Is my money safe with my broker?

My brokerage accounts are at Merrill Lynch. I own mostly stocks, plus open and closed mutual funds, and have between $1 and $2 million at three different accounts. Are they safe or will Merrill Lynch also go belly-up? If so, do I risk losing everything?

There are no safety ratings for brokers. But we're ready to present today the facts we do have.

All brokers currently doing business must meet the SEC's minimum capital requirements. But the minimum capital requirements are merely a bare bones minimum — not nearly enough, especially given the uncertainty regarding the valuation of certain new securities like mortgage-backed securities and derivatives.

So when we look at a broker, we look for a capital cushion that is much larger than the minimum capital requirements. The question we ask is: For every dollar of capital that they're required to have, how many dollars in net capital do they actually have?

The brokers listed at the top have the highest capital multiples. The brokers listed at the bottom have the lowest capital multiples. Bear in mind that there are other factors which can contribute to the strength or weakness of the firm. So this capital multiple alone is not enough to pan a particular firm. But it does give you something solid to hang your hat on.

If your brokerage firm runs out of its own capital, if regulators cannot find a buyer, and if the Fed doesn't bail it out, your account could be frozen. You will still have your stocks, bonds and ETFs. They're not going away. But you may not be able to sell your securities when you want to.