You don't need a broker to own ETFs, you need a broker to buy them. As long as they are in your name (not 'street name') in a cash account (not a margin account), they are yours regardless of whether the broker goes bust or not. Remember to keep electronic and paper copies of the purchase note, and your account statements, in at least 2 physically separate locations, so you can prove ownership in the event of liquidation, brokerage records being hacked or wiped etc.
I own a great deal of money in DIA, SPY and QQQ, all I get from IB are electronic statements. Never seen a stock certificate or physical proof. Since we are on the topic, are the CME futures also as safe? FoN
Someone said Etrade provides extended FDIC so you can have accounts over $250k that are safe. What diff does extended FDIC make when your account is SIPC insured which is only up to $250k cash?
IB has Lloyd's excess SIPC insurance up to $30 million and is one of the safest there is. http://www.interactivebrokers.com/en/p.php?f=ibgStrength&p=a Over a million dollars you can have them buy t-bills for you and use them to satisfy margin so that would be further protection.
Imagine having to bail out every customer or most, there would not be enough in the global limits to support them. FoN
True, it is mainly going to be of use in the case of isolated problems. I think all such policies will have global limits though. Theoretically the best thing would be to deposit T-Bills instead of cash. IB requires USD one million before they will accept them. Some other brokers will accept t-bills in any account size.