Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: SIPC insurance?
Old 11-29-2006, 03:37 PM   #41
Full time employment: Posting here.
 
Join Date: Sep 2003
Posts: 902
Re: SIPC insurance?

Quote:
Originally Posted by bpp
It is trivially easy to do something about it -- simply keep some assets somewhere else.
Is it really as trivial as that?

I'll quote justin up-thread:

Quote:
re: costs - let's say splitting the money in two at vanguard and elsewhere means you can't get into the admiral funds and save the 0.1% in expense ratio. That's $1000 per year on a $1,000,000 portfolio...
While you could probably conserve some of those savings, you'd likely give up a fair amount of them. Add to that the costs associated with passing on Flagship perks. Add additional costs associated with funds with higher ERs than Vanguard's investor shares. Add potential account fees that Vanguard waives.

Plus, the OP references a 1.2M portfolio. To remain under the SIPC limits he'd need to split into at least 3 companies - $400,000 each. In a bull market he'd hit $500,000 very quickly - now he needs to transfer a chunk from each of the three companies (or two, or one - gotta keep on top of that) to a fourth company. Or maybe one has tanked enough to handle the excess, but shortly after you get the assets transfered in, that company's holdings shoot up and now you've got to take some out. All the while you're trying to maintain some semblance of an asset allocation while juggling accounts at four separate companies with the intent of staying under $500,000 limit. Transfer forms. Mailbox clutter. More 1099s to deal with at tax time. An avalanche of paper to sort through and file.

Not trivially easy at all, IMO.
__________________

__________________
Bob_Smith is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: SIPC insurance?
Old 11-29-2006, 08:56 PM   #42
Full time employment: Posting here.
 
Join Date: Mar 2005
Posts: 699
Re: SIPC insurance?

Quote:
Originally Posted by Bob_Smith
While you could probably conserve some of those savings, you'd likely give up a fair amount of them. Add to that the costs associated with passing on Flagship perks. Add additional costs associated with funds with higher ERs than Vanguard's investor shares. Add potential account fees that Vanguard waives.
I don't know what Flagship perks entail, but you could, for example, convert some of your Vanguard mutual fund shares to VIPERs shares for a $50 fee and gain instant access to Admiral-level ERs that way. Then transfer the shares in kind to another broker. No taxable events.

Quote:
Plus, the OP references a 1.2M portfolio. To remain under the SIPC limits he'd need to split into at least 3 companies - $400,000 each. In a bull market he'd hit $500,000 very quickly - now he needs to transfer a chunk from each of the three companies (or two, or one - gotta keep on top of that) to a fourth company. Or maybe one has tanked enough to handle the excess, but shortly after you get the assets transfered in, that company's holdings shoot up and now you've got to take some out. All the while you're trying to maintain some semblance of an asset allocation while juggling accounts at four separate companies with the intent of staying under $500,000 limit. Transfer forms. Mailbox clutter. More 1099s to deal with at tax time. An avalanche of paper to sort through and file.
Ok, then just split it into two companies, 600k each. Now you at least have most of your assets under SIPC cover, and you wouldn't be sideswiped by your broker blocking your domain name or by penny-stock pumpers hacking into your single account. Expand beyond that only when and if you feel the need outweighs the extra paperwork burden.

Quote:
Not trivially easy at all, IMO.
It can be as easy or as complicated as you have the tolerance for. All I'm saying is that it is not crazy to consider it.
__________________

__________________
bpp is offline   Reply With Quote
Old 12-12-2009, 12:49 PM   #43
Thinks s/he gets paid by the post
 
Join Date: Nov 2009
Posts: 3,871
I know this thread has been dormant for over 3 years, but I did a search for "SIPC" and read through this big one. (I am a new member to this FIRE forum.)

Because of this year's bull market, I have pierced the $500k cap in my main taxable account (to about $600k now). I also have an IRA with the same brokerage house but according to SIPC rules that account is subject to its own $500k limit so it is totally protected (it is just under $300k). I have a small taxable account at another brokerage house so it is protected, too.

I also read the post someone made about Fidelity (my main brokerage house) buying additional insurance to protect its investors so I feel better about that.

I did appreciate the lively discussion in this thread even if it wandered a bit.
__________________
scrabbler1 is online now   Reply With Quote
Old 12-12-2009, 04:19 PM   #44
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,502
Quote:
Originally Posted by Dawg52 View Post
Below is Fidelity's response to the 500k SIPC insurance cap. Seems reasonable to me.

The Securities Investor Protection Corporation (SIPC) protects customer accounts up to $500,000, with a limit of $100,000 for cash balances. In addition to the portion protected by SIPC, Fidelity purchases additional coverage from the Customer Asset Protection Company (CAPCO) to cover the remaining net account value. This additional coverage is called Excess SIPC Coverage. CAPCO, a licensed New York insurer, has received an A+ financial strength rating from Standard& Poor's.
Fidelity also has a customer guarantee that protects you in the event that a hacker breaks into your account.

Almost all of our assets are in accounts at Fidelity. I think they have provided us adequate protections, so I enjoy the convenience.

Audrey
__________________
audreyh1 is online now   Reply With Quote
Old 12-12-2009, 04:34 PM   #45
Thinks s/he gets paid by the post
 
Join Date: Apr 2007
Posts: 1,304
Quote:
Originally Posted by brewer12345 View Post
I think that you would be better served by spending the time and money to put a meteorite deflector on your car rather than opening new acccounts to stay under the SIPC limits. D
So your saying, ... if I have the deflector up already, then I should start working on spreading for SIPC limits then?
__________________

__________________
Life is GREAT!
megacorp-firee is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Life Insurance... bamboogrrrl Young Dreamers 20 08-09-2007 09:45 AM
Fed employee life insurance ats5g FIRE and Money 2 10-10-2006 11:44 PM
Going bare on insurance... SecondCor521 FIRE and Money 44 09-21-2006 12:25 PM
The book, The New Health Insurance Solution Martha FIRE and Money 20 05-15-2006 11:16 AM
Bad news insurance bill Martha FIRE and Money 6 05-08-2006 10:37 AM

 

 
All times are GMT -6. The time now is 01:00 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.