Concentration risk across accounts
A portfolio spread over several brokers can look diversified on every statement and still depend on one sector, one currency or one story. How shared exposure hides, and how to see it.
What separate statements cannot show
Each broker sees the account it holds. Each statement values the positions inside it. Adding the statements gives the value of the whole portfolio, and value is where that arithmetic stops: no statement measures how positions held in different places respond to the same event.
FINRA's investor guidance makes both points plainly: concentration can hide in correlated holdings, in funds that own the same names and in a single security held across accounts, and judging results account by account misleads, because the picture that matters is the whole portfolio.
Six ways concentration hides
The obvious form is a single position that has grown too large. The quieter forms sit deeper: several holdings that depend on one issuer through funds and single stock, one sector that dominates once every account is counted, one factor, such as long duration or momentum, expressed through instruments that look unrelated, and one currency behind assets listed on different exchanges.
The last two ways are the hardest to see. A scenario, such as an energy shock or a cutting cycle, can bind positions with no formal link between them. A narrative can do the same: holdings bought for different reasons may all rest on one story the market currently believes. When that story breaks, they move together.
Correlation arrives when it hurts
Concentration built this way stays invisible while markets are calm, because prices move on their own local news. Under stress the shared dependence takes over: correlations rise, hedges that relied on them weaken, and positions that looked independent reprice together. The risk becomes visible at the moment it is already being paid for.
A review that only checks position sizes therefore misses the point of the exercise. The question is what share of the portfolio depends on one thing staying true, whatever form that thing takes: an issuer, a sector, a factor, a currency, a scenario or a story.
One view, weights only
Seeing shared exposure requires one picture above the accounts. It does not require disclosing amounts: portfolio weights carry the structure of the risk, so tickers and percentages are enough to read concentration, contribution to risk and behaviour under scenarios.
Hawk Thorne built AEGIS around that principle: a portfolio registered as weights only, read as one whole across accounts, currencies and markets, with exposures, scenarios and the owner's own limits in one dated process. AEGIS informs and warns, and every decision stays with the owner of the capital. It currently runs in private preview.
Where to start
A first reading takes an afternoon: list every account and position, convert them to weights of the whole, and group them three ways, by issuer, by sector and by currency. Then ask the harder questions of the largest groups: which of these depend on the same factor, the same scenario, the same story?
The exercise repeats on a fixed rhythm, and each reading gets a date. Concentration is a moving quantity: it grows with the performance of the winners, and the record of how it changed is the part a later review will need.