Broker Check

Account Protection

Both National Financial Services, LLC and our Broker/Dealer are members of the Securities Investor Protection Corporation, (SIPC), which was created in 1970 to protect customers of member Broker/Dealer firms in case of Broker/Dealer liquidation. A non-profit membership corporation, SIPC is funded by Broker/Dealers, and protects its membership by law. To cover assets such as yours, the SIPC fund is supported by a $1 billion line of credit with a bank consortium, and has borrowing power of up to $1 billion from the U.S. Treasury through the SEC.

Because the Securities Investor Protection Act of 1970 affords special benefits to SIPC-covered firms such as National Financial Services, LLC, our agreement with National Financial Services, LLC provides your assets a high level of coverage. Securities in accounts carried by National Financial Services, LLC are protected in accordance with the SIPC up to $500,000 (including cash claims limited to $250,000).

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Within certain limits, SIPC coverage applies to both investor securities held by National Financial Services, LLC and cash on deposit that will be used to purchase securities, or that has been generated from the sale of securities. This SIPC coverage protects your assets in the unlikely event that National Financial Services, LLC should fail to meet its obligations, but this SIPC coverage is separate from the SIPC coverage that is available should our Broker/Dealer fail to meet its obligations. It does not protect against a decline in the market value of your securities.

When analyzing your SIPC coverage, you should consider the following additional facts:

  •         The maximum SIPC coverage for covered amounts is $500,000.
  •         For claims filed on or after July 22, 2010, the $500,000 total amount of SIPC protection is inclusive of up to $250,000 protection for claims of cash, subject to periodic adjustments for inflation in accordance with terms of the SIPC statute and approval by SIPC's Board of Directors.
  •         These limits are on a per-customer basis, as defined in the Securities Investor Protection Act.
  •         Most types of securities held in a brokerage account at National Financial Services, LLC are protected, including stocks, bonds, notes, debentures, certificates of deposit (CDs), and mutual funds.



In addition to SIPC protection, NFS provides for brokerage accounts additional "excess of SIPC" coverage from Lloyd's of London, together with other insurers. 

The "excess of SIPC" coverage would only be used when SIPC coverage is exhausted. Like SIPC protection, "excess of SIPC" protection does not cover investment losses in customer accounts due to market fluctuation. It also does not cover other claims for losses incurred while Broker/Dealers remain in business. Total aggregate "excess of SIPC" coverage available through National Financial Services, LLC's "excess of SIPC" policy is $1 billion. Within National Financial Services, LLC's "excess of SIPC" coverage, there is no per account dollar limit on coverage of securities, but there is a per account limit of $1.9 million on coverage of cash. This is the maximum "excess of SIPC" protection currently available in the brokerage industry.

Lloyd's of London currently has an A (Excellent) rating with "Stable Outlook" from ratings firm A.M. Best, and an A+ (Strong) rating with "Stable Outlook" from Fitch Ratings and Standard & Poor's. (As of November 2009, and subject to change.)
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