GIC Wealth Management Broker Rates | Page 8 | GIC discussions | Discussion forum

True, but not only cluelessness, disinterest also was mentioned, and that's a big one. I know a lot about investing but currently, for example, outdoor sports/activities, creating music with friends and family, and puttering/maintaining my stuff is higher on my daily to-do list than time spent on my money, just don't get down that low all the time. So for me it's worth it to pay for the time freed up. And I notice the vast majority of folks I know similarly just get busy with life stuff, so I've been happy to invest in the big banks who profit specifically from that apparently large group of us.

Norman1 said

savemoresaveoften said
…
To me that makes no sense when the person is "suffering" at work to earn $$, and then so easily "give it away" just for being lazy or not interested... sigh

S&P 500 total return (around 13% per annum last 10 years) less 2% per year is still respectable.  

13% - ~10bps ETF fee = 12.9% vs 11%. That extra 1.9% each year compounded = an extra 23% over 10 years.

I maintain advisor fees are NOT worth it no matter how one looks at it.

Hedge fund / private invesment fees that gives you access to asset classes that are inaccessible to a normal Joe are may be worth something.

That's a shame. Sounds like RBC wants to phase PH&N out. I wonder why. Maybe they make more money off RBC funds. Another case of buying out the competition so you can wreck it. They probably bought it for the customer list.

I never held any of their funds but often considered it. They were particularly strong for bond funds.

RetirEd said
savemoresaveoften: Financial planner fees might be worth it IF they could be trusted not to put their own interests ahead of the clients'.

2% fee a year is just a lot to pay year after year, even if they act in your best interest. It is 2% a year on total asset, on both good AND bad years ! Even worse when they put your money into mutual funds, which you pay another 2% away each year to the fund manager !

On the other hand, a hedge fund will charge you 1-2% plus performance fee (10-20% on return), but they dont get paid the performance fee unless they meet the high water mark. So their incentive is aligned with the investor, and more importantly, the hedge fund manager is deep in it too in terms of his/her own money.

RetirEd said

…After about a year - and I already had my document package studied and my forms filled out - RBC closed all the PHN products to new customers, letting their existing ones continue to do business.…

I just checked and found no evidence of that.

Scotia iTRADE recognizes and accepts orders for, for example, PH&N Canadian Equity Fund Series F units (RBF5130). Latest fund information sheet is dated June 27, 2022.

No indication that the fund wouldn't be available through PH&N's own fund dealer, PH&N Investment Services.

Maybe the change is that you can't buy them directly at a branch, so you have to set up brokerage account? I'm pretty sure you used to be able to buy them directly from PH&N.

HermanH said

If a hedge fund must meet a certain mark in order to collect performance fees, wouldn't that incentivize them to take additional (possibly unreasonable) risk (especially if they are far from the mark and need great leaps to cover the gap)?  

Well hedge funds are usually leveraged to begin with, and most will have it in writing in terms of max leverage allowed etc. Having said that, nothing is stopping a hedge fund manager from getting carried away and max the risk, whether to try to extend a winning streak, or to climb out of a hole. But at least the fund manager's own money is taking the risk alongside the investors.

Re Norman's comment about the 2% is all-in including mutual funds, so am I correct to say if a mutual fund MER is 2%, the advisor get 0% ? Since the MER applies for every single investor, whether its thru a advisor or not. And if that is true, a "smart" advisor will only pick funds <2%. I never use an advisor, so not familiar how that break down works.

If the equity mutual fund MER is 2%, the advisor is likely receiving 1%. No advisor receives 2% per year for selling equity mutual funds. That's only justified if the advisor is both selecting the individual stocks in the fund and dealing with the investors.

No, a 2% MER does not apply to all the investors of a mutual fund. It would apply to the series A investors with advisors paid by a 1% trailer from the fund manager. Series D investors in the fund, with discount brokers that used to be paid by a ¼% trailer, would be charged an MER of 1¼%. Series F investors in the fund, who pay their advisor directly, would be charged an MER of 1%.

Roboadvisors seem to charge differently. When a roboadvisor advertises as charging 0.4% per year, the client is actually paying more than 0.4%. The 0.4% is only what the roboadvisor charges, not including the underlying MER of the ETF's.

An unscrupulous advisor can rip clients off by charging the client 2% per year directly and also collect a 1% per year trailer by placing the money in series A units of a fund instead of series F units.

"Roboadvisors seem to charge differently. When a roboadvisor advertises as charging 0.4% per year, the client is actually paying more than 0.4%. The 0.4% is only what the roboadvisor charges, not including the underlying MER of the ETF's.

An unscrupulous advisor can rip clients off by charging the client 2% per year directly and also collect a 1% per year trailer by placing the money in series A units of a fund instead of series F units."

Just buy the Index (KISS principle).