When you’re choosing a stock broker, cost is not the only consideration. You should also think about how safe your investments will be from fraud or loss.
Many investors don’t understand exactly how their shares are held and what the risks to their account are if the worst happens. So this article explains a few key points about how brokerage accounts works and what happens in the event of fraud or loss.
In particular, we’ll look at why nominee accounts and segregation can’t protect you from all risks, plus the main things you can do to protect yourself from the chance of a stock broker collapse.