Diversify or simplify? How many financial institutions should you use? | Personal Finance & Lifestyle | Yakezie Forums

OK, all you financial gurus out there (I know you are there, I read 'What's your day job'!).  

I know it is important to diversify assets across asset classes, such as stocks, bonds, mutual funds, real estate and etc, but how important do you think it is to diversify where you keep those assets?  

If you had a gob of liquid assets, would you opt for keeping them at different institutions (such as some at Vanguard, some at banks, some at Merrill, some at etc etc etc)?  This can increase account fees and record keeping complexity.  It can also lead to lost accounts if you and heirs aren't careful.

OR, would you opt for keeping them in one or two institutions, to simplify record keeping and reduce fees?

sooverthis said:

Oooh, I missed this topic until now! 

I haven't had to worry about a ton of liquid assets, but I still like to keep what I do have spread around a little. One of my grandfathers owned several businesses in my area, and he didn't like to keep too much in any one account because he felt it was no one's business what he had or didn't have. (Ah, the joys of living in a town of 4,000 people.) I guess that rubbed off on me because I don't like to bank locally and I never keep all my investments in one place. I also like having the option of pulling from another account in case something goes wrong, like when my primary bank's system got hacked and they canceled my debit card without warning.

Good points.  That means that a goal in having several institutions would be to make sure it isn't too expensive or difficult to move assets between them.

I have primary accounts (checking,savings, and mortgages) at one bank.  I also have savings at an online bank….. and always cash on hand hidden in the gun safe :)