Adviser vs no adviser | RRSPs and RRIFs | Discussion forum

Bob said

Peter before you deal with the nitty gritty issues like moving RSP funds to TFSA or buying mutual funds vs. common stocks to save taxes and clawbacks, you need to address the fundamental question - are you comfortable investing on your own?

Let me ask you:

Do you have any long term experience investing some money on your own (and having endured 2002, 2008 etc..)?

How educated do you consider yourself in investing (understanding financial statements, watch financial news, current happenings with companies, sectors, countries)?

How much time are you willing to allocate to investing?

Most importantly, are you really interested in investing?

Do you have any long term experience investing some money on your own (and having endured 2002, 2008 etc..)?
Yes, I have. As far as enduring 2002 and 2008 I took a do nothing approach and endured just fine. This was advice from my adviser. Let`s face it, it is usually the investor that wants changes when the market goes sour and the adviser can recommend changes or to sit and hold .... but if the investor insists the adviser reacts. In the latter case the investor feels better, still loses and the adviser makes more commission.

How educated do you consider yourself in investing (understanding financial statements, watch financial news, current happenings with companies, sectors, countries)?
Moderate.

How much time are you willing to allocate to investing?
I am retired and very interested in spending the time needed.

Most importantly, are you really interested in investing?
Absolutely. My investments are few, simple and have been durable with no intention of making any changes to them as they have weathered well.

Bob, my new adviser is more concerned about making a commission than he is with my best interest. My investments are easy to see where he can make some money from them. He suggested to begin to withdraw from RRSP to minimize income tax later on. He suggested to pull money from investments that currently made 9.5% and reinvest other money, that he will make a commission on, that will make 2%. So if I had two bank accounts and need some money where would I draw it from the account making 2% or 9.5%? This guy is a wreck-less idiot not to mention his communication skills are very poor. So either I go on my own or shop for another adviser that will give me all the buzz words I want to hear. In my opinion it is the investor that is feeding the adviser, the company that he represents, and the mutual fund or etf provider. The more middle men you can cut out the more for the investor.

You questions are thought provoking for sure. Would I kick my self the the a$$ if I made a poor investment .... probably .... would an adviser have prevented it, if he made the recommendation where to invest, not likely.

Bob are you in the financial industry?

Bob, you gave me a sanity check for sure. And I must say to you a big "Thank You".

It made me think of another method and perhaps and little safer but somewhat of a slower process which has its pros and cons based on which way our health goes (no issues yet and no crystal ball to help). Step one for my wife and I is to remove enough RRSP money this year and next year while keeping in our tax bracket that we are currently in and reallocate that to our existing TFSA investments. That step alone will give me another year or two to plan and/or modify the plan. No doubt the plan has to be modified based on our needs and any changes in taxation etc. My daughter is well educated and works for an adviser .... while it would be nice to use her knowledge, for some reason I still find my investments personal and am still not sure if I want to have an open book with her (it would be to her benefit in the long run if I did open the books).

A couple of options that I have thought about:
1.Talking to a fee only investment adviser that does NOT sell products ... but is that just an adviser that did not make it or one that is well versed but does not want to take responsibility for their clients investments?
2. Talking to a good accountant that is well versed in income tax, pension, and the sort.

I am beginning to think that #2 is the more suitable thing to do. Although my wife suggests to see a few advisers for information under the idea of moving our funds from our current guy to a new one which something that I thought of too.

Here is part of my reason for selling off our RRSP's.
My mother was in a rest home that was government subsidized. Good deal for her, but as the government had to make austerity changes so did her subsidy. She did not have any registered investments BUT if she had, her RRSP/RIF withdrawals (100% considered as income) would have gone to the rest home and her subsidy would be lessened. Any interest she made was basically taken BUT her principal was always left alone. So my thought was to put myself and my wife in a position to always take the best benefit of income tested programs. I hope that makes sense as for part of my reason? So even though I see a slower plan something tells me that my first and faster plan is better as it is a race against the unknown affects of aging. Nor do I want to see a failure in either of our health to impact on the finances of the one that is well. Does it not make sense to reduce the affects of RRSP/RIF being considered as income as no matter what, we have to pay tax on it .... and if we keep the withdrawals in our current tax bracket we won't be hugely hit with income tax and then take that money and invest it in dividend bearing stocks/etf and capital gains. Our income currently makes us ineligible for GIS and that will likely be for ever. I just know that dividends and capital gains are taxed much lower than interest but to be honest I do not know how it affects the INCOME line on our income tax forms ..... that is what I need to read up on (or play with on Turbo Tax).

I want to think a bit more of what you have said and will respond in the next few days.