How Many Brokerage Accounts Do You Really Need?

Multiple brokerage accounts can unlock a fuller investing experience, but managing them can be a hassle

As the Investments Editor at Finder.com, I manage over two dozen brokerage accounts to test platforms, fees and tools — an extreme most investors don’t need.

So don’t do that.

But don’t shy away from multiple accounts either; no single platform has it all and extra accounts can offer flexibility. However, they come with extra paperwork, fees and tax reporting. 

So, how many accounts are right for you?

You’re a beginner with limited funds: 1 account

If you’re just starting out with a small amount to invest, one brokerage account is enough. A taxable account with a low-cost broker or robo-advisor lets you begin investing without overwhelming paperwork or fees. 

As your portfolio grows, you can consider adding a tax-advantaged account like an IRA to boost your returns.

You want a completely hands-off investing experience: 1–3 accounts

For hands-off investing, meaning you want to turn over portfolio control completely, a single account with a robo-advisor or traditional financial advisor can be enough. 

You might add a second account for tax benefits, like a traditional or Roth IRA, which offers tax-deferred or tax-free growth, depending on which account you choose. 

For maximum tax flexibility, a third account, such as a taxable account alongside both IRAs, could make sense.

You want to invest yourself: 1–3 accounts

For full control over your portfolio, where all investment decisions lie with you, one to two accounts are typically enough: one taxable account for flexibility and one tax-advantaged account, like a traditional or Roth IRA, for tax benefits. If your investments are simple, a single account might suffice.

You want to invest yourself and have a managed account: 2–6 accounts

For a mix of managed and self-directed investing, you might need two to six accounts: self-directed taxable, traditional IRA and Roth IRA, plus managed taxable, traditional IRA and Roth IRA. Most investors won’t need all six, but this setup maximizes flexibility for both strategies.

You’re saving for a specific goal: 1-2 accounts (for that goal)

If you’re investing for a specific purpose like a child’s college fund or a home down payment, one dedicated account, such as a 529 plan for education or a taxable brokerage account for flexibility, is often enough for that goal. For added tax benefits or liquidity, you might add a second account, like a Coverdell ESA for education or another taxable account for short-term goals.

If you’re also saving for retirement or other goals, you may have additional accounts like IRAs, but keep this setup simple to avoid complexity.

You’re a high-net-worth investor or diversifying across platforms: 3–5 accounts

If you have significant assets or want to spread risk, you might open three to five accounts across different brokers. For example, one for low-cost index funds, another for advanced trading tools and a third for alternative investments like real estate funds. 

Taxable and tax-advantaged accounts add tax efficiency, while multiple platforms help protect against broker-specific issues. Watch out for extra fees and complexity.

You’re managing accounts for others: 2–4 accounts

If you’re investing for family members or managing a trust, you might need two to four accounts. For example, a custodial account for a child, a joint taxable account with a spouse or a trust account could complement your personal taxable or IRA accounts. Each serves a distinct purpose, but be mindful of the extra time needed for oversight and tax reporting.

How Many Brokerage Accounts Do You Really Need?

How to choose the right broker

Picking the right broker depends on your investing style and goals. Look for low or no fees to keep costs down, a user-friendly platform for easy account management and investing, and investment options that match your needs and interests. Read reviews to understand customer pain points, and consider broker signup bonuses as an added benefit. 

Importantly, switching brokers is always possible — just be aware that many charge outgoing account transfer fees.

Bottom line

The right number of brokerage accounts depends on your goals, comfort with management, and tax strategy. Start with one or two accounts and expand only if you need more flexibility. Find the best brokerage for your needs, and review your setup annually to ensure it aligns with your financial plan.