Investors often wonder whether they should spread their investment accounts among several brokerage firms and mutual fund companies…or consolidate everything at a single firm. There are pluses and minuses to each approach.

Consolidation can simplify your financial life. It cuts down on the number of account statements and year-end tax forms and makes it easier for you to do portfolio maintenance, including rebalancing, keeping track of your holdings and—if you’re over age 70—taking mandatory distributions from your various IRAs.

If your investments are with one firm, you also can more easily maintain a watchful eye on changes in fees, commissions and other policies. Plus, many firms offer perks for larger-asset accounts. Keep $50,000 or more at Vanguard, for example, and the expenses charged by some of its mutual funds are as much as 50% lower. At Fidelity, account holders with $250,000 and up get free professional advice.

But consolidating isn’t right for everyone. Once you make the move, you may have to pay needless commissions. For example, if you transfer an account from T. Rowe Price to Fidelity but want to add money to your T. Rowe Price fund at Fidelity, it will cost you a $75 fee each time at Fidelity.

My advice: Simplify strategically. You don’t have to consolidate every single investment you own with one broker. The idea is to balance convenience, customer service, accessibility and low fees. For instance, I had one client with more than a dozen accounts at various brokerages. He was happy to consolidate them all at Fidelity except for his Vanguard index funds, which he found much cheaper to continue to buy and sell through Vanguard.

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