Reputable brokerages offer insurance. Just as the FDIC insures bank accounts, the Securities Investor Protection Corporation (SIPC) insures brokerage accounts up to $500,000 per account (including up to $100,000 in cash). Note, though, that this insures your account against your brokerage going under, not your stocks losing value. (Sorry!) For more details on exactly how this coverage works, take a look at this article.
Many brokerages even provide additional insurance in excess of the amounts provided by the SIPC. Brokerage firms are required to become members of the SIPC, but there might be a shady brokerage or two out there that somehow isn't insured.
Ask your brokerage (or prospective brokerage) for clarification on what insurance protection it offers. The folks at the SIPC suggest that you look for the words "Member SIPC" on signs and in advertisements of brokerage firms. If you're still not sure whether your brokerage account is protected, you can contact the SIPC directly, either by calling their membership department at 202-371-8300 or by visiting their website.
You can count on large financial institutions like Merrill Lynch
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Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article.