# RRSP/TFSA Portfolio Advice



## Rosey (Oct 23, 2018)

I am a newby here, have read through many threads prior to registering. I retired with a pension income of @ $70k per year, no mtge car loans etc but a small loc. I have been with an invest advisor for about 15 yrs but things are changing there and not what I perceive in a good way. Have been in the mkts since 1980 when I graduated from Ivey Bus School and started my own business which later sold. 

Just rec'd an email from the advsor group saying they want to move all clients over to their bank's UMA for clients with over $250k invested with them. I am looking into moving to direct investment as my portfolio is not actively traded.

Here is its current breakdown (RRSP & TFSA)

Cash 13.5%

MF. 48.7% (balanced and income)

C/S. 38.83% (fin'ls for dividends and growth)

I have another $150 in GICS but not with an advisor.

I am not sure which direct investing brokerage to go with, so far have read good things about BMO, TD and BNS. dealing with BNS Wealth Mngt and Estate Div as an executor and really am not impressed with this division. 

I am looking at MAW104, VBAL and an S&P 500 ETF, tired of paying hefty fees for maybe 1 phone call per year. I'm not looking for a regular monthly income but from time to time may want to take some out for trips or a new vehicle. I am in my early 60's. Looking fwd to receiving some advice and good options.


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## lonewolf :) (Sep 13, 2016)

70K yr with RRSP plus in future OAS & CPP your situation could get tricky regarding OAS claw maybe consider splitting pension income if practical

This is what I would do max out TFSA & RRSPs with GICs 

Once income gets to OAS claw back range in the future would invest none Registered in Gold & Silver for security.


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## Rosey (Oct 23, 2018)

Thank-you for your reply lonewolf, i have maxed out my RRSP AND TFSA contributions. I will talk with my tax acct but I have a feeling that even with income splitting that I will see some if not all OAS clawed back. I've never bought gold or silver before will look into that. 

I'm currently reading as much as possible to get more informed on self directed investing. I've learned quite a bit from reading many posts on this forum.


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## AltaRed (Jun 8, 2009)

Rosey said:


> I am a newby here, have read through many threads prior to registering. I retired with a pension income of @ $70k per year, no mtge car loans etc but a small loc. I have been with an invest advisor for about 15 yrs but things are changing there and not what I perceive in a good way. Have been in the mkts since 1980 when I graduated from Ivey Bus School and started my own business which later sold.
> 
> Just rec'd an email from the advsor group saying they want to move all clients over to their bank's UMA for clients with over $250k invested with them. I am looking into moving to direct investment as my portfolio is not actively traded.
> 
> ...


Nothing wrong with your proposed holdings, although MAW104 and VBAL are more, or less, the same in terms of being global balanced. The former is a mutual fund with a long established record while VBAL is an etf with a short history, but from a good provider. Not sure you need both but you could if you hold one in the RRSP and the other in the TFSA. However, be aware that RBC DI will not allow you to buy MAW104 while Scotia iTrade and BMO IL will allow it. I wouldn't get concerned about lack of 'favourable impression' by wealth management and estate divisions of any of the big 5. Those are entirely separate operations from retail banking and discount brokerages. 

I also wouldn't touch precious metals or anything on the exotic side. Keep your life simple with sound ETF products and put your energy and joy into things a whole lot more important in retirement.

I would not worry about possible clawback of OAS if you cross the claw back threshold. The clawback is only 15 cents on the dollar. I am fully clawed back and it is a nice problem to have.


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## Rosey (Oct 23, 2018)

Thank-you for your reply and life advice AltaRed. I was thinking along the lines of putting MAW104 in one acct and VBAL in the other and see how they do. I am planning on going into both my local branches of BMO and BNS tmw to pickup whatever info that they have on their discount brokerages and read over the wknd. Will ask them if I can bring my existing mutual funds over or if I have to sell them first.


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## AltaRed (Jun 8, 2009)

The local branches will know next to nothing about their discount brokerages and won't have any useful information on them either. They are separate divisions/corporations. 

