April 2023

Let’s talk about insurance. The last few weeks have been a little scary in the news when it comes to the stability of banks and the money they hold for us. It has brought up the discussion about the FDIC (Federal Deposit Insurance Corporation), what that is and what it covers, as well as what kind of insurance you have with your investments at Raymond James.

Insurance is one of those things that we all have on various items but we certainly hope we never have to use them. Last month, we had a horrible ice storm in Michigan and in my neighborhood, nearly everyone had some type of branches or trees come down in their yards. We were one of the lucky ones. While we had a number of large branches fall, nothing hit our home. A neighbor three streets over wasn’t so lucky. They had large limbs hit their house from behind and the side and did some severe damage. While none of us bought our homes and homeowners insurance because we thought or knew this would happen, it was a great to know that we had that coverage when we needed it.

Prudent people carry all kinds of insurance: homeowners, auto, life, health, pet, etc. You get the picture. We have insurance because unexpected things happen and this is protection against the worst.

In March, there were unexpected failures of banks. We don’t deposit our money in a bank thinking that one day they might not be able to give it back. We do feel safe making those deposits, however, because if something unexpectedly bad happens, we know the FDIC will step in and make sure we get our money back up to a certain amount. Here is a great explanation of the FDIC:

The FDIC protects against the loss of insured deposits if an FDIC-insured bank or savings association fails. FDIC deposit insurance is backed by the full faith and credit of the United States government. Since the FDIC was established, no depositor has ever lost a single penny of FDIC-insured funds.*

In the investment world, since your investments are not a bank deposit, Raymond James has insurance through SIPC (Securities Investor Protection Corporation). This covers you, as a client of Raymond James, in the unexpected event Raymond James were to become financially unstable. The statute that created SIPC provides that customers of a failed brokerage firm receive all non-negotiable securities – such as stocks or bonds – that are already registered in their names or in the process of being registered. It protects customers of its members (Raymond James is a member) up to $500,000. In addition, Raymond James purchases excess SIPC coverage, offered by certain Lloyd’s of London underwriters. It is designed to augment basic SIPC once a customer’s maximum limit of that coverage is exceeded.*

In other words, Raymond James has your back. While they cannot control what the market and the underlying investments do, they want to make sure you are protected as a customer in case anything happens to the company as a whole.

It’s nice to know insurance is out there. We don’t want to have to use but it helps us all sleep at night knowing it is there in case we do.

P.S. The attached brochure talks more about the coverage Raymond James has and is the source of information for much of what I have shared with you.

Learn how Raymond James protects your account: Click Here

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Stacy Caudill and not necessarily those of Raymond James. Raymond James Bank is a Florida-chartered member bank primarily regulated and supervised by the Federal Reserve and the Florida Office of Financial Regulation. Raymond James Bank is also regulated and supervised by the Federal Deposit Insurance Corporation (FDIC)and the Consumer Financial Protection Bureau (CFPB).