# Experience with a financial advisor?



## morechitlins (Apr 8, 2009)

First post and its a long one so please bear with me! OK, so my friend set me up with a meeting with a "financial advisor". This is what he outlined for me:



> $100,000 B2I investment loan @ Prime + 1 or 3.5% annually:
> Payment would be 3500$ a year or about 291$ a month.
> 
> This B2I is expected to grow at 10% per year (as history shows).
> ...


B2I = borrow to invest in a non-registered account
IRP = insured retirement plan, another name for universal life i guess.

I believe this package is in partnership with Canada Life who I guess is the one issuing the loan at such a low rate. 

I already don't like the fact that he's trying to sell me a Universal life plan so lets leave that out. I outlined the following concerns/reasons I have:
a) I am not comfortable with the idea of taking on 100k worth of debt as it would impact me in the future say when I need a mortgage for a house ( I am in my mid twenties )
b) In my opinion, 10% ROR is unrealistic, anything lower will cause the B2I -> IRP plan to fail. "Canada Life Harbour growth and income" is the fund he used as an example to show the superior performance it has over its index with mid teen ROR each year, but it has a MER of 3% and has only been around for 10 years. 

His reponse is:


> a) When it comes to debt, there is good debt and bad debt. Bad debt
> is simply any loan you may take out to buy something that may go down
> in value, e.g. Electronic items or a Car Loan.
> Good debt is simply any debt taken out in order to buy something that
> ...


Principle Guarantee? never have to pay it back even if my portfolio loses its value? Sounds incredible, but I am not familiar with these investment options insurance companies offer, so maybe someone with knowledge and experience can explain this to me.

And the rate of return debate, I believe this goes back to the active managed vs index argument. If the index is getting 10% on average, is it unrealistic to expect a actively managed fund with a high MER to outperform it for the same duration? 

Basically, I am trying to get some opinions and arguments on if I should believe his points or not and if this actually a good strategy. Also, the commission is 5% on all deposits, so that $100,000 initial loan/investment is actually $95,000.


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## CanadianCapitalist (Mar 31, 2009)

I don't think this is a good strategy at all. Here's why: assume that the premium you get for bearing the risk of investing in stocks compared to cash is between 4% to 6%. Because the loan is Prime + 1% and the MER is 3% and Prime itself has a 2% premium over the risk-free T-bill rate, the extra return expected from stocks is now reduced to -2% to 0%. Do you really want to take the risk of stocks plus that of a loan when you expect to not even make a profit? 

Now look at the motivation of the advisor. He probably collects a 5% commission on the initial $100,000 invested plus about $500 to $750 in trailer fees.


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## morechitlins (Apr 8, 2009)

> assume that the premium you get for bearing the risk of investing in stocks compared to cash is between 4% to 6%.


Are you saying investing in stocks will have a 4-6% rate of return advantage over cash? by cash do you mean bonds and stuff like that? i don't really get this assumption. sorry im really a noob.


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## CanadianCapitalist (Mar 31, 2009)

morechitlins said:


> Are you saying investing in stocks will have a 4-6% rate of return advantage over cash? by cash do you mean bonds and stuff like that? i don't really get this assumption. sorry im really a noob.


Yes. By cash, I mean Government of Canada issued T-bills maturing in 90 days. The past record for excess returns provided by stocks over bills/cash for the 1900-2000 period has been 4.7% for Canada and 5.8% for the United States [Source: Triumph of the Optimists]. I really don't know where these financial advisors get their data. Also here is the 10-year equity premium versus bills for 1900-2000:

3.5%
2.4%
8.8%
-0.5%
8.4%
12.9%
5.2%
2.5%
0.0%
3.5%

Only 3 10-year periods have stock returns that are 6% or more than bills. 6 10-year periods have stock returns that are 4% or less than bills. That is you have a 60% chance of losing money with leveraged investing of the type described in your post.


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## morechitlins (Apr 8, 2009)

Ah i get it. 

It seems his logic hinges on the fact that he will be investing my money into these hot seg funds with their 15-18% returns which are brought back to earth with their big MERs. And given the fact that less than 10% of all funds out there perfrom better than the index in a 10-year period, it sounds like gambling to me. 

Im pretty much convinced. Thanks!


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## Financial Highway (Apr 3, 2009)

I agree with CC on this one. However I dont think the advisor is selling you a UL product, he is talking about seg. funds and yes they do provide a minimum of 75% with an optional 100% guarantee at maturity or death. So in 10 years you are guaranteed to have at least your principle. This is something only life insurance companies provide (also a big reason for Manulife's stock drop).

Second his 10% ROR is just way too optimistic.

This is a strategy many "advisors" encourage who are mainly insurance agents. I remember when I was working for a firm this strategy was promoted heavily, one of the reasons I left. 

Also interest rates will start going up your rate will not be 3.5%.

Just out of curiosity, has this advisor met with you? or anything like that?


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## morechitlins (Apr 8, 2009)

yes he has met with me. He did try to sell my a UL policy as well. Basically his whole idea was to start taking funds from my non-reg account where the 100k was invested to start buying into the UL (16k/year) starting at the 7th year of this plan. A quick calculation shows that anything less than 10% ROR will cause this strategy to fail since eventually my non-reg account will have zero money left and I will still need to pay for the UL. Clearly a bad idea, thats why I didn't make this the point of my questions

The main reason I met with him was my other friend has recently joined the this industry and he gets $$ for referring potential clients, so I was really just doing this as a favor. But after seeing what their pitch is and what they trying to sell, I might tell him to get out haha but he seems pretty excited about all this stuff.


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## canehdianman (Apr 7, 2009)

This is a GREAT strategy!!!!!!!

.............. for the financial advisor.


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## DrStan (Apr 5, 2009)

Run as fast as you can. Just perusing the arguments put forth by your “advisor” makes for a good laugh. I would call him out on the following:

1) No one in their mid-twenties should buy segregated funds. Your capital is guaranteed years down the road. Well sorry, but getting your capital back won’t cut it, since the value will have been severely eroded by inflation. Anyways, the “advisor” is convinced that you’ll easily make 10-12 percent a year. So you don’t need a guarantee, right? Duh. This guy probably doesn’t have his “real” mutual fund licence so he’s trying to sell you seg funds which are a form of insurance. 
2) The MER is gross, bordering on theft. At your age, please do yourself a favor. Buy low-cost index funds gradually over the years and you will do great. You can put together a nice basket of ETFs or index funds for about 0.5% fees per year. 
3) The projected returns are highly optimistic. I would count on much less, 6-7% a year. Better be conservative in your calculations. 
4) Interest rates are at an all-time low. They will eventually rise. A couple of points could ruin you.
5) This “investment” takes away a lot of your financial flexibility by committing you to one (poor) strategy. Build up your RRSP, your TFSA and your non-registered savings. If and when you buy a house, you can take money from these sources as a down payment. 
6) This guy is just looking for a nice commission. Ask him how much he stands to make, and to lay out the numbers for you. Initial commission and annual trailer fees. He’ll squirm in his grey suit.

