August 21, 2008, 6:00 am

5 Reasons Why You Should Consolidate Your Assets With One Institution

by: The Financial Blogger    Category: Banks and You,Financial Planning,Insurance,Investment, Market and Risk,Personal Finance
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With a crazy stock market, very low interest rate and competition among banks and brokers rising; many individuals are shopping around and select the best offer for a single with one institution. What is the end result? You have an ING savings account, 1 Visa, 1 Mastercard and 1 Amex, you have your bank account at one bank but you got your mortgage through a mortgage broker and you don’t even know where your actual loan is held. You also have a online brokerage account for your own trades, a part of it is manage with a broker or a financial planner and your RRSP is with your best friend.

By going from one institution to another in order to get the best deals possible each time, you end up with dealing with 5 to 10 financial institutions and you will only get what you are looking for: cheap deals. However, there is a way where you can get much more than deals and you will still have good financial conditions.

#1 Savings fees by consolidating

Since new clients are not growing in trees, banks are now trying to increase their product per client. Therefore, they are more than willing to offer good lending conditions, paying down the notary, decreasing investment management fees or offering a better interest rate on your checking account in order to keep your business within their doors. I recently met with a client that would save more than $2,000 simply by consolidating his business with one institution. Since we can’t guarantee investment returns, we can at least play on what is certain: fees! Another point is that your power of negotiation for future product will increase accordingly.

#2 Better understanding of your financial situation

A good financial advisor should not only be there to do a quick sale but also to provide his clients with solid and personalized service. By knowing your entire financial picture, he will be in a better situation to make you save on taxes or to manage your money differently. For example, if you hold $30,000 in your ING account for emergency purposes and you still owe 30K on your mortgage, a good advisor will suggest that you pay down your mortgage (since you are probably paying 5% compared to 3% (taxable) on your ING account) and you setup a home equity line of credit form emergency purposes. However, he will never be able to suggest this strategy if he doesn’t know that you have the ING account!

#3 Simplicity

Even if you receive your financial statement by emails, you still receive 5 to 10 of them every month. If you have a financial question, you might not even know who to call! Having one advisor make things much easier to understand you own situation. If you are able to have only one contact point for all your questions, this would help you out in your retirement planning for example.

#4 Getting a real plan done

If you are interested of having a retirement plan, the best solution is to consolidate all your assets with one institution. The major flaw of plans is the fact that you have to work with expected returns. However, if you hold your investment with two to three different firms, they may duplicate your stocks or funds and decrease your diversification. Therefore, your expected return is even harder to assess.

#5 Avoid duplication

This is a major point that I see all the time. What is the point of having 3 different mutual funds (or ETF or stock portfolio) that tries to beat the same index? Duplication will increase your risk by decreasing your diversification and will probably increase your management fees as well. Chances are that the 3 funds don’t have the same MER’s and therefore, two of them are unnecessary. However, if you receive your statement separately, you might never realize that!

In the end, the key factor if to find a reliable financial advisor that will help you out reaching your goals. Once it is done, you should definitely consolidate your assets with this person.

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I agree whole heartily, with one addition. Not only must they be reliable, they must also be someone you can trust fully.

I don’t agree necessarily. I went to my bank years ago (I have been a client of theirs for 20 years) and said I want this VISA, but with this bank there is no annual fee, with you there is. Can you get rid of the annual fee. They said no. I said if you can’t give it to me for free, I’m going over to them for the VISA. They said their hands were tied. I said fine and went to the competitor. Six months later, they called me about that exact same VISA with no fee. I laughed and said I asked about it before, and they wouldn’t give it to me.

So I strongly disagree with your stance on using one instituion. I would love to, but I’m not screwing myself to stay in one place.

At a time when everyone seems to be choosing or suggesting folk choose individual suppliers of financial products, yours appears a lone voice advising the opposite. While I agree with your position, and practice it, I believe it has been the consumer who has chosen low cost options such as ING, E*Trade, PC Financial, etc., who have caused other suppliers to realize the need to become more competitive.

