Search
Close this search box.

Foire aux questions

Are online brokers safe?

Many online brokers are insured by the Securities Investor Protection Corporation—often referred to simply as the SIPC—which protects investors if a brokerage fails. Many brokers also carry additional private insurance for the same purpose. Neither coverage protects you from market losses. With a full-service brokerage, you typically get a wide range of services and a one-on-one relationship with a stockbroker—maybe also a financial advisor. They can help you cope with market meltdowns. They also can custom-tailor your financial plan, including individual investments, to your individual needs and goals. So can educational resources at an online broker. But full-service brokerage costs customarily are much higher, meaning that an online broker is cost-wise safer if you’re willing to do a lot of your own research and planning. Impulse trading, especially amid market volatility, is a key risk for do-it-yourself investors who trade through an online broker. But you can defend yourself by taking advantage of an online broker’s educational resources and research tools, then maintaining your discipline.

How much money do I need to open an online brokerage account?
What kind of online brokerage account should I choose?
Should I open a cash account or a margin account?
What is a paper trading account?