When asked about which financial institutions are the best to use, I have always responded with “bigger is better.” Given the recent issues faced by smaller banks no longer subject to Dodd-Frank, I think this statement has proven to hold up. Unless you have a local credit union you love that is run very well (Credit Unions are okay, but I prefer them only for cheap borrowing), my advice has always been to stick with the largest banks when it comes to parking your largest buckets of money. These are the institutions that are essentially too big to fail, but more importantly, they are subject to the regulations of Dodd-Frank.

In case you wondered, Dodd-Frank subjects the largest institutions to annual stress testing to ensure they are ready for unforeseen circumstances in the economy. If you know anything about American History, you know that bank runs were a large part of our economic cycles over the year. With the modernization and regulation of the financial system that is unrivaled in human history, I would say that things are much better than they were, say, a hundred years ago. Are they perfect? No. This means there will always be wacko conspiracies out there that promote fear and some sort of agenda. And in this current environment, you certainly want to keep all of your account balances within the FDIC limits.

Now, which banks are the best to use? I would recommend any of the largest banks that are based in the U.S. Here is a list of these banks. I personally would avoid banks outside of the U.S. based on the simple fact that they are subject to different regulations. I don’t need to be an expert in every other country’s laws when I have everything I need right here in the U.S.

As far as discount brokerage firms go, the debate has always been Fidelity Investments vs. Charles Schwab. They are the two heavyweights in the discount brokerage industry, and I’ve always said you can’t go wrong with either. My personal preference has been Fidelity Investments because they are privately owned, with employees now even owning a stake in the company. Schwab, while a good company, has been volatile lately in this rumor and panic-induced environment that has drug much of the financial sector down. I believe Schwab is a great company and would not be worried, however, with things the way they are now, it simply takes a lack of confidence (rather than poor fundamentals) to spark an irrational panic. All of our client accounts are held at Fidelity Investments, and the fact that they are privately held and conservatively managed makes me feel all the more confident about them. I recommend them to anyone who asks, and I put my own money there.

Disclosure: I do not receive any compensation for making any recommendations or comments about any of the firms mentioned in this article.