[ucm_edge]

You don’t have to use a singular bank to this. You have can have numerous banks in and sweep the money around to control exposure to any one bank. A single bank is not the norm for this kind of setup. Sweep accounts are a thing for this very reason.

[dig1]

Using sweep accounts is considered an investment (of client funds), which must be clearly stated in TOS. This also pulls tons of regulations for the company. There is also a higher chance that one of the sweep account investments goes badly than a bank collapses where you hold client funds.

[makestuff]

Yeah my first thought was I am absolutely shocked that they used SVB exclusively until 9 months ago. Now they use JPM, but what if JPM has an issue? You would think a payroll company would integrate with at least 2-3 of the bulge bracket banks…

[x0x0]

For long term holding, sure. For funds that move in and out in 48 hours? I doubt any bank wants money bouncing in and out like that. They probably pay svb, and now jpm, to be allowed to do that.