Last year I finally got fed up with all the statements I was getting from various financial institutions. I had retirement accounts with 4 or 5 different companies and stock accounts with 2 or 3 others. It was very difficult to keep track of what was doing well and what was doing poorly.
I finally settled on two institutions; one for retirement type accounts and one for my non-retirement savings, checking and investments. I contacted both institutions and gave them a list of what I wanted to move over. On the retirement side of things, the transition went very smoothly. They filled out all the paperwork, sent it to me for my signature and I FedExed it back to them. The non-retirement side of things took a bit more work–probably because I was dealing with a smaller amount of money, so they made me do it on my own.
In the end, it has made things much easier for me to manage. If you have worked several different places over the last decade or so and have retirement accounts in various areas, you might consider combining them.
One advantage I found was that with my combined balance, some of the fees I was paying are now waved on the retirement side of things. On the non-retirement side of things, I have access to savings accounts and CD with a higher interest rate because I’m over a certain threshold.
On the negative side of things, I suppose there is a little more risk that someone could get into one account and take my money than getting into multiple accounts. This is probably offset by the fact that, with my combined account on the retirement side, I have an account manager paying much more attention now because of the larger balance.
What are your thoughts? Do you think it is better to combine to one or two institutions or keep things spread out with 5 or 6 different places?
Originally published March 19, 2008.
Andrew Conkling says
A few tangential comments:
* Managing your disparate finances can be easier if you use an aggregator tool like http://mint.com. You can see all your finances in one place.
* If the thing that fed you up about the statements was receiving all that paper mail, you could also sign up for paperless (online) statements. I’m sure your office would love you for that. :)
That said, to answer your question, I don’t think it’s too bad to put all my eggs in one basket. Frankly, I trust my bank, and if my accounts were compromised, I know that my bank would handle it.
Mark Shead says
Paperless statements with most banks mean getting and email that tells you to login to a web site where you can download a pdf of your statement for your records. This isn’t too big of deal with one or two banks, but if you have 6 or 7 it becomes a real pain to keep up with.
Roland Greco says
As a financial advisor I find more and more people are looking to simplify their lives. When a new client walks in with 5 different statements they usally have no clue as to what investments they have, how the investments have performed and more importantly if their different accounts are diversified and “working together”.
I find that with less accounts people have a better understanding of what they own.
With that title I thought you were going to talk about all the banks going down the tubes…!
Mark Shead says
@missbossy – Well banks going bankrupt have forced me to consolidate a few accounts. :)
This got me thinking. Mostly because I’ve moved jobs and countries a few times, I have pensions, endowment policies, accounts and investments with 11 different companies/banks. In addition, I have a further 3 accounts jointly with my husband, and he has 6 accounts in his name (we run 2 businesses). So that’s 20 between us. We’ve asked various experts how we could simplify this but they usually reply that it’s best to have your assets spread around (i.e. it’s too complicated for them). Well, we’ve certainly done that! Maybe I should try harder, though I’m not sure where to begin…
Mark Shead says
@Claire – There are some advantages of having money spread around–particularly if you start hitting the limits of FDIC insurance. That said, eleven banks seems like a bit much.
SMSF Admin says
I am a financial advisor. As a financial advisor I find more and more people are looking to simplify their lives. When a new client walks in with 5 different statements they usually have no clue as to what investments they have, how the investments have performed and more importantly if their different accounts are diversified and “working together”. I find that with less accounts people have a better understanding of what they own.