Wealth Insights - April 2017

Wealth Insights

April 2017

Strength in unity – the benefits of consolidation

You wouldn’t check the air in just one of your tires. And yet, holding investments in a variety of different accounts under different organizations is very much like that. Just because one account seems to be doing fine, doesn’t mean the others are. Or, that they couldn’t all be doing better if they were actually calibrated to work in tandem.

Putting your fund holdings together, under one organization, helps ensure that the individual investments are sound and compatible with each other and with your objectives.

The scattered approach

Over time, many of us end up with a truly rag-tag collection of investment accounts. Maybe you moved or changed financial institutions but haven’t transferred your holdings. Maybe you received an inheritance or insurance payout and the money is still invested with that institution. Maybe you have purchased funds through your employer or professional association.

Whatever the reason, managing all of those different accounts becomes ever more onerous over time. In addition to costing you time, it could also be costing you in terms of management fees and lost opportunity.

A better way

Amalgamation is a highly effective way to streamline your holdings and maximize their potential. When you consolidate, you tap into a whole range of benefits, such as the following.

The key here is to set and maintain an appropriate asset allocation. Your portfolio mix is designed based on a “macro” view of your personal situation – one that balances your desire for growth with your need for security. By following your asset allocation, we can ensure you aren’t positioned too conservatively or too aggressively. And regular rebalancing based on analytical analysis, rather than fear of losses, can help you make wise buy and sell decisions.

  • Bespoke asset management. With the ability to review and manage all of your holdings, we can make more strategic decisions about your sector weightings, international holdings, and overall asset allocations. The long-term potential of this approach cannot be overstated.
  • Tax efficiency. Taking advantage of tax-loss selling can be more straightforward in an amalgamated portfolio where all of your investments (and their tax implications for the overall portfolio) can be assessed and apportioned in the most tax-efficient manner. Similarly, with a clear view of all your holdings, we may be able to maximize the tax-sheltering benefits of your Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA) and implement any applicable income-splitting strategies with your spouse or children.
  • Reduced risk. Mutual funds are a great way to mitigate risk, but holding too many of them can actually have the opposite effect. Amalgamation reduces the risks associated with under- and over-diversification and oversight. It also greatly reduces the chances you’ll inadvertently over-contribute to your RRSPs or TFSAs and face stiff penalties for doing so.
  • More efficient use of time. Spend less time calculating your overall performance and rebalancing your holdings. Take a breather from cataloguing the endless stream of transaction reports and statements. And fewer tax slips and reduced income reporting obligations may make tax-filing next April less onerous for you and your accountant.

Get the right advice

Your Credential® advisor at Westminster Savings is responsible for acting in your best interests, making recommendations consistent with your objectives and risk appetite. But remember, it's a partnership. Want to learn more about what we can do for you? Call us at 604-517-0100 or send us your question online and we'll respond to you within one business day.

The information contained in this report was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This report is provided as a general source of information and should not be considered personal investment advice or solicitation to buy or sell any mutual funds and other securities. Mutual funds are offered through Credential Asset Management Inc. Mutual funds, financial planning and other securities are offered through Credential Securities Inc. Credential Securities Inc. is a Member of the Canadian Investor Protection Fund.


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