Putting all your eggs in one brokerage firm

[daystar]

I currently have about half of my non-retirement assets in a Charles Schwab account and the other half is in a Vanguard account. I would really like to consolidate the two accounts so that I only have one statement to look at each month, and one website to log into to view all my assets. I plan on using Vanguard for almost everything. I also have my Roth IRA with Vanguard. Is there any risk for me in doing this? If Vanguard goes bankrupt, do I lose all of my stock holdings and IRA holdings?

P.S. The reason I'm choosing Vangaurd over Schwab is that I like investing in some of their low cost index funds.

 

[wabmester]

Well, first of all, if any brokerage goes bankrupt, you still own the securities in your account.   The only concern might be cash in the account, which they typically insure for a million or so.   Second, I think Vanguard has built a structure in which each fund is a stand-alone entity with joint ownership in the Vanguard Corp.   I may have this somewhat wrong, but I think the bottom line is that you are safe in the unlikely event that Vanguard fails as a company.

 

[daystar]

I might have a combined total of $30K in cash (money market) between the two accounts so I should be safe. I keep the other million in the coin tray of my car. 8)

 

[maddythebeagle]

some brokerage accounts get better commissions with higher account balances so that is something to look into. Also, you have more "leverage" with higher balances in general in my opinion.

 

[LOL!]

I myself would not worry about putting all my eggs in Vanguard.

OTOH, I like to get multiple statements and the newsletters from different financial concerns. If I had accounts only at Vanguard, I would see only the Vanguard opinion on things.

I use MS Money (came free on this computer) to keep track of everything, so I rarely look at my statements that are mailed to me. Is it really such a chore to look at a statement? If that's really the case, why not go all-electronic and online? Maybe you should look into a brokerage that will not even mail you statements if you so desire?

 

[Alan]

I agree with wabmester. Each fund in vanguard is a seperate entity, independant from the Vanguard company. I remember them publishing artilces on this during the scandals of some funds a short while back. as a vanguard customer you could post them a question to confirm.

Outside of my 401(k) I have everything in Vanguard funds, and will not hesitate to roll over my 401(k) to Vanguard when I retire in a few years.