How Does the Choice of Account Type Affect a Client’s Claim in a Broker Bankruptcy?

In a broker bankruptcy, a client with a segregated account has a stronger, more direct claim to their specific assets, as those assets are legally separate from the broker's estate. A client in an omnibus account faces a more complex, drawn-out process, as they must rely on the broker's internal records and may have their claim subject to the general distribution of pooled assets.

Segregated accounts offer a much higher degree of asset protection and faster recovery.