SIPC (Securities Investor Protection Corporation)

SIPC was created by Congress in 1970 and is funded by member broker-dealers. If your broker goes bankrupt and your securities are missing, SIPC covers up to $500,000 in securities (including up to $250,000 in cash). It does not protect against investment losses; if your stocks drop 50%, that is your loss. Most major brokers (Schwab, Fidelity, Vanguard, Robinhood) carry additional ‘excess SIPC’ insurance through Lloyd’s of London or similar, often into the tens of millions.