We have chosen to maintain our custodial relationship with First Clearing (an affiliate of Wells Fargo). As required by the SEC, First Clearing keeps client funds in a separate account distinct from the firm’s own money. Securities held by clients are held securely with the Depository Trust Company, separate and distinct from First Clearing’s assets. First, Clearing is required to identify and segregate securities by client.
As a member of the Securities Investor Protection Corporation (SIPC), it protects clients against the custodial risk of a member investment firm becoming insolvent by replacing missing securities and cash up to $500,000, including up to $250,000 in cash, per client in accordance with SIPC rules. An explanatory brochure is available at www.sipc.org.
In addition to SIPC, First Clearing maintains additional insurance coverage through London Underwriters (led by Lloyd’s of London Syndicates). For clients who have received the full SIPC payout limit, First Clearing’s policy with Lloyd’s provides additional coverage above the SIPC limits for any missing securities and cash in client investment accounts up to a firm aggregate limit of $1 billion (including up to $1.9 million for cash per client.)
