# My Advisor recommended



## FrugalCanuck (Jan 28, 2010)

Hello financial knowledgers and knowledgees,

I met with my Financial advisor a little while ago, he works mostly with Sunlife products.

For my TFSA, he recommended the CI Harbour Fund: 
http://pdf.globefund.com/servlet/FundProfile/EN/html/cif?mode=HTML&fund_id=50037&tf=Financial/FundProfile/html/en/pages/ci/ci_mutfund&universe=CI_FUNDS&branding=cif&product_id=

The returns over the years are pretty good, but the MER really has me in doubt of who's interest my FA had in mind. I've heard some will recommend these high MER MFs because they will get paid lucrative trailer fees...

I would like to hear your perspective on this fund and know if you would buy this under your TFSA.

Many Thanks!


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## MoneyGal (Apr 24, 2009)

I'd never buy a high-MER fund in general, but I particularly would not buy a fund with DSC (deferred sales charges) loads for a tax-free account, because you would need to pay a penalty to redeem units before the DSC charges elapse, typically 5 years but sometimes as much as 7 years after initial purchase. 

This defeats the purpose of a TFSA, in my view, which is a place to stash savings so they are accessible. If you have to pay a fee to access your own funds...blech. 

Also, low-MER, no-DSC ETFs which invest in mid-and large-cap Canadian equities are readily available. You don't need to pay these MERs or DSCs in order to meet the same equity profile.


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## MoneyGal (Apr 24, 2009)

But in general - this fund will not pay your advisor a higher trailing commission than any other high MER fund. They all pay 5% at initial purchase. So your advisor would earn 5% x $5,000 = $250. 

The reason he is recommending this fund is so that he can get that commission for serving your account. But frugal this ain't.


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## scomac (Aug 22, 2009)

Is you relationship with your advisor important to you?

Can you do the things that he/she does for you on your own?

If you don't value the relationship and you can perform your advisor's functions on your own, then you don't need to invest in this product, or a similar high fee fund.

If you do require the services of your advisor, then you must pay for this, either directly or indirectly.

There is nothing wrong with the fund that has been recommended; it's one of the best actively managed Canadian equity funds. Whether or not it is appropriate for you and this account will depend on what the purpose of the TFSA is for you and your risk tolerance. I have to assume that it meets these criteria. 

Either you follow the advice of your advisor because you have confidence that what he/she is telling you is appropriate for your situation, or you get rid of the advisor and DIY. It's about that simple.


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## OptsyEagle (Nov 29, 2009)

The main difference between higher MER funds and lower MER funds is the advisor. If you prefer to have their advice then you need to decide how you will pay them for it. I imagine that he did not leave you with a bill for the advice you have received so far. How did you expect to compensate them for their time?

Only you can decide if the advice is worth it, but keep in mind that they have no more ability to pick a good fund than you do, however, they can sometimes keep you from making really amateur mistakes that can be very costly.

And CI Harbour is a fine fund. As good as about 4000 others just like it.


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## OntFA (May 19, 2009)

Scomac: Bravo on a terrific response.

MoneyGal: I usually think your responses are well thought out but I have to take exception with your response in this thread.



MoneyGal said:


> I'd never buy a high-MER fund in general, but I particularly would not buy a fund with DSC (deferred sales charges) loads for a tax-free account, because you would need to pay a penalty to redeem units before the DSC charges elapse, typically 5 years but sometimes as much as 7 years after initial purchase.


If memory serves, MoneyGal, aren't you in the business in some way, shape or form? If so, whether you'd buy a fund that charges for advice is beside the point. The question is: what is the value of an advisor and a reasonable cost there for? Or, should FrugalCanuck buy this fund? But you answer pretty definitively without much information from the poster.



MoneyGal said:


> This defeats the purpose of a TFSA, in my view, which is a place to stash savings so they are accessible. If you have to pay a fee to access your own funds...blech.


In your view and for you, perhaps. But maybe not for others or, more importantly, for the original poster. If the TFSA is used as part of the retirement portfolio, either partially or entirely, then buying equities inside the TFSA is fine.



MoneyGal said:


> Also, low-MER, no-DSC ETFs which invest in mid-and large-cap Canadian equities are readily available. You don't need to pay these MERs or DSCs in order to meet the same equity profile.


Again, to Scomac's point, an advisor can be valuable to investors who don't otherwise know where to start. And are you telling me that the advisor isn't worth $250? We don't know this advisor but s/he need not do much for $250. I think this anti-commission thing is being taken a bit too far when you can't acknowledge the value of an advisor who is designing strategies (even simple ones), helping the client develop good saving/investing habits and sifting through the product universe enough to let the guy get paid a few hundred bucks. Sheesh!


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## OhGreatGuru (May 24, 2009)

_I met with my Financial advisor a little while ago, he works mostly with Sunlife products.

For my TFSA, he recommended the CI Harbour Fund: _

A financial advisor working moslty with Sun Life products wil be one working mostly with high MER products. Insurance companies are noted mostly for making money for themselves, not for investors in their products (except maybe their shareholders).

CI Harbour may be well-rated for its class, but it is a CDN Large-Cap Growth fund - 100 % equity. Is this what your want in your TFSA?


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## resource investor (Aug 9, 2009)

OntFA: I don't believe all this nonsense that an investor should have to pay $250 for advice on picking a mutual fund investment for a TFSA. That is ridiculous. 

Frugal Canuck: Why would someone like yourself who is FRUGAL choose an expensive boutique shop like SunLife to buy a TFSA? Why not go to a discount brokerage by any of the big banks. You can phone them (ie TDwaterhouse has a fundsmart phone line with people standing by to help you a pick a fund for free). Of course, you will have to pay the MER each year.


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## Toronto.gal (Jan 8, 2010)

scomac said:


> 1. If you do require the services of your advisor, then you must pay for this, either directly or indirectly.
> 
> 2. There is nothing wrong with the fund that has been recommended; it's one of the best actively managed Canadian equity funds.


Great answers!

1. I couldn't agree more, we all expect to get paid for our time & services, that is how we make our living, but in my case for example, though my prior advisor met with me often, he mostly talked about non-financial matters & I realized he knew little, except to put me in expensive funds. I then changed advisor, he was also reasonable with his time, but did zero changes in my portfolio for the time I was with him (2 years), saying all was fine, so while both gave me their time, they got paid trailer fees for years for doing absolutely nothing. I then decided to educate myself and become a DIY investor, I'm still new at it, but learning every day & making more money than I did with professional help.

2. The fund managers are considered among the best and I held such funds too, but be aware of how much the MER's translate on a 3/5/10 year investment, think long term, if you do the calculations, you'll be amazed. 

