Comments on: Should You Have More Than One Brokerage Account?

By: Doug Pedersen

Doug Pedersen — Sat, 25 Mar 2006 07:14:56 +0000

Don’t forget that there are good reasons to keep your brokerage activity with one broker. All brokers offer “break points” where their fees are reduced or eliminated. For example, I use TD Waterhouse, which charges inactivity fees (in brokerage accounts, but not in retirement accounts), however, these fees are waived if your total account balances exceed $25,000. Similarly, as account balances increase, commissions decline. Access to advice and research (and top investing talent) is also related to accounts invested.

It’s easy to feel nickel-and-dimed at many banks and brokerages. Resist the temptation to “spread it around” – they know who their best customesrs are, and the rules are really different for them. Find a brokerage that meets your needs, focus on being a good customer, and reap the benefits.

By: Trent

Trent — Fri, 24 Mar 2006 01:48:00 +0000

The reason I can think of would be if there is research you would like to have access to from each brokerage. For example, you might split funds between one broker that has very low costs and another that offers solid research on securities that interest you.

By: Tim MMF

Tim MMF — Fri, 24 Mar 2006 01:27:31 +0000

Yeah, I agree that you really only need one brokerage account. It would just be too unweildy to manage more than one.

By: Inchoate Random Abstractions

Inchoate Random Abstractions — Thu, 23 Mar 2006 18:22:59 +0000

Herb..I’m not sure what the actual amount is for most brokerage companies, but yes, it’s definitely higher than the current $100,000 FDIC insurance limit. I think my financial planner said $1 million for Fidelity. But again, don’t quote me on that. My point is that if you have a ton of assets (i.e., you’re a multi-millionaire), you might want to have 2 brokerage accounts. I don’t think most of us who are reading this blog fall into that category.

By: Joshua K

Joshua K — Thu, 23 Mar 2006 16:59:50 +0000

Yeah, I think my banks are up to $100,000 on the FDIC insurance limit. I don’t use a brokerage firm, but it’s definitely something you should ask your firm.

By: Herb

Herb — Thu, 23 Mar 2006 16:39:55 +0000

Aren’t brokerage accounts insured to a higher level than FDIC though? With FDIC, it’s 100K so it’s nt recommended to go over that, but I thought it was much higher for brokerage accounts, which are insured by a different entity…

By: Inchoate Random Abstractions

Inchoate Random Abstractions — Thu, 23 Mar 2006 14:01:36 +0000

I’m not absolutely positive about this, but when I asked my financial planner whether it would be better to keep my emergency fund in an FDIC insured savings account vs. a Fidelity money market account, he indicated that most brokerage accounts are insured up to a certain amount. If you have assets in excess of that amount, then it might make sense to have two accounts with two brokerage firms.