As an investor, it's important to know how your assets are protected. When you open a Wealth account, your holdings are safeguarded by the Securities Investor Protection Corporation (SIPC). This protection kicks in if a broker-dealer fails and ensures that you don’t lose your investments due to the firm’s financial troubles.

SIPC covers up to $500,000 per account, which includes a cash sublimit of $250,000. This means that if a broker-dealer fails, SIPC will reimburse you up to these limits.

In addition to SIPC protection, our brokerage firm, Alpaca Inc., provides excess SIPC coverage through underwriters at Lloyd's of London. This extends protection up to $30 million per account, with a cash sublimit of $900,000. Note that this extended protection is subject to an aggregate limit of $150 million across all accounts.

This insurance applies if a broker-dealer becomes insolvent and can’t return your securities or cash. However, it’s crucial to remember that this insurance does not cover losses due to market fluctuations. If your investments decrease in value due to market conditions, SIPC insurance does not protect against that. Additionally, futures and options on futures are not covered by SIPC or excess SIPC insurance.

To dive deeper into SIPC insurance, what it protects, and its limits, check out these helpful resources: