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Consolidating investments saves time and more

When it comes to investing, the old saying applies: “Don’t put all your eggs in one basket.”

But you’ve got to know where your baskets are – and what’s happening in those baskets.

That’s where a trusted investment advisor is worth his weight in gold.

Jim Liddle, a representative with the Dubuque-based investment management company First Community Trust, finds that many members have their assets with multiple advisors, believing their investments are diversified.

“The impression some people have is that in the worst-case scenario, if one advisor loses that portion of assets in the market, the next advisor may not,” Liddle says. “This concern can be mitigated by working with one advisor that diversifies your assets well.”

Liddle says there are two major problems with having too many accounts with different advisors:

  • When working with multiple advisors, you might find yourself overexposed to certain securities or sectors of the market without knowing it. “Each of their advisors will tell them they are diversified, when in reality, no one is looking at the overall picture,” Liddle says.
  • It can become an overwhelming, complex, time-consuming chore to review each account.

Consolidating your investments can have many positive effects, Liddle says.

Working with one advisor helps to ensure your assets are diversified properly, adjusting for your risk tolerance and time horizon. It can simplify your life. And, with certain advisors, the investment management fees might be reduced with more assets managed.

Before you consolidate, it’s important to find a trustworthy advisor who has your best interest in mind. Ask the advisor to review all of the statements for each of the accounts, Liddle says. The advisor should be able to tell you whether you are diversified properly, as well as any concerns with asset performance or account fees.

Also, ask your current advisor whether there are any penalties or fees for changing or selling the investments. (This is a great question to ask before making any investment with an advisor.)

“All in all, consolidation may simplify your life, increase your returns and lower your fees,” Liddle says.

Dupaco Community Credit Union partners with First Community Trust to bring members a full line of trust, investment, estate planning, retirement and wealth management services.