Consolidating Your Financial Relationships

Consolidating Your Financial Relationships

How many financial advisers do you work with or how many accounts do you have with different institutions?

If you’re like many Americans, you probably work with more than one, but that could be a number that’s changing.

I recently read about a trend that sees many people consolidating the number of investment advisers they work with, and their reasons for doing so are pretty easy to understand. Many want to improve their planning of retirement income while others want to lessen where their assets are held.

In this post, we’ll dive deeper into just who the people reducing their relationships are and how their circumstances bring them to the decision to consolidate everything.

Who Is Consolidating Their Investment Accounts?

When looking at the trends, the identities of those doing the consolidating can fall into one of three categories:

  • Households With Less Than $200,000 Invested – This covers the majority of people. Those in this category will typically focus on protecting their assets and will work with someone who can help release equity in their home while exploring different ways to produce additional income.
  • Households With Assets Invested Worth $200,000 – $2,000,000 – Instead of protecting assets, this category of investors will typically instead focus on what they need to do to maximize income that can come from the assets they own.
  • Households With Over $2,000,000 – Households in this category will typically focus on finding retirement programs to help disperse assets as they seek to maintain their lifestyle as well as their legacy. As a result, this is the category that will have the most need for financial planning and wealth management services.

Would Consolidating Work For You?

After thinking about and looking at the reasoning others have used, I’ve determined that there aren’t many good reasons to keep your assets split up among different advisers. However, prior to consolidating your assets be sure to do a comparison of account fee’s, investment expenses, and potential tax consequences. In fact, that so many have different advisers might be by accident or laziness. If you’ve ever tried rolling over a 401k, you know how much of an annoyance it can be between filling out withdrawal paperwork, filling out applications on new accounts, answering questions about risk tolerance, and many other aspects involved. That’s a big part of the reason why people leave money in 401k plans when switching employers. What many don’t think about is that as retirement gets closer, having everything in one place gives a more complete picture of financial standing.

People also evaluate rates of return. One account might return 5% annually, while another returns 15%. When you realize that, you might ask yourself what the one returning more is doing differently. In many cases, the answer has less to do with the manager’s ability to outperform it’s peers and more to do the asset allocation or lower expenses.

In the end, it’s all about working with a firm that will be able to craft a financial plan that is ideal for your needs. In that case, independent firms tend to be able to use a wide range of investment choices while also providing financial planning, allowing them to address the goals and concerns for many of the people in the three categories I detailed above.

If you would like to know more about investing or retirement planning, don’t hesitate to get in touch with me and let me know what I can do to help.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. No strategy assures success or protects against loss.

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