Advisor.CA | General financial discussion | Discussion forum

Thanks....only re-enforces my 2 year plan to part with my adviser and go on my own. I have a rather simple and conservative portfolio. I have never believed in putting all my eggs in one basket and have had, for years, alternative banks and brokerage all offering higher rates and lower or no fees. I only wish I woke up earlier with "the plan".

Just got an email from my adviser today to renew some GICS.

Term...His Rate.....Other Rates
1 year...1.95........2.25 Accelerate .30 more
2 year...2.1.........2.35 Oaken .25 more
3 year...2.2.........2.5 Accelerate .30 more
4 year...2.35.......2.65 Outlook .30 more
5 year...2.62.......3.0 Oaken .38 more

I also just opened RRIF accounts for both my wife and I to do annual withdrawals from.

Mistake 1. He recommended that I re-invest the matured GIC and all cash in my account to a 2 year GIC.
...............Leaving no cash for the annual self directed fees
Mistake 2. He quoted the matured GIC and future maturing GICs this year and next year and suggests to put them all into a 2 year GIC.
..............Omitting the ability to transfer and withdraw from our RRIFs and unless his crystal ball is better than mine.....I would prefer to wait to a closer date to maturity and see that the Bank of Canada is forecasting for rates before I commit.

This guy is totally focused in locking in and "holding" my funds. And not to mention in his quick summary he missing another $200,000 maturing next year that I am moving elsewhere for sure.

My only point here is.....YOU need to be on top of your investments and see what alternatives there are. Don't take your advisers word!! I imagine busy working folks do.....and those that are not on top of their investments may likely be taken advantage of. I know that for the last 10 years I have been shorted $3000 a year in interest on GICs alone. And with today's low rates every point helps!!! And you know what they say.....Take care of your nickels and dimes and your dollars will take care of themselves.

No intention of being unfair.....rather factual and letting others know what opportunity there is, dollar wise, by taking charge of all or part on their investments (or negotiate better rates with your adviser or asking if he/she has better rates to offer...keep in mind they don't really care about you and will do what is easiest or offers best commission). I could have made $30,000 more by being a little more attentive, which all helps after the withholding taxes are deducted.

Like I said....I am referring to a very conservative portfolio and any DIYer should fully document their portfolio in hard copy and soft copy.

I don't believe in chasing the rates (for high interest savings or GICs) either but if one is prudent in selecting a few alternative banks or credit unions to deal with they can do far more for their investments than an adviser.

GS....Believe or not I am a NO FEE guy. No fee banking, no fee credit cards, wont pay $2.00 to have a bill or statement mailed to me on a monthly basis.

I was with Peak Investments and did not pay fees and later on they decided to move all their accounts to self-directed which meant an annual fee. And how stupid of me.....I gave my wife some money to invest in her own RRSP account vs just keeping them all spousal...so 2 fees for her 2 accounts!!!!! I was working then and just went along with it as I imagine many do.....but in hind site that was odd for me to do and I have been the NO FEE guy for at least the last 25 years......I wonder why I let that one slip by? So since my adviser retired at the time they moved from Peak to Manulife I now have this semi looser adviser but the fees are actually less as they only have one fee per client irregardless of how many accounts they have. And yes, as minimal as they may be if that fee money had been invested it is "lost" money for sure.

I plan to totally dissolve my RRSP's for non registered and TFSA investments over the next 15 years. AND will be out of Manulife in 2 years. NO MORE FEES!! Now that I am retired and have learned more and more I will be truly self managing our investments with NO FEES!!! As far as managing my investments as I age hopefully the transition will be complete. And although it will be over multiple financial intuitions, not to over invest the CDIC, DCGM etc., it will be simple to manage. I do keep my wife informed of what we are doing but she is just not interested in being involved in the mechanics of it all. But I know she could explain it and she knows where everything is. I have a daughter that is an administrative assistant to an adviser that could over see and although she likely does not agree with my opinion of advisers, I think she agrees why I am not confident with mine. I also have 2 other very intelligent daughters that could also assist. I have had 3 advisers.....1 good.....2 out for themselves. I appreciate how you are planning for the future to manage your investments!!

Just imagine if you could find an adviser by word of mouth that actually selected best value, solid investments totally for my best interest and not his....and instead of going for the best commission.....he would double his commissions by word of mouth and his integrity would be his best friend and his clients. Am I interested in shopping for another adviser....no.....do the initials after his name mean anything.....maybe to not likely.....do I feel confident with my age, wisdom and available of time to research ...ABSOLUTELY. If you can see through your advisers (can see his cards), if he overlooks things, makes mistakes, and doesn't give you a plan or have an annual meeting as per his website...MOVE ON and find another adviser or do it yourself if you feel comfortable and confident with it. Am I worried about making statements vs lining someone else s pocket instead of mine at my expense.....ABSOLUTELY NOT.

