# Need your advice



## Mike2161 (May 31, 2012)

Hi
I am absolutely new to this forum. I desperately need your advice. I'm 53 years old professional [physician] with practically no knowledge about the financial planning and hence have to rely on a financial advisor. I have incorporated my practice for the last four years or so. My gross income is 350 – 400 K, which gets deposited to my corporate account. From this I withdraw about 100 K as my annual salary. My wife does not work and we have two kids 21 and 14 years of age. Now here comes the role of my financial advisor. Over the last about four years, he somehow convinced me about his planning for me. 
Personal investment –
This advisor advised me that as I come in the higher tax bracket, I should try to save as much as possible on the tax by taking investment loan. He told me that interest on the investment loan would be tax deductible and this will be one advantage. On top of that the investment would grow and he told me that by and large he would be able to get the returns at minimum 10% and it could be even 15 to 20%. Accordingly, I took huge investment loan [about 640 K] and for this I pay approximately $20,000 annually as interest. The investment for this loan amount is as follows –
1.	400,000 – Manulife. [Minilab dividend growth, Manulife fidelity Canadian, Manulife growth opportunities. Manulife Canadian investment GIF]
2.	100,000 – Canada life various funds.
3.	140,000 – global Maxfin - fidelity – 508

The market value of all these funds is very low. [Loss of approximately 60,000]


Corporate funds investment –

1.	He has purchased for me universal life insurance for about 1.9 million. He has advised me to invest about 100,000 in the insurance investment fund every year. He says that even with the conservative growth plan these funds will grow at the rate of 6%. I was told that when I retire at the age of 65, he would issue a line of credit against this amount and this way there would be tax savings. So far I have invested about 260,000 as the insurance investment fund.

2.	For the last many years, he has been telling me that the Corporation retained funds are sitting idle and I should think of investing it. I was avoiding it until last year when I allowed him to invest $200,000. This he invested in Manulife. This fund is down by 28,000 as of May 12, 2012.

When I saw my corporate fund down by 28,000, I got the shock of my life. I started getting a terrible feeling that I was in deep trouble.

I want to come out of this but do not understand how. I'm feeling like in the middle of an ocean without any support. At this point of time I started exploring on the Internet when I came across this forum. I went through some of the posts and realized that there are very knowledgeable people around. I would appreciate your advice and am extremely thankful to you for that. Some of the postings here suggested that fee for service types of advisors are always better than the commission-based advisors. I was thinking of taking that route, but again only after the advice on this forum. I would also appreciate if you would recommend some fee for service type of advisors.
Sorry for the long mail and thanks a lot in advance for your advice.

Mike 2161


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## Spudd (Oct 11, 2011)

Wow. I'm not one of the really smart people on the forum but I wanted to answer this to make sure it gets bumped up so the smart people will see it.  

My advice would be to see a fee-only advisor (expect to pay a few hundred dollars for their advice) and get their help in unraveling all this. I think your situation is very complicated given the corporation and life insurance wrinkles, so I would suggest a professional rather than an internet forum.


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## the-royal-mail (Dec 11, 2009)

I agree with spudd. Sounds like a typical advisor.

Their goal is to get people signed up to various "investments" in order to maximize fee income. Remember that your poor returns do not matter - they collect fees no matter what.

I really don't imagine you have the time to get into self-directed investing or even spend much time posting on Internet forums like this. Assuming that is correct, I would also echo the suggestion to speak to a fee-only advisor. Don't make any more appointments with the bank. Those are not financial advisors but mutual fund salesmen.


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## bigdogslife (May 16, 2012)

the-royal-mail said:


> I agree with spudd. Sounds like a typical advisor.
> 
> Their goal is to get people signed up to various "investments" in order to maximize fee income. Remember that your poor returns do not matter - they collect fees no matter what.
> 
> I really don't imagine you have the time to get into self-directed investing or even spend much time posting on Internet forums like this. Assuming that is correct, I would also echo the suggestion to speak to a fee-only advisor. Don't make any more appointments with the bank. Those are not financial advisors but mutual fund salesmen.


