02-02-2018, 10:52 PM
(02-02-2018, 07:00 PM)Caversham Wrote:(02-02-2018, 02:19 PM)Kerim Wrote:(02-02-2018, 01:13 PM)Caversham Wrote: I'm hesitant to move money into this account as I would probably be hitting SIPC limits within a ~5 years.
Surely the big firms have figured a way around this? Hard to imagine they'd just sit by and watch every client with more than $500k take the excess elsewhere?
I believe most brokerages have extra insurance in addition to SIPC.
However, my concerns are larger than just SIPC. Primarily, a single broker means a single point of failure. What if there is another financial collapse and the company providing that extra insurance goes bankrupt and can't pay? What if there is an asset run and my single broker freezes all asset withdrawals for a prolonged period of time? etc.
Those concerns might be a little tin-foil hatty, but it makes sense to me to diversify brokerages for the same reason we diversify stock holdings.
I don't think it's paranoid at all.
There are a million things that could happen.. now I don't think you'll be at a risk of losing your money as long as it's covered by a government that isn't completely broke... (for the US guys.. who knows about yours :p )
But having access to your money is another thing. Cybercrime is getting bigger and bigger, a lot of options there to cause delays. What if the broker does go bankrupt? Yes the government will give you back your money... but when? I don't know if there are any rules but I can bet it's not the day after.
I currently don't have to worry as all my accounts are well below the levels covered by the appropriate government. But if I ever do start to get to those levels, then it's pretty much time to open a secondary account. And even now I have bank accounts in two different banks... again I'm not worrying about losing the money, rather about not having access to it for a number of days.
Next step is to have both a visa and mastercard in my wallet, because it's a pain in the ass when one doesn't work. :p