Service keeps tabs on your many investment accounts

If you have multiple investment accounts, you might need to know the asset allocation of your combined accounts.

You want to make sure you’re holding the right percentage of stocks and bonds and taking the right amount of risk to earn the rate of return you need to meet your goals.

It can be tricky to calculate your combined asset allocation, but now you don’t have to.

A free online service called LikeAssets (www.likeassets.com) will show you the combined asset allocation of all your accounts with various brokerages.

Suppose you and your spouse each have a Roth IRA at a different brokerage.

Right now, you can only see the asset allocation of your individual accounts, not your combined accounts.

Since your accounts have different balances and different portfolios, you can’t easily see where you jointly stand.

LikeAssets works like the online budgeting program Mint in that you provide the usernames and logins for your various brokerage accounts and it imports your account information.

Account setup is easy and takes only a few minutes.

Your LikeAssets account will automatically update when anything changes in your brokerage accounts.

The service is currently compatible with about 50 brokerages, including Fidelity, Schwab, TD Ameritrade, Merrill Lynch, Vanguard, E*Trade and Scottrade, with plans to add more.

The service’s other major benefit is that it shows you how your investments compare to an appropriate ETF benchmark, a group of exchange-traded funds similar to your holdings.

Specifically, it measures your alpha, or how much your investment choices are over- or underperforming the benchmarks given the amount of risk you're taking.

A positive alpha is good; a negative alpha means you might want to re-evaluate your selections.

How useful you’ll find LikeAssets depends on whether the service is compatible with every brokerage you use and on how much investing knowledge you have.

If any brokerage you use is not compatible with LikeAssets, the service becomes dramatically less helpful.

In this case, you can try adding an account manually, meaning you have to input each of your investments.

If you have a 401(k) plan where you’re automatically investing with every paycheck, performing manual updates is too time-consuming to be worth the trouble, especially if your money is being allocated to 10 different investments.

Even worse, if your company’s retirement plan consists of investments that aren’t available to the general public, you won’t be able to add them to LikeAssets at all, because it won’t recognize the ticker symbols.

I can’t add my husband’s company-sponsored retirement plan account to our LikeAssets profile for just that reason.

The only way for us to get a picture of the total asset allocation of our combined accounts is to do the math ourselves.

LikeAssets can’t help us.

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As far as helping you evaluate investment performance, you’ll need to understand what alpha is and how LikeAssets creates its custom benchmark for your portfolio.

Basically, it takes your combined holdings, figures out what percentage is in each asset class (U.S. large-cap stocks, international emerging market stocks and so on) and then creates an ETF portfolio with the same asset allocation.

If your holdings outperform the ETF portfolio, your alpha is positive.

If they underperform it, your alpha is negative.

If your alpha is negative, what do you do with that information?

LikeAssets doesn’t make recommendations; it doesn’t even show you your custom benchmark portfolio.

Savvy investors can probably figure it out for themselves, since LikeAssets does tell you which ETFs it uses to create its benchmark portfolios.

These ETFs are your portfolio’s “like assets” because they are similar to your holdings (hence the service’s name).

Making the switch should give you an alpha of 0, because your portfolio would be identical to the benchmark portfolio. It wouldn’t be positive, but it would be an improvement.

Making more subtle changes will prove difficult for most people.

My portfolio has a negative alpha of 0.94%, but given that I’m generally happy with my portfolio and don’t want to overhaul it, I’m not sure what to sell and what to buy or in what quantities, and LikeAssets doesn’t tell me.

Another shortcoming is that LikeAssets only shows your accounts’ historical returns back to the beginning of 2013, which is an awfully short period for evaluating performance.

LikeAssets is useful for getting the big picture of your asset allocation if it’s compatible with every brokerage you use.

For real help improving your investment returns, consider a service like Betterment.