Cheers!


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## venter (Apr 10, 2009)

As a Financial Planner (CFP), I am appalled by this guy. Putting the dubious nature of his claims aside for the time-being, has he even bothered to identify your investing goals and risk tolerance? On what basis did he decide this was an appropriate investment for you? As far as his fees, as a CFP I am obliged to disclose up front how I am compensated, I have found talking to prospective clients that this is apparently not common practice.


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## morechitlins (Apr 8, 2009)

^ 

Hmm come to think of it, we didn't do any risk tolerance assessment (probably assumed, I'm young so I have a high risk tolerance) and did very minimal investment goal planning.

I did ask him about his commission but he did not say anything about trailer fees or the commission he stands to make from selling a UL policy.

I knew he was being pretty shady but you guys brought up a lot of points I never considered. Thanks!

btw, I already have a rrsp setup with td efunds as a start, so I think im on the right road


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## venter (Apr 10, 2009)

I have been working ad an advisor for almost 3 years but I have yet to meet a client that would benefit from a UL policy.

___________________________________________________________________
Finance Matters


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## DrStan (Apr 5, 2009)

morechitlins said:


> ^
> 
> Hmm come to think of it, we didn't do any risk tolerance assessment (probably assumed, I'm young so I have a high risk tolerance) and did very minimal investment goal planning.
> 
> ...




You sure are on the right track. I wasted 5 to 7 years in high fee funds before seeing the light. Efunds are an excellent way to save and buy small quantities of funds periodically. If you feel like having fun, you should set up a meeting with Bozo the advisor and destroy his pitiful arguments one by one. Depends on how cruel you are, but I would love that kind of opportunity! ;-) 

Ditto for the universal life. Stay away. There are plenty of better investment vehicles out there.


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## Financial Highway (Apr 3, 2009)

venter said:


> I have been working ad an advisor for almost 3 years but I have yet to meet a client that would benefit from a UL policy.
> 
> ___________________________________________________________________
> Finance Matters


UL policy does have some good benefits if used properly with the right client. However these strategies are very complex and need a good understanding of the product and strategy. Well now with the TFSA I think the use of UL policy will start to become less productive. I personally I have never used it with a client, I would always refer the client to a specialist in this area.


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## Germack (Apr 4, 2009)

The sad thing is that the financial advisory system in Canada is broken. The problem is that rather than paying directly for financial advice the fees are disguised. This creates a serious conflict of interest. The advice over your financial issues are connected with the advisor's own financial issues, namely how he or she is going to get paid. Therefore you are not getting straight advice. You are getting a sales pitch. Your financial advisor did pretty much everything to maximize his fees. You should look for a new fee only financial advisor.


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## beyondfunds (Apr 5, 2009)

I am also a financial advisor, and I agree with venter and Capitalist...run the other way!


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## bytekhne (Apr 23, 2009)

This is my first post as well
I too also have borrowed 100k to invest, and who could resist when the market just went on a 50% discount

I have a couple of questions though.

My advisor also suggest I invest with Canada Life (could be from the same firm? this place is really small though..) and I borrowed from a BANK not from an investment company.. I didn't know you could do that. 

I am currently invested in CI Harbour Canadian, not CI Growth & Income, because..well Growth and Income sucks. CI harbour is a 5-starred Mutual fund from Globefund (do not know it's rating on Morningstar, because I don't really use it...) The MF platform charges me 2.31% while the Segregated Platform, at the maximum MER charges me at 3.41% and the cheapest version (which i've got) is 2.85%. 

I picked the cheapest platform because 
A) I do not believe I'll ever need to use the reset feature, I mean c'mon 15years down the line?.. OF COURSE the market will outperform whatever principal you have in 15years
B) Extra fees suck, especially when compound interest works against you.. not cool, I did a spreadsheet and the results were pretty nuts.. try it yourself..at 1% difference in 20years you'd have a lot less money

Anyhoo, I stuck with the seg fund format because
A) I don't think I can get 100k otherwise.. lol I earn like 50k from my job and I am in my early 20s, I don't have a House to do HELOC against so =(
B) If i were to DIE the contract would protect some of debt so my family wouldn't have to pay in a down market, now given I don't die within the next 7years then it should be fine.. but I have insurance anyways so meh.

Ooh, he mentioned that if I borrowed money to invest for income purposes (I've got some dividend funds in my portfolio too) that the interest incurred is tax-deductible.. should would be sweet.. but is it true?

Now here's some MAJOR problem I see with your advisor/the plan you have

10~12% ROR is highly improbable, yes if you use the last 58 years it makes sense but most people's time horizon isn't that long.. I know I want MY house around my 30s and that fund? Growth n Income? Don't think about it lol. 8~10% ROR is somewhat achievable since the funds I've looked at, AFTER MER performance is still higher than the Index (but that's still 6.62% since inception) Keep in mind the average is outta whack due to our nice 40% drop last year..

My advisor also suggested the IRP strategy, but it's a whole-life strategy..
It's only suggested as a possibilty though ( it's UBER expensive >.<).. 

I am pretty happy with my term10.. it's cheap and if i were to get a house or a wife i don't have to worry about dying and leaving her high and dry.

Anyways I'm looking forward to some feedback from all the veterans from the forum!


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## archanfel (Apr 7, 2009)

Here you go, draw your own conclusions. And yes, the interests are tax deductible.


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## DrStan (Apr 5, 2009)

bytekhne said:


> This is my first post as well
> I too also have borrowed 100k to invest, and who could resist when the market just went on a 50% discount
> 
> I have a couple of questions though.
> ...


Where to start?

1) At your age, seg funds are a huge no-no. I think a majority of objective advisors (not the one who is selling you expensive funds) would recommend low-fee index funds or ETFs, considering your long term investment horizon. Seg funds are intended for people nearing retirement that can't afford getting wiped by a market downturn. Even then, these folks should be mostly in fixed income. If you believe the market will end up with better than a 0% return, why are you getting a seg fund?

2) Interest on the investment loan is deductible. Make sure you can document where the money came from and how it was used and don't mix personal and investment loans. I am somewhat troubled by the fact that you were not aware of that before going ahead. I think borrow to invest strategies are better left to experienced investors, or investors that have a solid financial backbone.

