You may have noticed the ads for online brokerage firms boasting about their lower fees, user-friendly trading features, stock charts, and many more. How do you pick just one? Can You Have more than one Brokerage Accounts? The good news is there’s no law upon ‘polygamy’ about brokerage accounts. There is nothing unlawful about holding more than one. You CAN maintain more than one brokerage accounts. But, there are also helpful ideas for having all of your finances at the same brokerage company. Let’s have a glance at the reasons on both sides.

Reasons for Having More Than One Brokerage Accounts

1. It Divides Your Accounts Across More than one Firm

All the most prominent brokerage companies give access to almost all major asset classes. These classes are:

● Investing in Stocks

● Futures

● Exchange-traded funds (ETFs)

● Options

● Bonds

● Mutual Funds

They all provide similar features, but each company is exceptional at some things and ‘just okay’ or average at others. So you may wish to divide your accounts over more than one Firm depending on their relevant strengths. For instance, you can have your Mutual Funds with a broker that provides excellent retirement planning sources. And you can have your taxable account, where you perform most of your trading, with a company that has rock-bottom trading charges or smooth simulation tools to test your trade ideas.

• It Trade Risky Assets

Not all brokerage firms enable you to buy several risky assets like forex, penny stocks, and cryptocurrencies. If you wish to buy them, you’ll require an account with a company that allows them, even though you may want to do most of your financing with a different brokerage.

• It Divides Your Accounts Across Various Firms

Some individuals who have a lot of money to invest choose to divide their accounts over different companies. But, this may not be as serious as it sounds.

Good Reasons to Have Just One Broker

• Watch Your Merged Exposure to Various Types of Assets on 1 Platform

Companies consolidate your holdings across all of the accounts held at that Firm. Their consolidated journaling points enable you to inspect your aggregate displays across all of your accounts, classified in different ways. For instance, you can observe your combined exposure to various types of assets, e.g., small-cap, mid-cap, and large-cap. If you have more brokerage accounts, you have to make these statements yourself in a spreadsheet.

• Get Yourself to be a Premium Investor

The more money you have funded through a brokerage company, the more critical you are to them. You can get special perks if your total account size surpasses some threshold — possibly complimentary consultations with an advisor, complimentary notary assistance, etc. If your finances are handled across various brokerages, you may not reach a “premium” level at any company. But unite them at one Firm, and you may qualify.

• Don’t forget your money

Eventually, you may overlook a brokerage account. That sounds absurd. It seems impossible. How could you overlook your own money? But it happens!

• More Secured

An ultimate reason to think twice before creating more than one brokerage account is an enhanced identity theft risk. The more companies have access to sensitive data about you; the more likely your data could get hacked. While not a significant risk, it is something to have in mind. If you use multiple brokerage firms, make sure you have separate passwords for each.

Active Trader vs Day Trader vs Pattern Day Trader

Despite having over 136 Crore, there are only four crore active trading accounts in India. Luckily, legendary traders like Sudarshan Sukhani and Rakesh Jhunjhunwala are making Crores of Rupees every year, day trading in India is increasing day by day.

There has been a ‘price war’ between firms to provide the cheapest trading charges. If you are an active trader, maybe you have created multiple online brokerage accounts to get the latest, lowest costs.

You may meet the definition of ‘day trader’ or a ‘pattern day trader’ if you are an extremely active trader. If you want to dodge this position, you can use multiple brokerage accounts to spread your activity.