---------------

I've been lurking for quite some time and greatly appreciate the board. I'm a self-employed business person who has gone through similar considerations and ups and downs as the OP in the past. I'll second the recommendation and make it more forceful. You must get your ACCOUNTANT and LAWYER involved to assist you. I am a very strong beliver in that team being the ones to truly rely on in complex situations of all kinds, but particularly the kind you are in now. 

Your cashflow, liabilities, legal scenario, and future considerations are much more complex than most folks'. You are in the 1% in this regard for sure.

My Accountant/Legal team has been invaluable in keeping everything in this area aligned with my vision. I can then make sound business decisions in tune with my goals and tell the "financial people" what to do. Many talk about the Accounting/Legal dream team being a core to their success. I have practical proof that this is true and the OP really, really needs it now. Respectfully....BDL


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## bigdogslife (May 16, 2012)

Lurking for some time and loving the board. I've been through similar ups and downs as the OP, as a professional and business owner. 

I strongly recommend that he gets his team of accountants and lawyers involved in this. This team must be strong. It has been invaluable to me. Many say this, I strongly personally endorse it. 

After you get the real advice you need, you can tell "financial people' to execute on what you want. The problem is, as a physician with an incorporated practice in a regulated environment, your cash flow, legal, liability, capital and risk issues are very complex and will get worse over time if you do not sort them out. 

thanks BDL


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## Spidey (May 11, 2009)

IMO you are getting absolutely horrible advice and your portfolio is a classic example of one that benefits the financial planner instead of the client. Here are just a few of the problems:

- Your planner has your investments in extremely expensive investment products (high MER mutual funds)
- Universal life is almost always a poorer choice than term-life insurance. Universal life combines insurance with a savings component. This bundling is accompanied with high fees that go into the planners pocket. Keep it simple - you wouldn't bundle car or home insurance with a savings product. Just get life insurance (term insurance) and invest your money separately. 
- Leveraging is a high-risk strategy. Advising such a large investment loan to buy such poor quality products is IMO verging on misconduct and again designed to pad the pocket of the adviser. 

With your net-worth you should be receiving much better quality advice than this. With your assets, a good adviser would have likely suggested more "direct" holdings (eg. ETFs or some of the larger stock holdings within these mutual fund) to avoid high fees. For example, here are the 10 largest holding in the Manulife asset allocation fund: 

Fidelity Conv Securities Inv Trust 4.57%
TD Bank 4.49%
Suncor Energy 3.03%
Cenovus Energy 2.77%
Bank of Nova Scotia 2.67%
Enbridge Inc. 2.48%
Baytex Energy Corp. 1.92%
Bank of Montreal 1.74%
Goldcorp Inc. 1.55%
Shoppers Drug Mart 1.44%

Why not own stocks like these directly and avoid the considerably large 2.74% MER? (This may not sound like much but research has shown that these levels of MERs are devastating to portfolio performance.) Or an alternative would be something like Vanguard ETFs with MERS ranging from 0.09% -0.5%. A fee-only planner may be the best way to go, but regardless considering what is at stake it is important that you increase your investment knowledge. I would suggest reading "The Four Pillars of Investing" by William Bernstein. Bernstein also has several other excellent books on investing. (By the way, Bernstein is also a physician.)


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## MoneyGal (Apr 24, 2009)

Spidey -- one quick note that for physicians (or anyone with a professional corporation), the tax advantages of permanent life insurance are usually the reason for purchasing UL or WL, not the pure insurance. There are some compelling (tax) reasons to hold permanent life insurance inside a professional corporation which have nothing to do with the actual insurance.


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## Four Pillars (Apr 5, 2009)

This is what is wrong with the investment industry - the OP got hosed.

I would suggest not dealing with that advisor anymore - they are not acting in your best interest at all.

As suggested, find a fee-only advisor or look for a managed advisor who will look after things for an annual percentage (ie 1.5%), you will be far better off.


