Questions for rich folks

[tmm99]

Now that I got your attention, do you keep all your money in one basket or you spread it over multiple banks/brokerage firms? Is it wise to split it up in multiple baskets just in case?

What is your strategy?

 

[73ss454]

Vanguard for the bulk and a few CD's with Pen Fed.

 

[traineeinvestor]

If rich is defined as anyone with enough to contemplate early retirement, then for my part the answer is "yes" - I split my assets between multiple brokerage firms/banks.

Part of the split is forced (the banks I use in Hong Kong provide either limited services or have no presence in New Zealand), part is competitive (e.g. I ended up using a bank because it offered the best mortgage deal available at the time I wanted to borrow) and part because I do not want all my eggs in one basket. Sure, life would be a little simpler to limt my self to one in each country but not by enough to overcome the reasons why I went to multiple institutions in the first place.

 

[FIREd]

Most of our money is at Vanguard (by choice). DW's 401K is at Fidelity (no choice). CDs at PenFed and USAA (by choice: best rates). I-bonds at Treasury Direct (no choice). Company stock at Etrade (no choice). Not really by strategy I suppose, but the money is spread around.

 

[Spanky]

We are not rich, but we keep most of our money at Vanguard and Fidelity.

 

[wanaberetiree]

define "rich"?

 

[tmm99]

define "rich"?

Sorry, it was just an attention getter (kind of half jokingly saying it). I was just interested in how I may want to split my money since it's all sitting there at Vanguard except for a part of my 401K.

 

[scrabbler1]

Most of mine is with Fidelity, as I have been with them since 1990. In my working days, I had my 401(k) with different Plan administrators, whichever one the company chose (and they switched a few times in the 23 years I was there). I rolled the 401(k) into a Fidelity IRA after considering keeping it with Principal Financial Group, the last 401(k) administrator. PFG did not have the mutual fund choices Fidelity had which is why I did not stay with them.

I also have some money with Dreyfus-Mellon but not a whole lot.

One advantage of having a lot with one firm is that you get some preferential treatment whether it is a personal account executive (no fee, but make sure you don't have some pushy guy as I have written about a few times) or going to the head of the phone queue when I called on their toll-free line.

 

[Aiming_4_55]

Not rich here.

I have investment $$ in Vanguard, Fido, TD Ameritrade, and Wells Fargo. It was mainly due to employer administered plans. My main one is Vanguard as I wanted to qualify for additional services for free or reduce fees, so most of my personal taxable investments sit there.

I have personal and business checking at a local bank, along with $$ at a few online banks, previous promotional rates, etc.

 

[sunnysideup]

It's split between Trowe and Fidelity. (There is some comfort in not having all the money with one firm...) CDs are with the credit union.

Used to have a lesser amount with Vanguard too, but was not pleased with their services or capabilities during rollovers and conversions. Left them last year. Still hold some of their funds, but since I am more invested in stocks than funds, the I find doing things "easier" and less expensive with the other firms.

P.S. I am rich in many ways, just not sure about financially! Depends on the criteria.....

 

[RunningBum]

A very recent thread may help:
http://www.early-retirement.org/forums/f28/is-it-safer-to-use-multiple-fund-companies-61206.html

Mine was somewhat spread out but I'm consolidating into Vanguard. When you get enough there you qualify for Flagship service which gets you a few small benefits. I'll keep enough cash somewhere else, and also keeping another brokerage account open just in case there are access problems getting to Vanguard.

 

[obgyn65]

I am not feeling comfortable answering this question, sorry.

 

[H2ODude]

Over ~25 years using Fido for the non tax protected stuff, as I've migrated employment I now have now moved all 401 and 457's to them in my IRA's. Same with DW. Their customer service was always excellent, and now that it's a good chunk of money, they go out of there way to be nice. Or maybe it would be same with less, who knows. Icing on the cake is they just opened a service center here in town I pass right by. One difficulty I had a few years ago was getting an international wire transfer done over the phone; they were very reluctant (and I appreciate that) but I had to do another last week and just dropping by in person it was easy.

 

[Andre1969]

I have my current 401k and the rollover IRA from my previous employer with Schwab. Rollover IRA from the employer before that is with Fidelity. The proceeds from my employer before that is still in a 401k, and I think it's with ING now. The website says "Boeing" all over it, but when statements come in the mail, they have "ING" on them, and it's in the website URL.

I also have a Roth IRA with Janus, as well as regular mutual funds with them. Also have some with American Century (formerly 20th Century). And I have a brokerage account with Scottrade.