Everything you want to know is online from their websites, plus googling Rob Carrick's review of discount brokerages, and MoneySense too I think. In most cases, mutual funds can be transferred over to the discount brokerages. Proprietary ones issued by the likes of Investor's Group and segregated funds issued by lifeco's are not. Best to simply phone up each brokerage and ask them specifically.... and then open your accounts and then simply ask them to transfer 'in kind'. FWIW, I have accounts at both BMO IL and Scotia iTrade but did have an RBC Direct Investing account at one time. Both BMO and Scotia allow the purchase of MAW104 as I previously mentioned. Also, both allow you to buy GICs online (as does CIBC Investor's Edge I think). With TD Direct Investing, one has to phone in to actually purchase a GIC.

Not that it matters, but I own MAW104 in my TFSA, my spouse owns VBAL in her RRSP and my ex-spouse who I continue to advise on, has VBAL in her TFSA. I see them as essentially identical products but only years will tell if one outperforms the other materially or not.


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## Eclectic12 (Oct 20, 2010)

AltaRed said:


> Rosey said:
> 
> 
> > ... I am planning on going into both my local branches of BMO and BNS tmw to pickup whatever info that they have on their discount brokerages and read over the wknd. Will ask them if I can bring my existing mutual funds over or if I have to sell them first.
> ...


YMMV ... I have usually seen the basic advertising for the brokerage account available in the local bank branch as a minimum. For some banks/discount brokers, the branch is split between the bank office and the brokerage office, under the same banner/location.

If this is intended as early research, without a list of specific questions or similar - I'd agree that using the online sources, including the brokerage web site would be a better deal (saving time while providing probably more detailed info).


Cheers


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## OptsyEagle (Nov 29, 2009)

I would use the brokerage that is connected with the bank you regularly use. I find all the bank's discount brokerages have a very similar format and fee structure and each will have a few small annoyances. The only difference is that it will be easier to move money around between your chequing account and the brokerage accounts if it is within the same family.

As for investments. If you feel you can withstand a large downturn without that phone call from the advisor then VBAL at a discount brokerage will work just fine.

One can say that this site or the ones like it can work as the advisor advice but the big problem with this site is the diverse opinions you will receive for every question. That's fine if your experience level is high, but for people who feel they have a fair bit to learn, it would be quite confusing. 

I have always said that an advisor's role is not to provide the customer with index beating returns, since they have no ability to do that. Their role is to provide returns better then you might do yourself, but more importantly, to create the illusion that everything is under control, during those frequent crashes and negative events that investors must navigate through. Although it is usually an illusion it can work quite well in getting an investor to stay the course. When one goes "do it yourself", they tend to react in some way to those events and usually it is the wrong way at the wrong time, costing them much more then any fees they would have paid to an advisor. Just my opinion of course, but something to think about before you jump.


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## AltaRed (Jun 8, 2009)

Eclectic12 said:


> For some banks/discount brokers, the branch is split between the bank office and the brokerage office, under the same banner/location.


Really? I'd be curious who they are and where. What I have seen in suburban branches, albeit not a big centrally located branch, is the financial advisors in big bank branches are associated with the asset management company arm of the big bank, i.e. those that peddle mutual funds, managed products and the like with 'high' MERs or % of AUM fees, with virtually no knowledge of their discount or full service brokerage arms... other than assistance with filling out applications.

I have sons who manage big 5 branches and they've never mentioned their companies having brokerage personnel co-located with retail banking branches. But now I will have to ask.


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## OptsyEagle (Nov 29, 2009)

AltaRed said:


> I have sons who manage big 5 branches and they've never mentioned their companies having brokerage personnel co-located with retail banking branches. But now I will have to ask.


They do. 

TD Direct Investment has them in a few of their many bank branches in Ottawa. I can't say how many, in total, but my guess is they put enough to ensure the client does not need to travel too far, but not too many to ensure the person working for TDDI is kept busy enough. I also can't say what duties they have exactly but I have used them once to sign the paperwork to open a new account. Contrary to popular belief, accounts cannot be opened online. They just get you to do the grunt work but still need to have you sign documents. They can be mailed but it is quicker to go into their branches in person.


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## AltaRed (Jun 8, 2009)

When I opened my BMO IL account ~5 years ago, I completed it online but did take it into a BMO branch to have my ID and signature validated. But it was just one of the bank employees in the branch, not a BMO IL employee, doing that grunt work.


