Question: I have my Roth IRA with Merrill Lynch, in what they call an MFA account. Also have my SEP there. Since the Bear Stearns debacle, I've been wondering what happens to individual investor's accounts, but have been afraid to ask. What I don't understand is what happens to people with accounts in a firm that goes under? I know Merrill Lynch is being taken over, but I don't know what happens to individual small fry accounts like mine. B., Ancram, NY
Answer: Your account is safe. You may be a "small fry" like most of us, but you're still a valuable customer with assets.
Like any merger, there will be a (difficult) knitting of back offices, maybe a name change, perhaps a different logo, and some new employees. These are the kinds of shifts in business that typically accompany a merger.
But you still own the mutual funds, stocks, bonds, or whatever securities you have in the MFA that makes up your Roth. The same holds with your SEP.
I would keep a close eye on several things. First, watch to make sure the information about your account stays accurate. Problems can emerge in the aftermath of a merger, and it's always easier to get the information fixed if the mistake is caught early. Pay attention to any fee changes or investment charges. Monitor customer service. All of these could improve or get worse in the coming months or year.