Retirement savings in different places? Why it's risky - MoneySense

Retirement savings in different places? Why it’s risky

For various reasons, many people have their retirement investments stashed in various places with various companies. Here’s why you should bring your investments together.



My wife and I have a portfolio that is scattered around a bunch of different places—a mutual fund company, a bank investment arm with an advisor, an employer pension-matching plan plus stock options and a self managed discount brokerage account. I am concerned about this. Even though I keep track of the total portfolio using a personal spreadsheet I wonder if I should consolidate all of it into one location?

PS: My wife won’t let me touch her portfolio with the mutual fund company.


Imagine taking the contents of your spice rack and scattering them around the kitchen: Cumin by the coffee maker, nutmeg with the knives and paprika peaking out from underneath the potato peeler. While dinner would eventually find its way to the table, it would likely be a time consuming and frustrating cooking experience.

Finding the right level of complexity for your money is one of the most important things you need to do to be a smart person doing more smart things with your money. A lot of people have either too much complexity to keep a handle on everything, or too little to get the results they want.

In your case, it sounds like too much complexity. I have outlined how I suggest you simplify things in this related post, Retirement planning: The question you need to ask yourself. But first let me say that I understand why you’re concerned. Having a portfolio scattered around at different places exposes you to a number of risks. For example:

Over/under diversification

You want some exposure to different asset classes, sectors and geographies—but not too much and not too little. A scattered portfolio makes it harder to gauge how much exposure to a particular stock or sector you actually have. For example, if you hold multiple Canadian Equity mutual funds you might be over diversified—holding a small bit of everything such that your portfolio is unlikely to perform well compared to the benchmark. And you might be under diversified when it comes to your individual stock holdings. You say you have options through your employer, but you’ll want to make sure that those shares don’t dominate your portfolio. That is harder to assess when every thing is scattered around.

Poor tax planning

A great portfolio is made up of the right investments in the right places. When it comes to taxes, fixed income is usually better in a registered plan, and equity in a non-registered plan. While not impossible, the more scattered your portfolio the harder it will be to invest with the highest tax efficiency.


If you had one statement from one institution it would be much easier to monitor if your performance is comparable to the respective benchmark indices over time. Many investments at many different institutions makes it either impossible to track performance, or a full time job. If you don’t track it, there is a real risk that you won’t catch underperformance and therefore fail to do anything about it.


When you have so many accounts, the left hand doesn’t always know what the right hand is doing, so there is a real risk that something will get missed. And if it does, who will be accountable?

This leads to my advice about The scattered retirement portfolio and what to do about it where accountability is a big theme.