Quote: 

Compare mutual funds with MERs of 1.7 percent and 2.5 percent. Assuming that a $10,000 investment grows at 8.41 percent a year, over a period of 10 years the value of *the fund with the 2.5 percent MER is $17,582 and the total cost is $3,402.*

The value of *the fund with a 1.7 percent MER is $19,017 and the costs are more than 28 percent lower at $2,406.*

The above is for an investment of $10K, so imagine the cost for $100K and so on and also keep in mind that you pay the fees regardless whether your fund makes money or not. 

Read the prospectus very carefully if you decide to go with an advisor. Good luck!


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## Toronto.gal (Jan 8, 2010)

resource investor said:


> Why not go to a discount brokerage by any of the big banks.


That is exactly what I did and it was the best move I ever did, but you need to know what you're doing!.


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## MoneyGal (Apr 24, 2009)

Hey, OntFA, I'm a former advisor. I worked exclusively on fee-for-service; no commissions. I also worked in the back office of a fee-for-service shop as a salaried employee for a while. 

I thought Scomac's advice and perspective was good. I don't object to advisors being paid (although I dislike the commission sales model, but whatever). I guess I was just struck by the "frugal" forum name and the $250 bite for an equity purchase. 

Also - for what it's worth - I didn't make any recommendations to the OP about what he or she should do. I said I would never buy a high MER fund, and especially for my own TFSA. Both of which are true statements.


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## OntFA (May 19, 2009)

resource investor said:


> OntFA: I don't believe all this nonsense that an investor should have to pay $250 for advice on picking a mutual fund investment for a TFSA. That is ridiculous.


Good luck with that. Also, good luck with getting a lawyer to draw up a will for free. And good luck getting your doctor to write you a prescription without charging to OHIP. Or the pharmacist for filling the prescription without charging your or your insurer. While we're at it, why not tell me what you do so I can demand you do it for me gratis. Sounds fair, right? 



MoneyGal said:


> Hey, OntFA, I'm a former advisor. I worked exclusively on fee-for-service; no commissions. I also worked in the back office of a fee-for-service shop as a salaried employee for a while.


All past tense. No longer an advisor or in the biz?



MoneyGal said:


> I guess I was just struck by the "frugal" forum name and the $250 bite for an equity purchase.


As an advisor, then, I thought you'd consider that although this poster came asking for feedback on this bit of advice that there might be more to it than simply executing a trade with no value added to the process. I admit that I sometimes react to what appear, to me, to be knee jerk "your advisor is a bum" response. Maybe yours wasn't that. But it seemed to me that you poo-poo'd it too quickly.



MoneyGal said:


> Also - for what it's worth - I didn't make any recommendations to the OP about what he or she should do. I said I would never buy a high MER fund, and especially for my own TFSA. Both of which are true statements.


I guess when someone asks a question and another responds, there is some implied advice - at least in my mind - unless there is some more explicit warning otherwise. Because of course, a plumber wouldn't pay another plumber to do work s/he can do for him/her self. Along the same lines, an advisor (or former advisor in your case) doesn't need to pay for advice that you clearly don't need. So what you would do is irrelevant to what an advice-seeking investor should do.

Anyway, MoneyGal, I shouldn't argue with you since there are only so many of us gals on this forum - and in this industry - so maybe my nit picking will clarify some issues for the original poster. If Frugal Canuck reads nothing else, go back to Scomac's initial response because (with all due respect to all responders) he made more sense than the rest of us.


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## resource investor (Aug 9, 2009)

OntFA: Why are you bringing up wills or estate plans? Of course you need to pay someone to do that service. We are talking about a monkey throwing a dart at a board (buying a mutual fund for a TFSA). A mutual fund is a place to park your investments until you learn and have enough money to justify investing in ETF's/stocks/bonds/etc on your own.

Frugal Canuck: Run (don't walk) to a discount brokerage.


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## MoneyGal (Apr 24, 2009)

S'all good, OntFA. As for your question about whether I am still in "the business" - depends on how you define the business.  I'm not a licensed advisor, I don't dispense investment advice, I don't work with individual clients, I don't do "financial planning" of any kind for any clients, but I do work in the broadly-defined field of finance and I do hold and maintain a CFP certification.  I also LOVE smilies. 

I think there is benefit to be had from these kinds of exchanges. What you think or what I think is not all there is to the story. I wish more people would discuss these issues - i.e., what you get when you pay for financial advice - more openly. My five-year-old is desperate to add something here, so here it is: i frances (that's her name)


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## OntFA (May 19, 2009)

resource investor said:


> OntFA: Why are you bringing up wills or estate plans? Of course you need to pay someone to do that service.


Because it's a service just like the selection of investment products.



resource investor said:


> We are talking about a monkey throwing a dart at a board (buying a mutual fund for a TFSA).


Then why don't most Canadians do it themselves? Why didn't FrugalCanuck? Why come to a discussion forum to speak to a bunch of anonymous monkeys (okay I'll speak only for myself)?



resource investor said:


> A mutual fund is a place to park your investments until you learn and have enough money to justify investing in ETF's/stocks/bonds/etc on your own.


Okay but here's the problem. In the real world, there are almost 200 ETFs trading on the TSX and another 900+ trading in the U.S. Many are specialty funds but a whole lot are broad market, using competing indexes - i.e. Russell, MSCI, S&P, Wilshire, RAFI, WisdomTree, value, growth, small cap, mid cap, large cap, total market, dividend payers, dividend growers, etc. and multiply that by each equity region.

It ain't easy. Truly benefitting from what ETFs have to offer requires ignoring 99% of the 1000+ ETFs available to Canadian investors. That's a tough market to sift through even for seasoned investors.

I'm curious - how do you construct your ETF portfolio?



resource investor said:


> Frugal Canuck: Run (don't walk) to a discount brokerage.


Good advice - if it was reversed. Sending people to discounters should be done with caution. No more than 5% of investors really do a good job on their own.


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## andrewf (Mar 1, 2010)

"Sending people to discounters should be done with caution. No more than 5% of investors really do a good job on their own."

And what proportion do well under the tutelage of frequently self-interested FAs? I'm not sure what ethics standards you folks are required to adhere to, but I've been privy to enough horror stories just from immediate family and friends experience. For one, not being totally up-front about what proportion of the investor's money ends up in their pocket seems like a big one. Most people have no clue that a full quarter (and often more) of the return on their investment gets eaten away by fees. All for dispensing advice that can't even consistently beat an index fund. It should be criminal. Tax, retirement and estate planning are great--and should be done on a fee for service basis. That way investors are more likely to spot a shark when their FA asks for tens of thousands of dollars in fees to dump their money in an unremarkable fund.