The question becomes how do consumers cause the big banks to provide their services at competitive rates?



You missed the point of the post. TFB didn’t say stay with one institution for all needs, he stated consolidation could save you money, and in this one instance, it did. All and all, if someone else can give you a better deal on the same, if not better, product/service, go for it. For it to be a good value though, it must be the same or better.


The only power consumers have over big banks is to remove their money from them. At some point, they will realize they need to compete. I can think of a few other industries where this has, and continues to, happen.

by: The Financial Blogger | August 21st, 2008 (7:17 pm)

The post was in fact about a consolidating your assets with one financial institution with a GOOD financial advisor 😉

Each time I see a client that decided to “diversify” his assets (or liabilities) among several institutions, I get to the conclusion that he is getting screwed. When they first make the move, they certainly save money or get a better product. However, after a while, no institutions is able to give him good advice because #1 the financial advisor don’t know much about the overall situation and #2 the client is “too small” to get a special attention. Reason #2 is unfortunate and I don’t recommend it as a financial advisor, but everybody has to earn their paycheck and some people use this shortcut.

the problem with banks is that they lived with only 6 competitors for the pas hundred years. They are now waking up and realizing that other company can take their bread and butter 😉 It is definitely a good situation for the client!

I agree with the 5 points above especially in cases when you expect professional consulting and advice from the financial institution. As so far I have not been impressed by the conversations I’ve had with 2 of the banks I’m dealing with, I still will try to get the best value for the money managing all my accounts myself.

My first rule is not to lose money and this means paying lowest fees possible.
… and I’m always open for a good proposal for asset consolidation with one financial institution 🙂

The problem with the “Not to lose money” rule is that you have to lose some money in order to have gains in the market. It is going to have. The greater the risk, typically, the greater the reward.

If investing for long term, it is more important to have time in the market and not time the market.

Great post, TFB. You make some excellent points.

Is there a risk to consolidating assets in that you might exceed the CDIC coverage?

I agree to a certain extent. If you are able to negotiate to get comparable rates and services by switching everything to one institution, then by all means. You should be able to inform your personal advisor of all of your accounts even if they aren’t at the same institution. They should be able to take them into account when helping you make decisions. Also, you don’t have to duplicate investments because you use multiple institutions. You are supposed to treat all of your accounts as one large nest egg when allocating assets and diversifying.

I do agree that there are benefits to doing so. One example is with Vanguard. The more assets you have at Vanguard, the quicker you reach certain platforms with benefits such as lower expense ratios and free financial advisors.

by: The Financial Blogger | August 22nd, 2008 (5:57 pm)

CDIC is covering up to 100K per institution per person. An “institution” is a legal entity. Therefore, you can have 100K in your bank account at BMO for example, another 100K in a GIC with BMO Nesbitt Burns and another 100K within BMO brokerage account (investor line?) invested in a high interest account offered by Altamira. Your 300K will be fully covered. Then, you spouse can have the same amoun in each of them and you will be now up to 600K before not getting insured.Products covered are bank accounts and GIC’s. All mutual funds are covered up to 1M$ by another Canadian (CIPF). They cover mutual funds in a case that the bank goes bankrupt.

I agree with you but if you select balanced funds with different banks or investment firms, chances are that your stock hold within your funds will be duplicated and you will end-up paying more fees for the exact same thing. By consolidating your assets, you might have access to other investment products (starting at 100K, 150K, 250K etc.) that offer better diversification for a lower fee.

Just my 2 cents 😉


Thanks, FB!

The only issue I have is that everything you’re saying can easily be done in a very short period of time. In fact it’s actually worth more than my hourly wage at my job to deal with these things on a personal level.

Partially because I believe no financial advisor will ever have *my* best interest at heart.

