by Scott Ronalds

If you’re a do-it-yourself investor and you’re getting up in years, succession planning may be on your mind.

Or at least it should be, according to Dan Hallett, an industry veteran who penned an article on the topic in the Globe and Mail recently. In his piece, Dan suggests that investors who manage their own portfolios could unintentionally be leaving a big burden on their family if they predecease their spouse or partner.

Often, the beneficiary(s) has little knowledge of the holdings in the portfolio, and little skill or interest in continuing to manage them on their own. Not knowing where to turn for help can make the task overwhelming.

For the DIYers out there, Dan offers some suggestions and strategies to ease the future burden on loved ones. The obvious one is to engage with an investment partner before that person or firm is needed. Yet, transferring your assets and giving up what may be a rewarding pastime (picking your own stocks) could be an unappealing option for many self-directed investors. Plus, it could trigger unwelcome tax liabilities.

The strategy that I found especially practical is to consider moving some of your registered assets (RRSP, RRIF, TFSA) to a trusted adviser or firm. This allows you to introduce a new financial partner to your family, while continuing to self-manage a portion of your investments, if you choose. And as Dan notes, “If it doesn’t work out, you can terminate [the relationship] and start again with no tax consequences.”

Portfolio succession planning is becoming an increasingly important topic among retired Canadians. As our population ages, this conversation is only set to grow. Many individuals in their 60s, 70s, and 80s have shared with us that their interest in managing their own investments is waning, their capacity to do so is declining, or they’re worried about the complexities that may arise if something happens to them (see Note from an octogenarian: What can you do for me?).

If you can relate, we invite you to reach out for a conversation. Financial advice is a key part of our offering, and we help many families with their retirement planning needs. Moreover, you can get started with us for as little as $10,000, allowing you to ‘dip your toe in’ with one of your registered accounts.