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By Jason Stipp | 06-22-2010 05:55 PM

Benz on Keeping It in the (Fund) Family

Morningstar's Christine Benz on the pluses and minuses of consolidating your assets with one investment firm.

Jason Stipp: I'm Jason Stipp for Morningstar. A typical U.S. worker could have as many as seven jobs in their lifetime, and a side effect of this can mean scores of investment accounts across lots of different providers. Is consolidating all of those accounts with one fund firm a good idea?

Here with me to talk about the pluses and minuses is Morningstar's Christine Benz. She is Director of Personal Finance. Thanks for joining me Christine.

Christine Benz: Jason, nice to be here.

Stipp: So it certainly sounds like a nice thing if I've got all these different accounts, and I'm trying to keep track of all the paperwork, to have one fund firm, one series of accounts, one format. What are the pluses to this? Is it a good idea?

Benz: Well, it doesn't even have to be one fund firm, Jason. It could be, say, a supermarket that lets you buy mutual funds, stocks, exchange-traded funds, and this has really been the name of the game for companies in the financial services sector over the past couple of years to be one-stop providers. They all want to be that so they are all offering a broad array of choices.

So there are a couple of key benefits. One is recordkeeping. You'll have fewer statements flowing into your house. You'll receive one consolidated statement, which can be very helpful, particularly for people who are getting close to retirement and want to spend less time managing this stuff. So from an oversight standpoint, I think it can be very, very valuable.

And another big benefit that I see is that when you take time to pull all this stuff together and consolidate, you can do some pruning and put more assets behind your higher conviction ideas, get rid of that fund that you thought was a good idea 12 years ago, but really haven't paid much attention to because it's only a small pool of money. If you spend time consolidating, you can do some streamlining and put more of your assets behind your better ideas.

Stipp: So it really gives you a nice opportunity to pull everything back together and have a nice overhead look and view of what your portfolio is made up. Maybe get rid of some overlap and things like that?

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