Here’s how to boost your savings with financial literacy

Navigating the world of investing can feel like learning a new language. Terms like "open shelf," "in-kind transfers," "holistic advice" and more may leave you scratching your head. But understanding these concepts can help you build a more diversified, tax-efficient, and personalized investment strategy. 

Discover what these terms mean and how they can benefit your financial roadmap.

If an advisor has access to an "open shelf" of investments, it typically means they can: 

• Recommend and invest in a wide range of investment products. 
• Choose from a broad universe of investment options like Mutual funds and Exchange-traded funds (ETFs).
• Help create a customized and diversified investment portfolio tailored to your specific needs and risk tolerance. 

In contrast? An advisor with a limited or "closed" investment, or proprietary product shelf, may only have access to a restricted set of investment products. These products are often from the firm they’re affiliated with.

A transfer-in-kind involves moving ownership of investments from one account to another without liquidating the assets into cash. In other words, rather than selling your mutual funds or ETFs and transferring the cash proceeds, you transfer the actual funds from one account holder to another.

There are a few reasons to choose an in-kind transfer over liquidating your investments:

• Tax deferral. You don’t trigger capital gains taxes from an asset transfer in-kind. You only trigger taxes when you ultimately sell the investments. It’s a good idea to talk to a tax professional about your specific circumstances.
• Maintain investment strategy. Selling investments could disrupt your long-term strategy if you need to repurchase them. Moving in-kind keeps your portfolio intact. While deferred sales charges/commissions have been banned, it’s important to note that you may or may not have a deferred sales charge schedule remaining on your investments.
• Reduce fees. You can potentially avoid fees and commissions by not selling and buying assets. You may only need to pay a transfer fee to the relinquishing institution.

You can typically transfer common investment types like ETFs or mutual funds between like accounts. However, some assets like annuities may not qualify. The brokerage or firm you’re investing with must also allow in-kind transfers.

The process may take a few weeks to complete. Starting the transfer involves your advisor contacting both the delivering and receiving firms on your behalf. Then your account and identification details are verified before the actual funds are moved between the accounts.

While in-kind transfers are generally a great solution, they’re not without a few possible downsides:

• Not all brokerages or account registrations will support an in-kind move.
• You may need to consider the fees charged by the relinquishing firm.
• In some cases, an in-kind transfer could even trigger capital gains taxes. Again, it’s a good idea to talk to a tax professional about your specific circumstances.

Diversification is a way to spread out your investments, so you don't have all your money in one type of investment. The goal is to balance the overall risk and the potential returns you could get.

By diversifying, you can also help protect your savings from the ups and downs of the market. This happens because different types of investments often move in different directions. So, when one type goes down, another type might go up, helping to balance things out.

Consolidating your investments is the process of bringing together or combining multiple investment accounts into a single institution.

For example, maybe you have several different investment accounts, like a retirement account, and savings account. Consolidating your investments means taking all those different accounts and putting them together into one centralized place.

Consolidating your investments can make it easier to see how your money is doing overall. Instead of having to check several different accounts, you can just look in one place and get a better sense of how your investments are performing. It can also help you save on fees and make it simpler to rebalance your portfolio if you need to.

Holistic financial advice is a way of looking at your overall financial situation, rather than just focusing on one or two specific aspects. It's like taking a step back and looking at the big picture.

Imagine you're building a house. A holistic approach would mean considering everything – the foundation, walls, roof, plumbing, electricity, and so on. It's not just about picking out the paint colour or the type of windows. It's about making sure all the pieces work together to create a strong, functional, and comfortable home.

Similarly, with holistic financial advice, your advisor can look at your entire financial life – your goals, income, expenses, savings, investments, and insurance. They can help you understand how all these pieces fit together and how changes in one area can impact the others. 

Instead of just focusing on stocks or funds, a holistic advisor can help you understand your overall financial situation. They can help create a roadmap that aligns with your risk tolerance and long-term goals. They'll help you make sure your investments, savings, insurance, and other financial decisions all work together to support your overall financial well-being.

Talk to your advisor about how some of these strategies could benefit your portfolio. They can review your specific situation. Then, provide personalized guidance to help potentially enhance your returns.