For those who are still hoping to find a good advisor and are now retired or anticipating retirement, I thought the following questions were useful:

Can you show me what it is that you do?
What do your written plans (blueprints) look like?
What processes do you use for structuring income and for the investment portfolios that will generate that income?
Can you help with addressing health-risk questions and wealth transfer?
More specifically, they should address: preserving government benefits and entitlements, preserving tax credits, reducing income tax and estate taxes, reducing investment costs and improving returns, reducing strain on income-producing assets to create necessary income, health-related insurance, etc.
What can you do to help turn the blueprint into reality? (they should be able to take on this role as well.)
These are my notes, from Your retirement income blueprint: a six-step plan to design and build a secure retirement. by Daryl Diamond, chapter 2.

Listen carefully to the answers! I especially like the first question, which is deceptively simple.
I'd like to add, "if I follow your plans to the letter and your projections don't work out, what recourse do I have?" I am not optimistic about an answer, but I think it's fair to raise the question. It's not good enough for them to fall back on the old saw of "you are paying for advice, and I can't guarantee results", to which my answer is, "I am paying you so that I will avoid making mistakes that I might make without good advice. If I have not avoided disaster, then I would say I received inadequate advice that was not worth the money, in addition to investment losses. What will you do about that?" I'm sure this would mean they would not want me as a client, but if you can't stand behind your product in a way that makes sense to me, the customer, then either you or your "profession" is a fraud in my view.
And, so, it's back to DIY.

GS, I suspect you will run into the same situation at all financial institutions that provide power of attorney functions for people who are no longer able to manage their own affairs. As far as I know, they all charge a fee for this. For them, it's a business. But they ought to be able to provide clear answers. Let us know if you find one that doesn't charge, please.

GS. I looked at the titles of articles on this site and read a few. I don't really see anything about giving your client the best bang for your buck. BUT I do see strategies (head games) to be used to keep your client and in the event of a clients death how to retain the funds as they change hands. Unfortunately when I see I am being manipulated (or mis-managed), which sometimes I am slow at or over speculate, I depart.

I have some guesses...but won't.

I think you need to tell us more:
Bank or Credit Union
Branch Level or Wealth Management owned by a bank or credit union.

Sometimes in a Credit Union you can deal at branch level or with "their" Adviser. My daughter worked for one of "their advisers" at a Credit Union but he was not an employee of the Credit Union, but she was. The Credit Union "suggested" what products he should sell and he moved on to be a self employed adviser with Raymond James where he had more freedom for selecting investments...and she followed with him as it was to her best interest. In this case the bank or credit union would select the new contractor and the clients would be owned by the bank.

To respond to your question we need to know if your current adviser is actually an employee of the bank or on an arrangement with the bank...contract....self employed using the bank name.

I also had a niece that was an bank employed adviser who did not like the responsibility of handling others investments or liked what the bank had to offer.

I know a few people that are totally satisfied with dealing with RBC and BNS.

I think I can understand your position, Brian, and your dilemma.
It sounds like it might be worth your while to give the new person a try. It seems there is no pressing reason not to, and that you wouldn't have been thinking so much about going on your own if the "old" guy weren't retiring.
It sounds like the "old" guy was good, and a good match for you. That probably means that as he approaches retirement he has some pride in what he has accomplished and probably doesn't want to leave his clients poorly cared for.
Generally, from what I've read so far, if you want an advisor who is worth having, and have enough assets to justify it, Wealth Management is the way to go. They generally have better quality staff, at least that's the theory.

On the other hand...
I don't know how long you've been with this guy, but equities seem to have done very well the last little while and my guess is that you could have achieved similar results on your own with not too much effort, having made the decision to invest in that direction. In fact my friend mentioned above has had significantly higher returns in that area. But that is probably comparing apples and oranges, as your investments were chosen with your particular risk profile in mind.
It sounds to me like the major benefit is in what I think you are saying is the fixed income side, and on that I would have to agree that it's very hard to get good investments right now, and a lot of brokers don't seem to want to be bothered with that or know much about it.

Thus (and I may have misinterpreted some of what you've said due to not knowing the whole story), it would seem to me that the value in having this broker is on the fixed income side. If you think the returns there justify the cost, then great!
The other matter of interest, if you have been with this broker longer, is the question of how well the advice served you during the downturn. Was this person able to anticipate what happened, and, if so, what defensive strategies were suggested? Are there any defensive strategies in place now? It seems to me that that is ideally what I would want someone to manage, if I thought I could find such a person. I have found that there is a tendency in the industry to say that what happened a few years ago was not foreseen by anyone, but that is absolutely not true, despite the chorus. It just wasn't apparently foreseen by very many.

It strikes me that you have given us one very good answer to the question one might pose to a potential advisor about what added value they bring to one's situation, namely "I can get you thus-and-so investments which you can't get on your own. This is what they are... and this is how they work... and this is why I think they would be good for your portfolio..."