3) The loan is huge compared to your income. Twice your annual gross income? That can be devastating if and when interest rates creep up. I'm surprised you were able to secure that loan. 

4) If the fund yielded 6.6% since inception and charged a MER close to 3%, that means that about a third of your investment returns would have been sucked dry by the fund company. Gross. By the way, last year's drop was preceded by 5 very good years of returns. I would figure on 6-7% returns going forward, any overage being a nice surprise. 

5) If you die, your family won't be on the hook. You are an adult, therefore responsible for all assets and liabilities. If you die and leave debts, TS. I gather you don't have dependents, which means this "protection" seems useless. 

6) It's your money (and your advisor's, now that he's made a few grand off of you), but have you thought about averaging in the market as you get free cashflow, a few hundred bucks at a time? This seems like a much more reasonable alternative. 

I wish you all the best...


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## bytekhne (Apr 23, 2009)

Thanks!

Yeah I was going to do Dollar cost avg into a balanced fund or an index ETFs before but he made a good case on starting with a lump sum..

He told me the interests were tax-deductible but I just wanted to make sure, since people here really seems to know what their talking about 

My loan is an Interest only loan that technically I'll never have to pay back. So the plan is to let that 100k grow until I don't wish to have anymore debts and just transfer my asset into a more fixed-income portfolio when I am much older, say slowly into another platform starting at 50 and finish at 65?

as for the protection, I was thinking 5years down the road if i marry my GF or have kids then it'll be a nice feature..you're right now, I don't have any dependents that i know of right now lol, but they wouldn't give me the 100k @ prime loan unless it's a seg platform so 

My cashflow is like 1.5grand and the int payment is currently at like 300 bucks.. if it's at prime like 2years ago then it'd be 500 bucks (500 x 12 = 6000 or 6% of 100k) 

*I basically went ahead with this because the leverage strategy was attractive AND i wanted to start planning my life.. I did some calculations with putting my own capital into an Index-ETF VS lvging strat..
over the long period of time the lvg wins, despite the MER and whatever..*

When morechitlin says the fund is ONLY 10years old.. is that consider really young for a fund? do i have to pick a fund that's been around for like 20+ years or something? 

thanks in advance for you guys helping out a newb!!


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## archanfel (Apr 7, 2009)

bytekhne said:


> Thanks!
> 
> Yeah I was going to do Dollar cost avg into a balanced fund or an index ETFs before but he made a good case on starting with a lump sum..
> 
> ...


What kind of protection does the seg fund offer? 100% principle protection or only a percentage of it? 

I am also not sure what do you mean by "technically I'll never have to pay back.". If you lose your job tomorrow, would the bank not recall the loan? 

Also, if we enter hyper inflation, the prime can easily jump to 10%-20%. The danger is minimum in the short term, but over the next 5 years, I'd say the likelihood can not be ignored.


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## DrStan (Apr 5, 2009)

bytekhne said:


> Thanks!
> 
> Yeah I was going to do Dollar cost avg into a balanced fund or an index ETFs before but he made a good case on starting with a lump sum..
> 
> ...



I can see why the company wanted you to go into seg funds... it's a good deal for them, securing a 3% MER for many years to come. I'm sure the advisor made a good case for the lump sum, because that deal is worth about $5K commission in his pocket, up front, plus trailer fees. Swweeet! I would be extremely convincing as well!

When you say your cashflow is 1.5 grand, you must mean your total cashflow from your salary, etc., ie. not the cashflow from the investment. So I can see that you can absorb the interest only part of your loan. But watch out. I think you need to look at it more objectively, as in what the investment is yielding versus the interest cost. Look at it as a distinct entity. Also, that kind of cash outflow may make it difficult for you to put money away for a house downpayment, or even qualify for a mortgage. Just take that into consideration. 

I don't know if you have a crystal ball, but nothing guarantees that leveraging wins in the long run. There may be a rise in interest rate in future years, making the investment loan unsustainable and precluding you from buying a house since a lot of your money would be tied up in the investment loan. Or a prolonged market downturn with companies slashing dividends. Any projections are only speculation. 

I like leveraging and I do it with ETFs. I'm just very dubious that you have picked the correct investment platform to do it very successfully in the long run. 

Would you mind sharing your calculations regarding the leveraging right now vs. averaging in the market? I would be curious to look them over!


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## bytekhne (Apr 23, 2009)

*first to Archanfel*

apparently this is a no-margin call loan, and the idea is there's no end term on the loan.. there's no expected pay back period.. now obviously If i lose my job that's be bad news not just for my investments, but for my livlihood as well  The "protection" is so my family wouldn't need to pay this debt in case of my death.. but I guess the only way that worst case scenario would happen is if let's say i have other assets(such as houses) and then I died.. now the creditors have hands on them before my family.. therefore they'll need to clear my debts and taxes before having access to my estate.. but i guess it's kind of a moot point because this is almost index investing so I doubt that'll happen, and once again, I don't plan to die anytime soon.

As to hyperinflation, I read somewhere that all the money they're printing is to make up the LOSS of real capital that kind of "dissappeared" during the Financial meltdown.. on paper the world has lost TRILLIONS of dollars.. we're just trying to replace it...
*
now to DrStan*

basically I budgeted 500dollars for this plan, but now it's only costing me 300 dollars.. I don't expect that to last. Let's say it is 500 dollars per month (which means the economy has recovered and we're at now 6% Prime.. let's just say) and I AM paying $500 per month.. so

6000 per year to possibly get 6~8% return. 
however since the 6000 is tax deduction, I still come out on top..

The calculation i did was a VERY basic compound interest calculator, of 6000 annual deposit, VS 100k lump sum deposit under the same market condition of 6% and 8% per annum over 20 years.. 

so 100k @ 6% over 20years would be _320,713.55_
6000 annual deposit @ 6 over 20 years is _253,199.17_

and 100k @ 8% over 20years would be _466,095.71_
6000 annual deposit @ 8 over 20 years is _324,503.27_

total money invested/interest paid = 120,000

now i disregarded the tax deductions and the possiblity of reinvesting with that money because that'd make lvg even more unfair against traditional DCA.. but you get my idea..

Here's the funds I am currently Investing in:

CI harbour
And I ran it against the TSX/S&P total return 

http://www.globefund.com/servlet/Pa...q&id=51573&gf_uid=globeandmail.gf.03671311884

Enhanced Dividend
Again, compared it against TSX/S&P total return

http://www.globefund.com/servlet/Pa...q&id=51562&gf_uid=globeandmail.gf.03671311884

Any thoughts? corrections? 
btw all your inputs are very appreciated!!


