Even with separate capacity, many affluent families have investment portfolios far exceeding the SIPC limits. In these situations, claims will first be paid out up to the limits. Those with accounts exceeding the limits will have a claim on the brokerage firm’s assets distributed during the bankruptcy liquidation process.  

History has shown that the SIPC process works, even with large cases. After Lehman Brothers Inc. filed for bankruptcy in 2008 (the largest filing in U.S. history), the SIPC closed the case six years later with an impressive 100% payout to customers. The case with MF Global Inc., which filed in 2011, was resolved after five years with 100% to customers and commodities investors and 95% to creditors.  

Even with this strong track record, the liquidation process can be lengthy. This can be problematic for retirees relying on their portfolio to fund current living expenses. To solve this dilemma, many brokerage companies offer excess of SIPC coverage to their clients.