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## sagsal (Apr 7, 2009)

Check the Financial Facelift articles in the Globe and Post

I worked with Derek Moran and he is great at unraveling this sort of thing - he is fee only and doesn't sell products

There are others 

Stay away from people selling products if you don't understand the products - investing is only complicated by those trying to make money off of everyone - it is not complicated at the end of the day


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## 0xCC (Jan 5, 2012)

sagsal said:


> Stay away from people selling products if you don't understand the products - investing is only complicated by those trying to make money off of everyone - it is not complicated at the end of the day


This is the key. If you don't understand what you are being asked to invest in and why it makes sense for your situation then don't make the investment. It is the advisor's job to make sure you understand what you are invested in and if they can't do that then they don't deserve the commissions they would get out of your investment. I think that the Universal Life policy falls very squarely into this category. The commissions on those policies tend to be higher than on other products so there is incentive for the advisor to get clients into them. They may make sense for some situations but they can be complicated (I don't totally understand them) and I think the client needs to be crystal clear on how they fit into their overall financial plan.

The leveraging also fits into this category but I think that leveraging is a little bit easier to understand. What advisors don't tend to point out though is that leveraging is an amplification mechanism, not a return improvement mechanism. When you get into leveraging you will just amplify what your returns would have been if you didn't leverage. So gains are larger but losses are larger also. This is espeically something to think about when investing in mutual funds which have difficulty beating their benchmark over the long term (all the while sending nicely amplified fees to the mutual fund managers and the advisor).


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## andrewf (Mar 1, 2010)

It seems like leveraged investing is used heavily by unscrupulous financial 'advisors' (aka mutual fund salespeople) to solve the problem of clients with little capital to collect trailer fees on.


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## Mall Guy (Sep 14, 2011)

OP, did you sign a Know Your Client (KYC) form in which you indicated you have practically no knowledge of financial planning, and perhaps a low risk tolerance ? You don't mention what company/bank/insurance firm you are working with (and strictly speaking, it doesn't matter), but you may have a claim against them depending on how that form was filled in. A fee based adviser can likely send you in the right direction.


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## jet powder (May 29, 2012)

Mike

Get rid of your financial adviser, I would open up an account with a credit union & make an appointment to speak with someone. With banks I have been pressured into investments that were not suited to me but with credit unions which are membered owned the advisor has always worked with me & if they did not have a product to suit my needs they never tried to sell me one that did & in fact have told me one to maybe consider elese where ( maybe I have just been lucky & maybe all credit unions are not like this)

The plan you use should fit your personality i.e., understanding of investments, emotional make up, amount of time you can spend, risk tolerance etc) I would never invest in plan this complicated.

Do not ever think your not smart enough to figure out how to develope your own financial plan. You have to take responsibility for developing your own plan that suits your personality but the plan can change as your nature becomes more suited to becoming more financialy independent, Just like a person that wanted to run a maraton if they were not in real good shape it might not be good to run the whole thing it might be better to walk it & maybe the next one as they got in better shape run part of it. It is same with investing you must develope your own plan & just like the marathoner that might be effected by maybe a sore leg they have the best understanding of how fast they can run. Of course now & then they might want to go to the doctor for a physical check up for safety, Just like you might want to go to an adviser incase they can point out something your doing terribly wrong i.e., maybe you never herd of TFSA & your not using one for you investments.

If you dont understand your investment you will be herding. Instead of investing with confidence you will be looking to see what others are doing or to others as you live in a sea of self doubt & confusion. Little do you realize often those you turn to for advise are just memorizing & repeating with no understanding & or just after the commision.

After an investor sells a position that has been bleeding they breath a sigh of relieve

Do not be the monkey investor. Know when to stop the bleeding. The natives catch monkeys by hollowing out a hole in a tree slightly larger then the fist of a monkey then fills it with berries. The monkey will put its hand in to the hollow grab the berries making his fist to large to fit out of the hole & not want to let go of the berries as the natives walk up & catch the monkey.

You must be the fox that chews off its leg to get out of the trap & then breaths a sigh of relieve.

