What happens if the options expire while you don’t have access to trade?

@ronsilva7394 Год назад

That Rom comic back there is worth a pretty penny , well done !

@natalieoj3078 Год назад

If this if that no one really knows basically we have to do what just feels right

@brandonbaker5884 Год назад

The money is secure. What you can buy with your money is the rub. When a cup of coffee cost $30 it won't matter.

@johnbeeck2540 Год назад

Rob Berger is awesome!

@MattieXMoto Год назад

Easy...even more so, the brokers and clients would be bailed out. If svb depositors got bailed out there is 1000% chance Fidelity et al would all be backstopped

@mwallm5906 Год назад

SVB got bailed out because of politics. Several clients of SVB are reliable Democrat party doners.some are major doners. Some clients are politicians or have political connections. Example is Gov of CA, who is related to pelosis husband, had three of his wineries businessfunds in SVB and has or did have personal funds in SVB. His wife runs charity type business and got 100k donation from SVB and SVB president was on board of that entity. Yellen said clearly no one else will get this bailout of all deposits.

@Redeemed_marine_69 Год назад

I would not be so sure of that.

@michaelfitzgibbons2739 Год назад

Is it legal for insurance companies to insure against illegal acts?

@secretariatgirl4249 Год назад

Schwab as of Q2 is rated F, poor, for capitalization at depositaccounts (below)..other ratios are OK,overall B+

@bigworld6788 Год назад

Thanks so much for sharing! Would you be willing to share your source? I’d like to check on another firm.

@DeAdBiGeYeFiSh Год назад

Adam, I have a guest suggestion: Ben Felix and/or Cameron Passmore, from PWL Capital. They have a podcast called "Rational Reminder". I think it would be interesting to discuss active vs passive investing in the past, present and future, how it interplays with financial advisor services, and knowledge of practitioners vs academics. In my view, they have a reasonably different view than your usual partners and guests on those aspects, which I find quite interesting.

@bigworld6788 Год назад

Thank you for suggesting this! I support this recommendation!!

@niveajones6400 Год назад

Answer: Maaaybe! But also, maybe not.

@flynnrobert3357 Год назад

I recently made more purchase. Saving money for a market downturn is likewise a bad idea. There are numerous ways to look at reccesion and depressions, we cannot always expect to make large returns, and taking chance is better than doing nothing. The bottom line is that you will achieve remarkable result by diversifying your portfolio raw earnings rose by $608k in just 5 months

@flynnrobert3357 Год назад

Sure, the investment-advisor that guides me is Camille Anne Hector, she popular and has quite a following, so it shouldn't be a hassle to find her, just search her

@llee8325 Год назад

9Here starts the "my advisor made me 500% on my money" reference advisor scam, followed by "she's on TG, here her handle" rap. These scam narratives are ALL OVER YT. BEWARE OF THIS CRAP.

@cryptowithravenhawk Год назад

what if a small cap bank goes under and it is the Trustee of an estate?

@JP5466 Год назад

Took it ALL out during covid when the 10% penalty was waived. Free and easy sleep.

@BitsyBee Год назад

Then what do you do with it? Is anywhere safe?

@toddbrown417 Год назад

@@BitsyBee gold and silver

@ryanyoung8663 Год назад

@Katherine treasury bills is the safest it gets OR buried in a bucket in your yard but that's when other things are even more problematic

@bigworld6788 Год назад

@@ryanyoung8663 How can treasuries be safe if the US is bankrupt - serious question, not being snarky. I very much appreciate any perspective you can share. Thanks for your time.🙏💖

@showandtell4265 Год назад

I looked at financial statements of the private insurance company cudic covering credit unions in canada... 800 million total assets.... 4 ish million accounts estimated in credit unions. Good luck.... If trust is ever lost.

@CaptTony107 Год назад

Are bank Money Market accounts/CDs FDIC insured? I hear yes, then I hear no.

@bigworld6788 Год назад

I’ve heard a MM account (treated like a savings account product) is FDIC insured but a MM fund (treated like a mutual fund product) is not

@macroeconomit7194 Год назад

Sipc per account per person

@rachelflaat3817 Год назад

As a side note, this is exactly what happened to my account at TDAmeritrade, now being transfered over to Scwabb.

@santonucci Год назад

So, if you hold a large cash position, can you buy US Treasuries and protect that during the chaos? Are US Treasury positions treated as "things in the filing cabinet" that just get moved?

@ask_why000 Год назад

Yeah,but with Lehman the regulatory agencies didn't have to pay, because the US taxpayer "graciously" agreed (?) to pick up that tab.

@ask_why000 Год назад

"Very rare" or the government is not doing their job. Also, individual investors don't own their shares outside DRS. Cede & Co. owns everything.

@SergeY-cg9dp Год назад

2 min in and already learn. Thank you!

@Anza_34832 Год назад

@7:53 “Shares are segregated assets…assuming no fraud…remain yours in case of the brokerage going bankrupt.” This applies to all ‘earmarked’ assets as those are kept separate from the brokerage’s assets. It’s similar to a safe deposit box.

@erichammond2466 Год назад

It's not money it's currency...money is a store of value.

@gabrielw7773 Год назад

My money follows the money printer and who has the money printer. I buy Treasuries.

@utpharmboy2006 Год назад

i agree. best house in a bad neighborhood.