Simplicity is for the rich. And I’m barely even a millionth of my way there.

by: The Financial Blogger | August 23rd, 2008 (6:19 am)

I agree with you that if you have less than 100K in investment and a mortgage, you won’t get much by consolidating everything to one institution (and you will more likely deal with a salesman than a financial advisor ;-0 ).
This is unfortunate, but it is the reality of the industry. However, there are still good financial advisors ready to give proper advice… you just have to find them!


I know several adviser’s and analysts that only have their clients best interests at heart. It takes time to find one.

Many are with Primerica (mostly my office), not all.

And frankly, the rich have a much more complicated setup which is why they use one.

Stating you do no believe one will ever have your interests at heart says you will never trust one. Until you can trust one, you will not find one. That is also the way of the industry. Any good adviser/analyst wont do business with you unless they know they have your trust.

Is there a good resource for finding and rating Canadian financial advisors? I find myself exactly in the situation you describe of having spread assets. Part of my issue in consolidation is that realistically, only the big banks have the breadth of services to consolidate into and my fear is that their talent on the investment side isn’t what the specializing firms would offer. Thoughts on any of this? Is there one bank with a better reputation on private banking for instance? Thanks!

by: The Financial Blogger | August 24th, 2008 (10:15 pm)

I would say that most banks have improved their investment products. Personally, I decided to associate my effort to an investment broker so we can team up and offer all investment product. Regardless on the financial services you are looking for (brokerage account, financial planner, or investment broker), you should be able to find everything under the big banks.

Unfortunately, I don’t know any place to find or rate financial advisors. However, I wrote a series on how to find a good one:
(from this article, you will be able to read all of them!)

Good luck!


Unfortunately, there never will be. Although that wouldn’t be too bad of an idea to create a site for that, it could be prone to too many false negatives. The best way to find one is, among other things, ask questions like you wrote in your posts.

I’m sorry but this is simply wrong. If you’re the type to keep up with your finances in any kind of detail it is NOT a good idea to consolidate. You will pay in higher fees.

Some people like my parents might benefit, but the types that actually read PF blogs will not benefit from this.

by: The Financial Blogger | August 25th, 2008 (5:42 pm)


I honestly didn’t meet one client that is with several institution with an optimal situation so far. The truth is that 95% of the population don’t keep up with their finance.

And seriously, I you only have your mortgage with me, tell me a good reason why I should give you an amazing rate? We all keep those great rates for our very good clients. Nobody is going to bleed themselves to death unless they desperately need your business.

So, the problem that you will face is that you will get a great deal by transferring every time because this guy or this institution need you business badly at that point. 3-4 years later, they won’t need it anymore and you will stuck to shop around again. If you do that for you mortgage, banking, investing and insurance protection, you will always be shopping around. Then , that’s another cost you have to take into consideration.

In regards to investment, it’s even worst. Try to get a good deal for managing 4 portion of 250K and go to someone with 1M$ to invest. You will see which kind of deal is the best.


I have to agree with TFB. The vast majority do not keep up with there finances which is why they need someone to do it for them. Even those who read PF blogs can, and do, benefit from consolidating with one person or institution.

Not only will you usually get better rates, but at an unfortunate time of death, the less places you have to call to get things squared away, the better.

Any decent institution will give you better rates and lower fees with more money in your cumulative accounts.

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In todays enviorment. putting all your eggs into one area is just downright risky. With major firms folding up tents and relying on the government to bail them out. You might be better servered to diversiify where your money is a little. Unfortunatly it will take a little more upkeep on thhe consumer side.

Credit Answers,

What many people don’t realize is that if your retirement is invested in stocks and mutual funds, the company you are with can go bankrupt, you still own those shares of stocks and mutual funds. Your account can be managed by another firm and you wont loose the money.

With banks, if you have too much money there, you run a greater risk if the bank goes under and the company that stands behind it does as well. I’m sorry to say, but FDIC is just a method to make people feel safe. The company behind that only keeps enough cash to protect up to about 20% of all depositor accounts.