When putting money on the table there is a reason I never go more then 3% & most of the time around 1 %
& if conditions arnt right I go with the safest investment vechile possible.


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## Eclectic12 (Oct 20, 2010)

Four Pillars said:


> This is what is wrong with the investment industry - the OP got hosed.
> 
> I would suggest not dealing with that advisor anymore - they are not acting in your best interest at all.
> 
> As suggested, find a fee-only advisor or look for a managed advisor who will look after things for an annual percentage (ie 1.5%), you will be far better off.


True ... but then again, paying is not a panacea either. Friends of my parents went the "1.0% of portfolio" route and that meant three or four pension funds instead of the promised active management.


Cehers


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## Four Pillars (Apr 5, 2009)

Eclectic12 said:


> True ... but then again, paying is not a panacea either. Friends of my parents went the "1.0% of portfolio" route and that meant three or four pension funds instead of the promised active management.
> 
> 
> Cehers


True. But it would be a big improvement over the highly leveraged, ultra-high fee situation he's in now.


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## Eclectic12 (Oct 20, 2010)

Four Pillars said:


> True. But it would be a big improvement over the highly leveraged, ultra-high fee situation he's in now.


I would expect the odds to be tilted towards an improvement but want to high light that due diligence is always helpful.


Cheers


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## Spidey (May 11, 2009)

I'm of the opinion that a person should read at least 10 good books on investment and financial planning before handing any money over to a financial planner, even a "fee only" planner. If they are going to invest on their own, they probably should read at least 15 to 20 such books. If for whatever reason that is not possible then I strongly feel that they are better off simply investing in the highest rate CIDC insured GICs available. In fact, I've known people, with a strong distrust of both the market and financial planners, who've become quite well off by going this route.

P.S. That comment wasn't meant in any way to be disrespectful of the OP. Unfortunately we're lead to believe that financial planners have our best interest, rather than their own, at heart. This, all too often, is not the case. It's the type of thing that many of us on this board have learned the hard way.


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## jet powder (May 29, 2012)

Spidey

I would have to agree with the GIC route. On line a link to global & mail can be found & they list a lot of different interest rates. If any one knows of any link thay lists every single creidt union in the country GIC rates it would be appriciated. The on line not bricks & mortar credit unions in Manitoba seams to always have the highest rates i.e., hurbert, achieva, out look , Maxa, accelerate they are insured but not under CIDC but Manitoba is not exposed to a big a bubble in real estate prices if there is a bubble in real estate & the economy there is often a little less boom & bust


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## Mike2161 (May 31, 2012)

Thank you everyone for your advice. From the beginning I knew that I did not have the knowledge about financial planning, but probably my biggest mistake was that I trusted the advisor to such an extent that now I'm finding myself in deep trouble. The various points covered by you guys are as follows –

1. Most of you seem to be of the opinion that fee only financial planner would be ideal for me. I would appreciate your suggestion as to how to go about looking for one good fee-only financial planner. I tried to search on the net and came across a list of such advisors. Some of the articles about such advisors highlighted the problems with these types of planners. One article quoted the following - ´The main drawback with hiring a fee-only planner is that many are not licensed to sell you investments directly, so they provide you with a general plan and you have to put it into action yourself. “. 
At this time I'm not sure if I will be able to take action myself but I'm certainly willing to give it a try.
If anyone of you could make a recommendation about fee-only advisor in the Toronto/Hamilton area that would be great.
Sagsal, you have recommended Derek Moran. Will I be possible to get his advice with me located in Ontario?

2. MoneyGal is right in saying that universal life insurance was taken considering the tax implications. As I told earlier, the idea is to take line of credit against the invested amount after retirement. 

3.	JetPowder, you have suggested to open an account in the credit union. Can you please elaborate on that?

4.	Most of you have suggested that I should be reading books about financial planning. I will definitely follow this advice. I would appreciate if you could please suggest me some books for the beginners.

5.	The most important issue at this time is should I immediately get rid of my advisor or should I hold on for some time. At this point of time, the stocks are really low and he keeps reminding me that when the market improves, then only I will be able to see my money grow. At this time I'm approximately down by about $100,000.


