First - with a stock brokerage firm all customers are protected their balances and securities are protected by SIPC wihich provides insurance that the firm, the receivor of survivor and pay the customers and sthat their securities can be either delivered to them or delivered to another broker/dealer.
Even if the firm is immediately closed, the clients still can liquidate their security position if they so desire OR they can submit instructions to delver the securities to another broker/dealer
Mututal funds can be sold directly with the mutual fund company
NO mutual funds or stock companies CAN NOT send you monthly statements since they do not know you, the stock and/or fund shares are held in the nominee name of a clearing corporation and or the nominee name of your brokerage firm
1) Agree with Duck-Duck that you are likely to just have your shares transferred to whoever picks up the assets. This would happen pretty quickly and you would find yourself with an Interactive Brokers account or similar.
2) In the US, brokerage accounts are protected from insolvency by SIPC often. This is not FDIC and is not govt protected and doesn't cover all brokerage accounts. You should check to see if you have this protection on your account as you are 10000% better off with it than without it if the broker goes belly up.
3) ".if you had a certificate for 100 shares of KO and it got lost or destroyed, those shares would be GONE for all intents & purposes"
Is simply wrong. If your stock certificates get destroyed, you end up filling out an affidavit and the transfer agent issues you new certificates. If someone steals them and you wait 10 years you might be out of luck.
4) To my knowledge there is no protection that guarantees you liquidity in the event of brokerage insolvency. Most likely the situation would get fixed pretty quickly, but if your broker goes belly up there might be a time in which you can't trade your positions. It is easily possible that this is days with an SIPC protected account. There are still people who had accounts at MF Global who are without their funds 3 years later (this is futures not stocks but the point is about the importance of stuff like SIPC).
Your stocks are held "in Street Name" at that brokerage house, and in the (unlikely) event that they file for bankruptcy, YOUR assets would simply be issued to you in certificate form OR (more likely) transferred to whichever brokerage the assets they held buys them out.
Check your on-line account, they almost certainly offer you the option of receiving periodic paper statements along with year-end tax documents (probably for a fee!).....and even if they do not (which helps decrease expenses), there's nothing to stop YOU from printing out your statements...
Paradoxically, having only "virtual" records of your holdings is SAFER than having a hard copy....if you had a certificate for 100 shares of KO and it got lost or destroyed, those shares would be GONE for all intents & purposes....whereas shares held "virtually" exist on multiple servers, so are impossible to destroy completely...
Yes, you will get periodic statements.
So, I recently stepped into the stock market by opening an account with OptionsHouse and invested some money. Now even though I invested quite a considerable chunk of my hard earned money in the stock market, I do not have any physical document as a proof that I own so-and-so company's stocks and mutual funds. Only thing I currently have is the online broker's account. The thing that got me thinking what if that online broker goes bankrupt and stops the services immediately? How would I access/sell my stocks and mutual funds? Shouldn't the companies whose stocks I own be sending me quarterly statements or something in the form of mail?
Not sure how valid is my question but I think my concern is definitely valid.
