Take Control of Your Finances through Consolidation

The first few months of a year can be quite busy when it comes to your finances. There may be contributions to make to your Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Account (TFSA). And of course, there’s your personal income tax return to prepare, which thankfully will soon be wrapped up for most of us. 

Once that’s out of the way, you might want to consider also adding this to your financial “to-do” list: If you have retirement savings and investment accounts scattered among a variety of financial institutions, consider taking control by consolidating everything to one place. It’ll probably make things easier for you next year and beyond. 

To start, you’ll be able to more effectively track your finances. Your records will be streamlined, sparing you from having to pore over a series of statements and tax documents from different institutions. Monitoring will require less effort, and you’ll likely be able to see the “big picture” more clearly. 

This should make setting your investment goals and tracking your progress more straightforward. For example, it’ll be easier to gauge aggregate investment returns. At a glance, you’ll be able to assess the specifics of your asset allocation and portfolio construction. 

When it’s time to choose new investments or rebalance your portfolio, working with one institution can make everything simpler. In particular, buying and selling investments can be less complicated if you can readily move cash from one investment to another. You may also realize a reduction in account administration fees. 

What’s more, dealing with a single institution eases the transition from an RRSP to a Registered Retirement Income Fund (RRIF) when you need to start drawing an income in retirement. Another point to keep in mind is that if you or your spouse should pass away, it becomes much simpler, more convenient and more efficient for the surviving spouse to deal with just one institution. 

Perhaps the most important benefit of consolidation is the potential for better financial advice. When you deal with a single institution, you can have more informed guidance and a closer, more comprehensive relationship with a financial advisor who has a clearer view of your full financial picture. That professional is put in a better position to help keep you on target for meeting your long-term goals. 

In short, consolidating can allow you to take control of your financial life and could improve your wealth-building potential by making it much easier to set goals, invest in line with your risk tolerance and investment objectives, and track your progress. If your accounts could use some consolidating, speak to a financial advisor who can assist you with the needed paperwork. 

Member – Canadian Investor Protection Fund