Sipc coverage needs to go to 1.8m

Discussion in 'Trading' started by KINGOFSHORTS, Jan 17, 2012.

  1. Calculating inflation since it was initiated. Sipc at 500k is a joke. It is too low and makes it a pain in the ass to deal wit your investments. I have to have 3 accounts with different brokers to work. Now it's not too bad since I trade options not day trading.

    But even for a regular retirement account 500k just does not cut it.

    Why is sipc still so low compared to what inflation dictates?
  2. Deal with the rules and continue opening multiple accounts if you have to.
  3. TD80


    There is a point where the hassle will be worth making a call to Lloyds (or equivalent). They have both crime and default insurance options. Still a good idea to have your eggs in a number of baskets (globally) as well though...
  4. rmorse

    rmorse Sponsor

    I agree. Even though SIPC is only meant to be a back stop to offer a basic safety to provide confidence to the system, I think $1MM would be a better target. SIPC could easily accomplish this. For many years SIPC has been well funded, so dues to SIPC members has been kept very low.
  5. agree the amount should rise; the Canadian Investor Protection Fund is C$1M
    and additionally covers All types of brokers, stock, futures, forex, etc


    there still remains the bankruptcy problem, that if not scooping client funds, can
    hold up the return of clients funds during very lengthy proceedings

    client funds should be segregated out of bankruptcy and Not be subject to creditor
    actions that are against the broker/company, not the broker/company clients
  6. Any other good options other than lloyds for additional insurance?
  7. rmorse

    rmorse Sponsor

    Just so you understand, you don't buy the extra insurance, the brokerage firm does. It does not cover your account directly, it covers the accounts in general.
  8. slumdog


    You can buy it individually too, just to provide cover for your own account, normally from the same insurance firm that provides it to the broker.

    The broker wide insurance will probably have a limit across all accounts. By having your own, you could set an exact insurance limit for your own account.
  9. rmorse

    rmorse Sponsor

    That's not my understanding. Can you provide me with a link to a service that offers direct excess SIPC? Have you ever done it yourself?
  10. slumdog


    IB rep once posted on ET, that if anyone is serious about doing this he can put them in contact with the right people at Lloyds.
    #10     Jan 19, 2012