By Jonathan Theunissen, CFP® – Financial Planner

The Benefits of Consolidating Investments onto Fewer Platforms 

In the intricate world of wealth management, the strategic consolidation of investments onto fewer platforms can offer substantial benefits, particularly for high-net-worth families and individuals. Streamlining your investment holdings not only simplifies your financial life but also enhances cost efficiency and administrative convenience. Here are the key advantages of consolidating your investments: 

Lower Fees through Sliding Scale Administration Charges 

One of the most significant advantages of consolidating investments is the potential for lower administrative fees. Investment platforms often charge fees on a sliding scale based on the total value of assets managed. By pooling your investments onto fewer platforms, you can achieve higher aggregate asset values, which typically qualify for lower percentage fees. This reduction in administrative costs can translate into significant savings over time, enhancing the overall returns on your investments. 

Simplified Life Administration 

Managing multiple investment platforms can be time-consuming and complex, especially when it comes to gathering tax certificates, monitoring performance, and keeping track of various accounts. Consolidation reduces the number of platforms you need to interact with, thereby simplifying your financial administration. With fewer platforms, it becomes easier to access comprehensive reports, view your entire portfolio in one place, and ensure all necessary documents are readily available when needed. 

Easier Estate Management 

For families, particularly those with substantial wealth and complex estate plans, the process of estate administration can be daunting. Consolidating investments onto fewer platforms simplifies the task for executors, who are responsible for winding up the estate. A more streamlined investment portfolio reduces the administrative burden, making it easier to locate, value, and distribute assets according to the will. This can result in a more efficient and less stressful process for your loved ones during an already challenging time. 

Optimised Management of Investment Strategy and Asset Allocation 

When your investments are dispersed across multiple platforms, it becomes challenging to maintain a cohesive overview of your portfolio and ensure that your asset allocation aligns with your financial objectives. By centralising your investment administration, you gain a comprehensive view of your entire portfolio, enabling more strategic decision-making. This holistic perspective allows you to identify and correct any imbalances in your asset allocation more efficiently, ensuring that your portfolio remains diversified and aligned with your long-term goals. 

Understanding Platform Fee Structures 

Investment platforms differ in how they charge administrative fees, and understanding these differences can help you make more informed decisions about consolidation. For example, some platforms bulk both local and direct offshore investments per client to determine admin fees. This means that all your investments are considered together, potentially lowering the overall fee percentage due to the higher total value. 

Conversely, other platforms may separate local and offshore investments but offer family pricing structures. Under family pricing, the combined assets of all family members, including those held in family trusts, are considered together for fee calculation purposes. This approach can provide substantial fee reductions for families with significant combined assets, even if individual accounts are smaller. 

Conclusion

Consolidating your investments onto fewer platforms offers multiple benefits, from lower fees and simplified administration to more manageable investment and estate planning. These advantages can lead to greater financial efficiency and peace of mind. Understanding the specific fee structures and advantages offered by different platforms allows you to make strategic decisions that align with your financial goals and needs. By taking these steps, you can ensure that your wealth management strategy is both cost-effective and administratively streamlined, paving the way for sustained financial success.