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## archanfel (Apr 7, 2009)

bytekhne said:


> *first to Archanfel*
> 
> apparently this is a no-margin call loan, and the idea is there's no end term on the loan.. there's no expected pay back period.. now obviously If i lose my job that's be bad news not just for my investments, but for my livlihood as well  The "protection" is so my family wouldn't need to pay this debt in case of my death.. but I guess the only way that worst case scenario would happen is if let's say i have other assets(such as houses) and then I died.. now the creditors have hands on them before my family.. therefore they'll need to clear my debts and taxes before having access to my estate.. but i guess it's kind of a moot point because this is almost index investing so I doubt that'll happen, and once again, I don't plan to die anytime soon.
> 
> As to hyperinflation, I read somewhere that all the money they're printing is to make up the LOSS of real capital that kind of "dissappeared" during the Financial meltdown.. on paper the world has lost TRILLIONS of dollars.. we're just trying to replace it...


Well, if you lose your job, you can probably find another one in a couple of month, not a really big deal (assuming your got some savings). However, if the bank recall the loan (read your fine print and see whether they can do it), you would be in deep trouble. 

I don't think you can discount the possibility of hyperinflation. Capital don't just "kind of disappear". Banks are de-leveraging, but for how long? The long term bond yield really didn't come down much despite massive government intervention, meaning people are expecting long term inflation. 

I am not sure your calculation is correct either. @6%, your pre-MER return would be 9%. 

100k @ 6% over 20years would be 320,713.55
6000 annual deposit @ 9% over 20 years is $334,587.18.


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## blackjacques (Apr 3, 2009)

*Don't trust Insurance Agents*

I'm a little late hopping on this thread, but I'd like to comment on morechitlins' original post. Any "financial planner" that pushes loans and Seg funds is looking for big commissions. For starters, Seg funds are overpriced products that insurance companies devised to get in on the mutual fund action. The other big problem is that the financial planning industry is under-regulated in Canada. As such, anyone can call themselves a financial planner! In fact, only those with the CFP designation are actually trained in financial planning. Those who sell insurance products can only sell insurance products. I once asked one of these "financial planners" what they thought of Exchange Traded Funds. Their answer was "I don't know anything about EFTs"!!! (notice the acronym). 

My advice is to eschew doing any business with that particular planner.

Rob


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## DrStan (Apr 5, 2009)

bytekhne said:


> *first to Archanfel*
> 
> apparently this is a no-margin call loan, and the idea is there's no end term on the loan.. there's no expected pay back period.. now obviously If i lose my job that's be bad news not just for my investments, but for my livlihood as well  The "protection" is so my family wouldn't need to pay this debt in case of my death.. but I guess the only way that worst case scenario would happen is if let's say i have other assets(such as houses) and then I died.. now the creditors have hands on them before my family.. therefore they'll need to clear my debts and taxes before having access to my estate.. but i guess it's kind of a moot point because this is almost index investing so I doubt that'll happen, and once again, I don't plan to die anytime soon.
> 
> ...



A few thoughts:

You're forgetting the time value of money in your calculations. If you keep investing $6000 each year for 20 years, that last $6000 will be worth far less than it is today (about $4,000 with 2% inflation). Let's assume your income and investment capacity follow a 2% inflation curve.

Here is a more precise calculation for gradual investment:

-$6000 per year, over 20 years. 
-Return 6%. 
-Taxation rate, 25% (let's not forget taxes!). 
-Deposits indexed by 2% a year. 

Total value: $246,653
In today's dollars, considering 2% inflation, this would be worth $165,990.

And for the $100K lump sum:

-$100,000 lump sum, invested at 6% over 20 years.
-25% taxation rate
-Obviously, no indexation

Total value: $241,171
In today's dollars, considering 2% inflation, this would be worth $162,301.

In other words, even though investing a lump sum up front can be attractive, it's far from a slam dunk. I still think it's very daring considering your age and your future financial commitments (house, wedding, eventual kids...) 

I applaud your gutsiness. I stand by my assessment that the investment choice is wrong, though, because I think your fund will have a lot of trouble beating the relevant indexes in the long run. 

Just a few final thoughts: make sure to top off your RRSPs and TFSA before going for exotic investment ideas. That should be a priority at your age. The TFSA is a very powerful tool, since all money invested in it will grow tax-free; and the Home Buyers Plan will allow you to pull out $25,000 out of your RRSP to put a downpayment on a house, to be repaid over 15 years. You can get a tax break up front, reduce your mortgage and put the money back gradually. If you haven't maximized these two options, I think you certainly should before borrowing to invest.

You should also give a nice kick in the teeth to insurance salesmen that try to sell you investments. Many of them don't know what they're talking about. A friend of mine started out in that business, and was never made aware of ETFs or low-cost index funds in his training, because there's no money in there for the insurance companies. Every penny in their pocket is one less in yours. 

Cheers,


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## Jon Chevreau (Apr 4, 2009)

There's a good article in the Atlantic Magazine currently entitled "Why I Fired My Broker." It should be required reading for all who frequent this forum. I reprise the main points in my blog today and also end it with a link to this very discussion:

http://network.nationalpost.com/np/blogs/wealthyboomer/archive/2009/04/24/why-i-fired-my-broker.aspx


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## CanadianCapitalist (Mar 31, 2009)

Thanks for the AM article Jon. I'm going to read it -- all 11 pages of it.

Personally, I've had only one experience with an "advisor". I was fresh out of school, with a new job and got referred to an advisor by a friend. I know very little about finances and guess I was easy pickings back then.

I was sold on the merits of a venture capital fund (the irony is I was working for a company that relied on venture capital back then) and the $5,000 tax break generously offered by the government. Left unsaid, were the sales commission, hefty MERs and generous trailers. Mind you, I'm not totally blaming the guy -- after all, I have a graduate degree and should have known better. To my knowledge, that's how he advised my friend as well. He'll put him in a "hot" communications fund one year, a corporate bond next year etc.

That was the only time I was a client of an advisor or invested in high-fee funds.


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## MoneyGal (Apr 24, 2009)

IRPs can be useful strategies in a corporation, for small-business owners who have maximized their RRSPs or IPP and have additional funds to deposit. But for your ordinary Jane or Joe? Not so much. 

CC - when I was an advisor, I would often look at prospects' investing statements and be able to pinpoint when each fund was acquired. "Look - you bought this in 2004, and then this one in 2005," etc.


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## michika (Apr 20, 2009)

I've seen 3...

The first one, a reasonably nice guy, told me that my $15K couldn't get me anything with his company, and told me to "come back when I was a little more established". Established being 100K or over. He was however very nice. He gave me some tips, pointers, and recommendations and gave me a couple of suggestions of where else to look. If I had the money, I probably would have stayed with him. He was open, honest, and struck me as genuine.

