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Why an investor should consolidate their investment accounts.

(With Quantum Private Wealth)

I met with a long-time client this week to go over his accounts and progress towards his goals. A friend and the son of one of my oldest living clients, he is going through one of life's natural changes. And he has economic concerns. You see he recently sold his company, and he will no longer collect a paycheck. Basically, he began wondering and asking questions about the future. What comes next and how do you pay for it?

This is completely normal as were the questions. Great questions like where will I get income from? How will I pay for things and what do I do with my company 401k? Insurance? What to do with an old account at 5th Third Bank and a never used eTrade account. These questions lead to he should take social security, what does diversification really mean. In short...really good questions about this next stage of his life.

This got me thinking. I deal with these issues every day but how many people actually have a good understanding of their assets, the titling of their assets (an estate planning question) and when they are moving on to the next stage of life, what to even look out for...what should they really do?

Now I've been aware for years of the financial morass that many of us are in the longer we stay upright on this planet. We save a few dollars when we are young, take out a life insurance policy when we first get married and leave a company or two as our career progresses. These little changes lead to us perhaps having a 30 year old saving account at a bank that's changed names so many times we lost track, a life policy that is lost or most likely has the wrong beneficiary (our parents?) information and several 401k plans from our old employers. How many have said we 'don't have the time to organize,' or, 'now that we are older and have a few more dollars we really have had 'better' things to do than organize the minutia'. But its time.

SO the question becomes, "If I get organized, how and where do I do it?"

A recent article in Advisorpedia had some good thoughts on the dilemma and what the pros and cons of consolidating with one trusted advisor may be.

(An excerpt)

Consolidation of assets is something that many investors consider at some point in their financial lives. While it is possible to manage your investments on your own, it can be difficult to keep track of all your investments, as well as the different strategies and options available to you. A financial advisor can help you make the most of your investments, while at the same time helping you develop a comprehensive plan for your financial future. Many investors hire multiple advisors, with each of them managing different components of their financial life. While this approach can be beneficial, it can also pose some risks, such as duplicating asset allocation and overexposing the investor to risk they do not want.

Some of the benefits of working with only one person is that you can be sure that all of your investments are being properly managed and that your advisor is familiar with your overall goals and objectives. Your advisor will be able to provide valuable advice on how to best diversify your investments, including which asset classes and individual investments may be best suited for your particular situation. Making the decision to consolidate down to one advisor is something that investors will do only under certain circumstances.

The most common reason investors consolidate assets to one primary advisor is to make things easier to manage, according to recent research from Spectrem Group.

SO, the main reason to consolidate is to give you peace of mind, make your life easier and in my way of thinking, give you the best possible outcome as your one trusted advisor has a clear and total picture of your situation and your goals. Diversification of investments is different from diversification of advisors. Good advisors who act as fiduciaries may be your best option when looking at getting a clear picture.

Choosing the right firm to work with is important. Advisors and firms that act solely as fiduciaries may be your best option as they are aligned with your needs and goals. Firms like Quantum Private Wealth have the tools and can help you organize for the future.

If interested in discussing how we can assist in consolidating and streamlining your investment life please contact us at 1-847-474-1400.


We are in the world where we are constantly bombarded by so called 'experts'. Turn on the TV and flip to a business channel and you will not have to wait long before seeing the talking head du jour. These are not investment shows... they are infotainment shows. People like Jim Cramer are entertaining for ad spend dollars. The fact is you would make more money by doing the exact opposite of what he recommends than by following his advice. As a data point, a group called Quiver Quantitative has been tracking Cramer's on-air picks for years. They established a strategy to do the inverse of what Cramer recommended. (it's a little more complicated but you get the gist) Through the 4th Q of 2022 the strategy has tracked over 4000 of Cramers on air stock picks and sold what they believe are Cramers highest conviction buys. Over the time of these 4000 recommendations the return for their portfolio is over 21% y/y.

Further if you look all the way back to 2012 Cramer had a remarkable year. In that year he recommended selling 4 companies (Netflix,Green Mountain Coffee, HP and Best Buy). Those four companies lead the market with the 4 top returns that year. From Seeking Alpha: 'Being a numbers guy, I couldn't resist calculating the odds of making four sell recommendations on what ends up being the four best performers out of 749 different stocks. Can we have a drum roll? The odds are 1 in 13.1 billion. By comparison, the odds of winning the Powerball jackpot are much better at 1 in 175 million, or 75 times more likely to happen than picking four stocks that poorly. Thus, picking the four best performers as stocks to sell is the next closest thing to being statistically impossible.' Yet Cramer did it!

In January of 2022 I tracked the companies' outcomes from his recommendation the year before. Ouch

So, its estimated, TV personalities aside, over 10 percent of investors would follow or have followed an influencer’s suggestions regarding finances on TikTok, Instagram, or other social media platforms. Millennials are again far more likely to be willing to do this, with 39 percent indicating they would follow or have followed the suggestion of a social media influencer. Some of this willingness comes from being more comfortable with social media platforms and the individuals on those platforms, while another component could be a lack of industry knowledge that leads to trusting knowledgeable experts on platforms the investor is comfortable with. But just like with following the like of Cramer or should be wary...Remember, it’s one thing to take financial advice from a person who has intimate knowledge of your situation. It’s quite another to take it from someone who’s pontificating to a mass audience and has absolutely no knowledge of your situation whatsoever.

Information contained herein does not involve the rendering of personalized investment advice but is limited to the dissemination of general information.

A professional adviser should be consulted before implementing any of the strategies or options presented.

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