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## OntFA (May 19, 2009)

andrewf said:


> "Sending people to discounters should be done with caution. No more than 5% of investors really do a good job on their own."
> 
> And what proportion do well under the tutelage of frequently self-interested FAs?


My 5% figure is not scientific but anecdotal based on 20 years of dealing with client and fellow advisors. The bad portfolios I see from other advisors are not nearly as poor as the ridiculous stuff I've seen from misguided DIYs. And the sharper DIYs I've met have good portfolios but not as good as those designed from good advisors. Again, all in my 20 years of experience.

Advisors are no picnic and there is a wide variety of skill and competence, but that's the case with any occupation/profession - i.e. lawyers, doctors, etc.



andrewf said:


> I'm not sure what ethics standards you folks are required to adhere to, but I've been privy to enough horror stories just from immediate family and friends experience.


I am bound, first and foremost, by my own ethical standards which I consider to be rather high. Second, as a CFP licensee I am bound by the FPSC code of conduct and standards of practice - i.e. letter of engagement, certain levels of disclosure, defined process, etc. As a licensed salesperson with a MFDA firm, I am regulated by both the OSC and the MFDA. Finally, my activities are further overseen by my dealer, which governs based on its obligations as defined by the MFDA and OSC - but many dealers more strictly interpret those obligations thereby setting a standard that is somewhat above the industry.

This would be similar for most advisors.



andrewf said:


> For one, not being totally up-front about what proportion of the investor's money ends up in their pocket seems like a big one. Most people have no clue that a full quarter (and often more) of the return on their investment gets eaten away by fees.


You have a point here since most are not up front about what clients are charged and how much the advisor gets. For most of my career (12 years), I've been showing clients those figures, in percentage and dollars. It's an estimate based on trailing year MER figures but it's close enough in my mind. This was not an easy thing to get by my compliance folks - even though I started this before they cared - but we agreed on an adequate disclaimer that basically tells clients that this is my own estimate and is not official or approved by anybody and that it's just provided to give them a better idea of what they pay.

But I agree that most people don't put this in writing. Many advisors do talk about this but it's forgotten by the client within 48 hours. That was my experience, which is why I started putting it in writing.



andrewf said:


> All for dispensing advice that can't even consistently beat an index fund. It should be criminal.


Even if all you're doing is giving investment advice there is more to it than that, which is why you don't assign much value to it. As an example, I saved - yes saved - at least a dozen investors who became new clients of mine between 2006 and 2007. These clients had been invested 85-100% in equities (funds, ETFs and stocks). Since stocks were doing well and bonds were not, they reasoned that stocks were the way to go.

I worked long and hard to convince these people that they were on the wrong track regardless of where the markets were headed because sooner or later - as happened in past bears - markets get hammered with big losses. So, before even talking about whether I'm picking the best fund or whether the MER is higher than it should be, my advice saved these people from losing significant amounts of money. They still lost, but instead of 50% they lost 20% because I positioned them in fixed income. Now, they're close to their peak values instead of still being down 25%.

So don't assume that we're all a bunch of idiots screaming "cha-ching" every time we come back from a client meeting to celebrate the next commission. Our industry still has many of those but most of us try hard to do right by the client.



andrewf said:


> Tax, retirement and estate planning are great--and should be done on a fee for service basis. That way investors are more likely to spot a shark when their FA asks for tens of thousands of dollars in fees to dump their money in an unremarkable fund.


I don't think the compensation method helps at spotting a shark. But tens of thousands of dollars in fees would require $500k-$750k portfolio just to approach $10k and millions to hit "tens of thousands" in fees. Not exactly the industry's typical client but these clients also have a bit more complexity and much higher client service demands.


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## scomac (Aug 22, 2009)

andrewf said:


> "Sending people to discounters should be done with caution. No more than 5% of investors really do a good job on their own."
> 
> And what proportion do well under the tutelage of frequently self-interested FAs?


Here I go defending financial advisors again…

But I suppose someone has to now and again who doesn’t have a vested interest.


For starters, I suspect that only 5% of the population has what it takes to go it alone completely and successfully reach their end goals -- others will try… I’ve been hanging around these forums far too long and seen far too many people out to slay the advisor dragon with just enough information to be dangerous to themselves. Like survivorship bias, once they’re gone, their tales are no longer part of the data set.

And don’t necessarily think of the discount brokerages as society’s savior per se. The banks love this trend and they’re going to promote it out of pure self-interest. It’s far cheaper to run a discount brokerage than it is to offer full-service; the margins are higher and with a couple of clicks of the mouse, they have been pretty much absolved themselves of all liability.



> Most people have no clue that a full quarter (and often more) of the return on their investment gets eaten away by fees. All for dispensing advice that can't even consistently beat an index fund. It should be criminal.


How often must this red herring be dragged out of the closet? Discount brokerages aren't free. Index funds aren't free. These are simply less expensive alternatives, but they come with a "cost" -- no advice. The fees paid to a full service account are for the advice and not just for hiring a chimp to throw a dart at the pages of the Financial Post. Servicing the account entails at least a modicum of personalized advice beyond picking an investment. Part of the problem is that clients don’t hold up their end of the bargain by disclosing all of their pertinent information to assist the advisor in fulfilling their roll. It’s hard to do a proper financial plan if the client won’t fill out the budget. Insurance needs analysis? Not interested. Estate planning? I’m too young to worry about it. Wills and PoA? I’ll look after that later. All I want you to do is sell me a fund today to cover my RRSP contribution. They pay for everything and yet make use of nothing and then assume that they’ve been hosed for picking a shitty mutual fund that didn’t beat the index. If that’s the way you view the whole process, then maybe the discount broker is the right choice because the only way you are measuring the value of the advisor-client relationship is by: Did the investment beat the index? 



> Tax, retirement and estate planning are great--and should be done on a fee for service basis.


In a perfect world you are quite correct. Everyone would pay a fee for service and then get their financial products at a low cost clearing house where no incentives are offered to impact decision making. But, we don’t live in that world and it’s pretty clear that the client base isn’t interested in that model either. By and large, the average retail investing client prefers not to pay for their advice up-front. They like that those fees are hidden and that is why things are the way they are. Sure the commission system is rife with potential for conflict of interest, but by-and-large; the vast majorities of advisors are honourable and have their client’s best interest at heart. Like the Toyota Prius with a faulty accelerator pedal that crashes into a river/police car/retaining wall; we only hear about the sensational and not so sensational bad apples. We don’t hear about the 9999 other ones that go about their daily business just fine. At the end of the day, it’s not the compensation model that is going to determine the success or failure of an advisor: client relationship; it’s going to be the quality of the people involved and the effort that they both put into the relationship. Gee… that sounds a lot like marriage, doesn’t it?