The second one just avoided answering my questions, big red flags there, and talked down to me.

The third one took one look at me while I was waiting, and then left. The receptionist later told me he had an emergency to take care of. Apparently said emergency was a Starbucks run two buildings over. I came to be standing in line behind him while he chatted on his cell phone about what I "freak" I was with my pink hair, and piercings. The look on his face when I called him on it was so worth it.

All in all, I'm still looking, but overall it seems that 1) first impressions colour your relationship and it goes both ways 2) Small fries like myself aren't "good" clients, and 3) go prepared.

I'm quite sure though that there is someone out there, I just have to keep looking. Sometimes the whole process reminds me of people searching for their "soul mates".


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## MoneyGal (Apr 24, 2009)

Michika - what is it that you are looking for in a financial advisor? What do you think they can do for you that you cannot do yourself?


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## kodeslinger (Apr 24, 2009)

@Dr. Stan.


Hi I'm a newbie here too, but I've done a little research on my own in regards to our financial options in Canada.

I was wondering how come the general consensus seems to be to maximize RRSP and TFSA?

My understanding is that with RRSP, most people like it for the tax deduction, however later on when you want to take it out at retirement, the entire growth is taxed as income (so 100%) when you take it out?

I know that TFSA is tax free when you take it out, but the money you are investing now is after-tax, so you lose out on that tax break up front (which can be considerable depending on your income e.g. 35%).

From what I understand about leveraging is that potentially you can have the best of both worlds: 

1) you get the tax deductibility similar to RRSP up front because the interest is tax deductible (assuming you were going to put in a similar amount into RRSPs as you would pay interest like you use in your example)

2) since the leveraging is non-registered, when you take it out it can be considered taxable at capital gains (only gains portion taxable at 50%) instead of as income, which sounds a lot better .


So in this case with your illustration, even if the end results come out to be the same dollar amount, the leveraged strategy would be ahead tax wise?

Also, I am curious to see how the calculation was done in your example with 100K lump sum versus 6000$ annually?

The reason I am confused is because, in your case, for both the Rate of Return is the same (6%), the time period is the same (20 years), and in your case, the 6000$ each year is worth even less, I don't see how the 6000$ wins? I am using the compound interest calculator here, and no matter how I enter the numbers, the 100K seems to come up ahead?

http://www.moneychimp.com/calculator/compound_interest_calculator.htm


Please let me know if there is something wrong with my view of the examples given here. Thanks!


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## ethos1 (Apr 4, 2009)

*to MoneyGal for michika*



MoneyGal said:


> IRPs can be useful strategies in a corporation, for small-business owners who have maximized their RRSPs or IPP and have additional funds to deposit. But for your ordinary Jane or Joe? Not so much.


For this simple average John & my wife Jane, other than RRSP's, what is that you are talking about - is it a lingo that only financial Planners as well as financial & investment advisors use

Did you go to a special school to be able to be financially cryptic & is that why the average public appear to be leary or have a distrust with FA's in general, all because they try to talk over & above their prospective clients heads?

Like michika I also would have problems going to an F.A who thought they were the cats meow, then again nothing personal in money - no grey zones

For me an FA would have to be frank as well as appear to be honest. Lay the cards on the table, no hidden agenda, no promises & no trying to sell me something that they make the most money on

Like Bob who says he is a fee for services or advice consultant would be fine for me, but I want at least a free review 30 - 60 minutes worth of where I am at & the honest answer whether the FA can help me or not

Moneygal, you talk about looking or reviewing a prospects package - just how much boring time do you give your clients?


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## MoneyGal (Apr 24, 2009)

Whoa, Ethos1. 

I'm no longer a financial advisor, as I posted in my intro thread. So I'm not boring clients or prospects for any amount of time, actually. 

IRP = same acronym as was used (and defined) earlier in the thread, "insured retirement plan"

IPP = "individual pension plan;" an alternative or adjunct to RRSPs, provided for in the Income Tax Act, and of interest to mostly high-earning, small-biz owners in mid-career.

I understand the ire towards many of not most "financial advisors" - I share it.


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## ethos1 (Apr 4, 2009)

MoneyGal said:


> Whoa, Ethos1.
> 
> I'm no longer a financial advisor, as I posted in my intro thread. So I'm not boring clients or prospects for any amount of time, actually.
> 
> ...


wasn't attacking you so please forgive me if it sounded that way

Being older than most, I cannot read between the lines so help me here by telling me which post # in this thread that the definition of those acronyms are posted

Thanks

BTW, why are you no longer doing FA work & what is or does an IDA-licensed advisor acronym mean?


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## MoneyGal (Apr 24, 2009)

The very first post in this thread gives the definition for IRP. 

IDA = Investment Dealers Association. There are various categories of license in the financial services world - the IDA license allows advisors to trade in stocks, mutual funds and bonds (as opposed to a mutual funds-only license). 

The story about why I am no longer an advisor is long and very OT for this thread. Short version is that it ultimately was not my cup of tea.


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## DrStan (Apr 5, 2009)

kodeslinger said:


> @Dr. Stan.
> 
> 
> Hi I'm a newbie here too, but I've done a little research on my own in regards to our financial options in Canada.
> ...



Great points. 

1) RRSP

As for the RRSP, I think the general consensus is that it's a very solid savings tool. First, you get the initial tax deduction. After that, the money continues to grow tax-free until it's withdrawn in retirement. The premise is that your income tax rate will be lower in retirement than during your working years, making the strategy cost-effective even if it's taxed at your marginal rate. There are other advantages as well, such as the Home Buyers Plan. If your income is lower in a particular year, you can always forward the RRSP deduction to a future year (we did this this year with my wife's contribution). In a non-registered investment (leveraged or not), your income is taxed each year, eating into returns. What you pay in taxes this year can't grow next year. The RRSP is the cornerstone of retirement savings.

2) TFSA

As for the TFSA, money you invest is after-tax, but it grows tax-free (this is the big advantage) and can be withdrawn with no capital gains or taxes of any kind. In a tax sense, it's very similar to an RRSP. Most reviewers seem to be of the opinion that it's a fantastic tax break over the long run. I agree!! If you have any non-registered money, the first place it should be is in a TFSA, period. It is ideal to maximize RRSP and TFSA before moving on to other less tax-advantaged investments.

