Funds held at one institution safe?

[watchman3135]

I'm 57, retired and looking to increase my monthly cash flow. I've been sitting on a bit of bank cash and started reinvesting in JEPI and SCHD in small increments as prices are falling in the past week. I have about one million two at Vanguard and started thinking is this prudent to house everything with one institution even a great one? Would it be better to open a Fidelity or Schwab brokerage and continue with them?

 

[COcheesehead]

https://www.early-retirement.org/fo...s-preferences-for-one-or-multiple-116672.html
[mod edit] This is a link to a recent discussion on the same topic.

 

[MRG]

My career was in the systems used in financial services. I don't have everything at one place because stuff breaks. Even if the systems are prefect there's always legal issues. When DF passed his trust did a TOD to our brokerage account and the Commonwealth of Pennsylvania locked it and my funds with it.

 

[braumeister]

I have great confidence in all the big players, and 90% of my holdings are at one of them. But I will probably always keep the other 10% at another, just because you never know ...

 

[Surewhitey]

We're consolidating accounts, both bank and brokerage. We use Fidelity and Vanguard & Fidelity as a suedo bank. Both are 401k and rollover IRA accounts too. Another company is my "hub" bank /brokerage for transferring funds around...

We have a local bank for big check deposits and access to other services. Hoping to get this one gone next. We have, this year, shut down 2 other banks from the past that are just low hanging fruit. DW opened another bank account for CD's & then there are our 3 TreasuryDirect accounts.

We definitely have too many.

 

[Sunset]

I am wanting to simplify, which to me, means just 2 brokerages, and 2 banks.

Something could happen to an account at one of them, I don't want to be out of $$$ for months while it gets fixed.

I've read of stories where people had the bank account emptied and the bank fought/delayed reimbursement for months.

Why take a chance

 

[frayne]

The old cliche of never keeping all of your eggs in one basket has been embossed in my pea brain since age 12. One tax deferred account with FIDO, an after tax brokerage account with VG and a couple of years living expenses with a local brick and mortar bank has served me well and no sleepless nights here. Also in case of an EMP event that wipes out all digital records, I print out and save financial documentation monthly. YMMV.

 

[ShokWaveRider]

Isn't having all one's money in ..... say Schwab or Fido, then within those buying products from multiple banks, for example CDs, still like having separate institutions?

 

[COcheesehead]

Isn't having all one's money in ..... say Schwab or Fido, then within those buying products from multiple banks, for example CDs, still like having separate institutions?

+1

Also pro tip. Use both the app and the website. I have never seen both go down simultaneously. You always have access to one.

 

[bloom2708]

It depends on you.

Do you value simplicity and ease of tracking or do you lose sleep thinking about a huge brokerage house going broke?

We have most things at Vanguard. I sleep well. We have my active 401k at Fidelity and our local bank.

Only you can answer the question for yourself.

 

[watchman3135]

It depends on you.

Do you value simplicity and ease of tracking or do you lose sleep thinking about a huge brokerage house going broke?

We have most things at Vanguard. I sleep well. We have my active 401k at Fidelity and our local bank.

Only you can answer the question for yourself.

I'm fine with Vanguard. I just have to stop watching those damn Bernie Madoff documentaries. Just watched the Netflix one a few days ago which is the fourth different one I've seen.

 

[RobbieB]

I have my equities at Merrill and my bonds at Fidelity.

I don't see either belly up. Especially Merrill / Bank of America.

 

[Spock]

Isn't having all one's money in ..... say Schwab or Fido, then within those buying products from multiple banks, for example CDs, still like having separate institutions?

Only from the perspective of FDIC coverage on the CDs.
If you can't access your brokerage you can't access those CDs. The brokerage is a single point of failure.

 

[Spock]

The old cliche of never keeping all of your eggs in one basket has been embossed in my pea brain since age 12. One tax deferred account with FIDO, an after tax brokerage account with VG and a couple of years living expenses with a local brick and mortar bank has served me well and no sleepless nights here. Also in case of an EMP event that wipes out all digital records, I print out and save financial documentation monthly. YMMV.

