Don't Put Your Eggs Into One B -

100percent of my liquid net worth with 1 broker, two accounts. One PM and one reg t. Reg t account is a legacy account and is now used as kind of escrow for cash that needs to out.

having multiple accounts adds a lot of bookkeeping work and is capital inefficient in my opinion.

 

Up until the time your broker fails. Unlikely and yes you are covered by insurance, but your money could be sitting for a year or two.

 

Exchanges can fail.
Clearing houses can fail.
Brokers can fail.
Banks can fail.

It's a matter of controlling your risks vs the hassle to do it
How much hurdle and inefficiency do I want to support in order to be covered?

 

I thought of using more than one but I realized I might not have the time to focus on both.

 

brokers can fail in theory and practice. But not one failed in the gfc. And not one investor couldn’t manage their money during it.

And like when a bank fails, the fdic will force a merger to protext depositers (deposits are highly sought after), same with AUM.

I am talking legit brokers: Schwab, Etrade, interactive, td amertrade, merril lynch, fidelity. Not fcm’s and certainly not bucket shops.

 

Off course it can't happen, too big to fail, government oversite, etc. But what if it did?

 

Did you build an underground bunker just in case?
No, but what if?

Do you keep your money under your mattress?
No, but what if?

Do you sleep with a loaded gun besides your pillow?
No, but what if?

If you open accounts with 2 different brokers, why not a third one, again, just in case the first two fails?

But hey, nobody forecast that the twin towers would collapse!
Nobody forecast the Covid pandemic and all its impact!
Nobody forecast that the crude oil contract would trade at a negative price!

 

And ofcourse, aliens landing.

~Just saying~

 

I guess you guys are not traders but rather investors. Many time for many reasons I have not been able to contact one of my brokers and have resorted to using my back-up.

I'm not saying you'll lose everything, only that your capital may be tied up outside your control while whatever agencies sort out the mess.

FWIW I have 4 different brokers. Nice to have the flexibility. Each have different features and tools I make use off.

 

Day trader here, for many years, fully automated.
I've never experienced any serious connection problem preventing me from trading.
I don't know.
Maybe it's just me being lucky, or using the right broker.