Why it Makes Sense to Consolidate Your Investments

Why it Makes Sense to Consolidate Your Investments - Marshall Financial Group

Author: Anthony Pugliese, Senior Financial Advisor, Director of Trading and Portfolio Management

How many different jobs have you had in your lifetime? The answer is different for everyone. According to a Bureau of Labor and Statistics study published in 2015, the average worker held 11.9 jobs from ages 18-50. This could result in having retirement funds left behind with at least a handful of former employers. So what should investors do with these accounts that they hold at multiple institutions? While it may not be possible to combine all of your investments into one account due to the different taxation and registration types, there are plenty of advantages to consolidating your investment accounts to one institution that will make your financial life much more organized.


When you have accounts at multiple institutions, they generally come along with many statements, prospectuses, trade confirmations, tax documents, etc. It can be overwhelming to keep track of everything in each account. Most institutions now are able to consolidate your accounts into one statement. This provides you with a snapshot each month of individual accounts and the combined total, all in one report.

Proper Asset Allocation and Diversification

As you approach retirement, your overall asset allocation becomes much more important in reducing risk. A properly diversified investment allocation based on your risk tolerance may be difficult for you or your advisor to maintain if there are accounts that are held outside the review scope. This is especially true during volatile periods in the market when there is more likely to be sharp movement either to the upside or downside.


Once you reach age 72 you are required to take a minimum distribution from your retirement accounts. This can be difficult to keep track of if you have multiple institutions that you must withdraw from separately. When your retirement accounts are consolidated into one account, there is one RMD calculation and one withdrawal form. The institution and your financial advisor will have the information necessary to make sure you satisfy your minimum distribution requirement each year. As with any potential moves it is important to analyze the advantages to keeping the funds in the retirement plan or consolidating into an IRA by comparing costs, investment options, and service expectations.

Personalized Service

In working closely with a Financial Advisor you will have a direct relationship with the individual managing your accounts. This means that you will have access to personalized service and will not have to call a 1-800 number and go through an automated system to, hopefully, get the help you need. You will know the person you are working with and will be able to speak with them directly whenever you have an issue. Along with this comes the confidence that anything you need will be handled for you in your best interest and in a timely fashion.

The Next Generation

Having accounts spread across multiple institutions can make it very difficult for your beneficiaries to access in the event something happens to you. Consolidating to one institution will cut down on the amount of time required to settle out the transfer of your account and estate to your beneficiaries. It will also help ensure that all accounts will be included in the estate transfer process and none will be missed. The funds that you worked your whole life for and saved will be left as a legacy to your heirs in an organized fashion that will be less burden on them during the difficult time.

Of course, there is always the old saying “don’t put all your eggs in one basket”. This refers more so to owning a highly concentrated amount of one asset, such as gold or a specific stock. Our belief is that with proper investment allocation and diversification you do not have all your eggs in one basket by consolidating to one institution or Advisor. Investment in a well-diversified portfolio that is allocated based upon your risk tolerance will reduce the potential for a devastating loss and increase the potential for successful achievement of your goals.