Is it bad risk management practice to rely only on one broker?

[ironchef]

But did any one at LB that was a customer lose any money? I'm not aware of any that did, even over the SIPC limits. In fact, and I could be wrong, I'm not aware of any brokerage accounts protected by SIPC that lost any money at any time in the last 35 years even over the SIPC limits.

Of course that is not a guarantee of the future.

I don't know either, just speculating.

But like the failed saving and loan situation back then, it took a long time to get your money back because the Agency needs to verify your claim and make sure it is legit, etc. And I am not sure you will get your stocks/security back or just their value at the time of failure so the opportunity costs......

 

[sle]

But did any one at LB that was a customer lose any money? I'm not aware of any that did, even over the SIPC limits. In fact, and I could be wrong, I'm not aware of any brokerage accounts protected by SIPC that lost any money at any time in the last 35 years even over the SIPC limits.

Didn't customers at MF Global lose money, or was it on the non-SIPC eligible contracts?

 

[spindr0]

During the GFC I only had one ISP. Because of the volatility, it was not unusual for me to have 15-20+ open orders at a time. My ISP went down and I was a bit freaked. Since then, I have carried two ISPs and consider the add'l fee to be the price of peace of mind (whether it be my ISP or IBKR down).

 

[IAS_LLC]

The well funded client has 2 backups including generator, might have cable, DSL and satellite to monitor off site server holding their trading software or automation, and they might call brokerage and escape with a few ticks of loss per.

It only takes once to be nailed to the wall then go overboard with backups, but the backups are but very small costs as opposed to losing brand new Lexus.

The "well funded" client is also probably smart enough to realize it's 2017, and cloud servers + cell phones are a thing....and triple redundant internet + generator is a completely unjustifiable fixed cost.

 

[Robert Morse]

Didn't customers at MF Global lose money, or was it on the non-SIPC eligible contracts?

I was my understanding that MFG was the worst, as it took time to get their money back vs being moved to another broker in a few days, because money was taken from the futures accounts.

https://dealbook.nytimes.com/2013/11/05/mf-global-customers-will-recover-all-they-lost/
http://farmdocdaily.illinois.edu/2013/08/behind-collapse-mf-global.html

 

[Handle123]

The "well funded" client is also probably smart enough to realize it's 2017, and cloud servers + cell phones are a thing....and triple redundant internet + generator is a completely unjustifiable fixed cost.

Your correct but when you live on ranch, takes them long time to come out, don't want to eat through solar in case going to be several hours. Thinking need to put in more panels as they come down in cost.

 

[Stdray]

I have IB and Tradier account. It's mainly because Tradier supports US stocks only and provides free 1k stocks quote streaming, whereas IB supports other markets and requires purchasing data streams.

 

[ajacobson]

No professional/institutional account would rely on only one broker. Lot's of folks whining today about IB being down and trades only moved against them.
We use three brokers - it takes some scale, but one day being offline can be more expensive than all those cheap commissions.
Today was the day that proves why you have multiple points of access.

 

[drcha]

But did any one at LB that was a customer lose any money? I'm not aware of any that did, even over the SIPC limits. In fact, and I could be wrong, I'm not aware of any brokerage accounts protected by SIPC that lost any money at any time in the last 35 years even over the SIPC limits.

Of course that is not a guarantee of the future.

that is good to hear, because I have the same question and have a lot of money in my IB accounts

 

[drcha]

No professional/institutional account would rely on only one broker. Lot's of folks whining today about IB being down and trades only moved against them.
We use three brokers - it takes some scale, but one day being offline can be more expensive than all those cheap commissions.
Today was the day that proves why you have multiple points of access.

Alex, do you refer to the broker being unable to execute trades within the day? I'm not a day trader (I'm more like a week trader or a month trader), so that is not a big concern to me. I mostly worry about the whole place going under and having >$500K there.

BTW, I must tell you that I attended some options seminars you did about 12 years ago and you were tremendously helpful to me as a newbie. Thank you.