Asset Safety

With so much current uncertainty, you may be wondering how safe your investment assets are. As a preliminary selection process, we only use custodians that we are confident have very little risk of insolvency. But even in that extremely unlikely event, there is virtually no exposure for client assets.

Securities held in client accounts at custodians are held by the Depository Trust Company (DTC) which is a member of the US Federal Reserve System. It is a limited-purpose trust company under New York State banking law and a registered clearing agency with the Securities and Exchange Commission. Custodied client securities are kept separately from a custodian’s own assets and are not subject to the claims of the custodian’s creditors.

In the event of a failure of a custodian, a new trustee will be assigned to handle the reconciliation and distribution of securities at the DTC. The Securities Investor Protection Corporation (SIPC) provides up to $500,000 of protection for each account, if the securities are missing due to fraud or the simultaneous failure of a firm that had borrowed securities from the custodian. This borrowing can only happen for individual securities (not mutual funds) held in margined accounts.

The custodians we use also carry additional insurance protection for accounts in the event that SIPC limit is exhausted.