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Too Many Accounts

By Peter T. Waldron

People have myriad of reasons for having multiple accounts and account types, be it psychological or financial. This article will discuss why consolidating or reducing accounts may be beneficial to your financial health. We will explore some of the reasons why people have too many accounts, the problems that can arise in having them, and lastly, we will look at the benefits of account consolidation. This article will arm you with information to be more successful with your own comprehensive wealth planning.

Many people have multiple accounts for different reasons. These reasons include to prevent fraud, to compare advisors, to receive discounts, to hide funds, or just because they have not taken the time to close out accounts when life changes occur. People assume that by opening accounts at different locations, or even multiple accounts at one location, it can reduce their exposure to fraud, this is not usually the case. People also use multiple accounts to test out how financial advisors perform against each other. Some spend time opening multiple accounts to receive discounts or other offered perks. Finally, some people feel the need to hide money from their spouses, so they open additional accounts.

The greatest challenge that comes with having multiple open accounts is when one of the three “D’s” occur; death, divorce, or disability. With a death or divorce, each account will have to be repapered, administrated, and/or transferred. When a disability occurs, each of the accounts will need to be managed by someone. It is highly likely that in either of these situations the accounts will be managed by someone who has little experience with multiple accounts and may not even be aware of all the open accounts. With that said, many people rely on professional help to navigate them. Though, it is important to recognize that having multiple advisors on multiple accounts can create a disadvantage to your wealth. This can lead to one zigging when the other is zagging. Specifically, if one advisors liquidates a position and the competing advisor buys the same position; leaving you, the client, in the same starting place.

The decision to consolidate accounts may make it easier to make decisions and plan for your future. It also gives you the opportunity to work as a team with your spouse and ideally your advisor to help you understand your current wealth and what your financial goals are. Reducing the amount of open accounts that you have may give you a clearer picture of your finances, as you are not trying to check on accounts at various places. Most importantly, tracking the performance of your accounts will be easier. If you have an underperforming account, you and your advisor can make a shift quickly (if your advisors has you invested in 100% liquid vehicles). Lastly, by having fewer accounts it will be substantially simpler to manage the income from your wealth, the gifting of your wealth, and ultimate transfer of your wealth.

Whatever your current situation is we recommend evaluating how many accounts you have and determine if you have too many. We think that you owe that to yourself, your spouse, your family, and to your financial future.



Peter T. Waldron: California Insurance License #0E47827. Peter T. Waldron is a registered representative of Lincoln Financial Advisors, a broker/dealer, member SIPC, and offer investment advisory service through Sagemark Consulting, a division of Lincoln Financial Advisors Corp., a registered investment advisor, Spectrum Wealth Partners, 3000 Executive Parkway, Ste 400, San Ramon, CA 94583. Insurance offered through Lincoln Marketing and Insurance Agency, LLC and Lincoln Associates Insurance Agency, Inc. and other fine companies. This information should not be construed as legal or tax advice. You may want to consult a tax advisor regarding this information as it relates to your personal circumstance. The content of this material was provided to you by Lincoln Financial Advisors Corp. for its representatives and their clients.


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