One Advisor, One Plan: Why Consolidating Your Investments Usually Beats Splitting

When people hear the word diversification, they usually think of spreading money around. Different funds. Different accounts. Even different advisors. The idea is simple: if one piece doesn’t do well, the others can carry the load.

That makes perfect sense when it comes to investments; owning a mix of stocks, bonds, and cash is the foundation of risk management. But when it comes to advisors, diversification can backfire. Working with more than one advisor often leads to duplication, higher costs, and missed opportunities.

I’ll explain why consolidating your accounts with one trusted advisor usually works out better than juggling multiple advisors. I’ll walk through what the research says, the hidden costs of overlap, and how consolidation can help you keep more of your money working toward your retirement goals.

Why People Spread Out Their Accounts

First, let’s be fair; there are reasons why people end up with multiple advisors or accounts scattered across different firms.

• Legacy accounts. You have a 401(k) from a former employer, an IRA you opened years ago, and a brokerage account managed by a family friend.
• Fear of putting all your eggs in one basket. Many people feel safer not giving one advisor “too much control.”
• Different specialties. You think one advisor is better for investments, another for taxes, and another for insurance.
• Inertia. Sometimes accounts accumulate. Life is busy, and it often feels easier to leave things as they are.

On the surface, this appears to be diversification. Not deciding is a decision, and it can create a messy financial picture.

The Problem with “Diversifying by Advisor”

What happens when you have multiple advisors?

1. Investment Overlap

Each advisor is building a portfolio, but they don’t see the whole picture. One advisor might buy you a large-cap U.S. stock fund. The other advisor might buy another large-cap fund. Suddenly, you own the same thing just under another name, and you think you’re diversified when you’re not.

A study on systemic risk and overlapping portfolios showed that portfolio overlap creates fragility. When everyone owns the same thing, risk isn’t reduced; it’s concentrated. The same holds for individual investors: owning “different” accounts that all invest in the same way isn’t real diversification.

2. Conflicting Strategies

One advisor says, “We need more international stocks.” Another says, “International isn’t worth it.” One says, “Pay off the mortgage.” The other says, “Invest more in your taxable account.” Without one quarterback, you’re left playing referee.

3. Lost Tax Opportunities

Effective tax planning requires a comprehensive view of the entire picture. Which accounts should hold bonds vs stocks? Where can we do tax-loss harvesting? How do required minimum distributions (RMDs) play into the withdrawal plan? If you split accounts, no advisor has the whole map, so opportunities slip through the cracks.

Vanguard estimates that personalized advice, including tax planning, behavioral coaching, and withdrawal strategies, can add 0.8% to 2.8% per year in net returns. But that only works when the advisor sees the whole picture.

4. Higher Fees

Each advisor charges their own fee. Each mutual fund or ETF has an expense ratio. Each account may have its own minimums. Instead of getting a break for scale, you’re paying twice. T. Rowe Price notes that consolidating accounts can reduce expenses by qualifying you for lower-cost share classes or advisory breakpoints.

5. More Complexity, More Stress

With multiple logins, multiple statements, multiple performance reports, who is responsible for what? If something happens to you, how easy will it be for your spouse or kids to untangle everything? Complexity doesn’t just cost money; it costs peace of mind.

What the Research Shows

Here’s what some credible sources say about the costs of fragmentation:

• Council of Economic Advisers (2015): Conflicted or uncoordinated advice can reduce returns by around 1% per year for retirement savers. Multiple advisors, each with their own incentives and blind spots, increase the risk of this.
• Vanguard (2022): Quantified the “value of advice” at .83% to 2.85% annually, but only when advice is coordinated across the full portfolio.
• CapTrust & TD Wealth reports: Consolidation lowers fees, simplifies reporting, and improves coordination on tax strategies and distributions.

In plain English: when your plan is fragmented, you’re almost certainly leaving money on the table.

Looking for one trusted advisor? We at Powering Your Retirement are a team ready to help you in all your financial needs. Reach out today! 

The Real Benefits of Consolidation

Let’s turn it around. What do you gain by consolidating with one trusted advisor?

