Assets at Single, or Multiple Brokerages?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
J295
Posts: 2589
Joined: Sun Jan 01, 2012 11:40 pm

Assets at Single, or Multiple Brokerages?

Post by J295 »

61 y/o couple. We have about 2/3 of our net worth in assets at Fido, consisting principally of retirement plan assets. Balance is at VG and real estate. I'm inclined to leave things this way, with an understanding that risk of loss to us in the event of a brokerage failure is quite small. Make sense? Thanks.
chinchin
Posts: 57
Joined: Tue Nov 14, 2017 8:02 pm

Re: Assets at Single, or Multiple Brokerages?

Post by chinchin »

You're actually increasing your risk exposure to any one broker failing, by using more brokerages. However your odds of having access to at least some of your money, conditional on one of your brokerages failing, goes up if you have multiple brokerages.

I opened up a second account not to decrease my risk, but because I got fed up with the Vanguard app.
HomeStretch
Posts: 4973
Joined: Thu Dec 27, 2018 3:06 pm

Re: Assets at Single, or Multiple Brokerages?

Post by HomeStretch »

Your use of Fidelity and Vanguard is reasonable IMO.

I use two brokerages in case my accounts at one brokerage are compromised or unavailable for a period of time. I’m less concerned about brokerage failure.
crefwatch
Posts: 651
Joined: Sun Apr 15, 2007 1:07 pm
Location: New Jersey, USA

Re: Assets at Single, or Multiple Brokerages?

Post by crefwatch »

Since I don't have a bunker, or a go-bag, I may not be the person you want to reply. But the danger of a brokerage failure resulting in any losses to you is vanishingly small. For example, mutual fund holdings are supervised by a trustee, and are not the property of the fund company. Do you keep some gold coins in your basement?

If you find the different features of accounts at Fido and Vanguard to be of value to you, that's one of several possible reasons to leave things the way they are. Maybe when you are much older, you'll want to simplify your holdings. As long as there are no annual fees, do what makes you comfortable.

There are many other reasons for two accounts. For example, my wife's company required one of five brokers on a list for the company stock and options programs. I got involved with TIAA-CREF because my first job's retirement plan required it, and certain holdings there can't be replicated elsewhere. Although my wife and I merged our finances within a few years of marriage, I encouraged her to keep that company stock account as she cashed out, so that she could see (I mean $$$!) the payoff (not worth it, to me -- blood money, as we say about 80-hour weeks in my union ... ) for her years of overwork and occasional Mean Girl co-workers.

Another reason (because we travel a lot) I've chosen an additional financial services provider is to get a credit card with no International Transaction Fees, and a true PIN-priority card. That can be a credit union instead of a brokerage, but it's the general point I'm making.
pasadena
Posts: 647
Joined: Sat Jul 02, 2016 1:23 am
Location: Washington State

Re: Assets at Single, or Multiple Brokerages?

Post by pasadena »

I have the same setup. Fidelity has my 401(k), one Roth IRA for Mega Backdoor Roth, my HSA and my "stocks" brokerage account (originally used for ESPP and RSU, but I consolidated by transferring my "play money" stocks from Schwab). Vanguard has my main brokerage account and one Roth IRA for regular Backdoor Roth.

I may or may not consolidate when I retire - it's far enough away that I don't have a plan for it, plus I will probably retire abroad, so that complicates things.
User avatar
Taylor Larimore
Advisory Board
Posts: 29940
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

Re: Assets at Single, or Multiple Brokerages?

Post by Taylor Larimore »

J295 wrote: Sat Aug 22, 2020 10:54 am 61 y/o couple. We have about 2/3 of our net worth in assets at Fido, consisting principally of retirement plan assets. Balance is at VG and real estate. I'm inclined to leave things this way, with an understanding that risk of loss to us in the event of a brokerage failure is quite small. Make sense? Thanks.
J295:

I believe it is usually much better to have ALL investments at one good company for these reasons:

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 a good company'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.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Simplicity is the master key to financial success. -- We ignore the real diamonds of simplicity, seeking instead the illusory rhinestones of complexity."
"Simplicity is the master key to financial success." -- Jack Bogle
bondsr4me
Posts: 1524
Joined: Fri Oct 18, 2013 7:08 am

Re: Assets at Single, or Multiple Brokerages?