Again, thank you very much for all your advice.

Mike 2161


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## humble_pie (Jun 7, 2009)

hello Mike,

i believe you have caught things fairly early in the game & that significant harm has *not* been done. The funds & accounts you mention, which are "down" since their highs last year, are actually not down by an abnormal percentage; although it is true that the leveraged assets are perhaps more sombre.

take your corporate fund, for example, which was set up last year, at a time that might have represented a high point in markets. It's presently down about 14%. This is a tolerable paper loss, imho. Many investors are presently witnessing similar paper losses in their accounts.

i believe that the most appropriate suggestions in this thread are coming from Big Dog. Yours is not a simple situation & an ordinary financial planner should not be expected to handle it.

i would hope that your own chartered accountant, in particular, can either help you re-engineer your financial plan or else introduce you to another CA who will. What you want to find is a professional who can offer expert portfolio, tax, insurance & estate planning combined.

it is true that, in the end, you might wind up with investments that are mostly etfs, or exchange-traded funds; but i think it would be a mistake at the outset to commence your search for advice with the myriad of persons who are licensed to sell these products. In other words, don't begin with the products, begin instead with the type of specialized advisor that suits your circumstances.

unfortunately there seems to be an often-voiced belief in this forum that any fee-based advisor can & will offer a hi-quality product. As it happens, my belief is that many fee-based advisors are really vendors of products. I hardly see much difference between them & the traditional advisor who is paid by commission.

in fact i would find the commission type a tad easier to deal with, because it would be possible to know what commissions he was charging & what trailer fees he would be receiving from some of the products he would be selling. With a "fee-based advisor" who is actually a covert seller of product, or where kickbacks for referrals are involved, it would be more difficult to estimate exactly what financial return he would be receiving from a particular client.

there are financial super-planners whose goal is not to prepare a client for product purchase but to provide a comprehensive financial plan that could last at least a decade, ideally until you would retire from medical practice. Their fees would run well over $2000, i would imagine, as they would be charging $250/hour & up.

how to find these super-novae ? the first reference, i would imagine, would be your own CA or your own lawyer, as big Dog suggests. Other places to check are word-of-mouth among your peers in the medical profession whose arrangements have proven satisfactory for many years. Another place to check would be financial advisory firms that cater almost exclusively to business owners & elite professional practitioners.

only later would come a search for investment dealers who can sell the products your planner will suggest.


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## Mike2161 (May 31, 2012)

Thank you very much humble pie for your objective assessment of the situation and a balanced reply. I was almost in a panic mode, but after carefully reading your reply. I also realize that the investments are down by approximately 10 to 15% and many of the investors are in a similar situation due to low market scenario.

As you and Big Dog have advised, I'm going to talk to my chartered accountant and colleagues and try to re -engineer my financial plan. Hopefully I will find a suitable and competent financial planner who would work in my best interest.

Like many others on the forum, I had also reached to the conclusion that fee only financial planners are the best as they do not have a vested interest. Looks like I will have to rethink about it after reading your mail. 

Overall, I'm getting a feeling after reading your mail that there is no need to rush and fire the current financial advisor with immediate effect. Rather, I should be watching the market closely and at the same time, look for a better financial planner.

Again, thanks to everyone for their suggestion and advice. I feel much better now.

Mike 2161


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## Dave (Apr 5, 2009)

A 640 K investment loan... this number is mind boggling. With his income, after the dividends and the corporate taxes, the OP still would have a healthy 150-200 K going each year to the corporate account. Those are not peanuts. Why would a financial advisor prospose such a thing to someone who already has a high income ? Was the goal to become a double digit multi-milionnaire by compounding the profits with the loan by age X ? Wow... I am shocked speechless by the amount of risk taken for someone who does not need it to be comfortable. Maybe I am too conservative, but I also have a high cash flow and I focus on wealth preservation in this environment.

