The assets we manage for you are held by a third-party custodian in your name. A third-party custodian might be a financial services firm such as Pershing LLC, Charles Schwab, or TD Ameritrade. The custodian maintains and safeguards your assets and executes the investment transactions that you direct. Your custodian also provides you with updates on the value of your assets. In addition to the consolidated reports you receive from Clear Perspective Advisors, you receive statements directly from the custodian confirming all transactions, from trades and wire transfers to any changes in how the account is registered.
Using third-party custodians seeks to minimize the exposure to risk and fraud because it establishes a secure check-and-balance relationship between Clear Perspective, the investment managers, and the third party custodian. In this relationship, we have no access to withdraw your money.
Pershing LLC has been a leading global provider of financial business solutions for 75 years, serving many of the world’s most respected financial organizations. They remain committed to the safekeeping, servicing, segregation and reporting of our global client assets. Pershing’s core financial strength provides the foremost measure of the protection of global client assets. Their parent company, BNY Mellon, is a leading provider of financial services for institutions, corporations and high-net-worth individuals. Pershing’s financial strength does not protect against loss due to market fluctuation.
-Over $1 Trillion* in global client assets
-Over $27.9 Trillion* in assets under custody and/ or administration
Evaluation and Segregation of Assets
As required, Pershing segregates clients’ fully paid-for assets from their own to ensure the return of client assets in the unlikely event of the financial failure of Pershing.
Securities Investor Protection Corporation (SIPC®) Coverage
Pershing is a member of SIPC, which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). An explanatory brochure is available upon request or at SIPC.
Excess of SIPC Coverage Led by Lloyd’s
In addition to SIPC protection, Pershing provides coverage in excess of SIPC limits from certain underwriters in Lloyd’s insurance market. It provides the following protection for Pershing LLC’s global client assets:
-An aggregate loss limit of $1 billion for eligible securities—over all client accounts
-A per-client loss limit of $1.9 million for cash awaiting reinvestment—within the aggregate loss limit of $1 billion
SIPC and the excess of SIPC insurance policy do not protect against loss due to market fluctuation.
An excess of SIPC claim would only arise if Pershing failed financially and client assets for covered accounts—as defined by SIPC—cannot be located due to theft, misplacement, destruction, burglary, robbery, embezzlement, abstraction, failure to obtain or maintain possession or control of client securities, or to maintain the special reserve bank account required by applicable rules.
Lloyd’s currently holds A+ ratings from Fitch Ratings and Standard & Poor’s® (S&P®), and an A rating from A.M. Best. These ratings are based on the financial strength of the company and are subject to change by the rating agencies at any time.** For more information about Lloyd’s, please see www.lloyds.com.
*As of March 31, 2014.
**Ratings as of November 2013.
Through our affiliation with Charles Schwab, a leading global provider of financial business solutions for 40 years, Clear Perspective Advisors clients are aligned with an acknowledged industry leader in global brokerage execution and clearance. Assets held in custody by Charles Schwab are protected by the Securities Investor Protection Corporation (SIPC®) for up to $500,000 in value, including $250,000 in cash awaiting reinvestment.
Additional brokerage insurance—in addition to SIPC protection—is provided to Charles Schwab & Co., Inc. accounts through underwriters in London. Schwab’s coverage with Lloyd’s of London and other London insurers, combined with SIPC coverage, provides protection of securities and cash up to an aggregate of $600 million, and is limited to a combined return to any customer from a Trustee, SIPC, and London insurers of $150 million, including cash of up to $1,150,000. This additional protection becomes available in the event that SIPC limits are exhausted.