The Pros and Cons of Opening a Joint Brokerage Account With Your Spouse

When you are married, you and your spouse will have to make a number of financial decisions about how you combine your financial life. For example, you may need to decide if you'll have a joint bank account or if you'll share a credit card.

You'll also have to decide if you should open a joint brokerage account or not. There are pros and cons to sharing an investment account and you should consider both when you make this choice.

Pro: You can work toward shared goals

If you and your spouse are saving together for a long-term goal, such as early retirement, then it can make sense to have a joint brokerage account to open the door to do that. You can both put money into it, which will help the balance grow faster. You will also be able to track your progress more easily if you are both investing in the same account rather than maintaining multiple separate accounts.

If you are sharing an account, it's also easier to encourage each other to contribute more in service of your shared objectives.

Pro: You can make sure you have a good overall asset allocation

When you invest, you need an appropriate mix of different assets in order to reduce the risk of loss. For example, you don't want to be too heavily invested in one company, or even in one industry or part of the economy. If your money is too concentrated in one particular type of investment, you face an elevated risk of loss.

You also need to make sure you have a good mix of different assets given your age and investing timeline. For example, you don't want to be too heavily invested in stocks if you'll be relying on the invested money soon.

If you and your spouse have different brokerage accounts, it's harder to see if you collectively, as a couple, have the right investment mix. Since you two are a financial team, it's helpful to look at your shared pot of money and check that you have the right asset allocation. If you each have funds in separate accounts, it's easier to miss the fact that you may be over-invested in a particular asset.

Con: You are limited in the types of joint investment accounts you can open together

One big downside of having joint brokerage accounts is that you are limited in what kinds of accounts you can open. For example, you typically cannot open a joint IRA account -- you would each need your own.

So, unless you have a taxable brokerage account with a broker that allows it, having a joint account may not be possible.

Con: You'll have to make investing choices together, which could lead to more conflict

Finally, if your money is pooled in one big account, you'll have to work together to decide how to invest it. This could lead to more conflict, especially if you are each used to investing independently and managing your own money.

Ultimately, you should carefully consider these pros and cons when you decide what's best for your needs. You may decide to have a joint brokerage account and some individual accounts as well, and that can work in the right circumstances too.