Some may benefit
from consolidating
their accounts

Answer: You bring up a good point. Many people keep investment vehicles in different places. However, there are some potential problems of keeping your investments at a variety of different institutions.

For one thing, despite your best intentions, you could actually forget about one or more of your holdings. State treasurers' offices regularly advertise "unclaimed" property, including investments. People move, change jobs, divorce and undergo all sorts of changes in their lives -- and sometimes, they leave their investment dollars behind. But if you consolidate all your holdings with one financial services provider, you can keep tabs on your investments without much trouble.

Of course, you could be a highly organized person, someone who would never misplace financial assets, no matter how dispersed. But, even so, your far-flung investments could slow your progress toward your important financial goals. If you maintain several different accounts, without a central focus or unifying philosophy, you could end up with redundant or inappropriate investments.

On the other hand, consider keeping your investments with one firm and work with one financial professional who knows your family situation, risk tolerance and investment preferences. Doing this may help you make steady progress toward your long-term objectives. A qualified professional can look at how all your investments work together, and make recommendations, as needed, to help improve your portfolio's performance within your stated level of risk.

Consolidating your various investment accounts can also help you in the area of required minimum distributions. As you may know, you need to begin taking distributions from traditional IRAs and 401(k)s or other employer-sponsored retirement plans in the year in which you turn 70 1/2. You can withdraw more than the required minimum distribution, but, as the word "required" suggests, you can't withdraw less -- and you could face tax penalties for taking less than the minimum or failing to take the distribution on time. Consequently, if you have multiple IRAs and employer-backed plans, you'll have to "reel them in" at the right times to make sure you're making the proper distribution moves.

If you do have several IRAs, from various providers, you'll need to determine the distribution for each IRA separately. You may, however, choose to aggregate your distribution for any given year from a single account. Again, though, you will find it much easier to track your distribution options if all your IRAs are "under the same roof." Plus, your financial professional can help you decide if the aggregate distribution route is the one to take. Your 401(k) or similar employer-sponsored plan cannot be aggregated with your IRAs to determine your required minimum distribution.