Broker Check

LPL Account Protection

I understand that you may have questions about your investment accounts at LPL Financial (LPL). LPL is a broker/dealer registered with the Securities and Exchange Commission (SEC) and a member of the Financial Industry Regulatory Authority, Inc. (FINRA) and the Securities Investor Protection Corporation (SIPC). As a registered broker/dealer, LPL is subject to regulatory oversight and internal controls that are designed to protect your accounts.

LPL’s regulatory obligations and controls include the following:

  • LPL must identify and segregate securities by customer, and must segregate customers’ securities and funds from its proprietary business activities.
  • LPL is required to maintain minimum net capital and to set aside a reserve for the benefit of its customers.
  • The purpose of these requirements is that if a broker/dealer fails financially, customers’ securities and funds should be readily available to be returned to customers.
  • In addition, LPL’s financial statements are audited annually by an independent public accountant and those financial statements are filed regularly with the SEC.
  • LPL is required to purchase a fidelity bond from an insurance company to provide a source of compensation to customers in the event of fraud or embezzlement by employees.
  • LPL is required to be a member of SIPC and, for accounts held at LPL, SIPC provides account protection up to a maximum of $500,000 per customer, of which $250,000 may be claims for cash. This account protection applies when a SIPC member firm fails financially and is unable to meet obligations to securities customers, but it does not protect against losses from the rise and fall in the market value of investments. An explanatory brochure is available at www.sipc.org.
  • LPL purchases an insurance policy that provides customer protection in excess of SIPC coverage up to an overall aggregate firm limit of $600,000,000, subject to conditions and limitations.
  • LPL also purchases additional amounts of professional liability insurance.

This protection and coverage for our customer accounts reflects our strong commitment to serving your investment needs. As always, our focus remains on our financial professionals and financial institutions and their clients and on helping you pursue your financial needs and goals. I hope this letter provides you with the information you need. I encourage you to speak with your financial professional if you’d like more details.

 

Sincerely,

Michelle Oroschakoff

Managing Director, Chief Legal and Risk Officer