Is Webull Safe?

With the recent success of free and low-cost brokers it’s no surprise that there are other new brokers entering the scene trying to cater to this strong demand, especially among the millennial crowd. Webull is one of those new brokers, and many investors may have concerns or suspicions regarding the safety and trustworthiness of a new player in this market, especially when the new broker is offering zero commissions. This article will do a deep dive into the credentials and legal status of Webull to hopefully give you a better idea of its safety profile.

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Webull’s Better Business Bureau Rating

We searched for Webull on the Better Business Bureau’s website however they don’t yet have a profile there. This could simply be due to how new the broker is. Webull is based in New York City, and only just launched in May of 2017. As more users try out the platform, we’d expect them to eventually be listed on the Better Business Bureau.

Is Webull SIPC Insured?

Some good news is that Webull is insured by the Securities Investor Protection Corporation (SIPC). This provides insurance coverage of up to $500,000 for each Webull account, half of which can be used to protect cash balances. It’s important to note that SIPC won’t insure your account against a decline in market value from market activity.

Even better news is that in addition to the SIPC coverage, Webull purchased additional insurance coverage through Apex, their clearing house. This coverage is more extensive and insures up to a total of $150million with a cap of $37.5million for any single customer’s holdings (up to $900,000 for any one customer’s cash). Having this additional coverage in place makes Webull safer than brokers that are only insured through SIPC, such as M1 Finance.

Is Webull FDIC Insured?

The Federal Deposit Insurance Corporation (FDIC) is a federal agency that insures consumer deposits in U.S. banks to give consumers reassurance that their savings would not be lost in the event of a bank failure. Webull is not a bank, and therefore, it is not a member of the FDIC. Nor does Webull offer any bank sweep program that would provide FDIC coverage.

This technically means there is some risk that you could lose some of the idle cash sitting in your Webull account if the broker ever went bankrupt. However, since Webull is insured both through SIPC and through Apex Clearing House, your Webull cash balance (up to $900,000) would be insured in the case of a bankruptcy. But if you are worried about this scenario, you should avoid keeping any excess cash above this amount in your Webull account.

Is Webull Legit

Is Webull Regulated by FINRA and the SEC?

Like most U.S. brokers, Webull is a member of the Financial Industry Regulatory Authority (FINRA). Their FINRA license number (or CRD number) is 289063. FINRA is a non-profit self-regulating organization dedicated to investor protection and the integrity of the financial markets through effective regulation of brokers.

Webull’s FINRA profile shows zero disclosures, which is a good sign. It also shows that Webull was formed as an LLC in Delaware, but operates out of a single office on Wall Street in New York. This is all fairly standard information, as many companies incorporate in the state of Delaware for tax purposes, but conduct their operations from other states.

Webull is also registered with the U.S. Securities and Exchange Commission (SEC). This registration is valid in all 50 U.S. states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. The SEC is a federal agency that provides legal oversight and enforcement within the U.S. financial services industry.

Is Webull Safe

Webull’s Founder and CEO

The CEO and founder of Webull is Anthony Michael Denier. His FINRA profile is fairly strong with zero disclosures and 15 years of experience across eight firms and it shows he has passed six different securities industry exams. His CRD number is 3260208.

Is Webull Safe Recap

There is no evidence to suggest that Webull is not legitimate or that it engages in fraudulent activity. The broker provides a free, zero-commission service in a market where this approach has been gaining in popularity and demand. Their safety profile is somewhere between average to maybe a bit above average. We like the fact that they have extra insurance coverage beyond the SIPC insurance, as this provides an extra safety net for investors and not all brokers offer this.

Through the SIPC coverage and additional insurance through Apex, Webull is able to offer a safe trading platform where investors can rest assured their account is in good, insured hands. Furthermore, because trading on Webull is completely free, there’s no reason not to try it out.

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