AFAIK, the underlying assets in investment accouns are owned by their account holders, the broker just manages them. If the broker becames insolvent, these assets are not part of insolvency proceeding.

For regular bank account, there are no other underlying assets, it is just the sum bank owes to the account holder. If the bank becames insolvent, outside of insurance limits, these are just claims against the bank.

Well the fun part is that the way it's different is that there would be a bank account with your money in it, that the brokerage isn't allowed to touch. So, you're protected from the brokerage going bankrupt - your money is still yours if that happens.

But it's still in a bank account, so if the bank goes under you're screwed. See my other comment in this thread though...

My holdings accumulate capital gains and are insured by market forces rather than the FDIC. I can put them in volatile holdings like stocks, or fixed income or even just money markets. That's pretty much what banks are doing and just keeping a bigger percentage of the returns for themselves.