Dave


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## kcowan (Jul 1, 2010)

Mike 2161
You have received some good advice in this thread. I would add that when you speak to your CA, you need to ask for a comprehensive financial plan. This will enable you to assess what impact some of these investment decisions will have on your future. The plan should be projected until death. It will not be your CA but another professional who can do this for you.

Also your current advisor has said you can count on 10% returns. If that is in writing, you can nail him for fraud. Your experience is proof that his claims are baseless. He is a silver-tongued salesman.

I am a retired CEO and I was sold a UL product. It has underperformed the market during the 10 years I have held it. The fees are too high. Yes there are tax savings but they are eaten up by the higher fees. The good news is that they offset each other. The bad news is that only your heirs get any advantage. If you borrow against the face value, you will pay big fee interest rates and a professional in your situation does not need to borrow.

Your plan is so bad, that we do not know where to start. But the accountant/lawyer is a good step.

But your experience is typical, so don't beat yourself up. You have taken the first step: seeking unbiased advice. Congratulations and welcome to the forum.


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## bigdogslife (May 16, 2012)

Mike, 

Kcowan said it perfectly above. I would implore you to get this intervention started as quickly as possible. 

Since you are not well-versed in any of this subject matter on personal finance, you would not know that physicians and related professionals are perhaps THE most "taken advantage of" group in terms of being manipulated and sold unsuitable products. With relatively high incomes and limited time and often limited interest, they often fall easy prey to the financial "industry". You can prevent yourself from being a further victim. 

BDL


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## Mike2161 (May 31, 2012)

Thanks Kcowan and BDL for your advice. This forum is amazing with so many knowledgeable people who are ready to give honest, unbiased advice. BDL you are absolutely right that physicians and other professionals often fall easy prey to the financial “industry”. Anyway, the damage has been done and now I should focus on how I could prevent further damage. In a day or two, I'm planning to see my CA and as you have suggested, I'm going to ask for a comprehensive financial plan. 

The advisor did not give me anything in writing about 10% returns, so I cannot do anything about it. I have to blame no one but myself for all the mess. But now I have learned my lesson rather hard way.

Kcowan, I have a specific question for you since you had taken UL product. Should I absolutely stop investing in these policies/should I cancel these policies altogether? A substantial amount goes towards these every year from my corporate account. If I cancel these, I do not have any term insurance at this time.

I will keep you posted. In case there is any further advice for me, please feel free to convey it to me.

Mike 2161


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## kcowan (Jul 1, 2010)

Mike 
I have kept the UL product. Having already paid the fees, I am collecting the tax savings. Plus I need the life coverage to compensate for a small DB pension without survivorship for DW. I have completed my contributions (80% of face value over four years). It is currently valued at 1.6 x face value but will continue to erode if market returns do not improve. It was a better deal when I bought it but the company was acquired and the investment alternatives got worse.


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## marina628 (Dec 14, 2010)

My husband and I bought Universal life policies in 1986 and it has guaranteed compounded interest rate of 8% ,so many times they have tried to switch us to other polices but we have maxed the extra contributions over premiums over the years.Back then interest rates were double digits and I guess had been for a while for them to offer such a good rate.


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## Charlie (May 20, 2011)

As an ongoing rule, Mike, talk to your accountant when you're pitched investments you don't fully understand. They're typically good at deciphering the numbers, assumptions and risk to help you evaluate the product or plan being sold. Often the 'tax advantages' are oversold by the sales people. The investment loan and amount of UL seem out of whack to me. You should have been well aware, and comfortable with these before going in. Your accountant, if asked, could have highlighted the advantages, disadvantages and risk levels without going through a full financial plan, or making any specific recommendations.

But often, if you don't ask, they'll assume you know what you're doing. 

You've been a very profitable client to this adviser.