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## MoneyGal (Apr 24, 2009)

ISTM that one thing we are stepping over is not just the fees paid to the advisor, but the deferred sales charges the investor would owe if he or she cashed out units before the DSC schedule had expired. 

To my mind, the question is not just "does an advisor deserve to be compensated for their advice (and some have suggested, for their underlying skills and experience, whether the investor draws on those or not)?" 

At one level, this is a moral question with a moral answer. Certainly that seems to be the "pitch" here - "advisors deserve to be compensated." I would never argue against that broad-based framing of the question. 

The other part of the question, to my mind is, "would the investor purchase the fund in question if he or she knew that it would 'lock' them into the fund for five years?" 

In addition, I think that it is worthwhile to think about and discuss the *level* of compensation. If we agree that advisors need to be compensated - and clearly they do, I don't think anyone would seriously argue otherwise - then perhaps it is useful to talk about and think about whether the compensation structures and levels are appropriate. 

It's been suggested that $250 for "picking a fund" is both too high, and appropriate (depending on whether you think it is for "picking a fund," or servicing a relationship). It's also been suggested that Canadians don't like or want a model in which fees are explicit. But what is the "right" amount - and how can we ever know the answer to that question when the fee amounts actually paid are obscured from plain view?


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## scomac (Aug 22, 2009)

MoneyGal said:


> It's been suggested that $250 for "picking a fund" is both too high, and appropriate (depending on whether you think it is for "picking a fund," or servicing a relationship). It's also been suggested that Canadians don't like or want a model in which fees are explicit. But what is the "right" amount - and how can we ever know the answer to that question when the fee amounts actually paid are obscured from plain view?


I seem to recall that Dan Hallett talked about this very issue at length on another forum. As a licenced IC, he would know full well the costs of servicing the typical client and meeting all regulatory and compliance hurdles (which are onerous), paying the help, keeping the lights on, etc. IIRC, a full financial plan had a "cost" of $1500. I don't know many uninitiated folks willing to pay-up for that. The rest of the details are fuzzy now, but I do remember clearly that the higher net-worth clients subsidized those with modest assets which just happens to be the majority.

It costs a lot of money to keep that shingle hanging out; far more than most folks realize. I think that explains why the turnover in people is so high in the financial advice game. Unfortunately the sharks get rewarded when sales is the name of the game.

So what is fair? Well, if you want personalized advice, you're going to have to pay for that at a rate commensurate with other advice professions. For a lot of folks that's going to be too much for the value that it might add and as such they would do just as well with the generic sort of advice you might get from your local bank branch personnel. Whether you like it or not, the commission based model works pretty well for a lot of folks as a value proposition. It falls apart a bit when you get into high net worth territory, depending on the level of service required, but those are the folks that are most likely to pay a fee for service.


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## andrewf (Mar 1, 2010)

It might sound like a value proposition, but when you're charging a 2% fee on AUM, that really begins to add up. Even for a $1500 financial plan, amortized over 3 years one only needs $25,000 for a fee for service arrangement to be more advantageous. And frankly, for people with under $25k to invest, a one-size-fits all investment plan (with perhaps years to retirement as a parameter) is probably just fine--and how much could that cost to administer?


The problem is that trying to keep the lights on with commissions means advisors are incented to make decisions with an eye on maximizing their fee, not what's best for the client.


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## MoneyGal (Apr 24, 2009)

They are also incented (I never use that word, but will make an exception following Andrew's example!) to be constantly on the lookout for new clients...or inducing existing clients to buy more or switch funds. 

If your model is commission-based, you need to be making new sales every month in order to keep your revenues flowing in. 

If your model is fee-based, you need to keep your existing assets stable. The incentive to find new sales is greatly minimized in this model compared to the commission-based model.


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## scomac (Aug 22, 2009)

andrewf said:


> It might sound like a value proposition, but when you're charging a 2% fee on AUM, that really begins to add up. Even for a $1500 financial plan, amortized over 3 years one only needs $25,000 for a fee for service arrangement to be more advantageous.


Not quite. Your ignoring the costs of reporting, regulatory and compliance. Those are sunk costs regardless of portfolio size. $500/yr. doesn't go far in covering those costs.


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## scomac (Aug 22, 2009)

MoneyGal said:


> If your model is commission-based, you need to be making new sales every month in order to keep your revenues flowing in.
> 
> If your model is fee-based, you need to keep your existing assets stable. The incentive to find new sales is greatly minimized in this model compared to the commission-based model.


Not necessarily. You could just as easily sell on a front end load at 0% and take back the higher trailer fee (1%-1.25%). That keeps the revenues flowing in the same manner as a fee-based advisor who charges a % of AUM as an on-going professional fee.

The person that is really stuck continually prospecting for clients/work is the individual that opts for a fee-for-service model and only charges for billable hours. That's a tough way to build a practice. Even if you're the best advisor ever licenced, you aren't going to do your clients a whole lot of good if you can't keep the lights on. That puts you in the same sticky wicket looking for ways to generate revenues.


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## MoneyGal (Apr 24, 2009)

Good point on the zero load funds, Scomac. I hadn't thought of that. 

I'm not aware of any person in Canada who both manages money AND only charges an hourly fee. I think there's a lot of confusion in this area. When you manage money, you have fixed costs throughout the year (i.e., E&O insurance), no matter how many hours you put in. 

There are lots of hourly fee-for-service people out there, but they aren't managing money. 

Most fee-for-service arrangements I'm aware of include a % fee for AUM, plus an agreed-upon set of services for that fee, with the potential to add additional services for an hourly rate. The people I know who do hourly planning typically combine it with AUM. That is, you can go to them for hourly planning advice without becoming a client - but they won't manage your money AND only charge you an hourly rate. Make sense?


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## humble_pie (Jun 7, 2009)

on the controversial twin topics of quality & remuneration of financial advisors, here's a view from a poor humble advisorless pudding:

- the one person on this forum who appears to be committed to thinking creatively and quite selflessly about how best to remunerate advisors so as to encourage high-quality ethical practitioners in the profession is moneygal;

- the non-backed-up anecdotal declarations that 5% if DIYers do a good job and succeed, along with its implied inverse that 95% do a bad job and fail, look like subjective gobbledygook to me. If discountland were indeed so imbalanced, then all the big discounters would have long since faded & vanished. Instead they are booming. From a slow but powerful client base-building in the 80s and 90s they graduated to sharply increased money-under-management and higher trading volumes, including major participation by women, in the 21st century. In the past year the pace of new client signups has exploded.

