Online Brokerage Firms Safety

A year or so ago, I opened an online brokerage account with Interactive Brokers. Buy and hold investor, mainly investing on US and European ETFs with some small positions in US tech companies. So I would say a couple of trades per quarter. And the reasons I chose IBRK is because of the really low fees and the fact that they are recommended by the majority of people.

I now have a sizeable amount (>150k USD equivalent) with IBRK, and even though I know that they are relatively safe and it is not really that much money for them, I do not feel ok with having all my eggs in one basket. So I was thinking about opening a new online brokerage account for the new deposits, mainly to hold long term EUR denominated US and European ETFs.

  • Which alternative is recommended? I was thinking either about Saxo Bank or IG.
  • What happens in case a brokerage goes bust? Are your shares/ETFs protected? And how about the cash lying there? I read somewhere that the limit of SIPC protection is $500,000, which includes a $250,000 limit for cash. Does this include residents outside the US and cash deposits in other currencies?
  • Would you recommend the UBS/PF brokerage services? I know they have insane fees and maybe a limited selection of products, but I guess security comes at a cost (if you consider them secure, given the recent CS fiasco).

From what I understand with Swiss banks securities (shares, bonds, maybe ETFs as well?) are yours, even if the bank goes bust they can’t take them for you. Only cash held by the bank is “protected” up to a certain amount



Take a look at Backed by the Basel Kantonalbank and offering fees well below standard Swiss investment funds…

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