@gabrielw7773 Год назад

@@utpharmboy2006 Most resistance to failure. If the gov't fails then we got worse problems to worry about than ones money. I won't care about my cash if the gov't fails. I need physical gold then and an escape plan and some lead.

@VangelVe Год назад

If you have a margin account, you become a creditor because all of your assets are mingled with the broker's assets. Registered accounts SHOULD be fine. But as long as the records at the transfer agents are fine.

@rd9102 Год назад

This dude has a Graded ROM comic in the background...something i never thought i would see in a finance channel. Kudos to him, not a huge ROM fan but i remember the comic from when i was a kid. Great information too.

@medwayhistory3101 Год назад

Anybody have thoughts on how wealthsimple trade stands up in Canada? Right now with TD but tempted by no commission on buys and sells.

@MrMilanoLau Год назад

What would happen if I kept my stocks in the Direct Registration System (DRS) and the transfer agent went under?

@audiophileman7047 Год назад

Thank you for this important video, Adam. 👍👍👍 An important consideration is how much of a bank and credit union's deposits are insured by the FDIC and NCUA. If most deposits are insured, then the likelihood of a run and failure would be very low. SVB was very risky because most of their deposits were uninsured. If you can find this insured bank deposits information, you will have a good idea about the bank or credit union's stability.

@greypawn7780 Год назад

what would happen to my IOUs / FTDs which practically never existed ?

@cyruschadrezzar Год назад

the most destructive and disruptive species on Earth. who says Karma doesn't exist?

@bizzzzzzle Год назад

I ❤ Bob’s content, looking forward to the interview!

@algreen273 Год назад

We did not ask about banks now did we, ... so can we get a straight freaking answer...

@mattanderson6672 Год назад

Brilliant interview!! Thank you !!

@karlbecker7511 Год назад

If you have valuables in a safety deposit box at a bank and it goes insolvent, can you recover the contents from the bank?

@stephenjones5465 Год назад

@FBICIA-j8j Год назад

Thanks! I was waiting for this video.

@bigworld6788 Год назад

Thank you very much for sharing this. In a similar vein, would you be able to discuss the situation with annuities held by insurance companies?

@nlajeunesse3211 Год назад

Qtrade & Questrade

@vincentmurphy9252 Год назад

Should I bail Out of Schwab?

@omglivetv1 Год назад

RObinhood?

@merlinwizard1000 Год назад

40th, 14 April 2023

@rachelflaat3817 Год назад

Always timely as usual 👌

@pascalcharpentier1713 Год назад

PRICELESS INFORMATIONS ADAM !

@ShamileII Год назад

Great information! My dad actually watched this then told me about it. We're both with Schwab brokerage and above the SIPC limits...but not concerned given the file cabinet/ safety deposit box analogy.

@USGrant21st Год назад

"safety deposit box analogy" is simply wrong. If you have a margin account the broker will likely use your cash to lend it to those who go on margin and use your stocks to lend to short sellers. Check your agreement. Broker doesn't report those activities in 1099-B, only the totals, but partnerships do. Last year in one particular stock, which I didn't trade, I received K-1 with trades listed happening every trading day. So there is a risk of cash/stock borrowers defaulting on their obligations, and if that amount surpasses the insurance limit, that becomes your losses.

@defyingfinance9882 Год назад

We are dealing with sweeps constantly at work right now. Every one of my properties in my portfolio are getting swept into money market accounts throughout every single day, depending on the expenses and income of the properties.

@tonylochner4730 Год назад

Schwab said to me, CASH is vulnerable.

@bigworld6788 Год назад

Whoa!

@kengaroo5170 Год назад

Keep it in stocks or options.

@stephenling3858 Год назад

Yes

@lambertois11 Год назад

Do you have an account with a margin with a broker? Did you know that when you have an account with a margin, all the assets in your margin account become a collateral for your margin? Did you know about rehypothecation? Rehypothecation means that the broker can use the asset you have posted as collateral, for their own purposes: like making a loan and post your assets as collateral. If the broker cannot repay their loans, then you just lost the assets in your margin account!

@wildandwooly Год назад

All you really NEED to know is that FDIC is way undercapitalized and you can lose everything, regardless of the size of your bank, if the bank runs reflect a failing economic cataclysm. That's why you need gold in your possession.

@labraham98 Год назад

Even if the FDIC has 0 capitalization you won't lose a penny if you have less than 250k. The FDIC will get bailed out as the Govt will do anything to protect the banking system. The reason you want to hold some gold is because all fiat currencies lose value over time due to excessive money printing. Likewise you shouldn't worry about whether or not you will receive social security. You should however worry about the value of the dollars that they use to pay your social security check

@rr2b Год назад

Thanks a lot, this was very helpful!

@user-99.99 Год назад

Rob has a great channel with tons of awesome content. Can’t wait to see the full interview.

@darrendemme Год назад

Curious what happens, for example, to a Fidelity fund if Fidelity goes out of business.

@theearlyyardbird Год назад

The assets are still there, probably would be sold and reimbursed to mutual fund holders or sold to another management company. Fidelity has SIPC insurance and excess SIPC insurance "that protects stocks, bonds, and other securities in case a brokerage firm goes bankrupt and assets are missing."

@entanglemententropy6227 Год назад

Very imortant topic to cover. Excellent discussion. Brokerages hold your stocks and bonds in what is called "street name" as opposed to "clinet name" which means the brokerage is legal owner of all your assets. Unfortunately this important distinction was not discussed.