Investments: Investment Consolidation
Principles | Investment Topics 1 | Investment Consolidation
Investment Consolidation
Investment portfolios containing a variety of mutual funds, GIC's, annuities, bonds etc. within numerous non-registered plans, RSPs or RIFs administered by a handful of financial institutions can often seem like a daunting task to oversee for the client. We recommend simplifying client's investment planning, if it's in the clients best interest, by consolidating accounts at one financial institution.
If investments are fairly straightforward, consolidating holdings within a single institution is, in most cases, a simple process of transferring assets from one place to another.
If clients own a variety of different kinds of investments, however, establishing a self-directed RSP or RIF may be the simplest way to reduce the number of plans in a portfolio, and provide the client with an "umbrella" under which a variety of investments can be held. Most self-directed plans will accommodate investments offered by a number of organizations.
Consolidating one's investment accounts can be beneficial for many reasons. Monitoring the asset allocation within each plan and tracking renewals for term deposits, as well as balancing foreign content and RIF incomes will be made far easier. In addition, clients may benefit from lower management fees by holding a larger volume of a portfolio within one company.
Consolidating also simplifies record keeping. Instead of receiving several financial statements and reports from different financial institutions, clients will receive one comprehensive statement and one set of tax reporting documents from a single source. From an estate planning standpoint, an executor will have fewer institutions to deal with in order to settle an estate and carry out wishes, and will provide the executor with a clearer inventory of just what constitutes an estate.