- in the recent past moneygal has posted that an advisor's fund-selling license is easy to obtain & requires only high school math. I might be just a dumb mince pie but if this is true it really flakes my pastry. What, i'm expected to entrust my entire family's future - their education, any unusual health needs they may have, everybody's old age - to a lumpen salesman with perfunctory education in real finance and a grade 12 grasp of how to push product ?

- lastly i do not believe for a minute that the big banks shamelessly promote their discount services. On the contrary, if you look inside any typical canadian bank branch, new & potential investors are all being herded to the mutual fund salespeople. The clients who pass through to the discount operation are the clients who specifically ask for this. I have never heard of any branch recommending DIY as a first choice to any client, whereas it's common to hear that they produce this option as a last resort.

(signed)
tarte tatin
another same old muffin face


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## MoneyGal (Apr 24, 2009)

We need a "blushing" emoticon. Humble, I just made (not a tarte tatin but) an apple crumble...in your honour.


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## resource investor (Aug 9, 2009)

Scomac: You are giving brutal advice.

When you are a novice/small investor who wants to open a TFSA then you should tell your advisor that you want:

-the lowest MER Canadian Dividend Fund available
-no minimum holding period
-no loads 

If the advisor scoffs, run (don't walk to another place paying whatever fees you have to).

You can hold the dividend fund forever and do fine. Of course, if you educate yourself, you can invest in ETF's/stocks yourself. 

Let's say a 20 year old works for minimum wage seeks out an advisor and you think he should pay all these fees. Shame on you Scomac. You have forgotten what it is like to try to make ends meet.


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## scomac (Aug 22, 2009)

resource investor said:


> Scomac: You are giving brutal advice.


There's nothing wrong with the advice I gave to the OP. It was balanced and correct. Just because you have a built in bias against what I said does not make it wrong.


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## resource investor (Aug 9, 2009)

I don't have a built in bias, I just question the value of the service rendered. The financial industry has spent alot of money to make people believe that if we don't seek out an advisor we will live in a cardboard box when we retire.


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## resource investor (Aug 9, 2009)

Scomac: I'm sorry to have to be the one to tell you this - but you have been brainwashed. 

Most rational people do not seek out an advisor to discuss their weight goals, career goals, relationship goals, etc. They figure it out on their own. If they want to lose weight, they consume less calories than they burn ETC. The same goes for financial goals. It's common sense, but you don't believe a person could make an investment decision without a sitdown that will cost $250 or more.


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## OptsyEagle (Nov 29, 2009)

Resource investor, your list of wants is fine, but what are you going to say when the advisor leaves you a big bill for the advice. If you want those things and are not willing to pay for them, why are you asking a financial advisor. 

As for Humble Pie. A fair bit of gobblygook there too. Most no load houses in the past have eventually been gobbled up by the advisor offered fund companies. There are exceptions, as in everything, but if they are doing anything, they are certainly not booming. They struggle and in my opinion await the 2 to 3 year period where they underperform, their DIY investors leave them in droves, providing them their last resort, which is to also get gobbled up by the Investors Group, CI and AGFs of the world. 

The problem with DIY is they want very low fees and above average performance over fairly short time frames. They have some dilusion that because they care about their money more than anyone else and are willing to put in the time and effort on their portfolio, that somehow this will lead to better performance. It will not.

All that will happen is that there will be more switching from a fund that has done poorly, but had a very low fee, into another fund that is about to do poorly, that may have an even lower fee. In the advice world an advisor should be able to explain the fees and put them in their proper context and can hopefully explain the fact that there will always be at least 1000 or more funds beating the one you are in, at any point in time and since no human can predict it in advance, keep the investor from chasing returns. I believe that the DIY will chase returns a heck of lot more than investors who are receiving advice. I know I did.

Overtime, the DIY will figure this out, but at what cost? I think I said upthread, that if you have a portfolio in the 6 figure range, it will probably be a lot cheaper to use an advisor then to pay for all the amateur mistakes that will ensue without one.

That is my opinion. Thankfully I have paid my tuition a long time ago when I had very little money to contribute. But like everyone that goes this route, I did contribute.


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## OntFA (May 19, 2009)

resource investor said:


> Scomac: I'm sorry to have to be the one to tell you this - but you have been brainwashed.


On the contrary. He has given sound, balanced and objective advice. Scomac is (I think) a DIY investor. And he's telling you something you disagree with. That doesn't make him brainwashed or his advice wrong. 



resource investor said:


> Most rational people do not seek out an advisor to discuss their weight goals, career goals, relationship goals, etc. They figure it out on their own.


Ever heard of weight watchers, personal trainers and nutritionists? Career coaches? Psychologists, psychotherapists and other counselors? Right, everybody just figures it out on their own because they're experts in exercise, nutrition and relationships. Saying it doesn't make it so.



resource investor said:


> If they want to lose weight, they consume less calories than they burn ETC.


And yet Canada and the U.S. are two of the most obese nations in the world. But we've got it all figured out, right?



resource investor said:


> The same goes for financial goals. It's common sense,


It's also common sense that people shouldn't start smoking or doing drugs because they habit-forming and kill brain cells. But strangely enough, people do it anyway. Why is that?

It's common sense that dining at McDonald's is a slow death sentence. But it's perhaps the largest restaurant on the planet, having served more than a billion people. Why is that if it's so simple to understand; you know, common sense?

Need I go on?



resource investor said:


> but you don't believe a person could make an investment decision without a sitdown that will cost $250 or more.


Let's make an important distinction. I believe any person of reasonable intelligence CAN make sound investment decisions - particularly in the early days with modest sums of money. I just don't believe that most people of reasonable intelligence are sufficiently interested in investing the time to develop the necessary knowledge base.

As the saying goes, and as my list above indicates, many things are simple but are not easy.


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## FrugalCanuck (Jan 28, 2010)

Hey everyone, remember me? 

I'd like to say thank you to those who shared thier perspective and answered my questions.

Just a few points that I should have mentioned in my original post. 

The TFSA is for long-term retirement savings. I'm young in my carrer and I plan 22 years until I throw in the towel. 

I am still learning, my financial knowledge is growing but I didn't want to stay out of the game while I take the time fill my head with the.... plethora of information on this subject. But this is the goal, as my old man said "you don't pay someone to get your groceries for you... do ya?" I don't think I will ever completely DIY invest, but I would be happy to have some investments on my own, and atleast intelligently work WITH my advisor on what is right for me. I want to arrive at my financial decisions.

First, I did not choose this advisor. I started with one just doing RRSP, then she moved on and I was passed to a second, then he got a job in Sunlife corporate. So this is my third... 

