Pro's and Con's to using one investment account!

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Old Blue Chair
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Pro's and Con's to using one investment account!

Post by Old Blue Chair » Thu Apr 11, 2019 3:55 pm

What are the Pro's and Con's to using one investment account such as Vanguard for everything ? Currently I have about 75% of my money in a Vanguard Regular and IRA . Also have about 25% in Charles Schwab.
It would be so much easier for me to put everything with one company . What are my risk of doing this?
Thank you

vu8
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Re: Pro's and Con's to using one investment account!

Post by vu8 » Thu Apr 11, 2019 3:58 pm

Old Blue Chair wrote:
Thu Apr 11, 2019 3:55 pm
It would be so much easier for me to put everything with one company . What are my risk of doing this?
If you make sure that you set a proper, secure password, and use it on a virus free computer at home, consolidating into 1 account would simplify your finance and simplify your tax bill. I wanted to move everything to V but V doesn't reimburse no ACATS fee yet Merrill does so I have V and ME for now.

123
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Re: Pro's and Con's to using one investment account!

Post by 123 » Thu Apr 11, 2019 4:12 pm

The biggest issue with one company holding all accounts is that if they are "hacked" or have other operational difficulties you are stuck till it gets sorted out.

Some might decide to divide things up IRAs at one place and taxable account elsewhere. But ideally you would have taxable accounts (with ready cash) at more than one place in case there's a foul-up.
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bck63
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Re: Pro's and Con's to using one investment account!

Post by bck63 » Thu Apr 11, 2019 5:18 pm

I have two -- Vanguard and Fidelity. All my investments at Vanguard are target date and balanced funds. My plan is not to look at them until I retire in 12 years.

I do all my banking, saving and the remainder of my investing at Fidelity. I like having two brokerage firms.

BigJohn
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Re: Pro's and Con's to using one investment account!

Post by BigJohn » Thu Apr 11, 2019 5:27 pm

123 wrote:
Thu Apr 11, 2019 4:12 pm
The biggest issue with one company holding all accounts is that if they are "hacked" or have other operational difficulties you are stuck till it gets sorted out.

Some might decide to divide things up IRAs at one place and taxable account elsewhere. But ideally you would have taxable accounts (with ready cash) at more than one place in case there's a foul-up.
I have all my investments at VG but to mitigate this risk I have a checking/savings account at a local brick and mortar bank. This is were all my bills are paid and includes several months of expenses. It also provides a safety deposit box and Gold Medallion signature capability which VG cannot do. I went this way because simplification for me as I age and for my heirs when I stop aging is an important consideration.

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dwickenh
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Re: Pro's and Con's to using one investment account!

Post by dwickenh » Thu Apr 11, 2019 6:02 pm

BigJohn wrote:
Thu Apr 11, 2019 5:27 pm
123 wrote:
Thu Apr 11, 2019 4:12 pm
The biggest issue with one company holding all accounts is that if they are "hacked" or have other operational difficulties you are stuck till it gets sorted out.

Some might decide to divide things up IRAs at one place and taxable account elsewhere. But ideally you would have taxable accounts (with ready cash) at more than one place in case there's a foul-up.
I have all my investments at VG but to mitigate this risk I have a checking/savings account at a local brick and mortar bank. This is were all my bills are paid and includes several months of expenses. It also provides a safety deposit box and Gold Medallion signature capability which VG cannot do. I went this way because simplification for me as I age and for my heirs when I stop aging is an important consideration.
+1, I agree with BigJohn and handle my investments the same way.
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

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goingup
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Re: Pro's and Con's to using one investment account!

Post by goingup » Thu Apr 11, 2019 6:49 pm

Old Blue Chair wrote:
Thu Apr 11, 2019 3:55 pm
What are the Pro's and Con's to using one investment account such as Vanguard for everything ?
Taylor Larimore made a list about the benefits of consolidation:

Benefits of having all investments in one company:
1. One familiar statement.
2. Less paperwork.
3. Easier tax preparation.
4. Avoidance of low-balance and other small fees.
5. It's much easier to learn only one company's policies, fees, regulations, etc.
6. With larger holdings it may be possible to qualify for lower costs and premium services (Voyager, Admiral, Flagship).
7. Rebalancing and exchanges are easier.
8. Eliminates 3rd party brokerage.
9. A loyal customer is appreciated and usually treated better.
10. Less chance of errors.
11. Knowledge that Vanguard's fine reputation and low-costs are always working for us.
12. More free time for ourselves.
13. In event of death or disability, it will be much easier for others.

retire2022
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Re: Pro's and Con's to using one investment account!

Post by retire2022 » Thu Apr 11, 2019 6:57 pm

Op

Having it at Vanguard allows for greater privileges, Flagship is my goal, and it will be when I retire end of this year.

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Old Blue Chair
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Re: Pro's and Con's to using one investment account!

Post by Old Blue Chair » Thu Apr 11, 2019 7:21 pm

All very helpful. Thank you

bck63
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Re: Pro's and Con's to using one investment account!

Post by bck63 » Thu Apr 11, 2019 7:23 pm

retire2022 wrote:
Thu Apr 11, 2019 6:57 pm
Op

Having it at Vanguard allows for greater privileges, Flagship is my goal, and it will be when I retire end of this year.
So you'll get to Flagship, which means you need one million dollars to have fewer services than Fidelity provides with no minimum investment.

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Re: Pro's and Con's to using one investment account!

