I once had three brokerage or brokerage-like accounts: at TIAA, at Fidelity, and at Vanguard. I slow consolidated them all to Vanguard, and all my securities are at Vanguard. I thought long and hard about it. I didn't see a problem with it at the time and I don't see it now.
I would not have "all my money" at Vanguard. We have a pretty good list of "places we can get money." We have a "too-big" savings account in a brick-and-mortar bank, another one with only $3,000 in it as a backup. We have a significant amount of money in the form of paper savings bonds which probably can be cashed at a fair number of banks. And, of course, two credit card accounts.
There is no such thing as perfect safety.
I believe all the major "real" brokerages--that have been in business for at least twenty years and aren't run by tech bros--are safe against losing-all-your-money-puff-boom-gone. They all have risks of IT outages, and possible scenarios where your holdings might be safe but inaccessible.
There's also what I call the "Charles Lindbergh" consideration. Before Lindbergh, all attempts to fly the Atlantic involved multi-engine planes. Lindbergh pointed out that having two engines may reduce the consequences of losing one engine, but it doubles the chances of losing one engine.
If you decide to go the cautious route, I'd add something. If you are holding similar mutual funds in more than one place, go to the Statement of Additional Information (SAI) for the funds and find out what bank is servicing as the fund custodian. I think you want to diversify that, too.
I would not have "all my money" at Vanguard. We have a pretty good list of "places we can get money." We have a "too-big" savings account in a brick-and-mortar bank, another one with only $3,000 in it as a backup. We have a significant amount of money in the form of paper savings bonds which probably can be cashed at a fair number of banks. And, of course, two credit card accounts.
There is no such thing as perfect safety.
I believe all the major "real" brokerages--that have been in business for at least twenty years and aren't run by tech bros--are safe against losing-all-your-money-puff-boom-gone. They all have risks of IT outages, and possible scenarios where your holdings might be safe but inaccessible.
There's also what I call the "Charles Lindbergh" consideration. Before Lindbergh, all attempts to fly the Atlantic involved multi-engine planes. Lindbergh pointed out that having two engines may reduce the consequences of losing one engine, but it doubles the chances of losing one engine.
If you decide to go the cautious route, I'd add something. If you are holding similar mutual funds in more than one place, go to the Statement of Additional Information (SAI) for the funds and find out what bank is servicing as the fund custodian. I think you want to diversify that, too.
Statistics: Posted by nisiprius — Mon Aug 12, 2024 12:07 pm — Replies 42 — Views 5536