The U.S. brokerage ecosystem recommends that every investor account should have insurance. Every customer is protected by Securities Investor Protection Corporation (SIPC) which currently protects the securities and cash in your account up to USD 500,000, of which up to USD 250,000 may be in cash and up to USD 250,000 in stocks. Please note that this protection of up to USD 500,000 is not applicable on general losses in the stock market.
SIPC says the following: SIPC protects against the loss of cash and securities – such as stocks and bonds – held by a customer at a financially-troubled SIPC-member brokerage firm. The limit of SIPC protection is USD 500,000, which includes a USD 250,000 limit for cash. A non-U.S. citizen with an account at a brokerage firm that is a member of SIPC is treated the same as a resident or citizen of the United States with an account at a brokerage firm that is a member of SIPC. SIPC does not protect against the decline in value of your securities. SIPC does not protect individuals who are sold worthless stocks and other securities. SIPC does not protect claims against a broker for bad investment advice, or for recommending inappropriate investments. Explanatory brochure is available upon request or at www.sipc.org.