Post by retire2022 » Thu Apr 11, 2019 7:30 pm

bck63 wrote:
Thu Apr 11, 2019 7:23 pm

So you'll get to Flagship, which means you need one million dollars to have fewer services than Fidelity provides with no minimum investment.
bck63, I'm ok with that, I had Fidelity in 1987 during the crash. I rather support the Vanguard folks, also I would like to buy Primecap funds, which btw I currently manage 1.5 portfolio.

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Re: Pro's and Con's to using one investment account!

Post by bck63 » Fri Apr 12, 2019 5:44 am

retire2022 wrote:
Thu Apr 11, 2019 7:30 pm
bck63 wrote:
Thu Apr 11, 2019 7:23 pm

So you'll get to Flagship, which means you need one million dollars to have fewer services than Fidelity provides with no minimum investment.
bck63, I'm ok with that, I had Fidelity in 1987 during the crash. I rather support the Vanguard folks, also I would like to buy Primecap funds, which btw I currently manage 1.5 portfolio.
:thumbsup

Sorry retire2022 didn't mean to sell you short. I thought You needed a million to get to Flagship and you said you would be there at the end of this year. Congrats on your upcoming retirement! I have 12 years to go and will be squirreling away until then. Hope to get to a million but may not. But that will still be okay.

One reason I like Fidelity for everything is psychological. My wife and I have our joint EF savings there, our checking there, and our investments there. So with everything there, when the market goes down is doesn't look as bad since our savings and checking is not part of our asset allocation. :-) A little psychological cheating but whatever works.

Best regards.

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Re: Pro's and Con's to using one investment account!

Post by oldcomputerguy » Fri Apr 12, 2019 6:09 am

I don't think there's anything inherently wrong with either having everything in one place or in having multiple homes for your investments. As noted above, there are multiple advantages to having them all in one place; some folks like the added security against intrusion that spreading them around provides. (Disclaimer: DW and I use multiple institutions. Our IRAs are at Fidelity, taxable investments are at Vanguard, and her workplace 401k is through Schwab.)

Something else that may figure into your calculation (and that I don't think anyone else here has mentioned) is SIPC protection.

Securities Investor Protection Corporation (SIPC) protects against failure of the investment house itself (it does not protect against market loss in the investments). That protection is limited to $500,000 per "separate capacity", so if one's portfolio is quite large (perhaps in two-comma territory), it might make sense to break it up into pieces so that no one piece exceeds SIPC protection limits. Here's a helpful page describing how that works with multiple accounts.
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Stinky
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Re: Pro's and Con's to using one investment account!

Post by Stinky » Fri Apr 12, 2019 7:43 am

BigJohn wrote:
Thu Apr 11, 2019 5:27 pm
123 wrote:
Thu Apr 11, 2019 4:12 pm
I have all my investments at VG but to mitigate this risk I have a checking/savings account at a local brick and mortar bank. This is were all my bills are paid and includes several months of expenses. It also provides a safety deposit box and Gold Medallion signature capability which VG cannot do. I went this way because simplification for me as I age and for my heirs when I stop aging is an important consideration.
This is also my situation. Accounts at Vanguard and local bank, with enough money at bank to pay bills for a while if Vanguard has problems.

It’s so much easier to deal with fewer providers!!
It's a GREAT day to be alive - Travis Tritt

DetroitRick
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Re: Pro's and Con's to using one investment account!

Post by DetroitRick » Fri Apr 12, 2019 9:01 am

Using one financial house for all accounts involves all the pro's and con's already mentioned here. Keeping critical mass and taking advantage of any bargains from holding larger household balances is the most important to me. But I also believe that the simplicity aspect might be overstated for some of us. Whether you use one brokerage or multiple, you are probably going to have multiple accounts eventually anyway - Roths, taxable, traditional IRA's, etc. More so with a spouse. In today's online world, I don't see that it makes all that much difference whether you go through one or several brokerages. Unless you do it all manually (I definitely do not), then I can see it being a royal pain.

I keep use two brokers now for two specific reasons: to get a constant real taste for what other firms are doing and offering (and I'd rather do that via direct experience vs. just secondhand opinions), and to provide a temporary funding source should a short-term issue arise with one company (as in a week to a month). That second rationale is new for me - it wouldn't have mattered at all prior to entering distribution stage. In the past, my rationale also involved each firm having some specific cost advantage for certain investments (no longer material, in my case, but it's possible).

There are also times when you might want to "try out" a firm without going all-in. That could result in multiple brokerages for a time. If I were ever to want to leave my primary brokerage, I'd probably move a smaller Roth account first, and maintain separately for a while, and see how it goes before going all-in. But that's more a temporary thing.

Edited to add - But here's one example of where having some accounts under one roof could really help. I've done a few Roth conversions where the whole process took just a minute. I could simply move shares with a mouse-click to accomplish that conversion. Had Roth and Traditional IRA been separate places, no way would it have been that quick and easy and form-free.

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Re: Pro's and Con's to using one investment account!

Post by beyou » Sat Apr 13, 2019 6:57 am

Few really can have all under one roof. A workplace retirement plan will go wherever your employer chooses (if you are self employed you can choose).

I have most at V
Some savings bonds (great rates and I dont find TD bad)
401k at Voya
etrade for company stock plan

What is easier to decide and implement on your own is for banking. I prefer 2 banks foe bill pay, atm and checking, so I always have one functioning to get cash and pay my bills. When one or other website is down, no sweat. Always an atm nearby. Easy to transfer between the two electronically.

student
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Re: Pro's and Con's to using one investment account!

Post by student » Sat Apr 13, 2019 7:35 am

Personally I do not plan to have everything in one account (one company). The main reason is that I do not want to be without access to my money in the event of technical issue with one company.

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