Is Your Advisor Working For Your Money or is Your Money Working For Your Advisor?
I recently talked to a person, I'll call her Lucy, who had investments with two different places and wanted to move them all over to one in order to make things easier. I am a big proponent of this as it makes the whole planning process much easier when one advisor can oversee all of the assets in all the different accounts.
The accounts were all transferred without a problem. Well, not at first. It wasn't until Lucy had her income tax completed by her tax accountant and noticed that she had extra income of
How could this be? Where did this come from?
She doesn't remember seeing $14 000 extra in her bank account.
We talked a bit more and came to the realization that when she moved from one investment company to another there was a capital gain upon the sale of her investments. This means that she sold them for more than she paid for them, which is a good thing, but it was unexpected.
Her 'advisor’ didn't even discuss this possibility, he was just concerned about getting the money moved over so he could start getting paid!
What is worse about the extra income that she had to claim? It put her over the OAS drawback threshold so now she has to pay back part of what she received as well as will be getting less this year!
To me, her advisor was more concerned about getting paid and less concerned about how to help his client avoid unnecessary taxes and claw-backs. Double whammy!
Could this have been avoided?
Most definitely. Investing isn’t just about “where should we put your money and how much of it will you invest with me”. Investing should be one part of your overall financial health. As a Real Wealth Manager**, my main role is to co-ordinate the decision-making by all stakeholders (client and professionals) to accumulate, grow, preserve and transition tax efficient family wealth to provide you, the client, with financial peace of mind.
*The opinions expressed here are those of Trevor Wright’s and are for informational purposes only. Insurance products provided by Wright & Associates Financial Services.
** The RWM (Real Wealth Manager) is a professional who has earned the right to use the RWM certification mark after comprehensive training in the delivery of goal-based, client-centric wealth management solutions. Trevor Wright completed the course of study in October 2013.