Now, as for the interest deductibility of investment loans, watch out. It's not a full deduction like an RRSP. If I put $5000 in an RRSP, this reduces my taxable income by $5000 on the spot. Interest is more complicated. For instance, I borrowed $20K in March to leverage into an ETF. I will be paying $500 interest this year, which I will deduct on my income tax. This will reduce my tax payable by approximately $150 at a 30% marginal rate. The investment will have yielded something like $750 after tax. The net amount in my pocket will be $750 income-$350 interest = $400. So yes, the tax deductibility of the interest is a factor.

Leveraging has advantages, and can be effective if implemented properly, with the right tools. It also helps to have a solid financial backing before leveraging. In a nutshell:

1) I think the investment loan should be repaid eventually. An eternal interest-only loan is just asking to get nailed by higher interest rates years down the road.
2) I strongly believe that low cost investment vehicles are superior. Especially ETFs. Seg funds make my skin crawl, because they are a treasure trove of fees, conditions, etc. Simplify, man!
3) Borrow-to-invest should be implemented by people with solid financial backing, who can absorb ups and downs. At least the poster has time on his side because he's young.


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## ethos1 (Apr 4, 2009)

MoneyGal said:


> The very first post in this thread gives the definition for IRP.
> 
> IDA = Investment Dealers Association. There are various categories of license in the financial services world - the IDA license allows advisors to trade in stocks, mutual funds and bonds (as opposed to a mutual funds-only license).
> 
> The story about why I am no longer an advisor is long and very OT for this thread. Short version is that it ultimately was not my cup of tea.


Thank you & have a great weekend

"OT", again an acronym - maybe its me


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## MoneyGal (Apr 24, 2009)

(I need a smacking-head smiley.) I spend a lot of time on forums and I don't even realize I'm using shorthand when I'm using it!

OT = "off topic"!


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## michika (Apr 20, 2009)

MoneyGal said:


> Michika - what is it that you are looking for in a financial advisor? What do you think they can do for you that you cannot do yourself?


Well for starters I know I need some financial guidance when it comes to investing & saving beyond just putting money into a savings account every paycheck. 

I'm just starting out, so I'm not even sure what I can do for myself and what I can't. I'm learning though! I'd love to be capable of doing it all for myself, however that is a future goal. I recognize that I am uneducated in this area at the moment and basically just need help.

Money in my family growing up, and now, and even with some friends is a very gauche thing to talk about. Its taboo almost. So in recognizing my shortcomings, originally I thought that my next logical step would be a financial planner. Although I realize more and more that I may not necessarily need one, but I'm still curious about what its all about.


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## DrStan (Apr 5, 2009)

kodeslinger said:


> @Dr. Stan.
> 
> 
> Also, I am curious to see how the calculation was done in your example with 100K lump sum versus 6000$ annually?
> ...



I can give you the full calculation. I use the Mackenzie Financial calculators. Very useful. http://www.mackenziefinancial.com/en/pub/tools/calculators/index.shtml
Register/Non register comparison

First, non-registered investment of $6000 per year, INDEXED 2% per year to take inflation into account. This is probably what you have not factored in.

-Invest $6000 per year, increased by 2% per year
-Taxed annually at 25%
-20 year period
-6% rate of return.

Total investment value is about $230,000.

Second, the $100,000 lump sum. Same variables, but obviously no indexation. This works out to $240,000. So yes, you come out ahead and I have not factored in the tax deduction from the investment loan. Let's say it's $1000 a year for the fully leveraged $100K, which does give a further advantage to this approach. However, the risks are enhanced by leveraging, because there are many unknowns. What will interest rates be in 10 years? What will the investment returns average? Will sustained losses in the first few years make it difficult to stomach? There is some psychology involved as well. 

Also, nothing says that the poster couldn't leverage gradually by borrowing a few thousand dollars a year to invest. By doing this, he would allow himself much more flexibility to increase, decrease or suspend investments based on his circumstances. He would also dollar-cost average into the market instead of going in all at once. That would provide the advantage of interest loan deductibility and leverage, but at a lower overall risk of getting wiped out by one ill-timed investment. He could also use his other cashflow to top up his RRSP and TFSA, since you can't deduct interest used for these investments.

In a word, I hope he does okay, but I think he received horrendous advice and didn't research it thoroughly before leveraging twice his gross income in one fell swoop.


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## Sampson (Apr 3, 2009)

michika, check out the thread about fave 5 Canadian personal finance blogs.

Read through those, slowly, sometimes two or three times over some articles, and you'll get much more knowledge and unbiased advice than you could ever get from an advisor.


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## DrStan (Apr 5, 2009)

michika said:


> Well for starters I know I need some financial guidance when it comes to investing & saving beyond just putting money into a savings account every paycheck.
> 
> I'm just starting out, so I'm not even sure what I can do for myself and what I can't. I'm learning though! I'd love to be capable of doing it all for myself, however that is a future goal. I recognize that I am uneducated in this area at the moment and basically just need help.
> 
> Money in my family growing up, and now, and even with some friends is a very gauche thing to talk about. Its taboo almost. So in recognizing my shortcomings, originally I thought that my next logical step would be a financial planner. Although I realize more and more that I may not necessarily need one, but I'm still curious about what its all about.



Michika, spend a few hours on these boards, and you may end up knowing more than your investment advisor. I don't want to generalize, but advisors are salespeople. They sell financial products, and favour the products which provide the best income for them. It's human nature. They count on annual fees taken off the top from your investments to earn a living. Many of them are honest and hardworking, but their knowledge base varies.

I strongly believe in doing your own research and educating yourself. If you are starting out, your financial affairs shouldn't be too complicated. 

If you plan on starting to invest for the long term, you should seriously look into low-cost investments such as TD E-Series funds. These are simple investments that allow you to purchase small amounts at a time. You can build your own portfolio of Canadian, U.S. and International funds, as well as fixed income (bonds). 

http://www.tdcanadatrust.com/mutualfunds/tdeseriesfunds/index.jsp

Using RRSPs and TFSAs to their fullest is also sound advice.

There are also financial organizations and non-profits that provide free advice on managing your finances. Look into these. I think it's great that you show serious interest in your financial well-being; that's a huge step!


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## ethos1 (Apr 4, 2009)

MoneyGal said:


> (I need a smacking-head smiley.) I spend a lot of time on forums and I don't even realize I'm using shorthand when I'm using it!
> 
> OT = "off topic"!


no, me thinks you have been texting too much


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## venter (Apr 10, 2009)

DrStan said:


> Michika, spend a few hours on these boards, and you may end up knowing more than your investment advisor. I don't want to generalize, but advisors are salespeople. They sell financial products, and favour the products which provide the best income for them. It's human nature. They count on annual fees taken off the top from your investments to earn a living. Many of them are honest and hardworking, but their knowledge base varies.
> 
> I think you are generalizing. As a CFP I would hazard to guess you would not have a hope in hell of passing the CFP exam by just following this forum. I have training and knowledge in a wide variety of areas including tax, investment, estate, insurance planning as well as having the ability to offer advice about budgeting, mortgages etc.


