Is Tradier Safe?

A securities firm with a unique trading system is Tradier Brokerage. Because the company is a relatively recent entrant into the investment world, some traders may have questions or concerns about the firm. It is not a scam, and accounts with the broker are fully insured. Tradier has all the safeguards that other brokers have.

Is Tradier SIPC/FINRA Insured?

Besides the government-imposed regulation, Tradier also offers brokerage insurance through America’s primary investment insurer: SIPC. This organization provides $500,000 worth of protection to every customer of every brokerage firm that’s a member. Thus, it’s possible to have more than $500,000 of insurance by opening accounts with multiple firms. Half of the $500,000 maximum can be applied to cash balances.

It’s important to note that SIPC does not protect against market loss. It only guarantees number of shares up to market price, whatever that is. For instance, let’s say you own 100 shares of General Motors. SIPC guarantees those shares in case they go missing in your brokerage account. SIPC does not guarantee the price of GM.

Is Tradier Legitimate?

Tradier is registered with the Securities and Exchange Commission in the US. This membership entitles Tradier to do business in all 50 states and the District of Columbia. The broker's CRD number is 104982, and its SEC number is 52972. These ID's can be used to research the broker's history online and verify its credibility.

The company's profile page at FINRA's BrokerCheck shows zero disclosures, a good sign. Tradier's executives are also listed at FINRA, along with their individual CRD numbers. Conducting research on the individuals running the firm is always a good idea, too.

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While Tradier accounts are just as safe as brokerage accounts at other firms, it should be noted that all securities accounts carry some amount of risk. There is no FDIC in the brokerage industry that protects against market decline. Investing carries the possibility that 100% of capital could be lost. No broker is ever perfectly safe in this sense. A broker isn't a bank.

Also keep in mind that Tradier is a new firm with an untested style of trading. The broker does not provide its clients with a platform. Instead, investors choose a software package from a selection of third-party providers. This setup hasn't been proven yet, so it is uncertain at this time whether Tradier's system will succeed.

If it doesn't, and the company goes out of business, then all account balances are protected by SIPC, as mentioned earlier. But the insurer only protects the number of shares of securities, not share price. There is no protection against a market decline. This applies not just to Tradier accounts, but to all other brokerage accounts as well.

You can never really say that any brokerage firm is 100% safe. Securities by their very nature are more risky than bank deposits. The US government did not want the FDIC involved with the brokerage industry, because it knew that it wasn't possible to protect share price. So it created SIPC instead. Tradier Brokerage is as safe as any other securities firm.

Tradier BBB Review

As of now, there is no Better Business Bureau (BBB) rating for Tradier Brokerage. There is only one negative review there, which is a great sign. Here is the link to BBB page.


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