Are My Assets Safe?

Nvest, since its inception, has utilized the brokerage and custody services of Charles Schwab & Co.  We consider Schwab to be the industry leader based on its history, low fees, and industry leading technology; it is also long considered one of the most conservatively managed asset custodians in the industry.  While the entire industry continues to undergo significant changes via consolidation and expanding access to investing via cost reductions (advocating for no-load mutual funds, elimination of trading commissions, account maintenance fees, and more), Schwab’s commitment to client security and financial stability remains unchanged. For example, Schwab avoids underwriting new securities issuance, does not hold or permit direct investing in risky or highly speculative assets (such as cryptocurrency), and remains highly protective of client assets.

With that said, recent events in the financial sector over the last month and resulting impact to financial sector stock prices, can raise concern.  Clients may be asking “Are my assets safe at Schwab”?  Over the last month, Schwab is communicating regularly on the topic; included below are links to Schwab’s website outlining the numerous protections to be mindful of and a couple highlights:

  • Your investments (assets) held at Schwab are segregated at the broker/dealer level and are not available to Schwab to use or satisfy their own liabilities or creditors. Your assets are your assets.
  • Investment assets are separate and not commingled with assets at Schwab Bank.
  • For cash held at Schwab Bank, FDIC insurance applies up to $250,000, per depositor. Different, higher effective FDIC limits apply to cash held in brokerage accounts.
  • Schwab continues to hold a safe and liquid balance sheet, but Schwab can also make use of recent programs made available by the Fed to shore up confidence in the general banking system that transpired in March.
  • Links for more detail:

Beyond these protections, we are keenly aware that a number of clients are utilizing higher-yielding money market offerings managed by Schwab, often as an alternative to traditional bank savings accounts or pending longer-term investment.  While these are not bank products nor FDIC insured, we are conducting ongoing due diligence on these funds.  Schwab’s core philosophy and priorities in the management of these offerings is focused on: 1) Stability of capital (stable NAV of $1.00/share); 2) Daily Liquidity; and 3) Attractive income that does not jeopardize the first two.

We trust this additional insight into the industry will help ease any concerns.  Recall too, “we eat our own cooking”.  This phrase applies not only to how our own personal and retirement savings is invested, but also the custodian where those assets are held – we ourselves utilize Schwab exclusively.   As always, we welcome the opportunity to discuss in more detail.  Feel free to call or visit.

Closing thought: an article, “Ignorance Really is Bliss When it Comes to Investing”, was recently published in the WSJ.  Investors are hit daily with a fire hose of information (news, analysis, etc) and possess an ease of instant trading not available even 10 years ago.  Studies are proving that this “access” is not improving long-term performance.  Rather, it is leading to overconfidence, greater risk-taking, and impulsive behavior.  We have long shared there are two types of investors: the mental accounter who checks and tracks his portfolio movement “daily”; by contrast the Rip Van Winkle is one who invests and then takes a long nap.  The mental accounter experienced great stress and struggles to stay invested; Van Winkle awakens following his extended nap in great amazement of how his money grew… unaware of all the ups/downs that were part of the journey.  We don’t advocate burying your head in the sand, but be careful not to let noise take you off track.


Steve Henderly, CFA | Nvest Wealth Strategies Inc. – April 6, 2023

Posted in Blog Post.