The reason for the mistrust is while our meeting was suppose to be focused on opening my TFSA he tried to up sell me critical illness insurance with a story of how his friend had a mild heart attack and bought a boat. Then refered me to other business partners of his for mortgage and tons of other things I don't need. I felt like a piece of meat for the lions. 

Aside from that, this MF might be a great place to get a tfsa rolling.


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## OntFA (May 19, 2009)

FrugalCanuck said:


> First, I did not choose this advisor. I started with one just doing RRSP, then she moved on and I was passed to a second, then he got a job in Sunlife corporate. So this is my third...


That is unfortunate. Not fun to be passed around.



FrugalCanuck said:


> The reason for the mistrust is while our meeting was suppose to be focused on opening my TFSA he tried to up sell me critical illness insurance with a story of how his friend had a mild heart attack and bought a boat. Then refered me to other business partners of his for mortgage and tons of other things I don't need. I felt like a piece of meat for the lions.


I don't blame you and it sounds like you have a good head on your shoulders. It would have been more suitable to suggest disability insurance, rather than critical illness given your age. Disability is the most important form of insurance for young people because it protects your most valuable asset - your employment income.



FrugalCanuck said:


> Aside from that, this MF might be a great place to get a tfsa rolling.


It is a good fund in my opinion. You could do a lot worse.

And for the rest here who would like to continue the debate over the value of advice, you might as well read what's already been batted around. See this old discussion (read from the bottom up). You might see one or two familiar posters in that old thread.


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## andrewf (Mar 1, 2010)

So, I suppose we can all agree that those people who don't have the desire, the interest or the ability to educate themselves about investing are doomed to have their funds managed by people motivated by fee extraction, yielding damn poor results. I suppose I should give up having sympathy for them. I'll do my best to take care of me and mine.

Maybe this just highlights the need for a Canada Supplementary Pension Plan. People need a set it and forget it savings alternative that has the scale not to require 2%+ fees on AUM and that will be soundly and professionally managed by people way smarter and better compensated than your typical PFA or fund manager. I have tonnes of respect for the people at the CPPIB and I think it'd be a great benefit for ordinary Canadians without enough savings to justify retaining good financial advice independently. Scale matters!


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## Larry6417 (Jan 27, 2010)

*My 2 cents*

Some people have been saying that $250 is too much for the service provided. Where does $250 come from? Of the 2.31% MER charged by the fund advised, only about 0.5% would be the trailer fee. Therefore, the financial advisor would get 0.5% (0.005) X $5,000 = $25. Yes, a whole $25! I think that explains why the OP was passed from advisor to advisor. 

Do I use a financial advisor? Actually, I do. In my case, financial advisors are provided through my association dues. These advisors do not charge a fee directly to clients but are provided a good salary through association dues. They are free to advise whatever investment products they feel are best. I have a good relationship with my advisor. That being said, I don't rely on him for investment advice. I rely on him for financial advice (which I consider to be different from investment advice) e.g. estate planning, insurance (disability, critical insurance), etc. I have as much or more investment education as he does. I've taken most of the CFP courses as well as the CSC (Canadian Securities Course) as well as other investment courses offered through a local college and “self-education.” 

One of the great ironies is that the financial services industry has marketed itself in awful way: as investment advisors. As some have pointed out on this thread, giving investment advice is like a monkey throwing darts. Unfortunately for those who advertise themselves as “investment advisors,” the analogy is apt. Standard and Poors has evaluated Canadian mutual funds, and only ~ 20% beat their respective index over 5 years (the % lowers with time). Investment advice is the least useful part of financial advice (for me anyways). 

Do financial advisors deserve to be paid? Of course they do! But the “fee” (direct or indirect) should be made completely apparent to clients. Those clients can then decide if the fee is worth the service provided. In the OP’s case, he’s getting about $25 worth of “advice.” I’ve taken courses with many people in the financial industry, and I can sympathize with their dilemma. Canadians want high-quality financial advice, but they don’t want to pay for it. That leads to the dog-and-pony show with trailer fees within mutual funds.

In the OP’s case, he’s willing to take time to manage his own investments. He would likely be one of the people who would be able to manage his own investments. And the advantage of doing so would be enormous given the time-frame he has. TD efunds might be a reasonable option for the OP. They’re low-cost, no advice index funds offered by TD.


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## resource investor (Aug 9, 2009)

Larry, the original poster was recommended a fund that had a 5% fee going to the advisor plus the investor would be paying a high MER for as long he owned this fund. After the advisor thought so far so good, the advisor decided to spin a yarn about a guy and a heart attack and a boat to extract more more money via a critical illness policy.

Frugal Canuck: If you are frugal you would go to a discount brokerage. Why not?


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## resource investor (Aug 9, 2009)

OntFA: Do you want a critical illness policy with that fund?


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## Larry6417 (Jan 27, 2010)

resource investor said:


> Larry, the original poster was recommended a fund that had a 5% fee going to the advisor plus the investor would be paying a high MER for as long he owned this fund. After the advisor thought so far so good, the advisor decided to spin a yarn about a guy and a heart attack and a boat to extract more more money via a critical illness policy.
> 
> Frugal Canuck: If you are frugal you would go to a discount brokerage. Why not?


Thanks for the clarification. In that case, the OP would be paying $275 for about $10 worth of advice. Awful deal!


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## scomac (Aug 22, 2009)

resource investor said:


> Scomac: I'm sorry to have to be the one to tell you this - but you have been brainwashed.


So tell me, do you see a chiropractor for that jerking knee?

While you're tending to your knee, you can to go back and reread everything I have written in this thread -- read what's written, not what you think is there. You won't find anywhere that I told the OP to go and pay high fees to have someone pick him an investment. What I did attempt to do was provide a couple of options and let him decide for himself. I gather that approach doesn't work for you due to your fixation on price paid rather than value received. Fortunately, you don't speak for the entire population and there's still some freedom for folks to make choices based on what's important to them rather than living up to somone else's view of how they should be doing things. 

You may think you know something about me, but I can assure you that you haven't got a clue which makes me wonder just how much you really do know about things that you claim to be knowledgeable about.


