What SIPC Does and Does Not Cover

Brokerage accounts carry Securities Investor Protection Corporation (SIPC) protection of $500,000 per customer per firm, of which $250,000 may be cash. Understand precisely what that insures: it replaces securities missing from your account because the broker failed or stole them. It is custody insurance, not investment insurance. It does nothing about a security that simply went down, and nothing about bad advice. Most large brokerages carry supplemental private coverage well above the SIPC limits; ask for the certificate rather than assuming it. Compare FDIC coverage, which is a different mechanism entirely (section “FDIC Insurance Optimization”).