BERKELEY HEIGHTS, N.J. (TheStreet) -- By the time most people reach their 40s they have accumulated multiple investment accounts. They don't plan for this to happen; it just does. Workers change jobs more frequently, so many have multiple former employer 401(k) plans and IRA rollover accounts. They also end up with multiple taxable accounts after years of opening various mutual fund accounts because the funds were featured in a magazine. You know the titles by heart -- "Best Funds to Own Now."

So why does it matter if they have accounts strewn all over?

Your accumulated accounts are probably a mess. It's time for a spring cleaning -- before spring is gone and months or years of money-making with it.

There are several issues with having too many accounts. The first involves an investor's ability to gauge the risk level in their portfolio. People with too many accounts have probably never reviewed their accounts in total to determine their overall portfolio asset location, which lets them know how much risk their portfolio contains. A portfolio 100% invested in equities is a much more risky proposition than one invested in 50% equities and 50% in bonds. Remember 2008, when the S&P 500 dropped roughly 38%!

People with too many accounts may also have a less diversified portfolio. Many investors mistakenly believe the more accounts they have, the more diversified they are, but a portfolio is not diversified by number of accounts, but by what is in the underlying accounts.

For example, having 20 different accounts all invested in U.S. large-cap growth stocks is less diversified than one account with several broad-based index ETFs.

When a person has too many accounts they likely do not even know how much they have saved in total.

So how does one clean up the quagmire? My suggestion is to select one custodian for all your accounts. The large investment custodians (

TD Ameritrade

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and Vanguard) now offer brokerage platforms where multiple types of securities can be held. The brokerage platforms allow investors access to ETFs, mutual funds and individual securities. They also offer mutual funds not only from themselves but from multiple other fund families.

The bottom line: Having fewer accounts will make it easier to keep tabs and manage your money.


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Michael Maye is the founder and president of MJM Financial Advisors (, a registered investment advisory firm in Berkeley Heights, N.J. He is a member of the National Association of Personal Financial Advisors (NAPFA) and has been a speaker covering tax topics at NAPFA's national and regional conferences. Maye has also been a frequent contributor to the Star Ledger of New Jersey's "Biz Brain" and "Get With the Plan" articles. In addition to NAPFA, he is a member of Financial Planning Association, American Institute of Certified Public Accountants, New Jersey State Society of CPAs and the Estate Planning Council of Northern New Jersey.