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## humble_pie (Jun 7, 2009)

hello optsyEagle,

i have no idea what you are nattering about. The big discounters are TD waterhouse, BMO's investorline and royal bank's action direct. When scotia gets over its reorg problems it may join them. What i posted is correct. These discounters are booming. Here's what i wrote:

_" ... the big discounters ... are booming. From a slow but powerful client base-building in the 80s and 90s they graduated to sharply increased money-under-management and higher trading volumes, including major participation by women, in the 21st century. In the past year the pace of new client signups has exploded."_

how you twisted this into a mumble about no load fund houses failing and being gobbled up by investors group & other fund families is beyond me. 

as for the rest of your post, DIY investors are not, for the most part, buying traditional mutual funds. They are buying index funds and etfs. They are buying stocks and bonds directly. They are buying these securities at big online discounters like td, bmo and royal.

thankfully, few in this forum are still dwelling in an era where they are happy to pay substantial fees to advisors who will sell them under-performing mutual funds at over-loaded fees. Posters here may be a vanguard among canadian middle-class investors, but they have definitely got the etf drift. Many, like myself, buy stocks and bonds directly.

so i'm sticking to my knitting. Once again, i'll say that fund industry spokespersons who pretend, without any published 3rd party citations, that only 5% of DIYers succeed whereas 95% fail, are attempting to spread self-serving propaganda. The phenomenal success of a discount powerhouse like td waterhouse over more than a quarter of a century proves that DIY rocks.


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## FrugalCanuck (Jan 28, 2010)

LOL RI,

In a heart beat, I would move to a discount brokerage. I am doing the simulator on questtrade now. But I'm not confident in my own skills yet to make the call with real cash. 

Sure it's not a huge sum of money at this point, but at least its a start. A DB is the overall goal for at least a portion of my portfolio.


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## OptsyEagle (Nov 29, 2009)

_hello optsyEagle,

i have no idea what you are nattering about. The big discounters are TD waterhouse, BMO's investorline and royal bank's action direct._ 

_the non-backed-up anecdotal declarations that 5% if DIYers do a good job and succeed, along with its implied inverse that 95% do a bad job and fail, look like subjective gobbledygook to me. If discountland were indeed so imbalanced, then all the big discounters would have long since faded & vanished. Instead they are booming. _

The above are your quotes. The banks are not discounters. Take a look at their fees. At best a 30 basis point reduction. The banks have also moved heavily into the advice scene. The no-load houses I talk about are the Altamira's the Sceptres and if my memory could go back further, many more. The banks will win every battle, but for companies that do not have a monopoly you will find the no-load/discounters will have a very shortened lifespan. That is because it takes too long for DIYers to learn what is needed and the hardship they inflict on the companies they use, is too costly.


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## MoneyGal (Apr 24, 2009)

Never a dull moment! 

I want to go back to Larry6417's point about the dollar value of the advice the OP receives. 

It's been said over and over (not here, though, I don't think) that the problem with the existing dominant advisor compensation model (commission sales) is that what's rewarded is *sales,* not advice. 

That is: Larry6417 is saying the OP pays or paid _x_ for _y_ amount of advice. But the actual transaction that was compensated was the sales transaction...not the advice-giving. 

There are points of view here on this forum that "simply picking a mutual fund" isn't worth $250...and alternately that devising a strategy for which that particular mutual fund is the right fit is the real value proposition, and hence $250 is an appropriate level of compensation. 

But surely the mischief in the commission sales model is apparent. The reality is that the advisor in this model is paid $250 (in a 5% up-front fee from the product manufacturer) whether _good or "bad" advice is provided_, or _whether any advice is provided at all_. (In addition, whose perception of whether the advice is "bad" or "good" are we to rely on - the client's? the advisor's? In the absence of an objective standard about what "good advice" is, how are we to say?)

Yet another issue is that by virture of embedded compensation for advisors through product sales, the products become more expensive than they would otherwise be. An alternate model would be one in which customers strictly pay for advice, in the hourly rate model, and then cheap products (i.e., F-class mutual funds or ETFs) are selected which meet the client's objectives. In that case, the advisor acts as a consultant, not a salesperson; and the advice is (presumably) completely disentangled from the product. 

I know it has already been said on this thread that "Canadians don't want that model," and I suspect that's largely true. The only big-ish effort that I know of to seriously implement this model is through Weigh House Investor Services (formerly Second Opinion Investor Services).

Anyways. Coffee cup nearly empty, and my in-box awaits.


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## humble_pie (Jun 7, 2009)

for the 3rd time, optsy, the banks own & operate the big online securities discount houses. I've named them. TDW. BMO investorline. Royal direct. They are discount brokerages. They serve only DIYers. They are hugely successful. They are booming.

altamira belongs to an ancient era. To the best of my recollection this fund management company used to offer managed no-load funds. What has that got to do with the price of chicken.

i'm not interested in hijacking a discussion of fees paid to investment advisors for investment advice that they offer into a discussion of banking fees charged by banks.

also, you are wrongfully combining 2 of my quotes from 2 different sources. Proper journalistic style calls for attribution of each quote.

btw if both quotes are from the same interview, or the same document, they are to be set off & separated by three dots. As in .... Thank you for respecting this well-known rule from canadian press.


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## andrewf (Mar 1, 2010)

Maybe a better model would be for the fee to be something like 1% of AUM for the first three years, then some percentage (to be equivalent to today it'd be about 20-25%) of trailing 3-year investment return net of fees. This way advisors wouldn't be rewarded for selling products, but rather creating sustainable wealth. The low initial fees would also create an incentive to retain clients for longer periods, leading to less sell-and-dump where the advisor pockets the 5% initial fee then ignores the client in favour of new prospects.


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## MoneyGal (Apr 24, 2009)

...works in accumulation stage; what about decumulation stage, when the portfolio is shrinking, not growing? Just thinking aloud...


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## OptsyEagle (Nov 29, 2009)

humble_pie said:


> for the 3rd time, optsy, the banks own & operate the big online securities discount houses. I've named them. TDW. BMO investorline. Royal direct. They are discount brokerages. They serve only DIYers. They are hugely successful. They are booming.
> 
> altamira belongs to an ancient era. To the best of my recollection this fund management company used to offer managed no-load funds. What has that got to do with the price of chicken.
> 
> ...



Then you are saying that you have no point at all. We were talking about mutual fund MERs and now you want to talk about the success of online trading companies. I guess we are talking about different topics. Please try to stay focused.


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## andrewf (Mar 1, 2010)

MoneyGal said:


> ...works in accumulation stage; what about decumulation stage, when the portfolio is shrinking, not growing? Just thinking aloud...


There's still an investment return. Calculate using this formula:

investment return = ([current value] + [withdrawals] - [contributions]) - [value of three years ago]

In any reasonably invested portfolio, three year investment returns should never be negative. If it happens, you probably had too much risk or poor money management.


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## MoneyGal (Apr 24, 2009)

Der. Thanks andrewf. I was thinking about gross portfolio size, not return adjusted for withdrawals!