I probably should consolidate some of those accounts, but I've just been too lazy to.

 

[MichaelB]

There is a PITA factor in having multiple accounts. They each need to be tracked and monitored, records kept and fees paid. This doesn't sound like much and it may not be an issue for someone good at managing details, but it can be a problem if someone else needs to step and manage the finances in case of illness, accident or worse. We have simplified some since my ER and I continue to look for ways to reduce the number of accounts, and have also included instructions on how to do even more should I leave the scene unexpectedly.
I think for most retired people one investment account and one bank is enough. Working people need to deal with employer provisions that complicate that.

 

[Brett_Cameron]

401 k (bulk) at T Rowe Price and brokerage with USAA.

 

[2B]

Not counting employment related plans where I have no choice, I'm split between Vanguard and ETrade. I like having the online bank option with Etrade.

 

[LOL!]

There is a PITA factor in having multiple accounts. They each need to be tracked and monitored, records kept and fees paid.

In this age of the internet and online stuff, there is hardly any difference between having one web browser window open or two or three windows open. Also, multiple statements are no big deal since they are equivalent to one big statement with even more pages. Furthermore all vendors download tax info at the click of a button into tax software nowadays.

We have multiple accounts since we are both employed and have separate 401(k)s at different vendors. We have assets spread around at 7 or so major places mostly for historical reasons and their separate "no fees" policies. We have the least amount at Vanguard, but do use Vanguard ETFs at two other vendors and Vanguard funds in 529 plans. Vanguard is a good shop, but by no means the only place to do business.

Perhaps another benefit of using different financial institutions is that one is prevented from doing any major portfolio changes in a day or so.

Anyways, one vendor or multiple vendors ... I do not see a strong reason to force anybody to go one way or the other.

 

[ziggy29]

There is a PITA factor in having multiple accounts. They each need to be tracked and monitored, records kept and fees paid.

Would agree in many ways but there are times -- especially if you own annuities and/or have substantial savings -- where you want to split it up in order to remain below insurance limits with each custodian.

 

[MichaelB]

Would agree in many ways but there are times -- especially if you own annuities and/or have substantial savings -- where you want to split it up in order to remain below insurance limits with each custodian.

For sure. Some accounts, such as HSAs, are also separate simply because the major brokerage firms and many banks don't offer them or do but through subsidiaries. In general, though, lots of accounts are not worth the effort.

 

[ziggy29]

For sure. Some accounts, such as HSAs, are also separate simply because the major brokerage firms and many banks don't offer them or do but through subsidiaries. In general, though, lots of accounts are not worth the effort.

True that. In the case of my 401K and HSA I have no real choices -- sure, I could use any HSA I wanted but there's only one I can directly deposit into from my paycheck (with no SS or Medicare tax) -- and if I went elsewhere I'd have to pay the fees. I have most of my investments with Schwab and I did roll over my previous employer's 401K into an IRA there.

It can be a bit of a pain, especially for tax stuff and updating everything in Quicken.

 

[ikubak]

Mostly Vanguard, but some Fidelity, Ameritrade, Wells Fargo, ING.

Because we are still working, we have to use Fidelity and Wells Fargo in our 403b and 401k. The appeal of Vanguard's low fees and variety of options, we will probably move the Fidelity and Wells Fargo investments over to Vanguard after retirement.

 

[Independent]

Everything that was movable went to Vanguard.

We're holding some I-Bonds and I still have a balance with my former employer's thrift plan (due to tax issues). Oh, and we still have two small FPRA's with lifetime 4.5% interest guarantees.

 

[lemming]

In your question you are asking if someone has all their eggs in one basket or spread over several funds. Those different funds or stocks can be 100% correlated.
IMHO if it is in the market it is all eggs-and they can fall off the wall and be scrambled.

To answer your question, I am not rich and I have accounts at three brokerages, a credit union and a bank. But that is a historic building issue not an asset allocation decision.

 

[Animorph]

I'm happy enough to have my portfolio all in one brokerage, but sometimes it has been necessary to have accounts outside that. DW's 401k, my Solo 401k's, and several accounts direct with fund families are all held outside the main brokerage account. By opening an account directly with a fund company I can get lower minimums, no transaction fees, no clawback of transaction fees for short-term redemptions, and funds that are not offered though my brokerage. The main inconvenience is having to remember all the extra passwords, and accessing several sites if I'm doing a major rebalancing.