You’ve got one investment account here, your RRSP and TFSA there, and some more assets over at that other place. You’re “diversifying,” right? That tactic could be raising your risk, inviting costly fees and preventing you from creating a sound retirement strategy.

It is not uncommon for investors to think a well-diversified portfolio means spreading assets among different financial institutions or advisers. Indeed, media hype may suggest multiple advisers can enhance the security and success of a portfolio.

 The risks to your money

As the saying goes, quantity does not trump quality. Risk can increase if you are overweight or underweight in some investment classes. A well-balanced portfolio provides checks and balances for market ups and downs—strategies that can only be implemented with complete knowledge of the extent of your assets.

There can also be tax consequences. Say you have a large capital gain with one adviser, and he or she suggests creating capital losses by selling underperforming stocks to help reduce taxes owing at year-end. If you haven’t consolidated your portfolio, that adviser may not know you already have major capital losses elsewhere and you could end up with unjustified losses arising from the incomplete overall picture of your investments.

Consolidation is even more important as you prepare for retirement. There are key decisions to be made in structuring a retirement strategy, including optimizing your many income sources, such as pensions, government benefits, RRSPs, TFSAs, RRIFs, and any employment income. With a consolidated view, one adviser can help you decide how and in what order you could be withdrawing from your income sources to help maximize after-tax income.

 Benefits of consolidation

There are very clear benefits to having a single, trusted adviser help manage your assets:

Smarter asset allocation: More than picking the “right” stock, identifying and rebalancing your asset allocation over time may determine the strength of your returns.

Multiple advisers blindly buying different funds or stocks without a proper overview means you might not know your true risk.

Lower costs: Consolidating assets with one adviser typically lowers the management and transaction fees you pay since prices can differ among institutions and some fees are paid on a sliding scale tied to the value of your assets.

Simpler reporting and administration: With one adviser, paper or online statements come from one source, and tax reporting related to investment income and dispositions can be easier to manage.

Easier estate planning, settlement: You can avoid the nightmare that so often happens when deceased investors have accounts in multiple locations—some of which might be forgotten. With one adviser, your family members or beneficiaries have one point of contact you trust.

With a consolidated approach, you may feel more confident knowing you and your adviser are “on the same page,” and there will be fewer statements to manage. Your adviser can help make consolidation easy with helpful advice and simple transfer documents.

Deborah Leahy is an investment adviser with Edward Jones, member of Canadian Investor Protection Fund. deborah.leahy@edwardjones.com