Splitting Accounts Over Several Brokerage Firms

There is technically some brokerage firm risk but if a firm like Vanguard goes under then the world is ending. It would be chaos at a level never seen before.

I am “diversified” across a number of brokerages but that was not really intentional...different retirements accounts in different brokerages across the years.

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There is no such thing as being “diversified” across multiple brokerage firms. Especially if you’re seeking advice from each. You wouldn’t want to go see several different doctors for the same medical issue?

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I’m not talking about AA. I’m talking about brokerage risk spread across different companies. As an example say someone has ~750k in VG and 30+ years to retirement (so account will grow) and they are receiving a windfall of 1.5M. Would it be wise to park that 1.5M in Fidelity to offset some of that risk?

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He just answered that, it seems you just didn't like it

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No he didn’t frickhead. He’s talking about AA across several companies which I’m not asking about. I’m asking about avoiding brokerage risk. Not market risk. You’re such a ducking idiot you wouldn’t understand that though. Continue to follow me around everywhere and slurp up my leftovers.

When you say you have money with a particular firm, what do you mean exactly?

If you have all your money in Schwab accounts, but invested in non-Schwab funds, then do you really have any "brokerage risk"?

All Schwab is doing in this scenario is being a middleman. If you own a Vanguard fund, a PIMCO fund, and a Schwab fund, all within your Schwab account, then you're already diversified with respect to firm.

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When you say you have money with a particular firm, what do you mean exactly? If you have all your money in Schwab accounts, but invested in non-Schwab funds, then do you really have any "brokerage risk"?

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In this case the 700k is in VG and 100% in VG MF’s.

If you're a very active or pro day trader, you might do this to avoid/alleviate margin call risk. But outside of special situations (mainly involving heavy traders), there's no real advantage that I can think of. But even in that case, unless you have adequate funds to spread your accounts between firms and still be able to position size, you're probably hurting yourself more than you're helping.

I mean, as long as you're talking about majors which have trillions under management, and you're primarily talking about retirement or investment accounts (not active traders employing options, futures, etc.), the risk is minimal.