Not necessarily. If the funds are all focused on similar markets / asset classes, you would be correct. In this situation, you could be doubling up on exposures, increasing tax-inefficiency, and even worse, owning funds where managers have contrary opinions and cancel each other out.
However, if your advisor has built a global portfolio and/or with exposure to multiple asset classes, a dozen funds might be very important. There are so many categories and sub-categories to choose from. Your advisor may well be developing a strategy for you that is very specifically targeted. Go to Morningstar.com and take a look at all the categories!
My advice is to sit down with your advisor and have him/her explain it to you. The one thing that is of paramount importance is that you understand and agree with the philosophy being employed on your behalf. After all, IT'S YOUR MONEY!
Best of luck.
Really depends on size of the IRA (portfolio) but in my opinion it is probably high unless your portfolio is just made up of mutual funds which would only be appropriate (again in my opinion) if it was under $50k ($100k max). That being said, if your advisor chooses to (and follows) all the funds/managers then power to him/her.
I can't speak to the specifics or the quality of what your advisor is recommending, but depending on the assets under management, that may be entirely reasonable. Most institutional investors break down investments managers by market segment, for example: large-cap (capitalization) value, large-cap core, large-cap growth, mid-cap -value, core, growth, small-cap -value core growth, international developed markets, international emerging markets, Intl REITS, US REITS, and many more categories (we have even started on bonds). You may ask why I mention institutional investors, but investing like a pension fund pays dividends in the long run. If you have a strategic asset allocation and rebalance to that allocation, you are likely to do well.
Look at the class of the mutual funds, and understand the cost involved. One can get very good market diversification by using index ETFs. Cost matters.
Frankly I think you can achieve adequate diversification with 5 funds or ETF's , maybe even 3. But beyond 7 it is probably done to give a perception of being " more" diversified though it really isn't..
kurt, I fully agree with Jon and George . There are alot of variables to consider when building a portfolio for a client. Be honest with your advisor and ask him directly to explain his process and reasoning to you. Remember, sometimes it's the way someone answers you as opposed to the answer given that reflects the tru intentions. Good Luck, Dan
Kurt - Most likely 12 funds is too much. To be sure, ask your advisor to explain to you why you are invested in 12 different funds and to get even more detailed, ask him/her to show you a "holdings map" of sorts that will show you where the actual holdings of the funds may overlap. Frankly, over diversification is a BIG issue in portfolio management and that's what this sounds like. I agree with Evan above, 5 (probably 3) funds are plenty.