There are many reasons why investors hold assets at multiple institutions. An individual might have left a 401(k) behind after a job change, retained accounts established for various reasons at different life stages, or received a gift of stock certificates or other assets from a relative. It could also simply be that moving accounts takes time, can be complex, and involves numerous steps with multiple institutions. Usually, however, it makes good sense to consolidate assets with one institution to reduce overall expenses, simplify your administrative burden of tracking and accounting for your investments, and make the process of managing your investments easier.
At BWFA, one of the greatest values we offer is our ability to look at a client’s complete financial picture. BWFA’s financial planning department can create a comprehensive pre-retirement, retirement, and/or estate plan that considers the many aspects of a client’s financial well-being and outlines a strategy for helping the client achieve his goals. Our team of portfolio managers and financial planners work together to customize each client’s investments to make sure they are in line with the client’s overall financial plan and investment objectives. Though different clients often have very diverse financial goals, we find that in nearly every case, people who come to us for help can benefit from asset consolidation.
ASSET ALLOCATION: Holding accounts at multiple institutions may make it difficult to maintain a properly diversified portfolio. In addition, when assets are scattered, periodic rebalancing of the portfolio can be particularly challenging. Also, there is an increased risk that the portfolio may not meet an individual’s overall goals. Assets that are consolidated under one roof may simplify administrative tasks.
REQUIRED MINIMUM DISTRIBUTIONS (RMDS): The most common problem that results from having assets at multiple institutions is missing a required minimum distribution (RMD) from a retirement account. This may result in costly tax penalties. You can save time, energy, and potential tax penalties by consolidating your retirement accounts, making it easier to manage RMDs.
STOCK CERTIFICATES: When physical stock certificates are held, there is a risk of losing or misplacing the certificates. When a certificate is lost or stolen, the issuer charges a hefty fee to re-issue the certificate. This can be avoided by depositing physical stock certificates into one or more appropriate, like-titled accounts.
BENEFICIARIES: Consolidating assets will help beneficiaries sort out an estate when the owner passes away. We have seen many instances where it was difficult and overwhelming for personal representatives to properly divide an estate, especially when actual stock certificates were still held. There are many extra steps required to transfer the paper stock certificates of a deceased individual. This can be avoided by depositing the certificates now, while the owner is still alive. Depositing stock certificates in an appropriate account and consolidating them at one institution with other assets will lighten the burden for beneficiaries during what can be a difficult period.
We recognize that consolidating assets can be complicated and challenging. We are available to help and will make this process as simple as possible for investment clients. Our operations team has experience transferring even the most complicated assets. We will coordinate every step in the transfer of assets to ensure your peace of mind. If you need help transferring or consolidating assets, please do not hesitate to contact us for assistance.