By consolidating your investment accounts with one advisor, you can reduce fees, streamline your overall investment strategy and enhance your retirement income. Consolidation also avoids multiple advisors having only partial visibility of your overall financial life.
This becomes even more important as you approach retirement. There are key decisions to be made in structuring a retirement strategy, such as coordinating your various sources of income to ensure you’re receiving everything you’re entitled to, and doing so in a tax-efficient manner. This includes optimizing your many income sources, such as pensions, government benefits, RRSPs, TFSAs, RRIFs, and any on-going employment income.
It is also important to remember that not all income is taxed equally. The structure of your assets significantly impacts your after-tax income, as different types of income are taxed in different ways. Consolidation provides clarity for your advisor on properly structuring your investments within registered and non-registered accounts.
More than picking the right stock or trying to time the market, identifying and rebalancing your optimal asset allocation over time has the most impact on the strength of your portfolio. If you have multiple advisors blindly buying various stocks or funds without a proper overview of your total assets, you risk duplication and redundancy in your portfolio. Consolidating your investment accounts can give you a better understanding of how your assets are both allocated and diversified, while helping you to avoid duplication and over-exposure risks.
Consolidation is also important for the bigger financial picture – a comprehensive financial plan. This plan should be an adaptable step-by-step document that serves as the blue-print for your overall financial strategy, and allows you to track progress towards your financial goals. Consolidating your assets with one advisor provides complete clarity of your current financial situation and helps ensure the validity and value of your plan.
At the end of the day, benefiting from one advisor who can offer guidance with your complete financial picture in mind also depends on trust. It’s important to find someone you are comfortable relying on, someone who can understand your needs and help you achieve true “wealth” – whatever it means to you.