Your brokerage account has SIPC protection up to $500,000 ($250,000 for cash) if Robinhood Securities fails, but SIPC does not cover investment losses from market movements.
This analysis describes what Robinhood's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
The SIPC disclosure informs customers of the scope and limits of account protection, which is material to understanding the actual financial safety net available in the event of broker-dealer insolvency.
The updated terms establish new fiduciary verification and personal liability provisions for trust and custodial accounts. Trustees are now required to complete Robinhood's identity verification and onboarding before accessing trust accounts, notify Robinhood promptly of any material changes to the trust (amendments, revocation, trustee changes), and provide the correct taxpayer identification number for the trust. The revised language states that trustees are personally liable for obligations, debts, or negative equity arising from instructions given outside the scope of their authority under the trust instrument or applicable law. Robinhood reserves the right to freeze trust accounts or request updated documentation at any time, and will rely on instructions from any onboarded trustee without requiring consent from co-trustees or verifying compliance with the trust instrument. You should consult a tax advisor regarding the appropriate taxpayer identification number for your trust and review your fiduciary authority under the applicable trust instrument before executing trades.
View change record →The agreement discloses that SIPC coverage protects up to $500,000 in securities and cash per customer in the event of broker-dealer failure, but explicitly states this protection does not cover losses resulting from market risk or investment decisions.
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"Robinhood Securities LLC is a member of the Securities Investor Protection Corporation (SIPC). Securities in your account protected up to $500,000 (including $250,000 for claims for cash). SIPC does not protect against loss from market risk or bad investment decisions.Excerpt from Robinhood's Customer Agreement (PDF)
REGULATORY LANDSCAPE: SIPC membership and disclosure obligations are governed by the Securities Investor Protection Act of 1970 and SIPC rules.
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The SIPC disclosure informs customers of the scope and limits of account protection, which is material to understanding the actual financial safety net available in the event of broker-dealer insolvency.
The agreement discloses that SIPC coverage protects up to $500,000 in securities and cash per customer in the event of broker-dealer failure, but explicitly states this protection does not cover losses resulting from market risk or investment decisions.
ConductAtlas has identified this type of provision across 287 platforms. See the full comparison.
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