ALL FOR ONE AND ONE FOR ALL: How a self-directed plan saves you time, energy

No, this article is not about the Three Musketeers! Rather, it is about a way of organizing your portfolio to consolidate investments, reduce paperwork, and make your tax return a less onerous chore.

Specifically, what I am referring to is a structure called a "self-directed" or "nominee" account. As a Scrivens client, a nominee account allows you to have a mutual funds and GICs from various companies all within one plan. This gives you the ability to see both the big picture as well as the individual components. Nominee accounts are available for all tax structures: non-registered, RSP, RIF, and TFSA. For non-registered investments, the nominee account structure is available to corporations as well as individuals.

There are particular advantages to holding your registered investments in a self-directed structure. For RSPs, it means contribution receipts from only one company. For RIFs, it means T4 slips from only one company. This is despite the fact that the investments may be from many companies.

Estate planning is simplified when nominee plans are used for registered accounts. This reflects the fact that beneficiary and successor annuitant designations take place at the account - and not the investment - level. In other words, the beneficiary designation is made when the nominee plan is opened, and changed only when required. Monies switched between investments within the nominee plan do not necessitate any changes to beneficiary designations. This feature is also of great assistance when planning for incapacity: Powers of Attorney are not allowed to make beneficiary designations and so consolidating registered assets in a nominee account prior to incapacity will provide both peace of mind and easier administration.

The catch? There is an annual fee to pay for nominee accounts, which can range from $35 to $135 (plus applicable taxes) depending on the provider, the type of account being opened, and whether you would prefer paper or electronic statements. We are able to provide the nominee accounts offered through both FundEX Investments Inc. as well as B2B Bank Financial Services Inc. The question regarding the annual fee is therefore: how much do you value the ability to have your assets consolidated and your administration simplified?

The annual fees charged are fixed and do not depend on account size. There is no minimum asset value required for a nominee account, though of course the lower the account size the greater the proportion accounted for by the annual fee. Finally, both FundEX Investments Inc. and B2B Bank Financial Services Inc. have "relationship pricing" arrangements in place with certain mutual fund companies whereby the annual fees are partially or fully waived when minimum balances are maintained with those companies.

How organized is your portfolio? Contact Ken Browness to arrange a discussion, and let us provide the best value for your portfolio: 613-236-9101,

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