"One Stop Shop" or Keep Banking/Credit Cards separate from Investing

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solaris17
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"One Stop Shop" or Keep Banking/Credit Cards separate from Investing

Post by solaris17 »

There have been debates/ differing opinions on this forum about consolidating all investments with a single provider (for the sake of simplicity) vs. 'diversifying' across multiple providers out of a concern for any individual account being hacked and made temporarily inaccessible.

There have also been discussions about consolidating banking/spending and investing under one roof (e.g. using Fidelity's cash management account for banking, their 2% credit card for spending, alongside their investment account offerings, or the equivalent at Bank of America & Merrill Edge).

On this second issue, I'm curious what people think about consolidating everything under one roof vs. keeping banking/credit card accounts separate from investment accounts. Particularly from a behavioral point of view--do you find it beneficial to keep investment accounts 'separate' from checking/savings accounts and credit cards--does this help to promote a 'set and forget' approach to investing and mitigate against the possible tendency to tinker with one's portfolio and/or pay undue attention to short-term market fluctuations? Or does the benefit of simplicity by having everything under one roof (or, the added 'perks' of Bank of America's preferred rewards program) outweigh these potential disadvantages?

Has anyone started with one approach and then switched to another? If so, what was that personal experience like--what led you to adopt the new approach?
Lastrun
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Re: "One Stop Shop" or Keep Banking/Credit Cards separate from Investing

Post by Lastrun »

I really looked hard at using a one-stop approach but rejected it for two reasons:

1. Something, whether it is interest on cash, credit card bonus, fund availability at no fee, physical offices, etc, has to give. It will be missing. For some, this is no big deal, perhaps they don't keep much cash and could care less about (0.01% v 0.50% current), or they are not that concerned about physical branches, or whatever. Simplicity is a good thing, but losing 0.50% to 3% on cash spend on credit cards is not insignificant in this low rate environment (Fidelity). When interest rates were better Schwab and Merrill had poor to terrible cash options.

2. I don't like to have my eggs in one basket-just basic paranoia. Access issues, selected web outage, fraud lockdown, just don't want the frustration.

So I have a 2 and 2 strategy, 2 banks (one online, one local), and 2 brokerage accounts.

BofA/Merrill-mostly for the bonus on credit cards. Hold a fair amount of VXUS there and get what is best in class credit cards, which are our main spending cards. Also BofA is ubiquitous in my area so this gives me a large branch and ATM footprint.

Ally-for savings and moving large amounts of money around through ACH.

Vanguard for investments-have not had the issues other complain about on here, not saying VG does not have issues. Just not enough to move.

But honestly, I think you could do this with 2 institutions. Say Fidelity or Schwab combined with Ally, insert Chase in there (not in my area), a good local credit union, and mix and match to what is best for your personal situation.

I personally do not see how one stop versus having more than one broker will change behavior.
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oldcomputerguy
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Re: "One Stop Shop" or Keep Banking/Credit Cards separate from Investing

Post by oldcomputerguy »

Most of the "one-stop shop" discussions that I have read are discussing using Fidelity. I happen to have my retirement assets at Fidelity, along with a Cash Management account (which gets me the Fidelity debit / ATM card). I also have the Fidelity-branded credit card, which is actually issued and backed by Elan Financial. I have no concern using that card as my primary card; if something happens at Fidelity, it shouldn't affect my use of the card, as they are separate companies.

Schwab used to have a Schwab-branded Visa credit card, but according to what I read, they did away with that years ago. They now offer a Schwab-branded AmEx card that is issued by American Express National Bank. So I would assume that any issues with Schwab would not affect use of or access to the AmEx card.
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mrb09
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Re: "One Stop Shop" or Keep Banking/Credit Cards separate from Investing

Post by mrb09 »

oldcomputerguy wrote: Tue Jan 25, 2022 7:26 am Most of the "one-stop shop" discussions that I have read are discussing using Fidelity. I happen to have my retirement assets at Fidelity, along with a Cash Management account (which gets me the Fidelity debit / ATM card). I also have the Fidelity-branded credit card, which is actually issued and backed by Elan Financial. I have no concern using that card as my primary card; if something happens at Fidelity, it shouldn't affect my use of the card, as they are separate companies.
+1. I import my CC transactions into a budget tool (YNAB), and although Fidelity does show my the card balance in its Fidelity dashboard, I can download just the credit card transactions separately using the Elan login, so I don't need to give access to all my accounts.
radiowave
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Re: "One Stop Shop" or Keep Banking/Credit Cards separate from Investing

Post by radiowave »

Also using a 2+2 approach: two brokerages with investments roughly spread across plus a brick and mortar and online bank. Yes, it adds significant complexity to investing and banking but the redundancy does help us sleep well at night.

One other thing to consider is having a backup ebilling account if using that method for bill pay. We consolidated our bill pay on one bank but plan is to link the second bank as well in case one bank access ebilling fails. Yeah, that adds a whole layer of complexity.
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PatrickA5
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Re: "One Stop Shop" or Keep Banking/Credit Cards separate from Investing

Post by PatrickA5 »

Currently, we have 95% of our money at Fidelity. His/Hers IRAs, CMA, Brokerage and Elan (Fidelity) credit card. All bill pay is done through the CMA.

We have a small amount in a local B&M bank. I'm struggling whether or not to dump the local bank.

Cash savings is at Ally. Back when MM accounts paid something, we didn't need an online bank like Ally. If/when interest rates on MM account improve we'll once again dump Ally.

DW has her current 401K elsewhere. It will be rolled over into her Fidelity IRA when she retires.

We have various credit cards due to playing the points/miles game. Eventually I'll give that up and just use the Elan card.