Post by bondsr4me »

You are just fine the way you are.
It is prudent to spread your risk just as you are doing with brokerages.
The only weak link I see is VG "brokerage"; not VG funds or ETF's.
But, I would not recommend keeping all your eggs in one basket.
Just my opinion.
RetiredAL
Posts: 970
Joined: Tue Jun 06, 2017 12:09 am
Location: SF Bay Area

Re: Assets at Single, or Multiple Brokerages?

Post by RetiredAL »

DW and I both have ROTH and Taxable accounts each Schwab and Fidelity. It was not done for diversity, but because we had a Schwab account long before my work 401K switched to Fidelity. Since I was using Fidelity regularly, I started my doing my yearly funding of my Roth with Fidelity, keeping DW's at Schwab.

My 401K and Pension Lump Sum were converted to IRA's at Fidelity when I retired. Last Dec, a Fido Taxable account was established as my excess RMD repository since the RMD's is twice what I withdraw to live on. Then they delayed the RMD's.

DW's Roth at Fidelity was a one year contribution to serve as a placeholder (5 year holding rule concerns) for rolling over my Roth to her if I died. Today with the help of BHs I understanding the rollover to wife rules my better, I know it was not needed, but there it is.

Yeah, it complicates this a little having it in two places, buy not much. I do my equity/fixed ratios by account type (they have different targets) so I seldomly even analyze that ratio as a "one pot".

My Dad's Trust accounts are at Schwab, so when he gave me the Trusteeship, those accounts just showed up under my user ID.
Index24
Posts: 43
Joined: Sat Sep 08, 2018 7:25 am

Re: Assets at Single, or Multiple Brokerages?

Post by Index24 »

Taylor Larimore wrote: Sat Aug 22, 2020 12:21 pm
J295 wrote: Sat Aug 22, 2020 10:54 am 61 y/o couple. We have about 2/3 of our net worth in assets at Fido, consisting principally of retirement plan assets. Balance is at VG and real estate. I'm inclined to leave things this way, with an understanding that risk of loss to us in the event of a brokerage failure is quite small. Make sense? Thanks.
J295:

I believe it is usually much better to have ALL investments at one good company for these reasons:

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 a good company'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.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Simplicity is the master key to financial success. -- We ignore the real diamonds of simplicity, seeking instead the illusory rhinestones of complexity."
:beer
Dead Man Walking
Posts: 1000
Joined: Wed Nov 07, 2007 6:51 pm

Re: Assets at Single, or Multiple Brokerages?

Post by Dead Man Walking »

When I retired, I moved all of my mutual fund assets to Vanguard. I have not experienced any problems with Vanguard other than an occasional inability to access my accounts because they were doing maintenance on the website. However, Vanguard is converting all accounts to their brokerage account platform. I have all my assets in mutual funds and liked the simplicity of Vanguard’s annual statements for mutual fund accounts. According to many posts here, annual statements for Vanguard’s brokerage accounts are cumbersome and not as functional as the annual statements on the old mutual fund platform. Consequently, I have decided to move my taxable account to a Chase YouInvest account for simplicity. Since I have bank accounts at Chase, it is simpler for me to move money from my bank accounts to my investment account at the same website. The annual statements for the Chase account is different from what I am used to, but the new brokerage account statements from Vanguard would also be different. Furthermore, I concur with the old adage about not having all your eggs in one basket. I was uneasy having all my accounts with Vanguard.

DMW
Stumptowngal
Posts: 6
Joined: Fri Jul 24, 2020 3:12 pm

Re: Assets at Single, or Multiple Brokerages?

Post by Stumptowngal »

My husband and I, late 60s couple, went through this thought process of single vs. multiple brokerages last year upon retirement.

We had an IRA at Fidelity, 401A and 403B at Lincoln Financial and a taxable account plus IRA at Vanguard. We are low maintenance in that we own low cost index funds and make very few transactions.