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## michika (Apr 20, 2009)

venter said:


> I think you are generalizing. As a CFP I would hazard to guess you would not have a hope in hell of passing the CFP exam by just following this forum. I have training and knowledge in a wide variety of areas including tax, investment, estate, insurance planning as well as having the ability to offer advice about budgeting, mortgages etc.


I'm doing my very best to try and educate myself, that was one of the main reasons for joining this board. Plus, like you've pointed out, I get the chance to sample a wide variety of opinions, as well there is no pressure to purchase/invest/etc. in anything.

Maybe the next question then should be what questions should you be asking when looking for someone? What should you be looking for (generally speaking)?

I seem to only find 3 types of people when it comes to money; 1) up the creek with no paddle (not a clue whats going on around them), 2) the I have people people, or I can just pay someone to do it, and 3) the people who understand the ins and outs, and are aware of what is going on around them.

I love the blogs, I like how personal they are!

I'll also be checking into those mutual funds!

Thank you for the recommendations!


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## DrStan (Apr 5, 2009)

venter said:


> DrStan said:
> 
> 
> > Michika, spend a few hours on these boards, and you may end up knowing more than your investment advisor. I don't want to generalize, but advisors are salespeople. They sell financial products, and favour the products which provide the best income for them. It's human nature. They count on annual fees taken off the top from your investments to earn a living. Many of them are honest and hardworking, but their knowledge base varies.
> ...


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## kodeslinger (Apr 24, 2009)

@Dr. Stan

So is it from my understanding that your consensus is that in general Financial Advisors are not necessary?

From what my research has shown, it seems Finance is among the top 3 industries in Canada (after Energy and Materials)?

I understand ETFs (and leveraged ETFs) with low MER are the hottest things for many DIY financial planners, however from my experience with them it seems they do involve a bit more management (e.g. if you have one that is close to the index, they would've dropped 40%+) whereas a more value invested fund that may be more "expensive" that is managed more carefully would've potentially lost less (maybe 20-25% after MER) like the forementioned CI Harbour?

I know that many on this forum (myself included) tend to be more hands on with our own financial plans, but even then the thought of monitoring my investment in 2008 and switching to fixed income or money market at the right time before the drop makes me a little nervous itself.

Wouldn't it be better to have someone manage this for you?

I know probably not advisors provide this service, but if there are those who do, wouldn't they be worth paying a little more in fees, or would you still recommend doing it yourself with ETFs etc.


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## canabiz (Apr 4, 2009)

My concern with financial advisors/financial planners is are they providing the same level of service to a Joe Blow with a $25K portfolio compared to a Mr. Hotshot with 10 or 100 times that amount ?

In a perfect world, one should not have to ask this question. Nevertheless, at the end of the day, I firmly believe you are the masters of your domains and nobody cares about your own finance as much as yourself.


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## kodeslinger (Apr 24, 2009)

canabiz said:


> My concern with financial advisors/financial planners is are they providing the same level of service to a Joe Blow with a $25K portfolio compared to a Mr. Hotshot with 10 or 100 times that amount ?
> 
> In a perfect world, one should not have to ask this question. Nevertheless, at the end of the day, I firmly believe you are the masters of your domains and nobody cares about your own finance as much as yourself.


That's a good point.

Unfortunately, in today's society usually the higher portfolio gets the best service, whether it's with your Bank, with your Lawyer, your Accountant, even with your phone company sometimes.

Everyone needs to pay their mortgage. I've worked in the service industry before (software) and I found that the smaller clients tend to give you some of the biggest headaches to the point whether you wonder if it's worth giving them the same quality of service for an insignificant profit.


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## MoneyGal (Apr 24, 2009)

Kodeslinger - you can purchase value ETFs. You don't need to use actively-managed retail mutual funds (or pay retail MERs) in order to get a value slant on your portfolio. 

Also - you are assuming an advisor will "manage" your portfolio for you (i.e., monitor and make recommendations). If you are using a retail rep mutual funds salesperson, 99 times out of 100 you will not get this service. What you will get are sales calls. 

You may get monitoring and rebalancing recommendations from an IDA advisor if you have an investment policy statement that sets out your asset allocation and actions to be taken if the portfolio deviates by an established amount from the recommended allocation. But there is no reason you cannot do this for yourself by yourself.


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## DrStan (Apr 5, 2009)

kodeslinger said:


> @Dr. Stan
> 
> So is it from my understanding that your consensus is that in general Financial Advisors are not necessary?
> 
> ...



Hi there!

Financial advisors can be useful for many people. I agree that it's impossible to be an expert in every area, and the financial industry is huge because people and businesses will always need loans, investments and day-to-day management of their financial affairs. That won't change. Many advisors provide information in various fields, such as tax planning, mortgages, etc. Others provide no valuable advice, because they're only interested in selling products.

The main problem is that many financial advisors don't know much more than you. Insurance salespeople can sell investments after minimal training. Even CFPs can provide horrible advice, as I've received. A designation is no guarantee of quality, honesty or integrity in any field. So my point is that investors should not fork over their money if they don't understand what they are doing, what they are buying and how much it will cost them. To be able to sniff out the bad apples, it's imperative to have some knowledge. 

As with investment choices, I strongly believe that a well-selected ETF portfolio will outperform bloated mutual funds over the long run. Over 5 years, anything's possible. Over 25 years, very few actively managed funds beat their index. You mention the Harbour Fund. OK, it lost less than the index last year, but it underperformed it in previous years. Look it up in Morningstar. It's worth about the same as an index investment made in 2003. I don't see any added value here. Over the long run, the MER will grind returns down.

You mention switching to fixed income at the right time in 2008 to avoid the drop, etc. Some did it, many didn't. Huge financial institutions with extensive research staff didn't foresee the extent of the crisis coming and were walloped. How many funds went to all cash? If your advisor is trying to time the market, you may have some big problems. 

I think the generation of younger investors is very fortunate to have access to such low-fee products for most of their investing lives. I just think it's unfortunate that many still go for products that likely won't provide optimal returns over time, simply because a lot of advisors won't touch these products that don't offer any sales incentive. Human nature!


