#MoneyMythMondays — Are banks the safest?
This week’s Money Myth:
“Banks are the safest place to put my money.”
Banks are large institutions, and usually, have the market share and revenue to appear like they are the monolith behemoths that will protect your money against all adversity.
In reality, your money is just as safe with an independent advisor or an insurance company. If your financial advisor’s company goes bankrupt, your money is insured by an independent organization (insolvency insurance), and a separate record is usually kept to reclaim that money.
While the size and market position of banks makes them unlikely to go bankrupt, they cannot provide you with any additional protection from market losses. Market losses are borne by the investor, based on their risk tolerance, suitability and time horizon.
Read more in How Safe Is Your Money.
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