The value of simplicity in record-keeping; tax-prep; and tracking things once we begin RMDs won out over any perceived safety of not having all our eggs in one basket. We also wanted to make things easier for our children upon our passing. So, we moved everything to Vanguard quite easily with no problems. Having accounts at a local brick and mortar bank and CDs at a local credit union relieves any worry of having immediate access to funds.
neverpanic
Posts: 387
Joined: Sun May 10, 2020 12:26 am

Re: Assets at Single, or Multiple Brokerages?

Post by neverpanic »

RetiredAL wrote: Sat Aug 22, 2020 12:33 pm My Dad's Trust accounts are at Schwab, so when he gave me the Trusteeship, those accounts just showed up under my user ID.
Seeing that this transition was seamless is worthy of a tip of the cap to Schwab, I would say. A decade ago, my father struggled with how to manage his deceased parents' accounts and ultimately, everything was cashed out as-was. It wasn't my business, but I know they got fleeced. He refuses to discuss investments, land, or any element of estate planning with me and we don't use the same brokerage.
I am not a financial professional or guru. I'm a schmuck who got lucky 10 times. Such is the life of the trader.
Blake7
Posts: 284
Joined: Fri Mar 30, 2018 2:52 pm
Location: USA

Re: Assets at Single, or Multiple Brokerages?

Post by Blake7 »

I’d consolidate to one, especially for your age group. The risk of brokerage failure is beyond tiny, and is likely insured (VG is). Simplify your life and your heir(s).
000
Posts: 2680
Joined: Thu Jul 23, 2020 12:04 am

Re: Assets at Single, or Multiple Brokerages?

Post by 000 »

Definitely multiple if above SIPC limits.
Topic Author
J295
Posts: 2589
Joined: Sun Jan 01, 2012 11:40 pm

Re: Assets at Single, or Multiple Brokerages?

Post by J295 »

Thank you all for taking time to help out.
User avatar
ruralavalon
Posts: 19403
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Assets at Single, or Multiple Brokerages?

Post by ruralavalon »

J295 wrote: Sat Aug 22, 2020 10:54 am 61 y/o couple. We have about 2/3 of our net worth in assets at Fido, consisting principally of retirement plan assets. Balance is at VG and real estate. I'm inclined to leave things this way, with an understanding that risk of loss to us in the event of a brokerage failure is quite small. Make sense? Thanks.
It's okay to leave it as is, with accounts at not Vanguard and Fidelity.

We have all of our accounts at Vanguard, and use only Vanguard index funds. I like the convenience of having all stocks investing accounts at one place.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
Rudedog
Posts: 265
Joined: Wed Aug 01, 2018 3:15 pm

Re: Assets at Single, or Multiple Brokerages?

Post by Rudedog »

Yep, I use Vanguard and TD Ameritrade (soon to be Charles Schwab).
User avatar
abuss368
Posts: 21505
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Assets at Single, or Multiple Brokerages?

Post by abuss368 »

J295 wrote: Sat Aug 22, 2020 10:54 am 61 y/o couple. We have about 2/3 of our net worth in assets at Fido, consisting principally of retirement plan assets. Balance is at VG and real estate. I'm inclined to leave things this way, with an understanding that risk of loss to us in the event of a brokerage failure is quite small. Make sense? Thanks.
I prefer the simplicity of having everything at one investment house for the reasons mentioned in this thread. In fact, moving and consolidating everything at Vanguard was the best financial decision we have ever made.
John C. Bogle: “Simplicity is the master key to financial success."
AlwaysaQ
Posts: 597
Joined: Fri Apr 13, 2007 7:37 am

Re: Assets at Single, or Multiple Brokerages?

Post by AlwaysaQ »

I have an account at Vanguard because I prefer mutual funds over ETFs and their mutual funds with an ETF share class don't generate taxable capital gains. I have my IRA at Fidelity because there are offices nearby that my heirs can visit when I pass since inheriting and dividing an IRA is much more complicated.
invest2bfree
Posts: 68
Joined: Sun Jan 12, 2020 9:44 am

Re: Assets at Single, or Multiple Brokerages?

Post by invest2bfree »

My wife is finance illiterate so it is easier for us consolidate in one brokerage.
In case anything happens to me then it is easier for her to manage.
Post Reply