The Strength of Baird
and Safety of Client Assets
We believe our clients should have full confidence in the safety of their assets held at Baird. Read more below about the strength of our firm and the number of ways in which our client’s assets are protected.
The Baird Difference
For over 100 years, we have managed our firm responsibly, with an emphasis on mitigating risk and maintaining a long-term focus. Our five complementary, mix of core businesses balance our sources of revenue and broaden our capabilities for clients. This helps Baird maintain financial strength and stability through even the most challenging market environments, helping ensure that we will be there to guide and advise you when you need us most.
Our other unique strength is our independent, privately held, employee-ownership model. Today, approximately 70% of our associates are shareholders. It is because of this ownership that we have a huge stake in making sure we do things right. Baird has remained strong because we put our clients’ interests first and take the long-term view, both in terms of our clients’ success and in how we run our business.
Baird is highly capitalized, with net capital well in excess of regulatory requirements. As of December 31, 2022, Baird had shareholders’ equity of nearly $1.7 billion. An updated audited statement of our financial condition is available here.
A Summary of Client Asset Protections
Certain client assets held at Baird are further protected as outlined in more detail below:
- Securities in client cash accounts are segregated from Baird’s assets.
- The Securities Investor Protection Corporation (SIPC) covers most types of investments up to a value of $500,000. 1
- Baird clients are further protected by a policy in excess of SIPC limits that provides additional coverage beyond the $500,000 SIPC limit.1
- The Federal Deposit Insurance Corporation (FDIC) covers client funds swept into bank accounts – up to $2.5 million per depositor (or $5 million in joint accounts).
Protection and Segregation of Client Assets
Our focus is and will remain on the protection of client assets through a variety of rigorous controls which include regular and systematic reconciliation of assets in client accounts. We protect and segregate client assets from our own, in accordance with Exchange Act Rule 15c3-3 (known as the Customer Protection Rule) and in addition to other laws, rules and regulations (such as maintenance of required net capital and other requirements).
Our controls are audited no less than twice annually by an independent audit firm. These procedures, our controls and other operating systems are also continuously evaluated by management and by Baird’s Internal Audit Department. This department is responsible for auditing and monitoring the activities of the firm and its subsidiaries on a regular basis to ensure that employee duties are properly segregated and that control procedures are functioning properly.
As detailed below, our compliance with applicable law, rules and regulations is also audited by our primary regulators, which include the Securities Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) as well as third party auditors. For more information about our primary regulators, their missions and focus on investor protections, please visit www.sec.gov or www.finra.org.
Securities Investor Protection Corporation (SIPC)
We are also a member of the Securities Investor Protection Corporation (SIPC). In the unlikely event of our insolvency, securities in your account are protected up to $500,000, which includes a $250,000 limit for cash awaiting reinvestment in the event such assets are missing. Clients owning accounts at a failed institution in different capacities in addition to their individual capacity may be eligible for additional protection. Segregated customer assets will not be subject to claims against an insolvent firm’s bankruptcy estate. For more information, visit www.SIPC.org.
Baird’s Insurance Policy in Excess of SIPC Limits
For additional security, we offer coverage in excess of SIPC limits through an insurance policy purchased through Lloyd's of London. The Lloyd's policy has an aggregate coverage limit of $250 million for all claims of Baird customers eligible for distributions. The policy has a sublimit of $1.9 million per customer for cash awaiting reinvestment. Although there is no guarantee, we believe Baird's excess SIPC coverage will be sufficient to satisfy all claims in the unlikely event of our insolvency.
Financial Institution Bond
As additional protection, we maintain a Financial Institution Bond. This is provided under a comprehensive Stockbrokers’ Blanket Bond. The Blanket Bond affords coverage against loss of securities due to fraud (including employee fraud), theft, mysterious disappearance, damage, destruction and forgery or alteration.
Federal Deposit Insurance Corporation (FDIC)
We are not a bank. However, clients may purchase and hold certificates of deposit (CDs) at certain banks through us. In addition, clients participating in Baird’s Cash Sweep Program may have eligible cash balances swept to one or more participating banks.
Deposits at banks are generally insured by the FDIC on principal and accrued interest up to $250,000 per individual depositor for all deposits held in the same capacity at a bank. However, under Baird’s Cash Sweep Program, clients may, through a number of FDIC-insured participating, have their cash balances spread among these banks, providing the potential for FDIC coverage greater than that which clients may have if cash deposits were held only in a single bank. This feature currently seeks to make available up to $1,250,000 for most account types (or $2,500,000 for joint accounts with two or more owners) of aggregate FDIC insurance protection for the cash balances of clients participating in the Cash Sweep Program. For more information on Baird’s Cash Sweep Program, please visit www.rwbaird.com/cashsweeps.
Please note that any deposits (including CDs) that a client maintains in the same insurable capacity directly with a Bank or indirectly through Baird or another intermediary, regardless of the number of accounts, are aggregated by the FDIC for purposes of the applicable insurance limits. For more information on FDIC insurance coverage, visit www.FDIC.gov .
Please note that SIPC and Baird’s insurance policy in excess of SIPC limits do not provide protection for bank deposits in the event of a bank failure.