The minimum size of the account to open and obtain premium brokerage account services is $500,000 in equity, but such an account is unlikely to receive many benefits beyond what would be offered by discount brokers. For hedge funds or other institutional clients, in order to obtain the type of services that are worth having a first-rate brokerage account (including reduced trading fees), $50 million of equity is a likely starting point. Nevertheless, these services are highly sought after by customers and the best banks only accept the customers they are most likely to benefit from over time. For this reason, a hedge fund would probably have to have up to $200 million of equity to qualify for the best treatment. Because of this intensity and strings, the standard online brokerage account, which is sufficient for us, the investing public, will not reduce it for an institution. Instead, these clients need a first-class brokerage agreement to ensure the wide range of financial services they need. After Lehman`s collapse, investors realized that no premium broker was too big to fail and spread their counterparty risk over several bonus brokers, especially those with large capital reserves. This trend towards multi-premium brokerage is not without its problems. From an operational point of view, it increases complexity and hedge funds need to invest in additional technologies and resources to manage different relationships. From an investor`s perspective, multi-prime brokerage increases due diligence by a certain complexity, as it becomes very difficult to make a good wealth agreement between the fund manager and his counterparts. [3] If you`ve just gone public, the first thing you need is a stockbroker.
Browse our selection list to find one that fits your needs — as well as information about what you should look for. If the near-bankruptcy of Bear Stearns was a wake-up call on the first broker`s credit risk, the collapse of Lehman Brothers in bankruptcy was probably a direct blow to the hull. Some hedge funds with Lehman as a prime broker are mired in damage, and others have managed to stay afloat, they have not yet been able to fly away and are entangled in the rubble left by Lehman`s bankruptcy.