1. Clarity and Control

You get one clear picture of where your money is, how it’s invested, and whether you’re on track. No more wondering if your right hand knows what your left hand is doing.

2. True Diversification

A single advisor can design a unified portfolio. Instead of unknowingly duplicating investments, your advisor can allocate your portfolio intentionally across various asset classes.

3. Better Tax Planning

One advisor can coordinate:

• Which accounts hold stocks vs bonds (asset location)?
• When to realize gains or harvest losses.
• How to structure Roth conversions.
• The most efficient withdrawal order in retirement.

4. Lower Costs

Consolidated accounts can reach fee breakpoints, unlock cheaper fund share classes, and cut duplicative costs. A few basis points might not sound like much, but over 20 years, that can be tens of thousands of dollars.

5. Simplicity

One login. One set of statements. One contact person. One plan. Simplicity lowers the odds of mistakes and makes life easier for you and your loved ones in the long run. Especially for PG&E retirement plans, a simple plan goes a long way in keeping your future simple. 

6. Accountability

With one advisor, there’s no finger-pointing. Success or failure rests with them, and you have a clear relationship with a single fiduciary.

But Isn’t It Risky to Rely on Just One Advisor?

It’s a fair question. Trust is earned, and no advisor is perfect. So why not keep a few to hedge your bets?

Here’s the problem: you’re not hedging your risk; you’re hedging your responsibility. You’re hiring advisors to make life simpler, not more complicated. If you don’t fully trust one advisor, the answer isn’t to hire more. The answer is to find one you trust.

That means doing due diligence: checking credentials, understanding their compensation, agreeing with their philosophy, and ensuring their values align with yours.

When It Might Make Sense to Keep Accounts Separate

To be balanced, there are a few cases where splitting accounts makes sense:

• Employer plans with unique benefits. Some 401(k)s have very low fees or unique investment options worth keeping.
• Insurance or annuity products. These may be locked in or have guarantees that make sense to preserve.
• Specialist services. In rare cases, you might need a specialist for a slice of your wealth (say, concentrated stock options), and even then, your primary advisor should be in the loop.

If accounts must remain separate, the key is coordination. Make sure that one advisor serves as the “quarterback.”

A Real-World Example

Let me share a quick story (details changed for privacy).

A PG&E employee I met had three different advisors, plus a 401(k) plan still with Fidelity. On paper, he thought he was diversified. But when I pulled all the statements together, here’s what we found:

• Two different advisors had put him in nearly identical large-cap U.S. stock funds.
• The third had him in a “balanced” fund that also held… large-cap U.S. stocks.
• Across all accounts, he was 75% in the same type of investment—without knowing it.
• He was paying three different advisory fees, plus higher expense ratios, because no single account qualified for lower fees. 

***If your advisor does not have a reduced fee at higher asset levels, that would be unusual. For amounts of $1,000,000 or more, a reduction should be available.

Once we consolidated, we reduced his costs, rebalanced his portfolio, and created a tax-efficient retirement withdrawal plan. The result was more diversification, lower fees, less paperwork, and greater confidence.

The Bottom Line

When it comes to investments, diversification is a powerful strategy. When it comes to advisors, diversification usually creates confusion.

The research is clear: duplication, conflicting strategies, and uncoordinated advice cost real money over time. Consolidating with one trusted advisor provides clarity, lower fees, enhanced tax planning, and a unified retirement strategy.

If you’re serious about getting the most out of your savings, ask yourself:

• Do all my advisors know what the others are doing?
• Am I truly diversified, or just duplicating?
• Could I be paying more than I need to?

In most cases, the answer points to a straightforward strategy: simplify, consolidate, and let one advisor quarterback your plan.

At Powering Your Retirement, I primarily work with PG&E retirees and employees. I understand your pensions and 401(k) plans, as well as the unique challenges of converting a lifetime of savings into retirement income.

If your accounts are scattered or you’re juggling multiple advisors, I can help you sort through the clutter, identify hidden overlaps, and build a clear plan.

Schedule a call today to see how consolidating your accounts could simplify your retirement and help you keep more of what you’ve earned.