Covering Your Assets: Part 2 – SIPC

Welcome back to Part 2 of Covering Your Assets. As we touched on last week, many of our clients have asked the question of how their assets are covered. While the topic is nuanced, we wanted to provide you with some information regarding the two types of insurance: FDIC (Federal Deposit Insurance Corporation) and SIPC (Securities Investor Protection Corporation). Our email last Thursday, April 20th 2023 covered FDIC. You can read it here, if you missed it.

SIPC protects against the loss of cash and securities – such as money market, mutual funds, stocks, and bonds – held by a customer at a SIPC-member brokerage firm. SIPC does not protect against the decline in value of customer securities (ie. due to market fluctuations). There is no requirement that a customer reside in or be a citizen of the United States; however, the customer must hold their funds at a SIPC member brokerage firm and should understand the coverage as it pertains to investment type and registration of the account.

Securities

The following are examples of securities which are insured by the SIPC**
  • stocks
  • bonds
  • Treasury securities
  • certificates of deposit
  • mutual funds
  • money market mutual funds
  • certain other investments as “securities”

*The amount of FDIC Insurance coverage you may be entitled to depends on the registration of the account. We sent out an email last week that covered FDIC insurance and how it works .

**The amount of SIPC insurance depends on the registration and number of accounts you have. Below is a more detailed explanation of this.

Registrations

All of the following account registration types are insured up to $500,000 including a $250,000 limit for cash only. If someone has multiple accounts with the same registration, the account totals are combined for the purposes of SIPC protection limits.

  1. Individual Accounts
  2. Joint Accounts
  3. Trust Accounts
  4. Pension Plan Accounts
  5. Corporate Account

In addition to SIPC, Schwab clients receive an extra level of coverage through “excess SIPC” insurance protection for securities and cash. This helps ensure claims will be covered in the event of a brokerage firm failure and funds covered by SIPC protections are exhausted. Schwab’s Excess SIPC program has a $600 million aggregate (meaning the most the program will pay for the Excess SIPC portion of the losses). Commodity interests, futures contracts and cash in futures accounts are not protected by SIPC.

Learn More

Market Update

The heaviest week of this quarterly earnings period has prompted a mixed response from investors, resulting in a muted performance from the indices. Although Q1 GDP (Gross Domestic Product) results came in lower than expected, the robust labor market has helped maintain investor confidence for an additional rate hike at the next Federal Open Market Committee (FOMC) meeting. Currently, the futures market indicates an 85% likelihood of a 25-basis point increase. For the week, the S&P 500, Dow Jones Industrial Average, and Nasdaq are all up 0.14%, 0.14%, and 0.69%, respectively, as of today’s close.

Schedule a Review

We encourage you to use our new scheduling service to book your next meeting with your Wealth Manager. Click your Wealth Manager’s name below to schedule via Calendly.

Rhonda Ducote, AIF®
Harmon Kong, CFP®, AIF®
Landon Yoshida, CRPC®, AIF®
Christopher Whitaker, CFP®, AIF®
Joshua Garland, ChFC®, AIF®

Have a wonderful week,

Rhonda Ducote, AIF®
President

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Disclosures:

Advisory services offered by Apriem Advisors (“Apriem”), a registered investment adviser with the United States Securities and Exchange Commission in accordance with the Investment Advisers Act of 1940. Any reference to or use of the terms “registered investment adviser” or “registered,” does not imply that Apriem Advisors or any person associated with Apriem Advisors has achieved a certain level of skill or training. Apriem Advisors may only transact business or render personalized investment advice in those states and international jurisdictions where we are registered, notice filed, or where we qualify for an exemption or exclusion from registration requirements. For complete information about our firm, please refer to our Form ADV Part 2A, 2B and CRS at any time.

The information provided in this report should not be considered a recommendation to purchase or sell any particular security. There is no assurance that any securities discussed herein will remain in an account’s portfolio at the time you receive this report or that securities sold have not been repurchased. Past performance is no guarantee of future results. The reader should not assume that investments in the securities identified were or will be profitable.”

Apriem Advisors is not affiliated with Charles Schwab & Co. Their company name, logos, their staff and representatives do not imply endorsement for Apriem Advisors.

The S&P 500 Index is a free-float market capitalization weighted index of 500 of the largest U.S. companies. The Dow Jones Industrial Average, or DJIA, is a price-weighted index that measures the performance of 30 large publicly-owned companies in the U.S. The NASDAQ Composite Index covers more than 2,500 stocks in The Nasdaq Stock Market. All index data is reported on a total return basis, which includes dividends. One cannot invest directly in an index, and index returns do not reflect the deduction of advisory fees, brokerage or other commissions, and any other expenses a client would have paid, and that these expenses would negatively impact performance.

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