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Should I consolidate accounts?

Should I consolidate accounts?

June 15, 2022

Over the years, I've observed that it's common for investors to confuse the consolidation of accounts with the diversification of accounts.  The first rule of investing is diversification and it's a rule we shouldn't ignore.  However, we can diversify AND consolidate.  They are not the same and one does not exclude the other.

In my opinion, consolidation is muy importante.  You'll have fewer passwords, fewer statements, fewer accounts to keep track of, and fewer accounts that could get hacked.  It's also easier to be sure you're diversified correctly if all of your investments are held at one firm.  

A logical next question I've been asked is, what happens if the investment firm holding your consolidated accounts closes its doors?  In that case, which can certainly happen, investors simply have to find another firm to hold assets.  In other words, if you own stock in Exxon, for example, you'll still own stock in Exxon.  You don't lose ownership of a stock if an investment firm goes out of business.

The greatest benefit of consolidating investments actually benefits those left behind when we've passed.  If you've ever wrapped up someone's affairs or been named an executor of an estate, you know what I'm talking about.  Settling an estate can be a huge chore and extremely time consuming.  Your executor will never know how much time and hassle you've saved him or her if you choose to consolidate.

Don't hesitate to call the office if we can help with consolidation or if you have additional questions.