Personally, I would love to have everything at Fidelity and hope to get there someday.

To answer OPs question, I don't feel any need to separate brokerage/savings accounts from spending accounts. I'm not tempted to spend more just because we have the money available at the same brokerage.
humblecoder
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Re: "One Stop Shop" or Keep Banking/Credit Cards separate from Investing

Post by humblecoder »

Honestly, I don't see how having separate checking and investment accounts helps with a "set it and forget it" approach. Conversely, I don't see having a one-stop shop hinders this approach. Can you elaborate on your thinking?

If you think that having separate accounts means that you are less likely to transfer money from X to Y, I am not sure if I'd agree. Transferring money between different institutions is relatively quick and straightforward these days, so that hardly seems like a barrier to tinkering.

Regarding simplicity vs not having all one's eggs in one basket, I see merits to both sides of that debate. Personally, we have ended up with accounts in many places, just by the nature of things. For instance, I have a 401k with an institution that I otherwise do not do business with. However, I have no choice in the matter; it is who my employer chose. Same with 529. In our state, we get a deduction only if we use provider X. I would suspect that most people end of with accounts at multiple institutions just by virtue of not having a choice with some accounts.

Honestly, it doesn't really bother me that much since I can get an aggregate view of all of our accounts using a free available tool. Perhaps when I retire, I'll start to "cull the herd". My thinking is that as I get older, I might value simplicity for both myself and my heirs. But for now, it is no big deal to me.
Jags4186
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Re: "One Stop Shop" or Keep Banking/Credit Cards separate from Investing

Post by Jags4186 »

Simple doesn't mean best. Simple can sure cost you a lot of money. I've earned over $50,000 of bank account bonuses, brokerage bonuses, and credit card bonuses by not being simple. I wouldn't trade $50,000 in an effort to reduce the number of webpages I log into.

Use a consolidator like Personal Capital or Mint.com to dashboard your finances, and it all becomes pretty simple, regardless of how many accounts you have and institutions you do business with.
GAAP
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Re: "One Stop Shop" or Keep Banking/Credit Cards separate from Investing

Post by GAAP »

We use Schwab for investing and banking. The credit cards are with Chase and BofA. As for how we got here -- we married late, and gradually simplified as the efforts made sense.

I refuse to use a consolidator -- that doesn't really make my life any easier, adds costs, and adds security risk exposure.

I've never noticed that the location of an account has any effect on what I do with investments. However, my guess is that reflects an individual trait on my part.

I also think that a tendency to tinker is indicative of a lack of comfort with the current choices, and therefore likely an indication that insufficient thought was placed into making those choices.
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Bogle7
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Re: "One Stop Shop" or Keep Banking/Credit Cards separate from Investing

Post by Bogle7 »

Two.
1. Fidelity for all the retirement funds. Easy to manage with a good web interface.
2. Credit union for checking and designated savings accounts. My credit union allows sub-accounts and so I have 5 of them with a few thousand in them.
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Topic Author
solaris17
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Re: "One Stop Shop" or Keep Banking/Credit Cards separate from Investing

Post by solaris17 »

Thank you to all who have responded.

I run most of my spending through Bank of America credit cards, and have been considering moving taxable investments from Vanguard to Merrill Edge mainly for the preferred rewards credit card boost. I typically check my credit card transactions online at BofA once daily, whereas I try to check in on my investments at Vanguard no more than once per week. Ultimately I'd like to check in on my portfolio no more than once per month.

It might sound trivial, but one concern I have about moving investments to Merrill Edge is that after checking my credit card transactions, I will click on the button that takes you to Merrill Edge, inevitably see my portfolio value fluctuating in real time, and fall into the habit of paying more attention to daily market movements (something I would rather not do).

So even if it amounts to a kind of mental accounting/ bucketing, I'm leaning toward sticking with a system of keeping checking accounts & credit cards 'separate' from investment accounts--not having them accessible under the same login.
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Re: "One Stop Shop" or Keep Banking/Credit Cards separate from Investing

Post by NYCaviator »

PatrickA5 wrote: Tue Jan 25, 2022 12:12 pm Currently, we have 95% of our money at Fidelity. His/Hers IRAs, CMA, Brokerage and Elan (Fidelity) credit card. All bill pay is done through the CMA.
Do you have any security concerns about having everything at one brokerage?
BUBear29
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Re: "One Stop Shop" or Keep Banking/Credit Cards separate from Investing

Post by BUBear29 »

Fidelity for all investing, checking (cma) and credit card. online hysa for emergency fund (i use alliant and bc inuse them i also have a checking acct bc i can deposit cash at local partner credit union atm)
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PatrickA5
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Re: "One Stop Shop" or Keep Banking/Credit Cards separate from Investing

Post by PatrickA5 »

NYCaviator wrote: Fri Feb 04, 2022 8:04 pm
PatrickA5 wrote: Tue Jan 25, 2022 12:12 pm Currently, we have 95% of our money at Fidelity. His/Hers IRAs, CMA, Brokerage and Elan (Fidelity) credit card. All bill pay is done through the CMA.
Do you have any security concerns about having everything at one brokerage?
No.
Parkinglotracer
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Re: "One Stop Shop" or Keep Banking/Credit Cards separate from Investing

Post by Parkinglotracer »

We invest at vanguard

Local bank at chase

Use credit unions over years for loans and cash back credit cards

Another community local bank for home equity LOC

T Mobile for 1% fdic insured checking

Treasury direct for ibonds

Tsp for stable value fund

Tasty broker for $500 bonus

I guess we will go to where the best deal is with a decent amount of convenience.


Not worried about consolidation.

I use a spreadsheet to track account balances and locations.
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