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## Rosey (Oct 23, 2018)

Looking at BMO IL and BNS at this point. Interesting note, I emailed my broker last Thursday asking if there are any DSC's remaining on any of the funds that I own and what exactly would I be looking at in total fees if I did move into the uma. Rec'd an email back within the hour requesting a conference call. I prefer these things in writing first so that I am better informed before a verbal discussion takes place. Sent another email requesting the fees/costs again before any conf call takes place. Nothing back yet.


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## AltaRed (Jun 8, 2009)

You can also look up the DSC schedule yourself by looking at the prospectus for each specific fund and counting the years from date of purchase. If you disclose your fund codes, I have little doubt someone here would quickly be able to find out if it is 6 or 7 year decreasing DSC schedule and by how much each year.


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## OptsyEagle (Nov 29, 2009)

If he/she does not get back to you within a few days, about your DSC fees, just transfer everything "in-kind". No DSC fees would be rendered and then either see if you can get that info from your discount brokerage and if no luck there (due to the DIY nature of their business) then do it yourself. Call each fund company and ask. They will give you the number and also tell you when the final DSC date will pass, if there is one.

Once a broker attempts to stand in the way of you and your money, as he/she did by asking for a CC instead of giving you the info you requested, that would be the last day they were ever a broker of mine. Way too often brokers talk about "their assets under management", etc.,etc. They have no assets under management. They have clients who have assets under management. A few brokers understand this. Way too many need to be taught it.


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## Eclectic12 (Oct 20, 2010)

AltaRed said:


> Really? I'd be curious who they are and where ...


So far I have seen TDDI and CIBC do this.

It wasn't an even split between bank and brokerage but London Ontario had one circa 2006. Since then I've see this setup in Toronto and Ottawa locations.




AltaRed said:


> ... What I have seen in suburban branches, albeit not a big centrally located branch, is the financial advisors in big bank branches are associated with the asset management company arm of the big bank ...


For the locations I have had business at, the AM associated types have offices in the bank section while the brokerage types have offices in the separate brokerage section.

When I have arranged appointments, if it wasn't made clear which entity I wanted to deal with, the booking person asked.

I haven't had a ton of questions for the brokerage person as I don't do anything fancy so I can't say how broad their knowledge was/is. Unlike the AM associated types, my brokerage questions were answered.




AltaRed said:


> ... I have sons who manage big 5 branches and they've never mentioned their companies having brokerage personnel co-located with retail banking branches. But now I will have to ask.


It will be interesting to hear what they have to say.


Cheers


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## Eclectic12 (Oct 20, 2010)

OptsyEagle said:


> If he/she does not get back to you within a few days, about your DSC fees, just transfer everything "in-kind" ...


I'd first check whether the receiving brokerage will accept the funds with DSCs. 

I haven't had to fill out the transfer paperwork in a long time but it wouldn't surprise me if filling it out for an "in-kind" transfer of a fund that won't be accepted is dealt with by selling the fund (including taking the DSC charge) then transferring the net amount of cash. Maybe they'd call to indicate that the "in-kind" transfer can't happen but then again, maybe not.


Cheer


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## AltaRed (Jun 8, 2009)

Agreed. Per my post #13, it is not difficult for an investor to look up DSC schedules, nor should it be difficult for some of us here to know whether the funds are likely transferable 'in kind'. Just need the Fund Codes.


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## OptsyEagle (Nov 29, 2009)

Eclectic12 said:


> I'd first check whether the receiving brokerage will accept the funds with DSCs.
> 
> I haven't had to fill out the transfer paperwork in a long time but it wouldn't surprise me if filling it out for an "in-kind" transfer of a fund that won't be accepted is dealt with by selling the fund (including taking the DSC charge) then transferring the net amount of cash. Maybe they'd call to indicate that the "in-kind" transfer can't happen but then again, maybe not.
> 
> ...


The discount brokerages will take most funds under DSC and any that they don't they will leave behind. No one will sell a fund to cash without authorization and no authorization for that is given with an "in-kind" transfer. 

If Rosey is worried about this, and she should not be, she can simply call the fund companies themselves BEFORE she transfers anything in kind. I imagine with would be a waste of time because even if she has some funds with DSCs charges still applicable, what is her intent with these. I would imagine she would want to at least moves these in-kind as well, so her better action would be to simply send a copy of her account to the discount brokerage she is interested in to determine if any of the funds are on their restricted list. I doubt they will be for transfers, but who knows. Never hurts to ask.


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