How many brokerage accounts can you have?

A brokerage account acts as a gateway to investing, granting you access to buy various kinds of securities. In the same vein of potentially wanting more than one savings account, you may be wondering if you can have multiple brokerage accounts.

The good news is you can: There’s no industry-wide standard limit on how many brokerage accounts someone can have. Whether you should have multiple accounts, however, is a different story.

In this article, we’ll take a closer look at brokerage accounts as well as the pros and cons of opening more than one.

What are brokerage accounts?

A brokerage account allows investors to buy and sell various types of investments, such as stocks, mutual funds, bonds and exchange-traded funds (ETFs). After opening an account, you can deposit money and start investing – either independently or with the help of an advisor depending on the type of account you open.

While taxable brokerage accounts don’t offer tax advantages like retirement accounts do, they also don’t come with strict contribution or withdrawal rules. In fact, because of the flexibility and earning potential of brokerage accounts, many investors use them for long-term goals like buying a home, funding higher education or supplementing retirement savings.

What are the types of brokerage accounts?

Brokerage accounts come in different variations. While there could be numerous options to consider, these are three variables you’ll likely have to decide on when you open a brokerage account:

If you want a self-directed or full service brokerage account with an advisor:

If you want an individual or joint account brokerage account:

If you want a cash or margin account:

Is there a limit to the number of brokerage accounts you can have?

There is no industry-wide standard limit to the number of brokerage accounts you can open as a U.S. investor. You can generally open as many accounts as you’d like, though you may run into limits within a specific brokerage. If you plan to open multiple accounts with a single brokerage firm, it’s a good idea to confirm any account limits the firm has.

Reasons you may want to open multiple brokerage accounts

Individuals often start investing by opening a single brokerage account, but additional accounts might make sense for various reasons. To realize some of these benefits, you may need to open multiple brokerage accounts at different firms, while some benefits will be available to you just by opening multiple accounts in general. Let’s consider some of the reasons you may want to open multiple brokerage accounts:

You’ve hit the Securities Investor Protection Corporation (SIPC) limits

In the event of a brokerage failure or insolvency, and your securities are missing, SIPC protects up to $500,000 ($250,000 in cash) per customer in the same legal capacity, per brokerage. Opening accounts at different firms that are SIPC members can offer protection beyond those limits.

You want access to more investment products

Not all brokerage firms have the same investment offerings. By opening accounts with different firms, you may be able to access a wider range of products or take advantage of brokerages that specialize in certain products. The same can even be said for multiple accounts at the same brokerage, as different account types can have different investment offerings. For example, between firms, one may offer international stocks or options trading, while another specializes in mutual funds or ETFs; and within the same firm, retirement accounts can have different investment choices than standard accounts.

You want access to a variety of tools, research and services

Different brokerage firms offer different tools and services, such as deep stock research reports, ETF and mutual fund ratings and more. By opening accounts with multiple firms, you may be able to benefit from a variety of resources, insights and tools designed to help guide your investment decisions. This can also be true for opening multiple accounts at the same brokerage, as different account types can come with different tools and services. For instance, you may have access to different types of tools and services by having a self-directed brokerage account and a full service brokerage account with an advisor.

You want to take advantage of incentives

Brokerages may offer special promotions to entice investors to sign up with their firm or to open a specific account. Opening a new account may be worth it if there’s a great incentive available, such as a sign-up bonus or an offer for reduced fees but make sure you’re familiar with the terms and conditions of these offers.

You want to track the success of different investment strategies separately

You may want to devote different accounts to different investment strategies. For example, maybe you want to have one investment account focused on long-term investing and another one focused on active trading or alternative assets. Doing so can make it easier to manage your respective accounts and track their specific results.

You want separate accounts for specific goals

Opening different accounts for specific purposes can help you keep your goals clear and organized. For example, you might use one account to save for a down payment on a home, another for your child’s education and still another for retirement. This way, you can tailor the risk level and time horizon of each account to its specific purpose.

Potential challenges of having multiple brokerage accounts

There can be benefits to having multiple brokerage accounts, but there are also drawbacks to consider. Let’s walk through them:

Multiple brokerage accounts may bring complexities to managing your investments

Having multiple brokerage accounts can be more tedious and time consuming than investing with a single brokerage account. It will likely require more management and time spent on oversight.

Multiple brokerage accounts could potentially multiply how much you are paying in fees

Each brokerage account has a unique cost structure, which can include trade commissions, markups and markdowns, account maintenance fees, wire transfer fees and more. Having multiple accounts can lead to higher costs – and potentially more complexity in tracking the various fees that come with brokerage accounts.

Multiple brokerage accounts may provide a fragmented financial picture

With investments spread across multiple accounts, it may be harder to get a complete picture of your investment portfolio if you use different firms. Getting that consolidated view of your investment portfolio for tax purposes and periodic reviews could prove challenging.

Tips for managing multiple brokerage accounts effectively

If you decide to open a second, third or even 12th brokerage account, here are some tips to keep in mind. First, you’ll want to start by shopping around, comparing brokerage account options, including their products, costs and the tools they offer.

Once you’ve chosen a good fit for your current needs, create a master tracking spreadsheet to keep a bird’s-eye view of your accounts. Record key details such as balances, fees, returns and goals.

If your multiple brokerage accounts are held at a single firm, find out if there is a simplified dashboard view that will enable you to see all your accounts together. If your accounts are at different brokerages, you might also explore portfolio aggregators that let you link multiple accounts to one dashboard for easier monitoring.

From there, schedule regular reviews of your accounts to track performance and adjust your investments as needed. For example, you could plan a brief monthly review, a quarterly deep dive and a comprehensive year-end assessment.

The bottom line

As you progress in your investing journey, having multiple brokerage accounts may prove beneficial for certain reasons. While having multiple brokerage accounts can bring more complexity, managing them can be simplified with the help of a master tracking spreadsheet or aggregation tool. Those complexities and other potential drawbacks may be justified by the additional protections multiple accounts can offer along with other potential benefits. As with any investment strategy, though, you’ll need to weigh the pros and cons to decide if multiple brokerage accounts make sense for your long-term financial goals.

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