The print out means nothing.
I went to buy a motorcycle a couple of years ago. Sellers lien holder required a certified check. I went to Wells Fargo to get one but their systems were down. Showing them last months statement, checkbook balances/registers, 30 year customer, etc meant nothing to them as "you could have drained the account 30seconds before our system went down". I was cut off no different than the bank closures back in the pre-FDIC days, it was just a shorter duration.

 

[aja8888]

The old cliche of never keeping all of your eggs in one basket has been embossed in my pea brain since age 12. One tax deferred account with FIDO, an after tax brokerage account with VG and a couple of years living expenses with a local brick and mortar bank has served me well and no sleepless nights here. Also in case of an EMP event that wipes out all digital records, I print out and save financial documentation monthly. YMMV.

Big EMF strike may indicate the possible start of a nuclear attack. You will have a use for that paper when the TP is gone.

 

[scrabbler1]

I have my local bank which is the hub of most of my financial activity. This is where the cash comes in and the bills get paid. I don't keep much in there, just enough to meet minimum balance requirements with a small cushion.

As far as investments go, most of my portfolio is with Fidelity. But I have a small but nontrivial amount with another institution. This one account offers checkwriting privileges, a handy feature in case I need to write a check for a large amount in a hurry, something which has happened a few times over the years. Having an account with something other than Fidelity offers me some comfort in case something goes wrong with Fidelity because I will have access to some other money, especially one with checkwriting.

 

[Lewis Clark]

I'm not overly concerned about the big brokerage firms going broke. But my in-laws were scammed a few months ago and it has made me cautious. Fortunately, they did not lose everything, but they did lose most of the funds in a single account.

An effective scam or hacker attack could possibly empty an entire account. By not keeping my funds in a single institution I feel safer that a single scam or hacker attack cannot affect all of my funds.

 

[Sunset]

I'm not overly concerned about the big brokerage firms going broke. But my in-laws were scammed a few months ago and it has made me cautious. Fortunately, they did not lose everything, but they did lose most of the funds in a single account.

An effective scam or hacker attack could possibly empty an entire account. By not keeping my funds in a single institution I feel safer that a single scam or hacker attack cannot affect all of my funds.

Can you elaborate on the scam ?

I like to hear about scams, as now and then I hear about a new one, which I hope will prevent me from falling for it.

 

[Lewis Clark]

Can you elaborate on the scam ?

I like to hear about scams, as now and then I hear about a new one, which I hope will prevent me from falling for it.

See post # 88 in this thread.

https://www.early-retirement.org/fo...ngle-brokerage-fidelity-or-schwab-115084.html

 

[COcheesehead]

Can you elaborate on the scam ?

I like to hear about scams, as now and then I hear about a new one, which I hope will prevent me from falling for it.

The two latest ones I have experienced are a random text seemingly sent to me by mistake. The other is a buyer from an online marketplace wanting to verify me as a seller.
Both will lead you down the wrong road.

The first line of defense with any scam is skepticism.

 

[PatrickA5]

95+% of our finances are at Fidelity. Will probably move the last pieces of retirement money there shortly.

We do have our monthly spending money at a local B&M where all bills are paid. We have several months of cash there. Between that cash and credit cards, we could probably go 6 months without access to Fido if we needed to. Not worried at all.

 

[Surewhitey]

FWIW, I used the FIDO app to make a check deposit and works fine... They appear to have a larger max deposit too. My local bank has a $2500 max so I have to make a drive there for anything over that.

 

[COcheesehead]

FWIW, I used the FIDO app to make a check deposit and works fine... They appear to have a larger max deposit too. My local bank has a $2500 max so I have to make a drive there for anything over that.

I have a $500,000 check deposit limit. Like I get checks that big everyday.

 

[ncbill]

One of the Big 3 brokerages for equites & fixed income, credit union for normal everyday stuff.

 

[Lsbcal]

Over the roughly 20 years I've been retired, having it all at one institution has been the best. With a taxable account, 2 Roth's and an IRA it is complex enough.

Investing is an interesting exercise for me and so keeping some simplicity works well. I really do not think that any of the large investment firms (Schwab, VG, Fidelity) will get locked up.

I'm not counting the separate bank checking accounts in the above.