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## canabiz (Apr 4, 2009)

kodeslinger said:


> That's a good point.
> 
> Unfortunately, in today's society usually the higher portfolio gets the best service, whether it's with your Bank, with your Lawyer, your Accountant, even with your phone company sometimes.
> 
> Everyone needs to pay their mortgage. I've worked in the service industry before (software) and I found that the smaller clients tend to give you some of the biggest headaches to the point whether you wonder if it's worth giving them the same quality of service for an insignificant profit.


kodeslinger, I don't have any previous dealing with financial advisors/financial planners so I will reserve my comments but from a personal experience, I recently called and emailed 2 *mortgage specialists* with a Big 5 bank who shall remain nameless to inquire about the possibility of transferring my mortgage over. 

The first specialist called me back and referred me to one of his colleague who promptly called me and let me know her system was *down* at the time and she would get in touch with me once everything is up and running again. That was 3 weeks ago and my attempts to reach both just to get an idea what rates they can offer, among other details, have gone fruitless. I have left voice mails, I have sent emails and no luck getting a hold of them. 

Maybe because I didn't have any previous business with said Big 5. Maybe because our mortgage is not big enough to justify their time. Maybe both of them are on vacation. The mind is left wondering what else I could have done.


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## DrStan (Apr 5, 2009)

canabiz said:


> kodeslinger, I don't have any previous dealing with financial advisors/financial planners so I will reserve my comments but from a personal experience, I recently called and emailed 2 *mortgage specialists* with a Big 5 bank who shall remain nameless to inquire about the possibility of transferring my mortgage over.
> 
> The first specialist called me back and referred me to one of his colleague who promptly called me and let me know her system was *down* at the time and she would get in touch with me once everything is up and running again. That was 3 weeks ago and my attempts to reach both just to get an idea what rates they can offer, among other details, have gone fruitless. I have left voice mails, I have sent emails and no luck getting a hold of them.
> 
> Maybe because I didn't have any previous business with said Big 5. Maybe because our mortgage is not big enough to justify their time. Maybe both of them are on vacation. The mind is left wondering what else I could have done.



Stop wondering and talk to a mortgage broker (or two)! You'll likely be able to get better rates than what the Big 5 are willing to offer you. They deal with many institutions and can provide good advice. They are paid by the institutions once you get a mortgage with them. It's fairly ridiculous, in a way: the bank won't offer you their very best rate as a retail customer, but they will offer it indirectly through a mortgage broker, PLUS pay them a commission. You can even negotiate with the broker, since it's your money after all. My brother-in-law received a $500 kickback from his broker as an incentive for using the broker's services. A bit of skilled negotiation... "How can you sweeten the pot and prevent a well-qualified borrower from walking out to the competition, since your rates are very similar..." 

http://www.grgmortgage.com/index_e.html
http://www.invis.ca/

And there are many more...


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## canabiz (Apr 4, 2009)

DrStan: thanks for the info but my question is do you find the conduct of these 2 *mortgage specialists* questionable at the very least and unprofessional ?

Speaking of that, is there a governing body in Ontario/Canada who regulate financial advisors/financial planners ? 

What can the small potatoes i.e. the individual investors do if we have a Bernie Madoff case here in Canada ?


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## DrStan (Apr 5, 2009)

canabiz said:


> DrStan: thanks for the info but my question is do you find the conduct of these 2 *mortgage specialists* questionable at the very least and unprofessional ?
> 
> Speaking of that, is there a governing body in Ontario/Canada who regulate financial advisors/financial planners ?
> 
> What can the small potatoes i.e. the individual investors do if we have a Bernie Madoff case here in Canada ?


They don't care. They're "specialists" because that's their job title. They could be cashiers, or investment advisors, or insurance advisors within their bank. If they're salaried, they have no incentive to provide you with great service, and you are a small fish in a big pond. Find someone who cares and has a real incentive to help you out. 

There are some governing bodies, depending on the type of planner you deal with. For instance, CFPs are regulated by their standards council, and they have a code of ethics to abide by. That's no protection against bad advice, obviously. That's why I'm so adamant about doing your own research! At least if you show up informed, the advisor won't take you for a sucker. Be prepared to call them out at the first sign of "Universal Life", "Segregated Funds", "Strategic Leveraging", "Insurance-to-ensure-insurability later" and other crapola.

You can avoid getting Madoffed by NOT investing blindly in things you don't understand, and exotic investments promising whopping returns.


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## MoneyGal (Apr 24, 2009)

Index investing vs. active investing - the latest SPIVA report ("Standard & Poors Index versus Active") shows that the vast majority of actively-managed mutual funds failed to outperform the indexes across all market categories (i.e., fixed income, large cap, small cap, broad market exposure, etc.) for the past 5 years. The same report notes that these results hold true for the previous 5-year period as well. 

Here's a link to the SPIVA report, and here's my blog post about it. 

I know that it is possible to outperform indexes. Obviously, some active management strategies do so. But I strongly believe that for "ordinary" investors (like me), passive management is the way to go. (By the way, when I was an advisor, I only used passive strategies. ETF and index advisors are out there.)


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## catrina (May 2, 2009)

Well, it’s shocking and needed an immediate attention to sort out at the earliest.

catrina

Divorce Lawyer


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## gwerstiuk (Apr 3, 2009)

To say that you never have to pay it back until you want to is wrong. The banks can always call a loan if they want to even if you have excellent credit. 

Another thing to consider is that any time you borrow money you have to factor in risk appropriately, and a $100k in debt is a huge risk factor. As I was once told "I could give you a 500% return from a roulette table or a 10% return from a mutal fund. Which would you rather have?" Most intelligent people would pick the mutual fund because the roulette return is severely discounted by potential risk. 

I'm very familiar with the good debt/bad debt arguements and I agree somewhat but don't be mistaken in plain terms debt=risk.


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## Serviss (Jul 15, 2009)

*How financial advisors get paid...*

Hello all

I would like to share with you my blog, I recently wrote an article that outlined how financial advisors get paid. I hope it helps with your advisor research experience. (In the blog item #2 is the article) 

http://financialserviss.blogspot.com/2009/07/arm-mortgages-how-dsc-works-kelowna.html

If you are looking for an innovative place to research advisors you may be considering, check out www.advisorslounge.ca. It is a directory for: financial advisor's, accountant's, lawyers, mortgage brokers, realtors and life/business coaches.

www.advisorslounge.ca


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## alicesmith009 (May 22, 2015)

MoneyGal said:


> Michika - what is it that you are looking for in a financial advisor? What do you think they can do for you that you cannot do yourself?


Online savings distribution calculator is uniquely intended to help you in deciding how a lot of your investment funds remain after a progression of withdrawals. Enter your beginning sum, the amount to withdraw and how frequently and we will determine your normal last balance. It is also known as Savings Withdrawal Calculator, which is the finest in all Savings Calculator. This is the best-suitable when you want to make a big purchase or at the time of your retirement.


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