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## jet powder (May 29, 2012)

Mike 

The reason I sugested credit unions was is because they are none profit, Often money goes back to the shareholders which are the members or used to grow or to make the credit union more secure. From my experience the dividend is based on interest paid by loans & or interest recieved by members. Unlike banks or insurance companies who has a goal to make money for the owners regardless if you make or lose money. Maybe I have been lucky but I kinda think it has to do with the fact that the credit union members want to work as a team & help each other out as much as possible to make the credit union strong so members do not have to rely on banks who has a goal to make money regardless if you win or lose. Of course they might make a mistake but for the most part they are honest & of course if you pay someone there is no garrentee they are going to do a good job for you either.

In fact any way you slice your getting advice by someone that works for money & most likely can not be financialy independent as of yet by not working for money. Teachers in schools work for money so what they say to make money grow should be taken with a grain of salt also.

How would you have liked to have been the average investor in the best performing mutal fund in the United States for the last 10 years ?

A view years back I remember Robert Prechter commentd that the average investor in the best performing mutual fund of the last 10 years lost money over the 10 year period even though the mutual fund made money ( Cant remember exact numbers but I think it was double digit forget the name of the fund but the concept is inportant) Reason investors were buying the fund @ highs selling @ lows which is the natural thing to do. The stress created by going against the crowd can be amazingly high. In fact when Prechter won the united states trading championships he said he had to lay on the floor in the fetal position due to the stress around the time he placed a trade.

If the average investor (If your a typical investor do not put money on the table) in the best performing mutual fund was losing money it should make you wonder in regards to other mutual funds. I was reading a book by the lady (forget name) that has a similiar show as Gail on till debt do us part but had to leave library before I could finish it but I kinda skimmed through it & I kinda got the impresion that she thought most should invest in GICs because she saw the figures from her clients of how much investors were lossing in the market.

I made a lot of money in 2008 shorting the market. I hated the stress but I also hate going to the dentist but I knew the odds of doing what I hated would most likely promote my long term happiness.

I strongly recomend reading Prectors Perspective to get an idea what type of nature is needed to play the market, you might have it & you might not. Of course you can always change your nature so you can extract money from the market without adding liquidity. An identity of an entity must act in accordance with its nature & can not act otherwise.


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## jet powder (May 29, 2012)

Another option is if you know someone that has been around the block a few times & unlike most has had a long history of instead of working for money has money work for them & they werent handed the money on a golden platter.

A mentor is hard to find but if you can find one they most likely will be able to tell you what to do & more importantly what not to do.

These people are usually eccentric & do the opposite of what the majority is doing & seldom have people to share thier ideas with. You might think with all thier money they want to be out having fun spending it but often they love to to talk about thier ideas to the rare person that will listen. Those that have developed a method to let money work for them will often like to talk to someone about.

Iam a strong believer in taking responsibility for being financialy independent & the method you use has to fit your personalty, so you need to be an independent thinker because you have the best understanding of that which you are thinking ( as long as to your best & honest ability you remove that which is not true in your mental content & replace it with that which is true) & being a doctor you most likely understand the laws of logic & principals of thought to establish truth from falsehood

A mentor would maybe help shorten the journey.

In fact if you posted where you lived it would not surprise me if someone in your area would meet with you in person & maybe point you in the right direction.


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## Mike2161 (May 31, 2012)

Thanks everyone for the advice. Thanks KCowan and Marina for sharing your experience about universal life policies. Thank you very much jet powder for your elaborate information about credit unions. All these discussions have really increased my insight about the financial affairs and investments. I did not have and still do not have the adequate knowledge but until this time I was really lazy and did not bother to look carefully into the finances as to what the advisor was suggesting and what implications it could have on my financial health. Now, that I have started taking interest, I'm sure slowly things will fall in place. After talking to you guys, I have already questioned my advisor, so much so that now he has realized that I am no more an easy-going person as I was until this time. 
I have talked to my accountant at length about the various investments and insurance I have with this particular advisor. She is going to look into everything in detail. But as I was talking to her, I also realized that most of the advisers are more or less the same. I was told that they have an advisor who would charge up to 2% of my portfolio as annual fees. Then they would advise about various investments. The money would not grow substantially; rather it would grow very slowly. My only question on this was – if the advisor is already getting of 2% of my half a million portfolio annually, how does it matter to him if my money grows or not. (Say for example - $500,000 grows to 515,000 at the end of the year, there is not much difference for the advisor at the rate of 2 %.). Even with my limited knowledge about the finances, this has been my general experience with one financial advisor I was dealing with before the current advisor. Expert unbiased advice from our friends on the forum in this regard would be very helpful to me in developing my insight about the game.
Again thanks Jet powder about the mentor issue. I live in Ontario – Hamilton/Ancaster area. I'll be more than happy to get in touch with someone who lives in this region.
Mike


