Consider Consolidating Your Investments

Physician's Money DigestJanuary15 2004
Volume 11
Issue 1

Keeping tabs on your portfoliocan be quite a chore, especially ifyou're a physician-investor withnumerous accounts. In addition to all thepaperwork you regularly pore over, youprobably spend a lot of time makingtransactions. Aside from the inconvenience,you may be missing out on valuableopportunities. While diversificationis key to getting the best overall returnon your investments, it doesn't meanhaving a lot of accounts.

Although it may seem to contradictdiversification, one way to get yourfinances under control is consolidation. Ifyou've been investing for some time andfind yourself struggling to manage multipleaccounts, you might want to considerconsolidating your investments. The followingare tips for proper consolidation:

• Think big picture. Before you sitdown and decide how you want to allocateyour assets, take the time to gatheryour paperwork. Having everything in aconvenient, central location will reducethe amount of time you spend on paperwork.While properly allocated portfolioswould include a good mix of stocks,bonds, and cash, it's easier to decide howto allocate your investments so that youmeet your financial needs and goalswhen you keep all of these items in anaccount with one institution.

• Protect your securities. Large financial services firms have measures inplace to protect your securities in theevent that financial institutions experienceunforeseen difficulties. Many financialservices firms belong to the SecuritiesInvestor Protection Corporation (SIPC; The SIPC is an organizationthat protects the investors of itsmember firms for up to $500,000 oneach eligible account, including $100,000for cash claims. Some firms even offeradditional protection. While it can't helpyou with losses in the market value ofyour securities, it will safeguard you inthe event that the financial institutionyou invest with can't meet its obligationsbecause of financial failure.

• Receive professional advice. Whileyou may have thought that keeping yourmoney in several different places wouldgive you access to more information, youwon't lose access to multiple opinionswhen you consolidate. Financial servicescompanies typically employ economistsand market strategists. These individualswork together to provide advice basedon their specific knowledge and expertise.So while you work directly with afinancial consultant, you still have accessto guidance from an assortment of financial experts.

• Control your assets. Consolidatingyour assets with one firm doesn't meanyou have to give up any control overyour portfolio. On the contrary, you candecide exactly how much you want to beinvolved in the investment decisions thatgovern your portfolio. Working togetherwith your financial advisor, you candevelop a plan for your investmentsthat meets your personal financial objectives.As your portfolio grows larger,you can take advantage of the professionalmoney management services thatlarge firms are able to offer.

• Take the time now to plan aheadand secure your financial future.Consider the benefits of consolidation.Talk to your financial advisor to find outhow they can help make investing a littleeasier for you.

Joseph F. Lagowski is vice president,investments, and a financialconsultant with AG Edwards inHillsborough, NJ. He welcomesquestions or comments at 800-288-0901 or This article was providedby AG Edwards & Sons, Inc, member SIPC.

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