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Previously, I was a simple case: I earned a salary, and I paid taxes. Therefore, I've been filing my own tax returns using online software.

Now: + wife, + kid, + mortgage, + want to contribute to RRSP, + RESP, + corporation and/or small business, + investing ambitions. We've retained an accountant already, but mostly for the corporation/business side.

Do I also need an investment adviser? Is he going to tell me anything that my accountant can't? My accountant did say to come to him for advice on investment/business issues. So, he is willing, but is he able? Not asking about his competence, but rather, is there something that only an investment adviser can provide, by law, that an accountant can't?

I am not looking for an investment adviser's knowledge of market trends and brands—I can read up about that on blogs—but rather broad decisions, e.g. rolling my own mortgage into my RRSP (I just read about that somewhere), the Smith Maneuver, handling a self-directed RRSP, etc. I'd like to know if any of those make financial sense in my current situation, and how to pull each of those off. But isn't that something that my accountant could/should do?

Do I need either of them? Won't the Internet and sites like this one suffice?

  • Accountant isn't an investment advisor. Listen to him, but don't act on his suggestions. Ask him why should you listen to his investment advise ? Internet can give you advice, but sometime you need very specific advice. That is the point to reach out to professionals. – DumbCoder Mar 20 '14 at 17:37
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    Beware: Many so-called "investment advisers" would advise you to not get a self-directed RRSP even if it might make sense. Most are really just commissioned salespeople in disguise who'd prefer you buy your investments through an account at their firm/bank/fund company, so they can quietly take commissions, loads, & trailer fees from your nest egg each year. Continue being skeptical about getting financial advice -- the industry in Canada is immature; many such "professionals" aren't held to a fiduciary standard. Learn about this issue first. Good advisers do exist; finding them is hard. – Chris W. Rea Mar 21 '14 at 0:53
  • @ChrisW.Rea, can you recommend any? Would it be big name firms, like Edward Jones, or small gems? – Slav Mar 21 '14 at 1:29
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    @Slav We don't recommend specific service providers here. But the kind of financial advisor that I would look for, if I were inclined, would work for a set agreed-upon fee each year, billed to me, and not a percentage of my assets paid as a kickback from the investments I make, and I'd ask for that in writing, among other things. Read this and watch this. – Chris W. Rea Mar 21 '14 at 3:18
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Do I need an Investment Adviser?

No, but you may want to explore the idea of having one.

Is he going to tell me anything that my accountant can't?

Probably. How much expertise are you expecting from your accountant here? Do you think your accountant knows everything within the realms of money from taxes, insurance products, investments and all your choices and what would work or wouldn't? Seems like it could be a tall order to my mind.

My accountant did say to come to him for advice on investment/business issues. So, he is willing, but is he able? Not asking about his competence, but rather "is there something that only an Investment Adviser can provide, by law, that an accountant can't"?

Not that I know though don't forget how much expertise are you expecting here from one person. Is this person intended to answer all your money questions?

But isn't that something that my accountant could/should do?

Perhaps though how well are you expecting one person to be aware of so much stuff? I want you to know all the tax law so I can minimize taxes, maximize my investment returns, cover me with adequate insurance, and protect my savings seems like a bit much to put on one entity.

Do I need either of them? Won't the Internet and sites like this one suffice?

Need no. However, how much time are you prepared to spend learning the basics of strategies that work for you? How much money are you prepared to put into things to learn what works and doesn't? While it is your decision, consider how to what extent do you diagnose your medical issues through the internet versus going to see a doctor? Be careful of how much of a do it yourself approach you want to go here and recognize that there are multiple approaches that may work. The question is which trade-offs are OK for you.

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An accountant should be able to advise on the tax consequences of different classes of investments/assets/debts (e.g. RRSP, TFSA, mortgage). But I would not ask an accountant which specific securities to hold in these vehicles, or what asset allocation (in terms of geography, capitalization, or class (equity vs fixed income vs derivatives vs structured notes etc). An investment advisor would be better suited to matching your investments to your risk tolerance.

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    IMHO, I would say may instead of would in your last sentence. Quite often, bad advisors place client money in perhaps riskier and higher-fee investments because the investment generates a better sales commission, not because it is right for the client. Until the financial advice industry in Canada is reformed, I would presume a sales pitch over any duty of care. Many bad apples, making it hard to find the good ones. Incentives mis-align client and advisor interests. – Chris W. Rea Mar 21 '14 at 3:28
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I think the OP is getting lost in designations. Sounds to me that what he wants is a 'financial advisor' not an 'investment advisor'. Does he even have investments? Does he want to be told which securities to buy?

Or is he wanting advice on overall savings, insurance, tax-shelters, retirement planning, mortgages, etc. Which is a different set of skills - the financial advisor skill set.

Accountants don't have that skill set. They know operating business reporting, taxes and generally how to keep it healthy and growing. They can do personal tax returns (as a favour to only the owners of the business they keep track of usually). IMO they can deal with the reporting but not the planning or optimization.

But IMO the OP should just read up and learn this stuff for himself. Accreditation mean nothing. Eg. the major 'planner' brand teaches factually wrong stuff about RRSPs - which are the backbone of Canadian's finances.

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