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## tombiosis (Dec 18, 2010)

One thing no one has mentioned is practice. You can set up an "imaginary" investment portfolio using fake money, and try your hand at stock picking/trading...This way you can compare how your virtual investments do against your real investments, then it is easier to decide if you should take the plunge into a DIY scenario...
Like someone mentioned up thread, you could buy the companies in those mutual funds diectly and save on fees.


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## Spidey (May 11, 2009)

One thing to be aware of is that while accountants know about taxes and balance sheets they are not always knowledgeable about investing. In fact, I know a few accountants and I would take investment advice over certain members of this board over them. However, she may be the best person to weed through whether UL is the best option for you.

I've found with investing, you can't totally trust anyone. You must educate yourself. And this is not as difficult as it sounds - if you take out one investment book per month from the library, you will probably know more about investing than 90% of the population. Here are some suggestions:

The Four Pillars of Investing by William Bernstein
Stocks for the Long Run by Jeremy Siegel
Winning the Losers Game by Charles Ellis
The Future for Investors by Jeremy Siegel
The Intelligent Asset Allocator by William Bernstein
The Investors Manifesto by William Bernstein
Investing for Dummies by Eric Tyson
The Bogleheads' Guide to Investing by Taylor Larimore
Rational Investing in Irrational Times: How to Avoid the Costly Mistakes Even Smart People Make Today by Larry E. Swedroe

There are other good books but these are the ones that initially come to mind. Reading these will likely result in a 6 figure net-worth difference for someone in your salary bracket by the time you retire.


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## bigdogslife (May 16, 2012)

Spidey makes a great point. Let me be clear; I was not recommending the Accountant (or Lawyer, obviously) to advise you specifically on investments - in fact quite the contrary. 

The Accountant will help you from making mistakes - this is important. He/she will prevent you from making mistakes through ignorance by helping you ask questions you don't know to ask. But most importantly, he/she and a strong Lawyer will help you STRUCTURE your affairs and your chosen investments (whatever they turn out to be) properly in the context of your professional affairs, your risk tolerance, your marriage and family, and your longer-term objectives. 

It is important not to confuse the value that they respective sets of folks might bring. I wouldn't go to a cardiac surgeon for anything more than general advice about bad knee. I wouldn't go to an Accountant, even a great one, for advice on how to run my business. But in terms of structure, risk mitigation, tax handling, future considerations, estate planning, liability, etc. the combination of great Accountant and Lawyer cannot be beat.

BDL.


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## eulogy (Oct 29, 2011)

I agree with what bigdogslife is saying. I wouldn't necessarily be seeking out investment options from people selling it. With that much money I'd definitely be looking for ways to ease my tax burden and get my ducks in order that way. I know where to put my money, but with that much of it I honestly wouldn't know enough about the taxes and things like that. If I was looking to leave a nice fortune to my kids, damned if I know how to do it and do it in such a way that half of it isn't taxed away.


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## Causalien (Apr 4, 2009)

Again I'll spew this nonsense here so that all those in the medical prof smarten up. Physicians/doctors are what insiders go to in order to unload their unwanted stocks. Because 1: They are rich and 2: They don't have time to learn about finances.

That said, I am of he opinion that the 600k loan make sense from the tax perspective. However Iam not sure if it is properly allocated. If 600k is within 20% of your net worth, it's a fine number. 

The one mistake the FA made is in pooling them all into insurance stocks and high mer ones. That is understandable from their perspective. But everything into insurance suggest someone wants to dump stock.


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