Having all money with one brokerage or multiple brokerages for stock investment?

thenewcomer

I have been considering the pros and cons of using multiple brokerages versus a single brokerage.

Managing multiple brokerages requires more effort, may involve transferring funds between accounts, and, in the event of my passing, would require my beneficiary to deal with multiple firms for payout. However, spreading funds across different brokerages provides a safeguard against insolvency, as the FSCS only protects up to £85,000 per institution.

On the other hand, consolidating all investments within a single brokerage simplifies management but carries the risk of losing access to funds or facing delays if the brokerage goes into administration.

What are your thoughts on this? How do you approach this decision?

Linton

I think spreading one portfolio over several platforms is something to avoid especially if you hold a range of funds as you are likely to end up with bits of each investment on both portfolios after a few  rebalances.

 However if you have multiple portfolios anyway eg his & hers SIPPs and ISAs there is no practical benefit in using the same platform for all of them, so you may as well have several.

Swipe

One brokerage. I cannot be bothered with more admin work of managing multiple brokerages.

I'm single, retired and keep a few years' outgoings in cash outside of the brokerage, so it's just the one for me.

Hoenir

One brokerage. I cannot be bothered with more admin work of managing multiple brokerages.

Stick to a reputable platform. Those that have had trouble in the past haven't been the household names. Investments are held in nominee form they are not assets of the platform itself. In no way impacted by the insolvency of the business itself. Very different to a bank where they do hold your savings directly and correspondingly lend it out. . 

thenewcomer

More than one brokerage (for each ISA and non-ISA accounts). Admin work is nothing compared to the ease of mind if the brokerage goes bankrupt or wind down.

Hoenir said:

Stick to a reputable platform. Those that have had trouble in the past haven't been the household names. Investments are held in nominee form they are not assets of the platform itself. In no way impacted by the insolvency of the business itself. Very different to a bank where they do hold your savings directly and correspondingly lend it out. . 

which brokerages had problems in the past? 

Albermarle

More than one brokerage (for each ISA and non-ISA accounts). Admin work is nothing compared to the ease of mind if the brokerage goes bankrupt or wind down.

I have three pension pots with different providers. Used to be 6, will probably eventually be two. Two lots of cashback in the process.

I had one S&S ISA , then transferred to a new provider ( with cashback) and now two new providers ( due to cashback offers ). Probably change again at some point.

All well known/mainstream providers.

eskbanker

thenewcomer said:

Hoenir said:

Stick to a reputable platform. Those that have had trouble in the past haven't been the household names. Investments are held in nominee form they are not assets of the platform itself. In no way impacted by the insolvency of the business itself. Very different to a bank where they do hold your savings directly and correspondingly lend it out. . 

which brokerages had problems in the past? 

Beaufort and SVS are two that spring to mind:

https://forums.moneysavingexpert.com/discussion/5808277/beaufort-securities
https://forums.moneysavingexpert.com/discussion/6032496/svs-securities-shut-down

Linton

eskbanker said:

thenewcomer said:

Hoenir said:

Stick to a reputable platform. Those that have had trouble in the past haven't been the household names. Investments are held in nominee form they are not assets of the platform itself. In no way impacted by the insolvency of the business itself. Very different to a bank where they do hold your savings directly and correspondingly lend it out. . 

which brokerages had problems in the past? 

Beaufort and SVS are two that spring to mind:

https://forums.moneysavingexpert.com/discussion/5808277/beaufort-securities
https://forums.moneysavingexpert.com/discussion/6032496/svs-securities-shut-down

Both specialised in non-standard investments. They were not alternatives to HL, AJBell, II etc. so their customer base would not be of interest to those latforms.

Alexland

More than one brokerage (for each ISA and non-ISA accounts). Admin work is nothing compared to the ease of mind if the brokerage goes bankrupt or wind down.

I don't stay within the FSCS limits as that would be impractical but like to have at least a couple of pensions and a couple of ISA providers on the go to avoid too high a proportion of my wealth being with a single platform or fund manger. I've usually got more on the go due to cashback incentives.

I prefer to invest with some of the world's largest asset managers (Vanguard, Fidelity, State Street, etc) but I am still OK with going over the FSCS limit with a FTSE250 (AJ Bell) or FTSE100 company (Lloyds Banking Group, Legal & General, etc) as they are probably still too big to be allowed to fail and the S&S assets should(...) be segregated anyway.

I don't see any reason to exceed the FSCS limit with any company that was below FTSE250 scale.

GeoffTF

Linton said:

eskbanker said:

thenewcomer said:

Hoenir said:

Stick to a reputable platform. Those that have had trouble in the past haven't been the household names. Investments are held in nominee form they are not assets of the platform itself. In no way impacted by the insolvency of the business itself. Very different to a bank where they do hold your savings directly and correspondingly lend it out. . 

which brokerages had problems in the past? 

Beaufort and SVS are two that spring to mind:

https://forums.moneysavingexpert.com/discussion/5808277/beaufort-securities
https://forums.moneysavingexpert.com/discussion/6032496/svs-securities-shut-down

Both specialised in non-standard investments. They were not alternatives to HL, AJBell, II etc. so their customer base would not be of interest to those latforms.

There have been problems with many other brokers. Google will give lots of examples. Here is a helpful article:

https://www.investorschronicle.co.uk/content/e0da9a63-1e77-5ce5-8747-93325d72a40e

"Mr Kuczynski is clear that there shouldn’t be a situation where an individual client dealing with a UK-authorised financial services broker has uncompensated losses for a broker failure. The only circumstances in which it might happen is when a client has a very large portfolio and their allocation of the administration costs – which are charged as a percentage of the fund held – exceeds the £85,000 limit."

It can be a long time before you get your money though. I would stay away from small brokers.

thenewcomer

More than one brokerage (for each ISA and non-ISA accounts). Admin work is nothing compared to the ease of mind if the brokerage goes bankrupt or wind down.

Albermarle said:

I have three pension pots with different providers. Used to be 6, will probably eventually be two. Two lots of cashback in the process.

I had one S&S ISA , then transferred to a new provider ( with cashback) and now two new providers ( due to cashback offers ). Probably change again at some point.

All well known/mainstream providers.

Thank you for sharing. Who are the providers that you are with for the cashback offers? 
One of my financial goals for this year is to get more cashback.