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## humble_pie (Jun 7, 2009)

no one could be more focused than i am. 

the first poster to refer to a 5% success rate - and by implication its inverse, a 95% failure rate - was referring to parties whose DIY accounts she had seen. These were generic DIYers. No mention was made as to whether their accounts included strictly advisor-sold mutual funds or a broad range of securities.

the second poster to refer to a 5% success rate - and by implication a 95% failure rate - said he was referring to all parties who post on forums such as this one. Again, these were generic DIYers. No mention was made as to whether this large cohort had purchased mutual funds or a broad range of securities.

as yet, there are no objective criteria or statistics to prove whether 95% of DIY portfolios fail or not. The two above-referenced anecdotalists offered personal anecdotes only. For my part, i submitted the booming success of the principal brokers that serve the DIY trade as evidence that DIY investing is thriving. In the absence of perfect statistics, it is an objective criterion.

do you, optsy, happen to possess objective criteria that show that the majority of advisors are able to pick funds that consistently out-perform both the median fund in the sector and the relevant index ? With all due respect, i doubt that you do.


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## MoneyGal (Apr 24, 2009)

I'm with Humble. Given that all the comments about the relative success of investing with or without advisors is anecdotal, wouldn't Optsy's comments be equally valid if reworded (by me) to change all the references to DIY investors to working with an advisor? 

Here's the re-write:

The problem with *working with advisors* is *clients* want very low fees and above average performance over fairly short time frames. They have some delusion that *because they they are working with a credentialled and licensed advisor*, that somehow this will lead to better performance. It will not.

All that will happen is that there will be more switching from a fund that has done poorly, into another fund *so that the advisor can continue to generate commissions*. In the advice world an advisor should be able to explain the fees and put them in their proper context and can hopefully explain the fact that there will always be at least 1000 or more funds beating the one you are in, at any point in time and since no human can predict it in advance, keep the investor from chasing returns. *But in that world, there is an additional hurdle for the individual investor to beat, which is the advisor's fee*. I believe that the *people working with advisors *will be *compelled to* chase returns a heck of lot more *because of that hurdle rate*. 

Overtime, the *person working with an advisor* will figure this out, but at what cost? I think I said upthread, that if you have a portfolio in the 6 figure range, it will probably be a lot cheaper to *use low-fee funds *then to pay for all the *advisor fees* that will ensue without *them*.

Back to me: I hesitate to add that this is not a reflection of my opinion...I just removed the references to DIY investors and replaced them with references to working with an advisor. I believe good advisors add value - and that bad advisors destroy value.


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## OptsyEagle (Nov 29, 2009)

humble_pie said:


> no one could be more focused than i am.
> 
> do you, optsy, happen to possess objective criteria that show that the majority of advisors are able to pick funds that consistently out-perform both the median fund in the sector and the relevant index ? With all due respect, i doubt that you do.


I do not. Never said I did. Never said they did either. If that is what one wants from an advisor, I am the 1st to suggest the use of a quarter for flipping. Advisors have many other uses, but each person needs to decide if the cost is worth the benefits, but those benefits will never be "better fund selection".

My main point is, quit asking financial advisors why the funds they suggest have higher MERs, than the ones that do not pay advisors. It is obvious. It is because of the cost of the advisor. If you have to ask, you have to pay. If you want to save a few bucks in MERs, stop meeting with financial advisors. I hope that clears up my position.


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## OptsyEagle (Nov 29, 2009)

Moneygal. That is pretty close, with the exception about my point of the constant switching. I was not referring to the churning of an account for commissions. I was referring to the fact, that the more closely one watches their portfolio, the greater the urge to switch it to something else. Since DIYers will be doing this a lot more than investors with advisors, I would imagine the switching (return chasing) will be more prevalent, but I do not have a harvard study for Humble Pie to prove this ... and really do not care.

As for the unethical advisor, the churners, the scumbags. Well, I would imagine that the financial industry has about as many of those as the real estate industry, the car sales business, the neighboorhood electronics store and of course Rogers Cable. The customer does need to be aware that advisor money is made when money is invested and even when it is moved around, and that is about all the advice I can give them. However, like those other industries, their existance does not void the other benefits that the service can provide.

Good luck to all.


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## MoneyGal (Apr 24, 2009)

Good point, OE, on the "closer watching." The nightmare scenario for an advisor is a client who wants to work with you, but *still* does that constant watching / second-guessing. Except they aren't going to take any action, and they want YOU to.


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## lonelimey (Mar 11, 2010)

I fail to understand why anyone would want to pay a financial advisor/planner when there is so much info readily available out in the public domain.


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## spirit (May 9, 2009)

*Do advisors have sound advice themselves*

It seems to me that advisors (the one I have anyway) attend information sessions on a constant basis. They also have access to management information that would be difficult for me as an average investor to find out. How much that knowledge is worth becomes the question. In some ways the DIY movement reminds me of the old adage the person who acts as his own lawyer has a fool for a client.(No insult intended because I am here in this forum to learn about investing) Having said that I also feel that excessive fees have been charged in the free wheeling atmosphere of the early 2000's which might not be the case today. I was raised in a world where doctors were respected for their knowledge, teachers did have some specialized knowledge in education, real estate agents had value in weeding out undesirable elements etc. However the explosion of knowledge from the internet has started a DIY mentality that is overtaking many business models. I would just caution that throwing out the baby with the bathwater in not in my investing style and that is why I am seeking information here. Thanks for all the posts on this forum. I am amazed at the world of knowledge out there.


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## resource investor (Aug 9, 2009)

Paying someone to pick a mutual fund/ETF is the most asinine idea I have ever heard of. Many (like Scomac) would have you believe that if you are inexperienced, your screwed and have to seek out the advice of a trained professional (LOL), otherwise you will live in a cardboard box when you retire. Others think their advisor has information they don't have (like Spirit eluded to above). Give me a break and your head a shake.

Inexperienced investors should open up a discount brokerage account and tell the "salesperson" they want the lowest MER Canadian dividend fund that has no deferred sales charges to it and put your money there and add to it when you can. If you choose to learn more, you can always analyze securities yourself and make your own selections. If you don't want to learn more, then keep adding to this original fund until you retire. 

I'm sure all the "brainwashed" people who took these expensive sales courses will say "where is the international exposure?" or "what about fixed income?" or "what about client goals? or blah,blah,blah. LOL. Of course, these people will want to make it more complicated. I mean if it is really that easy, what do we need them for? Exactly.


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## scomac (Aug 22, 2009)

So do you think before you commit words to text or is it simply good enough to type out the very first thing that spills out of your head? Either you have a comprehension problem or you are just taken to displays of ignorance. Most of what you claim I have either said or supposedly stand for is a fabrication of your own mind. The very fact that you would imply that a Financial Planning Certificate is an expensive sales course only further verifies your complete and utter ignorance of what is involved. You are nothing more than an opinionated buffoon!


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