If you are involved in using the stock market and already have an investing account, you may be looking for a way to save some money. Is it worth it to have multiple brokerage accounts? What are the pros and cons of such a solution? What should you take care of when you decide to open a brokerage account?

Legality of multiple brokerage accounts

Of course, you can have more than one brokerage account, but you will have to take care of the paperwork. First of all, you will have to fill out a lot of applications and forms, such as the tax ones. You will also have to remember to verify your data when setting up a new invest account. This is one of the biggest disadvantages of being a client of several brokers.

Second brokerage account can reduce fees

Many investors choose to set up a new broker account to save on commissions. Every company has to make money on something, so it introduces fees for some investments, such as buying stocks. On the other hand, you can buy some assets for free, which makes the offer attractive. In theory, you can use different accounts to buy different investment instruments to reduce the overall costs. In practice, unless you are a day-trader with millions of dollars at your disposal, the profits are not worth the effort. In most of the cases, your savings will oscillate about a few dozen dollars per year.

 

Should You Have Multiple Brokerage Accounts?

Second broker account increases level of risk

Having an investing account means some risk. Having a password and sharing your personal information with the broker are needed, but they can also be hacked. What’s more, you are depositing your money, and that means you risk losing it. If you decide to open a second investing account, you should secure it with a different password, otherwise you could fall victim to phishing, which is not likely what you want. The better passwords and VPN’s, the better you sleep. To sum up: an additional account means a higher risk of a hacking attack, although if it happens, you will probably lose less money.

Access to more investments

Even the best brokerage accounts do not offer all stocks, ETFs or CFDs. Buying stocks listed on the New York or London stock exchanges won't be difficult, but what about Mozambique or Armenia stock brokerage? These are very exotic examples, but access to some investments is more difficult than you might expect. If you open a brokerage account on another platform, you will gain the opportunity to invest in new markets. However, it's worth opting for a broker from another part of the world. It will increase your chances of buying stocks and ETFs that were previously unattainable. Possession of an account in some countries might be impossible or very tough. A good example is the U.S.

Investing as a company

You need to keep in mind that a business brokerage account operates under a slightly different set of rules than an individual one. To be able to set one up, your company must have legal personality, and this means some next complications. First of all, shareholders or co-owners must agree to take part in investments and establish new accounts. Secondly, setting up a second account is not always justified, which may cause additional problems. Sounds like a nightmare? Actually it is. If you represent a company, you should definitely stay with one investment account.

Access to knowledge base

Almost all stockbrokerage companies offer courses and training materials to their clients. Is it worth setting up a new brokerage account to gain access to them? There is certainly an argument for it. However, it should not be the only reason for such a decision. There are many free courses, webinars and blogs on the Internet, and the knowledge gained there will be at a similar level. The best brokerage accounts for people who care a lot about knowledge are XTB and Interactive brokers. If you own one of them, it is unlikely to be worth becoming a client of another company.

 

Should You Have Multiple Brokerage Accounts?

Mutual investing

You already have an individual brokerage account, but you want to invest with your partner. Is it worth setting up another one in this situation? Of course, it is. A joint investment account will allow you to build family wealth, while allowing you to keep your own money. However, you must remember that setting up such an account involves additional formalities and is not always possible. Exactly the same as with a joint bank account, but in this case, problems might arise.

Diversification using next investment account

The undoubted advantage of having several accounts is the separation of your assets. If servers crash, your funds may be temporarily blocked. If you fear similar situations, setting up a second investment account is a great idea. However, you must remember that diversification will not protect you from account seizure by the tax administration or debt collectors.

So, should you have multiple brokerage accounts?

An additional individual brokerage account may be warranted. If the above arguments have convinced you of this decision, take a peek at our article on setting up an invest account. We have included in it the most important information on this subject. Remember also that investing is not limited to buying stocks, ETFs and CFDs. Good alternatives will be, for example, buying gold or silver. Real estate is also worth considering!

Related Posts

man checks the best business podcasts on the internet

Podcast is a broadcast in audio or video form, appearing on the Internet. Its topics can be about anything, no specific subject area applies. Its…

Promotion is the dream of every person who wants to advance in his or her chosen career path. It carries with it a great many…

Imagine that, in your company, you are in charge of recruiting new employees. You are looking for a person whose level of English, allows fluent…

The boss and employees talk about a joint project

Being a new manager often comes with many challenges. In addition to performing your duties, you manage a team and you are responsible for the…

A person doing an online course

Are you thinking about creating your own online course? With the right preparation, you can easily create online courses. Creating your own online course not…