ONGOING PORTFOLIO MANAGEMENT
Diversifying across accounts
How holdings and account types interact once you hold more than one account.
One portfolio, spread across several accounts
Once there's more than one account in the picture — a registered account and a taxable one, or a workplace plan alongside a personal brokerage account — it's natural to look at each account on its own. Is this account diversified? Is that one?
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Diversification isn't really a property of any single account, though. It's a property of everything held across all of them, added together. Two accounts that each look reasonable in isolation can add up to something quite concentrated once combined — or the reverse, two accounts that look thin on their own can be perfectly balanced together.
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This is less about a rule to follow and more about a habit of looking at holdings differently: as one combined portfolio that happens to be split across a few statements, rather than several small portfolios that happen to share an owner.
How the same exposure ends up in two places
A common pattern: a broad-market ETF gets opened in one account, and later, a second account gets funded with a different broad-market ETF — different provider, different ticker, similar-sounding name. On paper it looks like two positions. In practice, many broad-market funds hold a large, overlapping set of the same companies, just weighted slightly differently.
The same thing happens with individual stock positions. Someone might hold shares of a company directly in one account, not realizing that same company already makes up a meaningful slice of a broad-market fund sitting in another account. Neither position is a problem by itself — the overlap is what quietly narrows the diversification that was assumed to be there.
Registered vs. taxable accounts — why this is a separate question
It's worth separating two questions that tend to get bundled together: what is being held, and which type of account it's being held in. A registered account (like a TFSA, RRSP, or a 401(k)/IRA) and a taxable brokerage account are taxed differently — that part was covered in account types, back in Making the Switch.
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But the tax treatment of the account doesn't change whether a holding is diversified. The identical broad-market ETF can sit in a registered account or a taxable one; either way, it's the same underlying exposure. Diversification is about what's owned. Which account it sits in is a separate layer — one that matters, but for different reasons, covered next in asset allocation and asset location.
A simple way to check for overlap
Most fund providers publish a list of a fund's holdings, or at least its largest positions and sector or geographic breakdown. Comparing that list across accounts — rather than comparing fund names or tickers — is how overlap actually gets spotted. Two funds with completely different names can hold much of the same underlying companies; two funds with similar-sounding names can hold surprisingly different things.
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Self-directed investors handling this across multiple accounts often keep a simple running list of what's held where, updated occasionally, rather than trying to reconstruct the full picture from memory each time a decision comes up.
WHY IT'S EASY TO MISS
A fund tracking the total US stock market and a fund tracking just the S&P 500 can overlap by a large majority of their combined value, since the S&P 500's largest companies also dominate the total market fund. Holding both, split across two accounts, can feel like diversifying into two different things — mechanically, it's much closer to one slightly larger position in the same companies.
Where this fits on the path
This builds directly on account types, cash, margin, and registered, from Making the Switch — that article covers how the accounts themselves work; this one covers how to look across them once more than one is in use.