How Does Your Broker Rate?

Unless you’ve followed Jim Sinclair’s recommendation to get paper certificates for all the stocks you own, you probably still have some stocks through a broker. If the broker goes belly-up sure, SIPC will supposedly cover some of your losses. But, if that happens you may be frozen out of trades for weeks or months.

One way to rate your broker is to calculate the ratio of their total net capital divided by their minimum capital requirement. This gives you the broker’s Capital Multiple number and the higher, the better.

Here’s a list of some of the most popular brokers and their Capital Multiples, put together by Weiss Research.

Broker Ratings

Remember, you can also get a letter-grade rating (“A” through “E”) for your broker or insurance company from the same place you can rate your bank. See How to Rate Your Bank’s Safety .

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